Federal Appellate Court weighs in on data bank reporting


Health care entities have typically grappled with issues of reporting physicians to the National Practitioner Data Bank (NPDB) by following the guidance of the Health Care Quality Improvement Act (HCQIA), the related regulations, and the NPDB Guidebook. It is important to know, however, that a federal appellate court has now issued an opinion that includes an interpretation of the term “investigation”, as that term is used in HCQIA, the regulations, and the NPDB Guidebook. Doe v. Leavitt, 552 F.3d 75 (1st Cir. 2009).

Since the case is one of first impression (i.e., there is no binding authority on the matter presented), it cannot be ignored. In all likelihood, the case will have persuasive authority if other jurisdictions ever address the same issue. Additionally, HCQIA contains 10 defined terms that assist in understanding the law, and the term “investigation” is not defined in HCQIA, the regulations, or the NPDB Guidebook. Thus, even though the opinion was not issued by the Fifth Circuit (the federal court circuit for Texas), the First Circuit’s interpretation of “investigation” is significant in Texas— both for health care entities with reporting obligations and for physicians who may be the subject of reports to the NPDB.

Health care entities such as hospitals and HMOs must report physicians to the NPDB when the entity (i) takes a professional review action that adversely affects the clinical privileges of a physician for a period longer than 30 days; (ii) accepts the surrender of clinical privileges of a physician while the physician is under an investigation by the entity relating to possible incompetence or improper professional conduct; or (iii) accepts the surrender of clinical privileges of a physician in return for not conducting such an investigation or proceeding. Health care entities that fail to submit reports as required by law may lose the statutory immunity from liability that HCQIA generally provides for compliance with the law. Thus, the reporting requirements of HCQIA also cannot be ignored.

For purposes of confidentiality, the plaintiff/ appellant in the case is referred to as John Doe, M.D. Michael O. Leavitt, the current Secretary of the U.S. Department of Health and Human Services (Secretary), was the defendant at the trial court level and the appellee on appeal. The sole issue before the appellate court was the propriety of the Secretary’s interpretation of the word “investigation”, as that word is used in the HCQIA reporting provisions.

Under the facts of the case, an operating room nurse at ABC Hospital, also a fictitious name, filed a written complaint against Dr. Doe, charging that the physician had threatened the nurse. On the following day, the medical staff executive committee temporarily suspended Dr. Doe’s privileges and appointed an ad hoc investigating committee to inquire into the nurse’s allegations. In approximately seven days, the ad hoc committee reported to the executive committee that the nurse reasonably perceived Dr. Doe’s actions as threatening.

Three days later, the executive committee met to discuss the report of the ad hoc investigating committee and Dr. Doe’s status. Following that discussion, the executive committee recommended that Dr. Doe be allowed to return to work as long as he agreed to certain revisions to his contract (Dr. Doe was apparently an employee of ABC Hospital). The recommendations included regular proctoring and psychological evaluations. About a week later, Dr. Doe rejected the proposal and voluntarily relinquished his clinical privileges. ABC Hospital accepted his resignation.

Believing that Dr. Doe had resigned or surrendered his privileges while he was “under an investigation”, ABC Hospital reported Dr. Doe to the NPDB. Dr. Doe subsequently requested administrative review of the Hospital’s report, contending that the investigation at ABC Hospital had ended when the ad hoc investigating committee presented its report to the executive committee. Under Dr. Doe’s argument, he had not resigned while under investigation.

Under the Secretarial review provisions set forth in the NPDB Guidebook, the Secretary issued a written decision in which he ruled that ABC Hospital had appropriately reported Dr. Doe to the NPDB. In his ruling, the Secretary stated that an “investigation is…considered ongoing until the health care entity’s decision making authority takes a final action or formally closes the investigation.” Since the executive committee had not taken a final action and/or closed the investigation when Dr. Doe resigned, the Secretary found that Dr. Doe was still under an investigation when he resigned. ABC Hospital, therefore, had a duty to report the surrender of privileges while Dr. Doe was under an investigation.

Dr. Doe first challenged the Secretary’s ruling in a suit brought against the Secretary under the Administrative Procedure Act. When the district court ruled in the Secretary’s favor in a sealed opinion, Dr. Doe appealed to the First Circuit Court of Appeals.

On appeal, Dr. Doe argued that the term “investigation” refers only to the factgathering phase of the investigation. Thus, he asserted that the investigation was completed when the ad hoc investigating committee completed its fact-gathering process. The Court soundly rejected Dr. Doe’s argument.

The Court found it significant that the Secretary himself, and not an underling, issued the ruling. Also, the Secretary’s procedures, according to the Court, encouraged the operation of the deliberative process. The Secretary had identified the congressional purposes for the enactment of HCQIA: “to improve the quality of health care by encouraging hospitals to identify and discipline practitioners who engage in unprofessional behavior” and to restrict “the ability of incompetent practitioners from moving State to State without disclosure or discovery of previous adverse action… history.”

The Court again noted that if Dr. Doe’s interpretation of “investigation” was accepted, a gap would be created between the time of the completion of the factgathering process and the taking of final disciplinary action. During this gap period, under Dr. Doe’s argument, a physician could resign with impunity and avoid being reported to the NPDB.

The Court also stated that a hospital’s medical staff bylaws could assist in determining whether a facility had initiated an investigation within the meaning of HCQIA, and, if so, whether an investigation was ongoing. The Court noted that even the NPDB Guidebook recognizes that a hospital’s bylaws may be useful in addressing NPDB issues.

Doe v. Leavitt addresses whether an investigation is ongoing. If an investigation is “ongoing”, it has not been closed. The issue of whether a report is required generally turns on the issue of whether a pending investigation has been closed. If an investigation has been closed, it is likely that a physician may resign from the medical staff. A surrender of clinical privileges, following the closure of an investigation relating to a physician’s competence or professional conduct, generally would not be reportable to the NPDB because the physician is not under investigation.

For physicians, the meaning of the case was made clear by a physicians’ blog on the rights of physicians. One blog entry provided the following advice: “It is important to GET AN AGREEMENT BEFORE YOU RESIGN THAT YOU ARE NOT CURRENTLY UNDER INVESTIGATION. Many doctors get caught in the trap of thinking that the investigation is over and then resign, only to be reported to the National Practitioner Data Bank.”

Some hospitals distinguish between investigations and inquiries in their medical staff bylaws. This distinction is probably an appropriate one, in that it permits reviews, rather than investigations, of physician’s professional conduct and competence. The Court in Doe v. Leavitt makes it clear, however, that a hospital may not frustrate the definition of an investigation in its bylaws by defining “investigation” to mean some type of “phenomenon that ended upon the completion of fact-gathering.”