Updated: Aug 5, 2019

Please welcome Taylor Fouser, an Attorney at Gjording Fouser as a Guest Blogger!


Last year (2018), according to the U.S. Department of Health and Human Services, the National Practitioner Data Bank (“NPDB”) received over 85,000 reports and provided approximately 8.5 million query responses. The repercussions and damage to a physician’s reputation are real concerns that every defense attorney and insurer must be aware of when negotiating a medical malpractice settlement on behalf of an individual practitioner. The NPBD typically arises as an issue when liability is disputed, but where a potential settlement involves cost savings related to continued litigation. The idea of a report submitted regarding settlement information that is available to a practitioner’s current and future employers, as well as state licensing boards, is enough to make any physician resistant to settlement, and defense counsel must be prepared to discuss with their client the ins and outs of reporting medical malpractice payments.


What is the NPDB?

The NPBD was created by the Health Care Quality Improvement Act of 1986, in which Congress sought to address “increased occurrence of medical malpractice and the need to improve the quality of medical care.” 42 U.S.C. § 11101. The Data Bank itself is a web-based repository of reports used as a workforce tool to enhance professional review efforts, and prevent health care fraud and abuse, with the ultimate goal of protecting the public.


Registered, authorized entities must submit certain information concerning medical malpractice payments and adverse actions regarding health care practitioners, providers, and suppliers. While this post addresses physicians, it is important to keep in mind that the NPDB Guidebook also includes nurses, midwives, and physician assistants as examples of “health care practitioners.” As such, merely because a practitioner is not required to go through the prelitigation process does not mean he or she is excluded from reporting requirements.


Consistent with the privacy and confidentiality surrounding peer review, only registered entities, and certain individuals, have access to the reports, including the following:


  • A hospital is required to query the NPDB when a health care professional applies for a position on its staff or for clinical privileges, and every two years for professionals on staff or holding privileges.

  • Practitioner self-queries.

  • State licensing boards.

  • A plaintiff’s attorney in a medical malpractice action against a hospital, where the requested practitioner is named in the action and where the plaintiff can provide independent proof that the hospital did not make the legally required query.

Entities then query the Data Bank for licensing, hiring, and credentialing decisions.


Concerns for Defense Counsel

First and foremost, it is important to know whether the physician’s employment agreement or insurance policy contains a “consent-to-settle” clause. While most policies allow the insurer to dictate litigation and settle on its terms, policies or agreements that have a “consent-to-settle” provision gives the physician the right to approve or reject a settlement. Courts have held that such clauses are enforceable, and a breach could entitle the physician to damages against the insurer. In consent-to-settle cases, it is of the utmost importance to fully explain the circumstances and terms of any proposed settlement to your practitioner-client.


In the unreported case of Steinberg v. Grasso, an obstetrician filed a legal malpractice claim against his attorney, who defended him in a medical malpractice action. In preparation for trial, the defense attorney had his client execute a consent-to-settle form, which acknowledged that any settlement would be reported to the NPDB. However, the defense attorney only discussed settlement with respect to a “high-low” agreement[1], and that if the obstetrician prevailed at trial, there would be no reporting obligation. The day after the physician executed the consent-to-settle, the case settled for a sum certain, and payment was reported to the NPDB. The obstetrician sued his lawyer for fraud and legal malpractice. The case was originally dismissed on summary judgment, but the Appellate Division of the Superior Court of New Jersey reversed and remanded the case for trial. The court found that even though there was no showing of economic loss, the reporting of the settlement to the NPDB in a case in which he should have been provided a defense damaged the obstetrician’s reputation. The takeaways for defense attorneys are (1) courts are willing to recognize damage to reputation as a valid form of damages, (2) an attorney needs to discuss all settlement scenarios with a physician before settling, and (3) provide reasonable defense expectations in questionable cases.


Addressing Databank Concerns

The easiest and most effective way to address any Data Bank reporting concerns is to talk about the reporting process with your physician client early and often. At your initial meeting, you should discuss the possibility of reporting and gauge your client’s thoughts on the matter. Best practice would also include documenting the conversation for the case file. There are also steps an attorney can make to lessen the blow of reporting.


1. Strengthen liability denial in reporting and settlement agreement.

While the defense attorney does not have any input for what is included in the report, it is important to keep in mind that the reporting form allows space to include substantial detail regarding the settlement. As opposed to a simple report that a sum certain was paid on a disputed claim, a complete summary should include, for example, that the payment was made even though there were viable defenses, and/or that the payment represents a cost savings and not a conclusion regarding the practitioner’s breach of the standard of care. It is also important to let your client know that a practitioner may submit a subject statement explaining his or her perspective, which will become part of the report.


A defense attorney can also help place the client in a better position to explain the circumstances of any report by including strong liability language in the release. While a denial of liability does not alleviate the reporting requirements, it gives the practitioner something in his or file to use in the future should the report ever become an issue. In sum, you are minimizing the impact that reporting will have on the practitioner’s reputation.


2. Corporate Hospital Settlement Only

Hospitals, clinics, and group practices are not within the scope of reporting requirements, so malpractice payments made solely for the benefit of a hospital are currently not reportable to the NPDB. In cases involving a hospital and individual practitioner, it may be tempting to frame a settlement to avoid the reporting requirements for a physician. However, the settlement must be solely for the benefit of the hospital to avoid reporting. With that said, any reporting should include a proportional settlement amount for the claims settled for the benefit of the practitioner. If a dismissal of a practitioner was the result of a condition in the settlement then the entity must submit a report.


3. Expense Reimbursement – maybe

The 2018 NPDB Guidebook identifies a category of payments as “loss adjustment expenses,” such as attorney’s fees, billable hours, expert witness fees, and deposition costs. Loss adjustment expenses should only be reported if they are included in a medical malpractice payment, but if a payment is made only for loss adjustment expenses, then the payment is not required to be reported at all. NPDB Guidebook, E-30. It is somewhat unclear if the Guidebook is referring to the attorney fees paid to outside counsel, or if a payment is made that equals the loss adjustment expenses then it need not be reported. As such, an argument could be made that, while there is no minimum payment threshold to meet the reporting criteria, loss adjustment expenses paid to release or dismiss a health care practitioner do not need to be reported.


4. Payment Made out of Personal Funds

It is never recommended to advise your client to use his or her own personal funds when there is available money from an insurer. However, if a practitioner wants to avoid reporting and the case should likely settle, you should advise your client that any payment made by an individual out of personal funds is not reportable.


Conclusion

The National Practitioner Data Bank reporting does not have to be a problem for defense attorneys. Don’t save this conversation for after a case settles. Early communication with your client can help minimize any impact reporting has on a practitioner’s reputation, and an understanding of what must be reported (and how it should be reported) will be vital in advising a client as to the settlement process.


For a more in-depth and helpful discussion about reporting requirements, please review the NPDB Guidebook found here: https://www.npdb.hrsa.gov/resources/NPDBGuidebook.pdf

[1] Notably, the 2018 NPDB Guidebook requires a registered entity to submit a report if a payment is based on a high-low agreement that was in place prior to a verdict or arbitration decision.

  • CMottHesse

Physicians know the scene all too well: After examination of a patient, a provider prescribes certain medications, refills others, advises the patient to stop smoking within the next 2 weeks in order to be nicotine-free for a month prior to a scheduled procedure, and orders the patient go in and have certain lab-work drawn during the next week; the patient's next follow-up visit is a pre-procedure visit in 6 weeks. At the follow-up visit, the patient did not pick-up the newly prescribed medications, has not stopped smoking, and did not present for lab-work. Nevertheless, the provider proceeds as previously anticipated. Unfortunately, complications arise during the planned procedure and the patient suffers a significant, adverse event, for which she later brings a cause of action against the provider. To what degree, if any, does the patient's non-compliance affect potential liability of the provider for an adverse outcome?


Why do patients fail to follow provider recommendations?

Patients with chronic conditions and complex drug regimens are at an especially high risk of not taking the medications they need to successfully treat their conditions. And, as former U.S. Surgeon General C. Everett Koop once reminded prescribers, patients and pharmacists, "Drugs don't work in patients who don't take them." Failure to follow a medication regimen is widely recognized as a top reason for treatment failures, serious adverse reactions and even deaths. In addition to poor patient outcomes, medication non-adherence can lead to hospital re-admissions and expensive treatments that drive higher downstream healthcare costs.


Some of the most common reasons patients fail to follow recommended treatment plans include:

  • Lack of understanding of the treatment, due to a language barrier or the use of medical terminology

  • Denial of the illness, especially if the illness doesn’t interfere with their daily life (e.g., high cholesterol or high blood pressure)

  • Inability to afford treatment, due to high co-pays or a lack of medical insurance

  • Difficulty following directions (e.g., “take medication every three hours”)

  • Fear of the anticipated side effects from treatment (e.g., pain from knee surgery) preventing the patient from agreeing to the treatment

  • Misunderstanding the importance of a treatment or the likelihood of its success

Recommendations for Treatment Providers

Patients who fail to follow instructions or recommended treatment plans (whether by choice or accident/oversight) pose a risk to themselves and to their treatment providers. When physicians deal with patients who will not follow their advice for further tests and follow-up visits, apprehension over liability is probably second only to concern over the patient's health. While there is only so much a physician can do to safeguard the health of these patients, protecting against a lawsuit is a matter of diligence and documentation.


The following strategies may be helpful in not only promoting patient compliance, but also minimizing potential risk from noncompliance:

  • Document everything! When treating a patient who doesn't follow treatment instructions, physicians should document their recommended treatment plans. If patients fail to show up for an appointment or to maintain regular visits, keep detailed notes, including reminders sent and/or phone calls made. Don't lose patience with documenting your efforts to encourage the patient to get appropriate tests.

  • Educate and encourage. Educate patients and family members about the patient’s medical condition so they can effectively participate in the patient’s treatment. New therapies begin with great hope for patients, but when a provider or pharmacy doesn’t fully prepare a patient for all potential outcomes, he or she may stop taking the drug. If a patient starts feeling better, he or she might think the drug is no longer needed, while if he or she feels worse, the patient could discontinue therapy to avoid side effects. Moreover, if the patient experiences no change, he or she may conclude that the drug isn’t working. The more time practitioners spend with a patient to explain his or her condition, how the drug works and why it is important to take the medication consistently (to a certain extent), the greater the likelihood that the patient will remain adherent to therapy. Encourage patients to personally and actively participate in developing their treatment plan to help them become further invested in the goals of the plan, understand the reasons behind the plan, both of which may increase the likelihood that they will follow it.

  • Listen and Advise.  Relaying clear instructions and asking for real-time patient feedback to evaluate the patient’s interpretation and understanding are paramount. For instance, rather than telling a patient “to lose some weight,” consider providing a specific goal, such as losing 10 pounds by the next visit.

  • Offer Written Instructions. Offer written instructions for patients to refer to later. Patients often don’t remember the verbal instructions they are given.

  • Empower. Establish guidelines for returning phone calls about prescription refills and lab results, and including patients in this process. For example, invite patients to take initiative and be an active participant in their care and treatment. Advising them it is not only alright to, but encouraged to, call the office for lab results if they have not heard back from your office within a specified time frame is often helpful.

  • Make it official. Obtain informed refusal from patients who admit they either can’t or won’t follow all or part of a proposed treatment plan. It is important to make sure that the patient’s medical record reflects these discussions, including the specific risks of choosing to forego a proposed treatment.

  • Document everything in the patient's chart. Again, the best offense is to document all instructions and discussions held with the patient about a proposed treatment, including the patient’s response, in their permanent medical record.

While patient non-compliance can pose challenges, providers can proactively help minimize risk of legal exposure while improving a patient’s health outcomes. The temptation to immediately "fire" noncompliant patients may, at times, be overwhelming. Firing or otherwise avoiding noncompliant patients, however, has been characterized as defying the norms of beneficence and non-maleficence, primarily because dismissing noncompliant patients results in discontinuity in care, which in turn leads to poorer health among noncompliant patients and higher medical spending. The rejection of noncompliant patients also lowers these patients’ trust in physicians and can leave patients feeling stigmatized and ashamed.


Though the first goal of any doctor's approach to a non-compliant patient is to motivate the individual to get the necessary care, the documentation of those efforts has the added benefit of helping to defend against a lawsuit that may still arise.


Please welcome Taylor Fouser, an Attorney at Gjording Fouser as a Guest Blogger!


Recently, the Idaho Supreme Court Civil Justice Reform Task Force, which is made up of a cross-section of judges and attorneys, recommended the Supreme Court adopt significant changes to the current Idaho Rules of Civil Procedure. As stated in the Task Force’s Final Report, “The suggested changes to the civil rules are intended to provide more timely and cost-effective justice in approximately 70 percent of the general cases filed in Idaho courts,” which includes medical malpractice. While the proposed rules have yet to be adopted by the Supreme Court, leaving in flux whether and when the rules will come into effect, it is believed the Task Force has the full support of the Idaho Supreme Court. This post, which is based on our analysis of the Task Force’s Final Report and a rules presentation from the Hon. Steven Hippler, summarizes how specific proposed rule changes to retained expert provisions will impact medical malpractice defense so we are prepared if/when the proposed rules become live.

Medical malpractice litigation is often referred to as a “battle of the experts.” Indeed, under Idaho’s Medical Malpractice Act, probably the most crucial aspect of a medical malpractice case is the expert disclosure and parties spend a significant amount of time and money on expert discovery. With its newly proposed retained expert rules, the Task Force hopes to “control the costs related to expert discovery.”


The proposed amendments to Idaho Rule of Civil Procedure 26(a)(2) will require litigants, without the need for a discovery request, to disclose:


i. Witnesses’ name and business address

ii. Brief statement of qualifications

iii. A brief summary of opinions

iv. A list of materials reviewed


Following this basic disclosure, the opposing party must then elect between a detailed written report signed by the expert or a deposition of the expert, but not both. If a deposition is chosen, which the Task Force considers to be the more expansive form of discovery, the party taking the deposition must pay the expert for the time in the deposition, and the deposition must not exceed 7 hours. A written report is the default if a timely election is not made; however, in multi-party litigation, if all the defendants cannot agree, then the proposed rules dictate that further discovery of the expert “may be obtained only by deposition.” The multi-party amendment could be the cause of dispute in the context of a medical malpractice action. For instance, does the hospital, who could be held vicariously liable, get a say in choosing expert discovery of an independent contractor physician? Can a co-defendant physician from a different specialty force a deposition? The rules are silent on these potential issues so it will have to be developed through case law, but at the very least, we trust that we will be able to decide expert discovery for an opposing expert who renders a standard of care opinion purely against our client. But certainly, there are gray areas.


Moreover, even though the Task Force considers a deposition the more broadly-based form of expert discovery, it also presents greater risk of facing an undisclosed opinion at trial. The proposed amendment provides that an expert may not testify “concerning any opinion or matter not fairly disclosed in the written disclosure or in deposition, if elected, unless during the deposition the deponent identified the opinion but the party taking the deposition failed to reasonably inquire further about the opinion and basis for it.” Such an exception is ripe for disagreement, and a crafty plaintiffs’ attorney (and expert) could drop a pearl during a deposition that later comes back to impact a trial significantly. Certainly, the proposed rule substantially changes for how a defense attorney prepares for expert depositions.


Obviously, a defense attorney should evaluate expert discovery on a case-by-case, expert-by-expert basis, but be wary of selecting a deposition until the courts provide more guidance. The safest and most reliable selection is to keep an expert within the four corners of his or her expert report.


The proposed rules are still in their infancy stage, and public comment on the rules closed on June 30, 2019. To this end, we can expect some changes and tweaks to the Task Force’s current recommendations. There can be no doubt, however, that there has been a significant push from people in high places to overhaul the current rules. Idaho can expect changes coming down the pike, and medical malpractice defense firms need to be ready.

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