National Practitioner Data Bank Provides Important Guidance on Medical Malpractice Payment Reports

By: Jesse Adam Markos, Esq.
Wachler & Associates, P.C

The National Practitioner Data Bank has published an article in the September 2014 Data Bank News to help clarify when a medical malpractice payment is reportable to the Data Bank. Since a Medical Malpractice Payment Report (“MMPR”) can have significant professional and economic ramifications, it is important for all health care practitioners to understand when a report is required and how one can be avoided.

For Data Bank purposes, a medical malpractice payment is an exchange of money that is the result of a written complaint or claim demanding payment for damages based on a practitioner’s provision of or failure to provide health care services. The payment must be the result of a written claim or complaint that results in a judgment, arbitration, or settlement. At times, medical malpractice claims may be settled for convenience and do not necessarily reflect the professional competence or professional conduct of a practitioner; nevertheless, all payments, regardless of amount, made for the benefit of individual practitioners must be reported.

Importantly, opportunities for practitioners to resolve medical malpractice claims without inviting a Data Bank report are available. For example, practitioners may use personal funds to make medical malpractice payments. Payments made by individual practitioners from personal funds that do not receive reimbursement from any source to satisfy the claim are not reportable. However, if the funds used come from the practitioner’s professional corporation or group practice, or the practitioner receives a refund from an insurer, then the payment must be reported. Similarly, practitioners may waive the patient’s debt or refund the patient’s payment out of personal funds without triggering a report.

A Data Bank report can also be avoided if money is paid on behalf of a physician in the absence of a written claim or lawsuit. If the demand for payment is only made verbally, it is not reportable. In addition, payment is not reportable for claims against an organization, such as a hospital, where the practitioner is not named in both the written complaint or claim and the settlement release. However, if a practitioner is excluded from the settlement as a condition of the payment being made, the payment is reportable. If the practitioner is dismissed independently of the settlement or release, then no report is required.

A report to the Data Bank can significantly impact a practitioner’s reputation and career. State licensing authorities, hospitals and other health care entities, and professional societies query the Data Bank when investigating qualifications. A response that contains an adverse report can result in a denial of credentialing, loss or limitation of hospital privileges, loss or limitation of licensure, exclusion from participation in health plans, and increases in premiums or exclusion from professional liability insurance. As a result, practitioners should carefully explore all options available to prevent a Data Bank report and avoid the resulting professional damage and economic implications. For additional information or assistance, contact a Wachler & Associates attorney at (248) 544-0888.