Gone but Not Forgotten

Malpractice claims can be kept out of court, but not the National Practitioner Data Bank.

RADLAW: Malpractice Claims Gone But Not Forgotten

A Note from ACR Legal Counsel

Medical malpractice claims are settled for many reasons, whether or not the claims are actually valid. Among those reasons is the desire to avoid a liability report on the physician’s record.

This month a Modern Healthcare article explains the federal government’s recent requirement that any written claim or written demand for payment must be reported to the National Practitioners Data Bank, even in states that have enacted laws specifically designed to avoid such reports in cases that do not go to trial. It’s important that ACR members understand that under the doctrine of federal preemption, federal laws preempt conflicting state laws unless Congress specifically states otherwise in the federal legislation. Access the data bank at www.npdb.hrsa.gov.

HHS has ruled that all medical malpractice claims that include a written demand for payment must be reported to a national database even if the cases are resolved under state programs designed to settle the matters outside of court.

The decision, issued with little notice in May, addressed Massachusetts and Oregon laws implementing the use of disclosure, apology and offer methodology, which is designed to avoid lengthy court battles by promoting full disclosure of medical errors and allowing providers to apologize for harm they may have caused without having that apology used against them in court.

On May 22, then–HHS Secretary Kathleen Sebelius signed a memorandum concluding that Oregon and Massachusetts physicians must report the out-of-court settlements to the Health Resources & Services Administration’s National Practitioner Data Bank (NPDB), which tracks malpractice payments and physician sanctions.

The memo took aim at a provision in Oregon’s law, which it described as having been “explicitly designed to avoid medical malpractice reporting to the NPDB for any claims that are part of the new process that do not proceed to litigation.” It also stated that the “NPDB has no history of allowing states to define requirements for reporting.”

Any case that generates a written claim or written “demand for payment” must be reported in the NPDB, HHS said. The Oregon law, however, states that a payment made to a patient under the measure’s mediation mechanism “is not a payment resulting from a written claim or demand for payment.”

Similarly, a summary of the bill from the staff of the Oregon state Senate Judiciary Committee said that it “ensures any payments are not considered written claim or demand for payment.”

The law stemmed from the work of the Patient Safety and Defensive Medicine Task Force, which included representatives from the Oregon Medical Association (OMA) and the Oregon Trial Lawyer Association and convened in May 2012. The resulting legislation passed the Oregon state Senate in March 2013 by a 26-3 vote. The state House of Representatives voted 55-1 to approve it. It was signed into law soon after by Oregon Gov. John Kitzhaber, a former emergency medicine physician.

Ryan James, spokesman for the OMA, said his organization was reviewing the HHS analysis. He added that the OMA believes the state’s mediation process, called Early Discussion and Resolution, “is good for patients and physicians and (the OMA) will work to continue the goals of the program within the NPDB requirements as they are determined to be.”

Bethany Walmsley, executive director of the Oregon Patient Safety Commission, which administers the mediation program, said, “There was no intent to provide some kind of loophole.”

According to the guidance the state received in July from HHS, she said, the only cases that won’t get reported to the NPDB are ones in which no payment or compensation is exchanged.

“The NPDB guidelines are followed, and continue to be followed in Oregon,” Walmsley said. “Oregon’s only intent is to improve patient safety and streamline the process so that patients and families can receive timely information, care, and — if appropriate — compensation than what the traditional medical malpractice system has offered patients.”

The program was officially launched on July 1 and has not processed any cases yet, Walmsley said.

HHS noted in the memo that the laws and how they relate to NPDB reporting requirements were reviewed after receiving requests to do so from the Public Citizen consumer advocacy group, Kitzhaber, and the Massachusetts Alliance for Communication and Resolution Following Medical Injury, or MACRMI, which includes payers, providers, and patient-safety advocates.

Last September, Public Citizen’s Health Research Group sent a letter to Sebelius asserting that the 2013 Oregon law “undermines the usefulness” of the database by allowing doctors who entered mediated settlements to move to another state where the incident would not be on the books.

Dr. Michael Carome, director of the Health Research Group, applauded HHS’ decision, which he said Public Citizen had only recently learned about. “It was exactly what we were seeking,” Carome said. “Other states were likely to follow Oregon’s lead and it would ultimately undermine reporting to the National Practitioner Data Bank and, ultimately, undermine patient safety.”

Carome said he didn’t think there was any intent to keep the May decision from being more widely publicized and added that it was just a matter of bad timing, as the decision was issued between the time Sebelius announced her resignation (April 11) and her last day in office (June 9).

Public Citizen, he added, is not against disclosure, apology and offer laws, and the intent of Oregon’s process can still be met if the settlements it creates are subject to NPDB reporting.

The Massachusetts law went in effect Nov. 5, 2012, and was rolled out at six hospitals. It has since been expanded
to include a seventh hospital and a multispecialty physician group with multiple locations. At issue is the definition of malpractice “claim,” which HHS said in the memo has been broadly defined to include written demands for payment or payments resulting from pre-litigation settlements. Massachusetts had proposed only reporting those cases where it was determined that a practitioner failed to meet the standard of care.

In the memo, HHS said cases had to be reported regardless of whether care was determined to be up to standards and that the state’s pre-litigation notice to initiate the meditation process qualified as a written claim and therefore cases that generate such a notice must be reported.

“It basically reinforces the status quo,” said Dr. Alan Woodward, a MCRMI board member and past president of the Massachusetts Medical Society. “They said, ‘This is what we’ve done since the (NPDB) law was implemented in 1986.’”

Woodward said the goal in Massachusetts is to implement statewide a methodology that has been successful at medical centers affiliated with the University of Michigan, University of Illinois, University of Washington (state) and Stanford University.

“It’s not about minimizing compensation to anyone who is injured; it’s about making sure you don’t repeat similar events,” he explained. “The number of new cases drops dramatically by learning from your mistakes.”

In contrast, he said, if cases go to court, they can drag on for five or six years with gag orders instituted so no one can discuss how a patient suffered harm and how to prevent it from happening again.

Woodward credited attorney Rick Boothman, chief risk officer at the University of Michigan Health System in Ann Arbor, for promoting the concept that the cost savings from these programs don’t come from smaller payouts to patients who are injured, but from preventing injuries in the first place.


By Andis Robeznieks (@MHARobeznieks), a reporter at Modern Healthcare. Reprinted with permission, Modern Healthcare [Aug. 13, 2014]. © Crain Communications Inc.

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