AAOS Now

Published 3/1/2010

Physicians as targets

By Michael J. Schoppmann, Esq.

Insights, hard realities, and how to risk manage them

Today, every physician must come to accept certain key insights and recognize certain hard realities.

Consider the case of Dr. B, who was seeking privileges at a local hospital. First, he obtained and completed the medical staff credentialing application. One of the questions, standard to all credentialing applications, asked if he had ever been sued for medical malpractice. Dr. B answered that he had been sued twice, provided the requested details, and filed the application.

The hospital, fulfilling its obligation, queried the National Practitioner Data Bank (NPDB) to verify Dr. B’s background—including any malpractice actions. Unfortunately, the NPDB report included a third malpractice action. When the hospital received the report, it denied Dr. B’s application for failing to report the third malpractice action and, as it is obligated to do, reported that denial as an adverse action to the NPDB and the state licensing board.

The state licensing board investigated and eventually issued a reprimand (the least serious form of public punishment) for “inadequate medical record keeping” to Dr. B. The reprimand, as the law requires, was also reported to the NPDB.

Because Dr. B was licensed in two other states, those state licensing boards also launched investigations of the reprimand. Because he no longer practiced in those states and hoped to avoid the costs of legal representation and travel, Dr. B did not challenge those investigations and both states eventually revoked his license, reporting those revocations to the NPDB.

When Dr. B sought to be re-credentialed with his hospitals and health plans/managed care companies, investigations were initiated and he was terminated from several health plans. He sustained significant loss of income and eventually lost his standing with all payors.

First insight: Everyone is watching
The number of agencies, entities, and authorities that regulate, audit, monitor discipline, prosecute, and punish physicians continues to grow.

This leads to the following hard reality: Any action, by any of these entities, will certainly be costly to defend and may be career ending.

To manage this risk, physicians should take the following steps:

  1. Obtain the ground rules (bylaws, policies, procedure manuals, protocols, codes of contracts) for every entity/agency under which the physicians exist, operate, and/or practice. This includes private entities such as hospitals or health plan/managed care companies as well as public agencies such as state licensing boards and/or federal oversight organizations.
  2. Review and analyze the ground rules.
  3. Decide if they can comply with these ground rules.
  4. If they cannot comply with the ground rules, physicians should immediately end any roles or responsibilities they hold under that entity/agency.

Second insight: Everyone talks to each other
All of these entities have the ready ability and, in some cases, the legal obligation to communicate and coordinate with each other as to any action they take against a physician or practice.

As a result, any application, investigation, or action seemingly limited to one arena may well result in actions and/or investigations being brought against the physician from a number of other entities. One of the tools in cross-referring physicians for corollary actions is the monitoring of the NPDB, as seen in the case of Dr. B.

The NPDB is a permanent depository of all professional data pertinent to a physician. Medical liability insurers, state licensing boards, hospitals, other healthcare entities, and professional societies are responsible for reporting to the NPDB any medical malpractice payments made and/or adverse actions taken against a physician.

As a result, no application, process, inquiry, or investigation (of any type, nature, or mechanism) should be treated as casual, educational, collegial, or informal. Physicians should carefully scrutinize and verify every application for credentialing themselves. Any physician under any type of review must be properly and thoroughly prepared for any meeting, review, or conference. This includes obtaining the medical record in question, reviewing the record thoroughly, and being properly prepared in advance.

Third insight: It’s happening more everyday
Medical records are being reviewed, audited, analyzed, and scrutinized at an ever increasing rate and in exponentially increasing numbers.

Most of the complaints generated about physicians and the resulting actions and/or investigations are initiated by and predicated upon negative conclusions derived from a review of medical records—often without any direct discussion with, or defense by, the physician. Moreover, most medical records are incomplete, inadequate, or in violation of some policy, protocol, or regulatory requirement. This is not purposely done, but a result of the physician’s naiveté.

Physicians should, therefore, design and prepare each medical record under the presumption that their patients, their department chairs, and their “worst enemies” will be reviewing that very same medical record.

Fourth insight: The “snowball effect”
Almost every complaint and/or adverse conclusion, in any form of review (from any jurisdiction or authority), results in an eventual reporting or referral to the physician’s state licensing authority; any adverse action by that state licensing authority far outweighs the practical impact of a medical liability claim. Moreover, that action carries a wide-reaching, pervasive, permanent, and adverse impact for the physician through the cross-reporting mechanism of the NPDB.

The hard reality is that no insurance protection exists to cover the settlement or loss of an action brought by a state licensing authority.

As a result, no physician should treat any inquiry (by telephone, correspondence, or in-person) lightly. Regardless of the source of that inquiry, the state licensing authority stands immediately behind the entity offering the inquiry and the physician should treat and defend the inquiry as if it came directly from the state licensing authority.

Fifth insight: Beware the “Scarlet Letter”
Because a medical license is a privilege and not a right under the law, the rights of physicians may be compromised and physicians themselves may be labeled as “disruptive,” “impaired,” and/or “outliers.” Any one of these “scarlet letter” labels is a virtually permanent and potentially career-ending accusation.

To manage this risk, physicians should not expect that there is, or will be, a day in court that exonerates them or provides them with justice. Regardless of the environment (medical malpractice, licensing authority, hospital quality assurance review, health plan audits, etc.), initial conclusions are binding, virtually irremovable, and devastating.

Conversely, regardless of the issue (negligence, disruptive conduct, impairment), physicians must be proactive in addressing it. Every suggestion or inference of wrongdoing should be dealt with immediately, aggressively, and relentlessly. Until each and every negative is fully resolved and documented, the matter remains an open, high-risk, and potentially career-ending threat.

It may be frustrating and unfair yet unquestionably true that physicians are the targets of an increasing number of both private and public sector entities and/or agencies. Accepting that reality, and seeking immediate and ongoing compliance with the rules of these entities and/or agencies is the first, and possibly the most critical, step in risk managing these attendant risks.

Had Dr. B understood that he alone was responsible for reviewing and verifying his application for hospital privileges, every aspect of the legal nightmare that engulfed him thereafter could have been avoided. It is crucial for physicians to avoid any critical review, any potential negative conclusion, and, especially, any adverse action.

Editor’s Note: This article was prepared at the request of the AAOS Medical Liability Committee and is intended for general information purposes. It should not be considered as legal advice. Individuals who need legal advice should consult a qualified, duly licensed professional.

Michael J. Schoppmann, Esq., is a principal in the firm of Kern Augustine Conroy & Schoppmann, P.C., which is solely devoted to the representation of healthcare professionals. He may be reached at mschoppmann@drlaw.com