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Oregon Law Threatens Integrity of National Practitioner Data Bank by Making Certain Malpractice Payments Secret

September 10, 2013

Oregon Law Threatens Integrity of National Practitioner Data Bank by Making Certain Malpractice Payments Secret

Public Citizen Calls on HHS to Eliminate Dangerous New Loophole

WASHINGTON, D.C. – A new Oregon law creates a loophole that will hinder the ability of hospitals, medical boards, health maintenance organizations and similar entities to detect doctors who have a history of medical malpractice payments, thereby allowing unsafe doctors to continue practicing without responsible oversight or retraining, Public Citizen wrote in a letter to U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius today.

The law, “Resolution of Adverse Health Care Incidents” (SB 483), seeks to allow physicians to avoid reporting to the National Practitioner Data Bank any malpractice compensation negotiated through a mediation process specified under the new law. Some are proposing that the Oregon law, which took effect March 25, be a model for other states to follow.

But this loophole could seriously undermine the quality and wholeness of the Data Bank, which is widely used by hospitals, medical boards, health maintenance organizations and others. Public Citizen estimates these entities used the data bank to make at least 50,000 licensure, credentialing or membership decisions in 2012.

“It is imperative that HHS act swiftly to close the loophole created by new Oregon law, which threatens the viability of our national system for performing background checks on physicians,” said Dr. Michael Carome, director of Public Citizen’s Health Research Group, and author of the letter along with Dr. Sidney Wolfe, founder and senior adviser to the group. “The new law undermines the usefulness of the data bank nationally because it allows physicians with mediated malpractice settlements to move from Oregon to other states without their previous bad record being discovered. If other states adopt the same provisions, the problem will be compounded, and the data bank will be severely compromised.”

In the letter, Carome and Wolfe acknowledge that a single malpractice payment is not necessarily indicative of a physician’s overall quality, but they note, “Research has shown that a pattern of malpractice payments is an excellent indicator of which physicians have quality-of-care problems and may need retraining, proctoring, or some other serious action to ensure the safety of their future patients.”

The new law seeks to facilitate malpractice settlements by allowing physicians to initiate a mediation process if they believe they have committed malpractice. If the injured patient (or his or her survivors) agrees to a mediated payment, the new law states that the payment was not made in response to a written demand for payment – and this is where the loophole lies. The NPDB Guidebook provides that only payments made in response to a written demand for payment are reportable, so these malpractice payments would not be reportable to the data bank.

Public Citizen calls on HHS to explicitly state that “for federal reporting purposes, any agreement to proceed with malpractice mediation constitutes a written demand for payment by the claimant, regardless of any contrary wording in state law.” The letter also asks that the NPDB Guidebook be revised to eliminate the requirement that a written demand for payment be made for a payment to be reportable.

The letter is available at https://www.citizen.org/our-work/health-and-safety/articles/letter-hhs-secretary-regarding-impact-oregon-law-national