Protecting Your Clients Healthcare Licenses in Several States After a Medical Malpractice Case:

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1 Protecting Your Clients Healthcare Licenses in Several States After a Medical Malpractice Case: Your Failure to Watch Out for Their Licenses Could Cost You Yours Michael V. Favia Quintarios, Prieto, Wood & Boyer, P.A. Two Prudential Plaza 180 N. Stetson Avenue, Suite 4525 Chicago, IL (312)

2 Michael V. Favia is a former Assistant Attorney General and Chief Prosecutor at the Illinois Dept. of Professional Regulation. Mr. Favia served as Chief of Medical and Health Related Prosecutions for the Illinois Department of Professional Regulation for nine years, where he directed and supervised the statewide enforcement of 40-plus professional licensure statues and rules. A highly skilled lawyer with 20-plus years of experience, Mr. Favia leverages his unique health law background with a highly skilled team of litigators, experts and investigators, to obtain maximum results. Mr. Favia and the Favia Law Firm are currently affiliated in an Of Counsel capacity with QPWB, a national full service law firm in representing individuals, businesses and government entities across the country.

3 Protecting Your Clients Healthcare Licenses in Several States After a Medical Malpractice Case: Your Failure to Watch Out for Their Licenses Could Cost You Yours Table of Contents I. Introduction...77 II. An Overview of the National Practitioner s Data Bank...77 III. How the National System Works...77 IV. Multiple Jurisdiction Concerns...78 V. Defense Attorney Considerations...78 VI. Issue Spotting and Defending Licensed Healthcare Professionals...79 VII. Various Jurisdictional Approaches to Professional Licensing...80 VIII. Tips on Dos and Don ts...81 IX. Impact of Adverse Disciplinary Findings...81 X. Appealing Adverse Disciplinary Findings...82 XI. Consulting on Healthcare Professional Licensing Matters in Several States...82 XII. Conclusion...82 Protecting Your Clients Healthcare Licenses in Several States After a Medical... Favia 75

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5 Protecting Your Clients Healthcare Licenses in Several States After a Medical Malpractice Case: Your Failure to Watch Out for Their Licenses Could Cost You Yours I. Introduction The general purpose for healthcare licensing and regulation divisions is to ensure the public is safe and treated by healthcare professionals whose credentials and certifications to practice are well documented and maintained as required by each licensing and regulating body. Public policy concerns for healthcare professional regulation and oversight are the underlying focus of the organization of boards overseeing professionals. A licensing board has a duty to protect the public and ensure that investigations and actions occur, when appropriate to correct an issue raised and complaint against a licensee. There are times action in one state triggers attention and action in another. The procedures and results are different in every jurisdiction. A complaint or letter of concern filed with professional licensing board does not necessarily cause adverse action or discipline. If a healthcare professional receives a complaint it becomes important to take a few initial steps including seeking legal counsel for both professional liability and licensing concerns. Attorneys interviewing healthcare professionals should maintain good records that might also be valuable in responding to a licensing inquiry. Medical malpractice attorneys advising healthcare professional clients of settlement options should consider the weight and meaning of admissions because what may take place with a civil case can jeopardize the client s professional licensing. Any defense attorney representing a state-licensed healthcare professional should bring in a professional licensing consultant attorney to make sure the client is not unnecessarily exposed to licensing liability. The top 6 states with the highest medical malpractice payouts are: New York; Pennsylvania; Illinois; New Jersey; Florida and California. Medical malpractice defense attorneys and in-house general counsels should be aware and cautious not to expose a client to liability beyond an underlying medical malpractice or neglect case. II. An Overview of the National Practitioner s Data Bank In the interest of protecting the public from harm and ensuring quality of all licensed healthcare providers, and to reduce health care fraud, various states now agree to share information on the National Practitioner s Data Bank ( NPDB ) (http://www.npdb.hrsa.gov/), a collection of information about healthcare professionals including malpractice awards, the loss of one s license or bar from participating in Medicare or Medicaid. There are three main laws governing data bank operations. These laws are codified at 45 CFR Part 60: (1) Title IV of Public Law (establishing NPBD); (2) Section 1921 of the Social Security Act; and (3) Section 1128E of the Social Security Act. III. How the National System Works The NPDB was created by Congress as a confidential information clearinghouse. Only qualified individuals are allowed to query and report to the data bank. Under different sections of legislation, there are several qualified reporters and those who may request information, for example, under Title IV, a medical malprac- Protecting Your Clients Healthcare Licenses in Several States After a Medical... Favia 77

6 tice payer would report medical malpractice payments, identifying the practitioners which information can be requested by hospitals, professional societies, plaintiff s attorneys, and state medical boards, for example. The data bank works as an alert or flagging system to allow a full review of the professional credentials of healthcare suppliers, providers, entities and professionals. Since medical malpractice payouts can set off flags with state medical licensing boards, a doctor may become subject to an investigation, especially if there are large or multiple awards for malpractice. It might be appropriate to make a full disclosure of a malpractice event to a medical board before they are otherwise alerted to a situation. The doctor might already be subject to a duty to report any incidents of malpractice claims and awards to the licensing body, just as the insurance company payers of malpractice claims have a duty to report settlements and judgments to the data bank and to licensing officials. Image from U.S. Dept. of Health and Human Services Data Bank website. IV. Multiple Jurisdiction Concerns Many healthcare consultants and professionals are licensed in several states. A settlement or decision in one state could be impacted other states in which they are licensed. A hit in one state can trigger all the states based on computer database operations. A professional licensing attorney experienced in multiple jurisdiction licensing alerts can best advise a healthcare professional as to how and when it may be appropriate to disclose medical malpractice information to licensing boards in the state in which an event occurs and other states in which the individual is also licensed. V. Defense Attorney Considerations When attorneys conclude cases and send them back to the insurance carrier, attorneys should understand what if anything they carrier does with the matter under mandatory reporting duties. It might be appropriate to communicate with the carrier and ask them to identify what information they plan to disclose to the 78 Medical Liability and Health Care Law March 2015

7 data bank pursuant to their duty. An attorney might advise their client to make their independent disclosure to their licensing bodies. By communicating with the insurance carrier, the client may have a better idea how much information they will disclose, such as the settlement agreement or award of the court versus the entire file including deposition transcripts, for example. When cases are settled, the client should have a reasonable expectation of potential license inquiries. As part of a wrap up meeting with a client or before the end of representation a professional licensing attorney may be brought in to help advise the client on how to respond to a license inquiry and whether to make an independent disclosure to the licensing body in advance. VI. Issue Spotting and Defending Licensed Healthcare Professionals Administrative codes, department policies and state procedural rules all may all become part of the defense of a licensed healthcare professional. Many states have developed informal and streamlined procedures for the review and response to complaints received by departments regarding licensed healthcare professionals, licensees. While each state has authorized departments for licensing and boards of medical professionals are unique, there are some common themes many departments and boards adopt in determining if any discipline is necessary. When possible, informal negotiations and alternative dispute resolution methods are used in alternative to full and formal court-like proceedings. The Illinois Department of Financial and Professional Regulation (IDFPR) overview of the enforcement division is as an example of an investigation and prosecution set of procedures to give medical malpractice attorneys an idea of what healthcare professionals might encounter when a state is notified of a legal settlement or disposition in a medical neglect or malpractice case. The following general information is one example of the administrative process and each state has its unique rules and procedures. Investigations at the IDFPR begin when the Department becomes aware of a complaint against a licensee with alleged violations of the Medical Practice Act in Illinois. The Department may become aware of such a complaint by a member of the public, healthcare practitioners, a governmental agency, and of course, the national data bank. An investigator is assigned a case for review and they must determine if there has been a violation of a licensing law, or Department Rules and Regulations. There are statutory grounds upon which the Department seeks discipline in prosecutions. Additionally there are administrative code sections with the standards for conduct such as dishonorable, unethical or unprofessional conduct, and immoral conduct and gross negligence. There is limitation period that starts upon the receipt of a complaint by the Department. Within the limitations period, once the investigator reviews the file and it appears there is a violation, the investigator refers the case to a prosecuting attorney. Prosecutions of alleged violations of the Medical Practice Act in Illinois often involve additional investigation by the prosecuting attorney once a case has been referred to them by the Department s investigative unit. In seeking appropriate discipline if it appears warranted, there is an option for an informal conference with the licensee, who is usually represented by counsel at the point of negotiations. In Illinois the informal process commences with a letter sent to the licensee giving them at least 10 days notice of the informal conference during which none of the formalities of a hearing apply. Most of the questions will be directed to the licensee who, with the interjections of their attorney, may respond and present any mitigating factors and responses to any of the allegations. At the end of the conference, the prosecuting attorney and the board may have a private discussion away from the licensee and counsel to recommend any disciplinary action. Next, the licensee is presented with any recommendations and if agreeable, the disciplinary action will be agreed to in writing within a short period and the agreement becomes a final order of the Board. Protecting Your Clients Healthcare Licenses in Several States After a Medical... Favia 79

8 If the discipline is not handled in the informal conference setting, a complaint will be filed with notice of a preliminary hearing. The Board has the power to subpoena and bring persons including the licensee in to take testimony. Discovery is conducted informally by the rules set forth in the Illinois Administrative Code. Hearings take place before a Department Administrative Law Judge and a Medical Board Member. The Department has the burden of proof made by establishing by clear and convincing evidence that allegations contained in the Complaint are true. Note that these hearings are public and at the conclusion thereof, the Administrative Law Judge makes a recommendation and forwards the file and transcript to the Medical Disciplinary Board for deliberation. The Board may order the individual s license remain in good standing or be subject to discipline including termination, revocation, suspension, probation reprimand and censure. After a Department hearing and Board order of disciplinary action, the licensee may has 20 days to request a rehearing or the Board s order will be forwarded, signed and finalized by the Department Director. A final order may also be appealed to the Circuit Court within 35 days. Appeals may go as far as the United States Supreme Court. VII. Various Jurisdictional Approaches to Professional Licensing Every state has a unique system for licensing and governing the licensing of professionals. The following states have the highest rates of medical malpractice payouts and are the larger more densely populated states. In New York, the Office of the Professions, guided by a Board of Regents, oversees more than 50 professions. Their website (http://www.op.nysed.gov/) offers a Frequently Asked Questions page (http://www. op.nysed.gov/opd/opdfaq.htm) that states that their Board of Regents may handle complaints of misconduct through advisory letters or administrative warnings. They also note that while their Board of Regents may have the authority to restore a revoked or suspended license, the licensee does not have a right to restoration of their license. An applicant for restoration of their license must prove that he or she is worthy of the privilege of regaining their professional license. The Pennsylvania Bureau of Professional and Occupational Affairs issues licenses to 29 professional and occupational licensing boards and commissions. Their website publishes a list of monthly disciplinary actions like other states. (http://www.dos.state.pa.us/portal/server.pt/community/bureau_of_professional occupational_affairs/12483) The licensing website also has a frequently asked questions page where reciprocity is mentioned. In certain professions endorsements and licenses from another qualified state is recognized in another state. What can be problematic is a question of reciprocal discipline. What may cause a suspension in one state can be treated differently in other states. Illinois oversees and regulates its professionals through the Illinois Department of Financial and Professional Regulation ( IDFPR ). The Department regulates most of the professionals and financial institutions. (http://www.idfpr.com/about.asp) The IDFPR does not, however, oversee attorneys. The Illinois Attorney Registration and Disciplinary Commission is a separate agency not reporting to the IDFPR. This is a good example of why it is important to always search for ancillary agencies with impact on a professional license. When there are multiple agencies and boards they are often set up in a hierarchy to work together using systems and procedures to defer to each entity s role in the process of licensing or discipline. The New Jersey Office of the Attorney General s Department of Law and Public Safety, Division on Consumer Affairs is divided into sections or units. (http://www.njconsumeraffairs.gov/highlights.htm) The Division of Consumer Affairs lists its 41 boards and committees that regulate more than 80 professions and occupations (http://www.njconsumeraffairs.gov/consumerinfo/boards.htm). Physicians are regulated by the 80 Medical Liability and Health Care Law March 2015

9 Division s State Board of Medical Examiners website identifies its Medical Practitioner Review Panel, a group that meets monthly to investigate information received regarding medical malpractice claims and HMO privilege actions. They then make recommendations to the State Board of Medical Examiners (http://www.state. nj.us/lps/ca/bme/board/reviewpanel.htm). In Florida, the Board of Medicine (http://flboardofmedicine.gov/) part of the Florida Department of Health, oversees healthcare practitioners. The Florida discipline and licensure restrictions chapter, as adopted into the Florida Administrative Code is available online (https://www.flrules.org/gateway/ruleno.asp?id=64b ). Among the list of guidelines and their various amendments a medical malpractice attorney not independently experienced in the state s licensing and disciplinary procedures could cause a problem for a client and be subject to their own malpractice exposure. A best practice is to engage a professional licensing consultant attorney. The Medical Board of California, governed by the laws of the California Business and Professions Code, oversees mandatory malpractice reporting. On their frequently asked questions page (http://www.mbc. ca.gov/forms/medical_malpractice_reporting_faq.aspx) there is a noteworthy section discussing reporting requirements, settlement apportionments, medical board processing (of complaints) and public disclosure. Under the public disclosure section it is stated that, Settlements resolved after are disclosed (on the Board s website available to the public) after a physician has accumulated three or four settlements within a 10-year period (depending on the specialty of the physician). Consider the weight of a settlement in light of the concern for public disclosure. This is another instance where the unknown implications of licensing and regulatory boards and their options for discipline are vast and variable among states. VIII. Tips on Dos and Don ts State s concern: Does the professional have clinical problems or pose a risk to others if the licensing body does not intervene or discipline an individual in violation of practice rules? Board of peers: In an administrative law setting, a board of educated and knowledgeable peers reviews the results of their department s investigation, including other agency findings, to determine if action is necessary. Preparing the doctor: Identify and disclose the threshold for discipline to the doctor before responding to written requests or appearing in hearings before the board. Doctors should be able to anticipate the process. Informal hearings: Disciplinary boards are often informal settings and more relaxed than a court of law. The individual, the board, and their attorney, if they have one, engage in a discussion about the circumstances. After hearing about the case, the board must decide if there is a public concern for the doctor s ability to practice. They may need skill revisions or retraining which can also be a part of the board s decision. When appealing: An adverse decision by the licensing body, do not attempt to retry the case. The findings of fact are not up for interpretation and the goal is to challenge the application of the licensing body s discipline policy for reasons including mitigating factors. IX. Impact of Adverse Disciplinary Findings Future hospital privileges could be at risk. When licensing boards discipline doctors, they may have a more difficult time obtaining routine hospital privileges when hospital administrations may be concerned with liability. Protecting Your Clients Healthcare Licenses in Several States After a Medical... Favia 81

10 Future insurance concerns should be considered and discussed. The nature and degree of actions taken by licensing boards can trigger a variety of results with professional liability insurance carriers. Considering future insurance implications might influence the strategy in representing doctors before licensing boards. Joining another medical practice in the future could be difficult when a doctor has been disciplined. Securing loans and contracts in professional practices, especially involving partnerships, could be difficult when an individual is compelled to explain disciplinary actions or decisions. X. Appealing Adverse Disciplinary Findings Appellate courts or administrative bodies, as discussed earlier in this paper show a variety of procedures and formats licensing bodies use in reviewing cases involving medical malpractice. It might be appropriate to appeal an adverse ruling considering the negative impact that could cause in other states if there the individual presently or might in the future possess licenses in multiple jurisdictions. The standard of review when appealing adverse decisions is the application of law. As stated earlier, the facts are not subject to review. This is another reason the facts and record in the initial investigation by a licensing board is very important. Documenting an occurrence very accurately and thoroughly is important because that report could come up in the future in a manner that could be useful years in the future. XI. Consulting on Healthcare Professional Licensing Matters in Several States Professional licensing, particularly in health care, is a niche area of legal practice. Attorneys experienced in the prosecution and defense of professional licensing cases can offer experience and can predict possible outcomes. Working with attorneys licensed in other states is important to the proper defense of a medical malpractice case. Sometimes doctors with medical malpractice cases form professional relationships with attorneys who practice in professional licensing matters. The attorneys experienced in professional licensing often work as consultants to work with the doctor s attorney or represent the doctor at a hearing. XII. Conclusion There are several pitfalls in representing healthcare professionals, especially in cases involving claims of malpractice. With multistate and mandatory reporting requirements, state boards of medicine and regulation agencies share information about healthcare practitioners in the name of public safety. The National Practitioner Data Bank is a collection of information about licensed healthcare practitioners and incidents involving their practice, including discipline and malpractice settlements. When a medical malpractice case is settled the detail about the matter may be published on state agency websites and is reported to the national data bank which can cause red flags in other states where the practitioner is licensed. Working with a professional licensing attorney and consultant is a recommended practice because the underlying medical malpractice case and any settlement could have further reaching impact. Every state has unique licensing and disciplinary policies and practices. What happens in one state could be different from the next and the healthcare practitioner s present and future career could be in jeopardy if an underlying malpractice case overlooks some far-reaching possibilities. 82 Medical Liability and Health Care Law March 2015

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