Federal physician malpractice database may not work as intended

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Hospitals appear to be skirting federal requirements to report clinician malpractice or hospital privilege revocations to a national database designed to keep patients safe.

Congress created the National Practitioner Data Bank in 1986 to prevent clinicians from moving to a new state or employer without disclosing previous damaging performance. Health systems are required to report to the Health and Resources Services Administration-operated database when they revoke a physician’s hospital privileges or conduct investigations into physician performance that last over 30 days. Other entities must report medical malpractice payments, or licensure suspensions from medical boards.

But the Justice Department’s recent settlement with Renton, Wash.-based Providence shows health systems can allow physicians to move on to new care settings without accountability, and a lack of reporting can go undetected for years and put patients at risk.

The American Medical Association initially estimated the database would receive 10,000 annual clinical privilege reports from hospitals per year. But since it opened in 1990, the highest number of reports on medical physician privileges revoked or investigated was in 1991, with 889 reports. In 2021, there were 592 reports. The vast majority of the 1.1 million adverse action reports in the data bank relate to nurse licensure action reports.

“What that means is a little unclear: have hospitals changed what they do, so they don’t have to report a suspension for 28 days, instead of 30 days? Or it could be that there are instances like this [Providence case] where apparently people who clearly should have been reported, weren’t,” said Robert E. Oshel, the former associate director for research and dispute resolution at the Data Bank who retired from the position in 2008. “I suspect it’s some combination of both of those.”

In a DOJ settlement released this week, Providence agreed to pay over $22 million to settle allegations that two former spine surgeons falsified or exaggerated patient diagnoses, and provided unnecessary surgeries and care.

Providence acknowledged in the settlement that it received information from hospital personnel about both doctors. Hospital staff reported concerns to administrators that the surgeons were performing procedures on patients who had medical histories or conditions that didn’t make them appropriate candidates for surgery. Staff also voiced concerns that surgeons jeopardized patient safety by attempting to perform an excessive number of overly complex surgeries.

The settlement revealed that Providence initiated independent analyses of the two surgeon’s practices, both of which lasted over 30 days. Each surgeon also eventually resigned. The law requires health systems to report professional reviews that last over 30 days, any restrictions of clinical privileges, or when a clinician surrenders their privileges while under or to avoid investigation.

None of this happened, according to the DOJ. Experts in the patient safety field said this case is not a one-off, and hospital inaction threatens patient safety and quality of care.

The data bank was created to hold clinicians accountable if their health employer found they billed for services that weren’t delivered, or ran tests or operated on patients who didn’t need them. But the payment system most U.S. health systems operate under creates disincentives for hospitals to act as internal watchdogs.

“There’s sort of this conspiracy of silence in which everything goes along pell-mell, merrily business as usual,” said Dr. Vikas Saini, president of the Lown Institute, which publishes research on unnecessary procedures. “Hospitals have no incentive to say, ‘are you sure everything we’re doing is needed?’ Hospitals are in the business of collecting revenue, and so it’s not that they’re deliberately engaging in ripping off communities, it’s that they have no incentive to try to be better, and they have plenty of disincentives.”

For instance, after a health system notifies an employed physician about an investigation starting, doctors usually obtain legal counsel.

“Physicians take medical necessity allegations very personally and fight them [health systems] symptom by symptom, diagnosis by diagnosis, chart by chart,” said Jeffrey Dickstein, a partner at whistle-blower law firm Phillips & Cohen.

Internal appeals usually take up a lot of resources, time and money in the process of a final finding regarding physician practices.

“There are times when hospitals may tell the physician, ‘We’re going to start investigating you tomorrow, so you might want to resign today, and we won’t report you,'” Oshel said.

Hospitals are legally required to file a report to the data bank if a clinician resigns to avoid an investigation. However, the only way the data bank or other government entities would know that a hospital skirted the law is through whistle-blower action.

The 1986 Health Care Quality Improvement Act provides health systems and others an incentive to make reports. In exchange for reporting to the data bank, hospitals receive a safeguard against potential damages to a former clinician employee.

Clinicians often will sue their former healthcare employer after their hospital privileges are revoked. The law provides a health system immunity from paying damages if a court does side with a clinician. But hospitals still have to pay to defend itself, which can be another disincentive to investigate or report.

In Providence’s case, where the data bank now knows about the missing reports, the Health and Human Services Department can hold a hearing and revoke the health system’s immunity from paying damages for three years. But the agency itself doesn’t impose monetary fines to systems who fail to report.

Oshel said that revocation of immunity doesn’t happen frequently. Generally, the data bank would rather have a late report than none at all as it tries to avoid driving these events underground, he said.

Despite any accuracy issues, many lawmakers and patient advocates say a broader swathe of providers should be allowed to query the database.

Only institutions with peer review mechanisms are allowed to look up potential employees. This leaves out most prison systems and long-term care providers that care for older adults and those with disabilities.

“If somebody gets in trouble in one state, they still try to go somewhere else and find a job where the employer can’t query the database,” said Oshel, now a consultant working on healthcare fraud and database issues with watchdog group Public Citizen. “That, in fact, is what happens pretty often.”

Lawmakers from both parties have introduced legislation to allow other health providers to look up potential employees. Reps. Tom Rice (R-S.C.) and Darren Soto (D-Fla.) introduced the Promote Responsible Oversight and Targeted Employee Background Check Transparency for Seniors Act this year, which would allow nursing homes, home health agencies and other organizations to query the database. Similar versions in past years never made it out of committee.

The Elder Justice Coalition, Alzheimer’s Association, Alzheimer’s Impact Movement, American Health Care Association and National Association for Home Care & Hospice have endorsed bills to address the database’s shortfalls.

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