February 19, 1999

Mr. Neil Sampson
Acting Associate Administrator
Bureau of Health Professions (BHPr)
Health Resources and Services Administration
Parklawn Building, Room 8-05
5600 Fishers Lane
Rockville, MD 20857

Re: Proposed Changes to National Practitioner Data Bank Reporting Requirements

Dear Mr. Sampson:

We are writing for and on behalf of the American Society for Healthcare Risk Management (ASHRM), a personal membership group of the American Hospital Association. The views presented herein constitute the opinion of ASHRM but do not necessarily reflect the views of the American Hospital Association.

ASHRM has been in existence since 1980. Its membership consists of approximately 3,500 healthcare risk management professionals who work for health care organizations of all types and sizes as well as insurance companies, insurance brokers, law firms and consulting organizations. For the reasons stated below, ASHRM has significant concerns with the proposed amendments to 45 C.F.R. §60.7, as published at 63 Fed. Reg. 71255 (December 24, 1998), and strongly opposes their implementation.

Health care risk managers strive to improve the quality of patient care in order to prevent injury. By doing this, they hope to reduce liability for health care entities. ASHRM supports all legitimate efforts to remove incompetent practitioners from practice in order to protect the public. However, ASHRM believes that the proposed regulation will not serve this purpose and will create significant challenges for organizations seeking to comply with the regulation. Our comments follow.

• The proposed regulation would replace the existing objective standard for determining whether to report a practitioner with a highly subjective and arbitrary process.

The existing requirements mandate the reporting of any licensed health care practitioner "for whose benefit the payment is made." 45 C.F.R. §60.7(b)(1). At present, the decision about whether to report a practitioner to the National Practitioner Data Bank is based on a straightforward analysis of the case. If a practitioner was named as a defendant in the plaintiff's lawsuit and was also named in the Release, and a payment was made to settle the claim or to satisfy a judgment in the matter, the practitioner is subject to the reporting requirements of the Health Care Quality Improvement Act. These requirements are objective and not subject to interpretation.

In contrast to this, the proposed regulations would require the payor to decide whether, in its judgment, a practitioner committed some act or omission that led to the injury. This determination is seldom clear or straightforward, and would be entirely dependent on the payor's perspective. While there are certainly situations in which it is clear that a practitioner breached the applicable standard of care, it is more often the case that a breach in the standard of care is hotly disputed. Thus, the proposed reporting requirement would replace a clear and objective standard for making decisions about whether to report a practitioner to the Data Bank with a highly variable and subjective standard. The decision whether to report would be little better than a guess in most circumstances and could be made arbitrarily by a payor.

• The proposed reporting requirement deprives practitioners of due process.

The proposed regulations require reports to be made regardless of whether the practitioner was as a named defendant in the case, and there is no requirement that the practitioner be notified of the filing of the report. In many cases, medical malpractice claims take years to resolve and by that time the whereabouts of key practitioners may no longer be known. Thus, it is foreseeable that a practitioner could be reported to the Data Bank without prior notice and would thus be deprived of any chance to defend herself/himself. Fairness and due process would be lost in this situation.

Another ramification of these circumstances is that since the practitioner may not be aware of such a report, he or she may inadvertently fail to accurately report involvement in past claims on a medical staff application or insurance application. The only way for practitioners to be fully informed of reports filed against them is to repeatedly query the Data Bank, which seems unfairly burdensome.

• The proposed requirements allow for reporting even when the plaintiff has agreed that the practitioner was not negligent.

The proposed requirements allow for any payor to make a report about any practitioner that it feels it made a payment on behalf of in order to dispose of a case. This means that even though a practitioner may have been dismissed from a case because the plaintiff concluded there wasn't a good case against the practitioner, a payor for the remaining co-defendant(s) may disagree. Upon settling the case, that co-defendant may report the practitioner in spite of the earlier dismissal on the merits of the claim. As noted above, since there is no requirement to notify the practitioner in advance of the filing of the report, nor any mechanism for due process, this can happen without the practitioner’s knowledge.

• The proposed regulations create confusion about reporting of practitioners involved in cases of corporate negligence against an institutional provider.

Medical malpractice cases frequently involve patients who have experienced bad outcomes unrelated to a specific acts or omissions. In many of those cases, the hospital or other institutional provider is named as a defendant on a "corporate negligence" basis, but other co-defendants are dismissed from the suit. This is usually because the plaintiff cannot demonstrate a breach in the standard of care by any given practitioner, or because the co-defendants are found to have conformed to the standard of care. Even so, the hospital may be nonetheless liable. For an example of this type of case, please see Denton Regional Medical Center v. LaCroix, 947 S.W. 2d 941 (Ct. App. Tex. 1997). In a case in which the hospital is held liable on a corporate negligence basis, but all of the individual co-defendants have been dismissed prior to trial, it is unclear whether reports should be made for the would the co-defendants still be reportable.

• Improper reports to the Data Bank may give rise to defamation actions.

As noted above, deciding whether to report to the NPDB under the proposed reporting requirements can involve highly subjective judgment. Yet by exercising such subjective judgment, a payor seeking to comply with the regulation can be exposed to a defamation action if the practitioner disagrees with the determination to report. See, e.g., Anbar v. Leahan, __________ F. Supp.__________, No. 97-CV-1138 (E.D. Pa. June 12, 1998); Swafford v. Memphis Individual Practice Association, __________ S.W. 2d __________, No. 02A01-9612-CV-00311 (Ct. App. Tenn. June 2, 1998). Thus, payors are placed in an untenable situation. They face potential sanctions from the federal government for failure to report and potential defamation actions from a practitioners if they do report.

• The proposed regulations are unfair to practitioners in training.

Frequently, teaching hospitals provide professional liability insurance for resident physicians just as they do for other employees. For this reason, plaintiffs in medical malpractice cases do not name residents as defendants in lawsuits, preferring instead to sue the hospital directly. Even when residents are named as defendants in lawsuits, plaintiffs often dismiss them before the case is resolved.

Under the existing reporting requirements, it is not necessary to report residents on whose behalf the payment was made unless they were named in the lawsuit and in the Release. The proposed requirements, because of their highly subjective nature, expose practitioners in training to more reporting to the Data Bank. While a report to the Data Bank is not intended to be construed as a presumption that medical malpractice occurred,1 it will be considered whenever the resident applies for clinical privileges. Thus, practitioners in training are unfairly stigmatized before they have entered independent practice.

• The proposed requirements are unduly burdensome to payors.

The proposed regulations would require payors to report any practitioner on whose behalf it made a payment. This would entail a comprehensive review of the entire medical record in each case in order to identify any practitioner who may have contributed in any way to the poor outcome being litigated. Such a review would be extremely burdensome, given the voluminous nature of medical records in most medical malpractice cases.

The proposed regulations also expand the requirements for reporting the entities with which the practitioner is affiliated. The current regulation requires reporting of each hospital with which the practitioner is affiliated (if known), while the proposed amendment requires reporting of all healthcare entities with which the practitioner is affiliated.

Since the terms "health care entity" and "affiliated" are not defined in the proposed regulation, one may assume that they could be construed expansively. "Affiliated," with respect to hospitals, generally indicates that the practitioner has obtained clinical privileges at the hospital. However, there is no generally definition for this term with respect to other types of healthcare entities. For example, long term care facilities do not typically grant clinical privileges to practitioners who have patients at that facility. Similarly, ambulatory care centers that are not owned by or affiliated with a hospital do not typically grant clinical privileges, and the relationship between the center and a given practitioner could take a variety of forms. It is unclear whether such relationships might be construed as affiliations under the proposed amendment.

Since there is no readily available source of this information, and hospitals do not typically ask for this information when granting clinical privileges, it would be extremely burdensome for the payor to be required to obtain this information when making a report. In addition, if the healthcare entities cited above do not normally grant clinical privileges, the value of reporting this information to the Data Bank is unclear.

• The reporting requirement could damage hospital/physician relations.

The current reporting system relatively objective and practitioners know whether they will be reported to the NPDB in all cases. The proposed reporting requirements impose a highly subjective system which could be viewed as arbitrary. This is especially harmful to self-insured healthcare providers who must report practitioners affiliated with them. Since the decision to report is based entirely on the payor's own assessment of the liability in the case, practitioners affiliated with such self-insured payors might feel that the payor is reporting them unfairly or for some ulterior motive, such as coercion from an economic competitor, or in retaliation for criticism of the hospital. Hospitals work very hard to maintain cordial and professional relationships with their medical staffs. All of this hard work could be destroyed by what may be perceived to be an improper report to the Data Bank.

• It is unclear to whom the reporting requirement would apply.

There are often multiple co-defendants in medical malpractice cases and they may have different insurance coverages. If one co-defendant were to be dismissed from the case and the remaining co-defendants still felt that some liability could be apportioned to that co-defendant, it is unclear who would be responsible for reporting that co-defendant to the Data Bank. The existing reporting system places the reporting responsibility on the payor that makes the payment on behalf of the practitioner. The proposed change appears to place that burden on and all payors. If each co-defendant is required to report, the process is unnecessarily duplicative and results in multiple reports to the Data Bank.

• The proposed reporting requirements create the potential for abuse.

Since the decision to report under the proposed amendment is entirely subjective, it creates the possibility for abuse. Reports to the Data Bank could be made for reason that are not valid, including retaliation by an insurance carrier for loss of business or desire of some defendants to cause economic injury to a co-defendant competitor. Such practices would not be inconceivable in the highly competitive environment that exists in healthcare today.

In conclusion, the proposed changes to the reporting requirements would cause significant problems for those seeking to comply with them and create numerous opportunities for abuse. They also deprive practitioners of basic protections against inaccurate and unfair reporting by eliminating the right to due process in the determination to report. Since reporting to the Data Bank can jeopardize a practitioner's livelihood, such defects in the proposed changes must be taken extremely seriously.

Any reporting requirement must have an objectively and clearly identifiable trigger mechanism that will allow a payor to know whether it must report a practitioner. The regulation must specify the payor(s) or party(ies) responsible for making the report. Most importantly, the system must be fair to all health care practitioners potentially affected by them and must protect practitioners from potential abuse.

Thank you for the opportunity to make these comments. If you would like more information on these or other topics, please feel free to contact either of us at the address on the first page of this correspondence.

Sincerely,

Grena Porto
President

This page and all contents are Copyright©1997-99 by the American Society for Healthcare Risk Management, Chicago, IL 60606