Feature Article: March/April 2022 – The Corporate Shield: A Light that Pierces Through the National Practitioner Data Bank’s Dark Shadow

The Corporate Shield: A Light that Pierces Through the National Practitioner Data Bank’s Dark Shadow

Zachariah B. Parry, Esq.

I am not a doctor, but I imagine your education and path to your chosen profession paralleled mine in some ways. I went to law school, bright-eyed and optimistic, with plans to change the world. I was learning a skill that would empower me to help people who couldn’t help themselves. These dreams of mine, if perhaps too idealistic, were propped up and encouraged by the professors whose rhetoric underscored the importance of my profession and the great power and responsibility that would come with it.

But when I entered the field, first as a student intern for a federal judge, then an attorney-to-be waiting for the bar results, and finally as a full-fledged, fully licensed and authorized legal practitioner and sworn officer of the court, I realized that the reality was much messier: justice wasn’t affordable, timely, or in any way guaranteed. Good intentions, hard work, passion, and a healthy dose of creativity were not always enough to achieve the desired result. And clients, even those for whom the highest quality work was done, were not always grateful. And in fact, sometimes they turn adversarial, even litigious, quickly.

It’s a bleak picture, but does it sound at least a little familiar to your own path?

When I ask medical professionals what led them to their chosen field, almost all of them will tell me their choice was born from a desire to help people. To do good. To earn a good living and robust lifestyle while healing, what better trade could there be?

Unfortunately, this dream is often never realized even once all the boxes are checked: you’ve got your license, you have a job, and you are treating patients. It isn’t that you’re doing anything wrong. It is just that the idealistic image that kept you going as you struggled through the MCAT, gruelled your way through organic chemistry, memorized body parts you knew you would never treat, survived the ludicrous residency match system, spent unconscionably long nights working through your residency, and gritted your way through the boards to finally become a sworn licensed practitioner of the healing arts—that same idealistic picture that you felt you had finally painted—wasn’t entirely accurate. For some of you, it wasn’t accurate at all.

The practice of medicine it turns out, like the practice of law, is also a messy endeavor. You can’t just assess a patient, diagnose them, and treat them. There are so many other considerations, most of which are created by those lawyers working in a field that was not quite as they pictured it, either.

With every patient, you don’t just have to consider what might render the best medical outcome. You also have to chart your work in a way that, if subjected to a post-hoc analysis, will not only accurately reflect the patient encounters, but will act to protect you against any claims by the patient, who all too often can turn against you.

You have to measure the humanity of expressing sorrow, maybe even apologizing, when something doesn’t turn out as expected, versus the possibility that your words could later be used against you.1

Even the process of diagnosing an issue and choosing the best course of treatment is complicated. There is rarely only one clear treatment path, and the choice of which path to take is often riddled with potential landmines, and due to a fear of achieving a less-than-desirable outcome, infused with a healthy sense of self-preservation, many doctors overtreat. This practice of defensive medicine not only drives up the cost of healthcare,2 it also often leads to medical error in and of itself,3 creating an ironic self-fulfilling prophecy where medical professionals do harm in an effort to uphold their Hippocratic Oath.

These unwanted complexities lead to what I am calling the Physician’s Lament: “Why can’t I just treat my patients?”

It Gets Worse

The complexities of a medical professional’s practice were heightened, the practitioner’s situation exacerbated, when Congress in 1986 created the National Practitioner Data Bank (“NPDB”).

Responding to what was perceived as a public health crisis, the NPDB was created to prevent “bad actor” doctors from harming patients in one state, crossing the border to a new state oblivious to the doctor’s past, and continuing their nefarious practices on unsuspecting patients.4

The NPDB became a permanent registry of doctors with a black mark on their past. Doctors can’t apply for licensure, privileges, credentialing, even insurance, without the board, hospital, or insurer sending a ping to the NPDB to see whether their name has ever made it to this blacklist.5

To have one’s name on the list, especially for repeat offenders, has steep consequences. Malpractice insurers can justify increased premiums or even refuse coverage. Health insurers could refuse to allow participation in health plans. Credentialing and privileges can be denied. In extreme cases, even medical licenses can be suspended or permanently revoked.6

Doctors can get reported, but they also have a duty to self-report, with stiff penalties—up to $39,811 per incident—for failure to do so.7 What is or what is not reportable is also a tangled labyrinth of often unanswered questions.8

The NPDB has become something like a sex-offender registry for doctors, though interestingly enough, criminal sex offenders have far more rights related to their registration on a list than medical professionals do.

The criminally accused have due process and other constitutional rights: they have a right to see the evidence against them, notice of what they are being accused of, a right to confront and cross-examine their accusers, a right to present exculpatory evidence, a right to an attorney, a right to an appeal, and can in some cases have their name removed and their record sealed.

Medical professionals do not have the same rights as criminal defendants. I have spoken to doctors who found out their name was on the list after it had already been added: they were not aware of what was happening until after it had already happened. Medical professionals are not always noticed. They can’t necessarily present evidence in their defense, or challenge the evidence brought against them. Evidence is not necessarily even part of the process. Sometimes it is automatic. There are no built-in rights of appeal, and except in cases of provable mistake (i.e., the doctor’s name should never have been on there), once your name is on the list, like an astronaut’s footprint on the moon, it will be there forever.

As well intentioned as this national registry was, it cast far too wide of a net; a medical professional doesn’t even have to do anything wrong to be considered a “bad actor doctor” whose name must be reported, left on the NPDB forever, a black mark on an otherwise sterling reputation.

Adverse findings from board investigations or negative judicial adjudications against a doctor are reported, and those relate directly to a doctor’s culpability, so that seems fair (assuming the underlying investigation was fair and complete). But where the NPDB, in this lawyers opinion, goes far astray of its purpose, is in requiring a doctor’s name to be reported when an insurer, on the doctor’s behalf, makes a payment to a malpractice claimant.

There are any number of reasons a doctor could desire to settle a lawsuit even if the doctor did everything right.

Even if the medical malpractice insurer is footing the bill, lawsuits are time consuming and highly stressful. There is value in making a business decision to eliminate these “nuisance” lawsuits to eliminate the stressor, even if the lawsuit is unjust and the doctor is free of blame. And because there is no lower threshold,9 even a $1 nuisance settlement is enough for the doctor’s name to go permanently on the list.

In other cases, because of respondeat superior (“let the master answer”), a legal doctrine that holds the employer vicariously liable for actions of their employees, a settlement may be prudent given the real and provable error of a member of the doctor’s staff, but because the doctor is also a defendant, the settlement will necessarily include a release for the doctor as well, which is all it takes for an NPDB report.

The NPDB fails to recognize that in civil law, there is such a thing as an innocent defendant—someone the law recognizes is not to blame, but because of pure economics, is nonetheless legally liable.

The NPDB policies therefore create a legal contradiction: physicians legally recognized as innocent defendants are permanently and irrevocably labeled as bad actor doctors.

It Gets Better, Too

Most doctors have heard of the NPDB, though many are ignorant as to its purpose or their relationship to it. Of course, this lack of knowledge is no exception to the well-known legal maxim: ignorantia juris non excusat, ignorance is no excuse in the law.

As luck should have it—and I deliberately use the word luck because Congress’s intent surely had nothing to do with it—there are loopholes in the NPDB reporting requirements that are wide and well known, and it appears Congress intends to leave them open.

One such loophole, now known as the Corporate Shield, allows payments made on behalf of a hospital, group practice, or clinical practice group10 to go unreported as long as the medical professional themselves were dismissed from the lawsuit without separate payment (or were never added to begin with) and are participating in an NPDB-conforming peer review process.

There are other exceptions, as well. Because only a “written claim or complaint”11 triggers the reporting requirement, settlements made in response to carefully drafted non-claims/non-complaints allow for the possibility of settlement without reporting.

As it was Congress and lawyers that created this labyrinthine mess, unfortunately, it often takes a lawyer’s careful look at the law to figure out how to navigate it to keep the medical professional unscathed (which is not always possible). But these paths are not uncharted. They are well traveled for those who know the path.

Despite the legal briars and thorns that sometimes seem to have a chokehold on the most optimistic of young lawyers’ and medical professionals’ dreams, there is still room to better the world, to practice healing, and to sleep well at night knowing that not only have you done no harm, but you have done a great deal of good.

 

1. Robbennolt JK. Apologies and medical error. Clin Orthop Relat Res. 2009 Feb;467(2):376-82. doi: 10.1007/s11999-008-0580-1. Epub 2008 Oct 30. PMID: 18972177; PMCID: PMC2628492.

2. Hermer LD, Brody H. Defensive medicine, cost containment, and reform. J Gen Intern Med. 2010;25(5):470-473. doi:10.1007/s11606-010-1259-3.

3. Berlin L. Medical errors, malpractice, and defensive medicine: an ill-fated triad. Diagnosis (Berl). 2017 Sep 26;4(3):133-139. doi: 10.1515/dx-2017-0007. PMID: 29536927.

4. “Background,” National Practitioner’s Data Bank, available at https://www.npdb.hrsa.gov/guidebook/ABackground.jsp, last accessed March 4, 2022.

5. It is not a public list. So at least one saving grace is the fact that the public cannot access it directly.

6. Deese, CS. “The National Practitioner’s Data Bank: Six Need-to-Knows,” J&CBLOG: Worthwhile Legal News and Commentary, 3 Nov. 2017, available at https://www.jackscamp.com/national-practitioner-data-bank-six-need-knows, last accessed March 4, 2022.

7. “What You Must Report to the NPDB,” National Practitioner Data Bank, available at https://www.npdb.hrsa.gov/hcorg/whatYouMustReportToTheDataBank.jsp, last accessed March 4, 2022.

8. See, e.g., “Is It Reportable? Archive,” National Practitioner Data Bank, available at https://www.npdb.hrsa.gov/helpCenter/reportable.jsp, last accessed March 4, 2022.

9. “Q&A: Reporting Medical Malpractice Payments,” National Practitioner Data Bank, available at https://www.npdb.hrsa.gov/guidebook/EMMPRQA15.jsp, last accessed March 4, 2022.

10. “Reporting Medical Malpractice Payments,” National Practitioner Data Bank, available at https://www.npdb.hrsa.gov/guidebook/EMMPR.jsp#PaymentsIndividuals, last accessed March 4, 2022.

11. Id.

 

Zachariah B. Parry, Esq. is an attorney with The Fortune Law Firm.

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