Adverse actions against physicians can bring dire consequences

According to the latest data available from the Federation of State Medical Boards (FSMB), in 2021, there were 7,223 actions taken by state licensing boards against physicians nationwide. Contrary to common perception, many of these medical board complaints did not stem from clear and unequivocal malpractice, fraud or misconduct issues.

Because state medical boards do not restrict or impede any person or entity from filing a complaint against a physician, anyone, including a disgruntled former employee, contentious business partner, or adversarial spouse filing for divorce, can trigger an investigative process that can ultimately prompt a medical board to discipline a physician. In addition, many state and federal laws mandate that hospitals, insurance carriers, law enforcement agencies and local prosecutors report to a licensing board whenever a physician is arrested, has their hospital medical staff privileges suspended or restricted or becomes the subject of an adverse judgment or settlement as a result of a medical malpractice lawsuit.

There are serious repercussions from a medical board complaint; such a move can result in the loss of hospital and controlled dangerous substances (CDS) prescribing privileges, specialty board certification, membership in medical associations and societies, and status as a credentialed provider for third-party payers, including Medicare. This is precisely why, whenever a physician becomes the subject of scrutiny by a licensing board, a timely and vigorous response is critical. Although medical licensure, in itself, is a privilege, not a constitutional right, a medical professional still maintains the right to due process, or more specifically, the right to a full and fair hearing on the merits of any claim or allegations brought against them by a state licensing board. Should the matter proceed to a hearing, it is essential to have a skilled medical expert who will defend the quality of care employed by the physician.

The NPDB explained

It is important to understand that medical board discipline involves more than a hefty penalty or financial settlement. Any discipline invoked by a state licensing board is inevitably reported to the National Practitioner Data Bank (NPDB), a federal database operated by the U.S. Department of Health and Human Services, that compiles and maintains all adverse action reports against health care providers. A report to the NPDB is like a national news bulletin transmitted to the entire health care community. Physicians cannot escape the ramifications of a NPDB report. Whenever a physician applies for credentials, certification, licensure, registration or accreditation from any health care organization, that entity will likely query the NPDB, which will reveal the adverse report. In addition, health care organizations often perform “continuous” queries on the NPDB, which allows them to regularly monitor a particular practitioner and be notified automatically whenever an adverse action against them is reported to the NPDB.

Hospital actions

According to federal law, hospitals must also report any and all adverse actions against a medical staff member that adversely affect the clinical privileges of that member for a period longer than 30 days. In addition, hospitals must report the acceptance of the surrender of clinical privileges, or any restriction of clinical privileges, while that physician is under investigation by the hospital relating to possible incompetence or improper conduct.

More concerning than this “30-day rule” is an additional requirement that hospitals report to the NPDB whenever a physician agrees to surrender their privileges, or resign from the medical staff, in return for the hospital agreeing not to conduct an investigation. This rule effectively precludes physicians under investigation from making a good faith offer to “just walk away” by resigning their medical staff membership and clinical privileges in exchange for a clean slate, with no reporting to the NPDB. Instead, the physician often has no recourse but to fight the adverse action and gamble on the uncertainty of a “fair” hearing.

The key to preventing adverse actions is to remain on guard for investigations targeting a physician’s clinical, prescribing, billing and documentation patterns. Medical providers should seek legal counsel immediately whenever it becomes evident that some institution is targeting them for an adverse action. Waiting too long can bring dire consequences.

Alex Keoskey, Esq., is a trial attorney and certified health compliance officer at Mandelbaum Barrett P.C. in Roseland, New Jersey.