AAOS Bulletin - October, 2006

What you should know about the NPDB

By Murray J. Goodman, MD, FACS

The National Practitioner Data Bank (NPDB) was established by Congress as part of the Health Care Quality Improvement Act of 1986. The NPDB serves as an electronic repository for information on medical malpractice settlements and judgments, adverse peer review and disciplinary actions against licensees by hospitals and other health care entities, licensing boards and certain professional organizations.

The intent of the NPDB was to improve the quality of health care by encouraging state licensing boards, hospitals and other health care entities, and professional societies to identify and discipline those who engage in unprofessional behavior and to protect the public by restricting “the ability of unethical or incompetent practitioners to move from state to state without disclosure or discovery of the physician’s previously damaging or incompetent performance.”1

Mandated reporting
Entities with a duty to report must do so at least monthly. Reports are made in the following areas:

  1. Malpractice payments—The law requires that all medical liability payments on behalf of a physician be reported to the NPDB.
  2. State license to practice—Adverse licensure actions by a state licensing board related to competence or conduct, including revocation, suspension, censure, reprimand, probation, surrender or reinstatement of license to practice are reportable.
  3. Restriction of hospital privileges—Adverse actions taken by a hospital or health care entity for conduct or competence issues, which affect a physician’s clinical privileges for more than 30 days, must be reported. This includes reducing, restricting, suspending, revoking or denying privileges as well as an entity’s decision—based on competence or conduct—not to renew privileges. Additionally, any voluntary surrender or restriction of privileges by a physician while under investigation or in lieu of an investigation must be reported to the NPDB.
  4. Peer review—Professional societies and other health care entities with formal peer review processes are required to report actions taken for reasons related to competence or professional misconduct.
  5. Medicare and Medicaid exclusion—The Office of the Inspector General is required to report sanctions taken against a practitioner in these programs for fraud and abuse.
  6. Drug Enforcement Agency (DEA)—The federal DEA reports adverse actions taken against its licensees.

Querying the NPDB
Hospitals are the only health care entities with a mandatory requirement for querying the NPDB. A hospital must request information when a health care practitioner applies for a staff position or clinical privileges and once every two years thereafter.

State licensing boards, professional societies (when screening applicants for membership or performing professional review activities), other health care entities and plaintiff’s attorneys (when a hospital is included in the suit and evidence is submitted that a hospital failed to make a required query to the NPDB concerning the defendant physician) are permitted to query the NPDB. Physicians may also query the NPDB about their own files.

Subject matter
Although several events must be reported, most of the NPDB’s data concern medical liability claims payment. A reportable event occurs any time a patient or the patient’s representative makes a written demand or files a lawsuit and money is paid on behalf of the physician. Information obtained from the NPDB by those who are entitled to query the NPDB is considered confidential and cannot be used for any purpose other than that for which it was provided.

Avoiding reporting
Certain events do not have to be reported. Under its 3R program, Colorado-based medical liability insurer COPIC identifies adverse events and, after appropriate investigation, offers reimbursement to the patient for out-of-pocket expenses and time lost from work because of the occurrence. Because the patient never makes a written request for compensation, this payment is not reportable. Also, physicians who use their own personal funds to pay a claim or judgment are not required to report that event to the NPDB.

Another nonreportable event is a settlement or judgment against a professional corporation rather than an individual physician. Some settlement agreements drop the individual physician from the lawsuit and make a settlement with the hospital or the physician’s professional corporation, bypassing the reporting requirement.

The military and the Department of Veterans Affairs report individual physicians only if the Surgeon General of that department concludes that the payment should be reported.

Criticism of the NPDB

Professional organizations and public advocates have raised serious questions about the reliability and accuracy of the NPDB’s medical liability information. Public advocacy groups are campaigning to have NPDB reports accessible to the general public, particularly since a number of states already make similar information available online.

Because the triggering event for a report is the payment of a claim, whether by jury verdict or settlement, information about culpability of the defendant is not available in the NPDB. Nuisance suits are often settled to avoid the cost of litigation, and juries may compensate patients for adverse events not due to a medical error. If there are multiple defendants in a lawsuit, reading the NPDB report is insufficient to determine whether a particular defendant’s actions were a significant cause of the adverse outcome.

NPDB reports can and do affect licensure, medical staff privileges and contractual relationships with health care insurers and managed care organizations. But because the data do not reflect true medical liability, physicians are increasingly reluctant to settle nuisance lawsuits. Medical liability carriers are pressured to litigate these baseless suits, resulting in higher premiums. Some medical liability policies do not require the physician-defendant’s permission for the company to offer a settlement. Although no-fault medical liability systems and alternative dispute resolution (ADR) have been proposed as ways to reduce the cost of defending and litigating malpractice claims, the higher incidence (albeit with lower expense) of physician payments would result in more reports to the NPDB. For this reason alone, many physicians oppose these alternatives.

Self-query
Whenever the NPDB receives an adverse action report or medical liability payment report, it sends the individual physician a notification document. A prudent physician will query the NPDB periodically, to check the accuracy of the recorded information. To initiate a self-query, follow the link on the NPDB home page. You must also submit a written notarized request before the report will be released. There is a nominal charge of $16, payable online by credit card.

Dispute process
The physician named in an NPDB report may dispute the factual accuracy of the statement in writing. The entity that filed the report will receive a copy of the statement and may decide to alter, void or decline to change the original report. The physician may also dispute whether the report was submitted in accordance with the NPDB reporting requirements, including the eligibility of the entity to report the information to the Data Bank. A physician may not dispute a report to protest an insurer’s decision to settle a claim or to appeal the underlying reasons for an adverse action, judgment or conviction.

The physician named in a report may, however, add a statement to it at any time. The statement is limited to 2,000 characters, including spaces and punctuation. Notification of the statement is sent to all those who previously received the report and included with the report in all future releases. It may be advisable to obtain legal counsel in drafting such a statement. The NPDB Web site contains links for filing disputes and statements.

Proposed changes
On March 21, 2006, the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) proposed a rule that would incorporate certain provisions under Section 1921 of the Social Security Act (SSA) regarding reporting of information to the NPDB. If adopted, this rule would broaden requirements to mandate reporting by all peer-review organizations as well as by private accreditation organizations. It would also allow a broader group of agencies and organizations to query the NPDB.

Under the proposed rule, any adverse licensure action (not limited to competence or conduct) would be reportable, as would any negative action or finding by a state licensing or certification authority, peer-review organization or private accreditation organization.

Summary

The National Practitioner Data Bank was initially established to create a centralized system for tracking physicians with disciplinary histories and preventing them from moving to another state and practicing at the public’s risk. The database does that to a degree, but some critics contend that all physicians listed are painted with the same brush. Other public advocates feel that the NPDB has not gone far enough and clamor for fuller disclosure. Physicians who think that they have been unjustly portrayed do have the right to comment and should avail themselves of that opportunity.

Murray J. Goodman, MD, FACS, is a member of the AAOS Professional Liability Committee.

References:

  1. The Health Care Quality Improvement Act of 1986, as amended 42 USC Sec. 11101, accessed online at www.npdb-hipdb.com/legislation/title4.html, Sept. 19, 2006

Resources:

  1. NPDB Guidebook
  2. National Practitioner Data Bank – 2004 Annual Report
  3. National Practitioner Data Bank Homepage

CME Questions:

1. Which of the following entities are required to query the NPDB?

    1. A hospital, when a new physician applies for staff privileges
    2. A state licensing board, when a physician relocates to a new state
    3. An HMO, before allowing a physician to participate in its panel
    4. All of the above

2. The majority of information contained in the NPDB relates to:

    1. State licensure disciplinary action
    2. Medicare/Medicaid fraud action
    3. Medical liability payments
    4. Drug Enforcement Agency actions

3. When can a plaintiff’s attorney query the NPDB?

    1. Only after the discovery process is complete and just before trial
    2. Only if the attorney is aware that the defendant has had multiple prior suits
    3. Only if the attorney can show that a hospital failed to make a proper NPDB query
    4. Never

(Answers: 1-a; 2-c; 3-c)


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