Federal appeals court clarifies when doctor conduct is reportable

The decision sets a precedent experts say can help steer the disciplinary process.

By Amy Lynn Sorrel — Posted Feb. 9, 2009

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A federal appeals court for the first time spelled out what constitutes an investigation under the Health Care Quality Improvement Act in a decision experts say could guide physicians in disciplinary and reporting actions.

The federal statute generally requires hospitals to report physicians to the National Practitioner Data Bank if they have been reprimanded for quality or conduct issues, or if they surrender privileges while under investigation. (See correction)

A panel of the 1st U.S. Circuit Court of Appeals clarified that an investigation remains ongoing until the hospital's decision-making process runs its course, and the medical executive committee either takes final corrective action or formally closes the probe.

"Congress did not intend to construct an easily accessible escape hatch that would permit beleaguered physicians to elude the reach of the HCQIA's reporting requirement," the Jan. 14 opinion states.

The physician involved was investigated after a nurse filed a complaint alleging the doctor threatened her.

The medical executive committee suspended the doctor's privileges, while a separate committee looked into the allegations. The medical executive staff, acting on the investigation committee's report, ultimately proposed the physician's privileges could be restored, if he agreed to certain conditions.

But the doctor rejected the deal and voluntarily resigned. The hospital, believing the physician resigned while under investigation, reported him to the data bank.

The doctor challenged the notification to the data bank in an administrative appeal to the Secretary of the Dept. of Health & Human Services, the agency charged with enforcing HCQIA reporting requirements. The physician argued the process ended when the medical executive committee received the investigation committee's findings. But the secretary concluded the doctor resigned before the query was formally resolved.

The 1st Circuit affirmed the secretary's interpretation that the doctor's proposal would have curtailed the investigative process. That "would create a gap between the completion of fact-gathering and the taking of a final disciplinary action," during which time "a physician could resign with impunity," the court concluded.

The physician is not appealing the decision. The doctor denied any wrongdoing.

From start to finish

Experts say the ruling reaffirms that there is a continuum to investigations so that medical staffs can effectively evaluate quality of care issues.

"The [HCQIA] statute is using the term 'investigation' in a broader context, and it's not just that portion in which [review committees] talk to witnesses or are looking into the facts," said Clark Stanton, a medical staff lawyer and partner with San Francisco-based Davis Wright Tremaine LLP. "Until you've concluded what you're going to do, it's hard to know whether the fact-gathering part is finished, and even if it is, the resolution of it is still remaining."

But the court's interpretation leaves little room for parties to discuss a resolution once an investigation is under way, said Michael A. Duddy, who represented the physician in the case.

"It takes away any flexibility," he said, adding that physicians can lose their privileges for as long as 30 days during a pending review.

The court also ignored the role of the medical staff bylaws in helping define for physicians the parameters of an investigation, Duddy said.

The bylaws may shed light on whether a hospital has initiated a review that could trigger reporting requirements, the court said. "That is not to say, however, that the [statutory] meaning of the word 'investigation' ... will vary from case to case depending on a particular hospital's bylaws," Judge Bruce M. Selya wrote.

The ruling reinforces a standard by which all hospitals must abide, said Patrick J. Hurd, a health care lawyer and partner with Virginia-based LeClairRyan.

"But the bylaws are still important in setting a framework for the process of investigation," Hurd said.

Stanton also suggested medical staffs "try to create as much room as possible for peer review," before pursuing corrective action. "You want there to be some give-and-take between physicians and medical staffs, and once you start a formal investigation, you're limited in that give-and-take."

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Case at a glance

Was a physician properly reported for resigning during an investigation into his conduct?

The court said yes. The decision set a precedent in defining what constitutes a formal investigation under the Health Care Quality Improvement Act.

Impact: Some experts say the ruling gives medical staffs some direction for conducting peer review or disciplinary probes. The physician's lawyer said it creates a rigid standard.

Doe v. Leavitt, 1st U.S. Circuit Court of Appeals

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This article incorrectly stated what hospital actions are reportable to the National Practitioner Data Bank. Reportable actions generally include hospital review actions that adversely affect a physician's privileges for more than 30 days. American Medical News regrets the error.

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