Advocacy group aims to close malpractice loophole in NPDB

September 7, 2016

A loophole exists that allows a physician to avoid being reported to the NPDB if a malpractice plaintiff agrees to dismiss the practitioner from a lawsuit or claim, leaving a hospital or other corporate entity as the sole defendant.

The National Practitioner Data Base (NPDB) opened in 1990 with the notion of providing hospitals and other healthcare entities with records of malpractice payments and adverse actions against licensed healthcare practitioners. 

 

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The problem is, a loophole exists that allows a physician to avoid being reported to the NPDB if a malpractice plaintiff agrees to dismiss the practitioner from a lawsuit or claim, leaving a hospital or other corporate entity as the sole defendant.

The advocacy group Public Citizen is working to change this.

Michael Carome, MD, director of Public Citizen’s Health Research Group, notes NPDB rules are not consistent with the federal statute that established the NPDB and that this “corporate shield” loophole undermines the accountability of physicians and the safety of patients.

“We think it’s a vitally important resource which allows state medical boards, hospitals and other healthcare organizations to learn about past history that may be problematic when they are going to license a physician,” he says. “The corporate shield loophole makes the NPDB’s information less complete, less reliable and less useful. When that information is incomplete, it undermines the purpose and utility of the data bank.”

 

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In 2014, the group filed a citizen petition with the U.S. Department of Health & Human Services (HHS) advocating that the NPDB amend the current medical malpractice reporting regulations. Last month, it filed a suit in U.S. District Court, asking a federal judge to order HHS and the Health Resources and Services Administration to act.

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“The loophole allows physicians to evade having reports submitted to them for malpractice payments when excluded from a settlement and the only named party is a corporation, such as a hospital,” Carome says. “The reason for the suit is they have not acted on our petition to solve this.”

It’s not that HHS didn’t know the problem existed. In fact, more than 15 years ago, HHS issued a proposed rule to close the loophole, but it was withdrawn without explanation.

 

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Robert Oshel, retired associate director for research and disputes at the NPDB, and a volunteer for Public Citizen, feels this is an important issue because since the beginning, the rules of NPDB have not been parallel to the requirements necessary for a physician in filling out in an application with a hospital or other healthcare institution. Additionally, times have changed.

“When the law was passed, very few physicians were employed by hospitals or healthcare institutions at that point,” he says. “Now a majority of physicians are, and it’s easier to sue a hospital than the physician, and it makes no difference to the insurer.”

The NPDB once conducted a survey of users and discovered that 9% of hospitals querying the database found something about a physician they didn’t know. That shows how valuable it is, Oshel notes, because it is a protection against those who are dishonest.

“More and more people responsible for malpractice are not being reported and that lessens the value of the database,” he says. “If the loophole is removed, it will mean nothing to the vast majority of physicians who fill [applications or licenses] out honestly. It will affect only those trying to hide something.”

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Rebecca Palm, a former Athenahealth executive and founder and chief strategy officer of Copatien, a patient advocacy organization, says healthcare should always be focused on improving patient outcomes and a lack of consistently reported, centralized information about medical errors or other issues affecting outcomes cripples that quest.

She believes that reporting requirements should be expanded and strengthened along with outlining meaningful penalties for failure to report.

 

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“Additionally, I believe it would be a huge improvement to allow patients to access information about potentially dangerous medical professionals rather than relying solely on others in the system to uncover potential issues,” she says. “As we ask patients to take increasing responsibility for the cost of their care, we should provide corresponding access to information that may impact their decisions.”