NPDB Reporting Obligations Reinforced by Recent Court Decision

Recently, a federal court in Oregon held that healthcare entities, including hospitals, are legally obligated to report to the National Practitioner Data Bank (NPDB) where a practitioner surrenders their clinical privileges while under investigation, even if the physician did not know that he or she was under investigation.

The Department of Health and Human Services (HHS) originally established the NPDB pursuant to the Health Care Quality Improvement Act of 1986 (HCQIA) in order to collect and release certain information relating to the professional competence and conduct of physicians, dentists, and other healthcare practitioners. Under the Act, healthcare entities, particularly hospitals, are generally required to disclose the acceptance of the surrender of clinical privileges of a physician while the physician is under an investigation by the hospital relating to alleged incompetence or improper professional conduct. The overarching goal of this provision was to close a loophole where physicians under investigation and healthcare entities would resort to “plea bargains” in which a physician agreed to such a surrender in return for the healthcare entity’s promise not to inform other healthcare entities about the circumstances of the physician’s surrender of privileges.

In the recent case, a hospital reported to the NPDB that a physician surrendered his privileges with the hospital while the physician was under investigation. The physician sought a preliminary injunction ordering the hospital to withdraw the report and argued that the report was false because he was not under investigation when he surrendered his privileges since the hospital officials allegedly failed to comply with the hospital’s policies before an investigation had begun. The court stated that for NPDB reporting purposes, the term “investigation” is not controlled by how that term may be defined in a healthcare entity’s bylaws or policies. Rather, that term is viewed expansively for NPDB reporting purposes, and is considered to run from the start of a general inquiry until a final decision on a clinical privileges action is reached. Notably, the court implied that the result would be the same even if the physician was not aware that he was under investigation, since there is no requirement in the context of NPDB reporting that the healthcare practitioner be notified or aware of the investigation. Thus, the court ultimately disagreed with the physician and upheld the hospital’s report.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.