Public Citizen Applauds HHS Decision to Address Loopholes Created by Oregon, Massachusetts Laws That Threaten Integrity of National Practitioner Data Bank: The Next Step is Now Required

August 12, 2014

Public Citizen Applauds HHS Decision to Address Loopholes Created by Oregon, Massachusetts Laws That Threaten Integrity of National Practitioner Data Bank: The Next Step is Now Required

Ensuring All Malpractice Payments Be Reported Would Protect Patients and the Viability of the Data Bank

WASHINGTON, D.C. – In a letter today, Public Citizen applauds a recent decision by the U.S. Department of Health and Human Services (HHS) to address dangerous loopholes resulting from recent state laws that hinder the ability of hospitals, medical boards, health maintenance organizations and similar entities to detect doctors and other health care providers who have a history of medical malpractice payments.

But to implement and give force to the decision, Public Citizen is urging HHS to immediately notify appropriate state officials about the decision and ensure state policies are changed to conform to the HHS decision and the 1986 law that established the National Practitioner Data Bank (NPDB).

This HHS determination is exactly what Public Citizen sought in September 2013, when the organization sent a letter to then-HHS Secretary Kathleen Sebelius urging her to address a loophole created by a recent Oregon law that allows malpractice insurance companies and other entities to avoid reporting to the NPDB any malpractice payments made on behalf of those physicians and other health care practitioners who negotiate medical malpractice settlements through a mediation process established under the state law.

Public Citizen had expressed serious concern that the Oregon law threatened the viability of the NPDB as a comprehensive and reliable source of data regarding malpractice payouts, particularly if other states were to follow Oregon’s lead and similarly withhold malpractice payment information on many physicians and other health care providers.

In a decision memorandum signed by Sebelius on May 22, the agency agreed that this loophole, as well as a similar loophole created under a recent Massachusetts law, is inconsistent with the NPDB’s policies and practices. The agency has determined that malpractice insurance companies and other entities must report to the NPDB malpractice payments made on behalf of physicians and other health care practitioners even if they have been negotiated through the mediation processes specified under these new state laws.

The data bank is used to conduct critically important background checks to determine if a doctor or other health care provider has been sanctioned for misconduct by a hospital, had his or her license to practice curtailed by a state medical or other health care professional board, or has had any malpractice payments made on his or her behalf. The goal of the NPDB is to protect patients from doctors and other health care providers who have a record of providing substandard or negligent care.

“This determination made by HHS is an important first step toward preserving the integrity and viability of the data bank as a comprehensive and reliable source of information regarding malpractice payouts,” said Dr. Michael Carome, director of Public Citizen’s Health Research Group. “More importantly, the department’s action will help to ensure patient safety throughout the country.”

But as a crucial second step, Public Citizen urges HHS to immediately notify appropriate government officials within Oregon and Massachusetts – as well as within any other states contemplating enactment of similar malpractice reform laws – about the decision and ensure that policies in those states are changed to conform with this important clarification of the federal law or confirm that such action has been taken.

“Requiring all malpractice payments – whether settled in mediation or not – to be reported is a necessity if the NPDB is to properly fulfill its intended purpose. Research shows that a pattern of malpractice payments is an excellent indicator of whether a physician has quality-of-care problems and may need retraining or some other action to ensure the safety of their patients,” Carome said. “If state efforts succeed in creating a legal basis to avoid reporting malpractice payments to the NPDB, it will become more difficult, if not impossible, for hospitals and medical boards to identify such patterns of malpractice by a practitioner when they conduct background checks through the NPDB.”

Read the letter.

View Public Citizen’s 2013 letter calling on HHS to address the malpractice payment loophole.