Protecting Your Practice

By Keoskey, Alex J. | Medical Economics, October 22, 2010 | Go to article overview

Protecting Your Practice

Keoskey, Alex J., Medical Economics


Many physicians have witnessed a friend or colleague endure an investigation conducted by his or her state medical licensing board for alleged violations of laws or regulations governing medical practice. Some physicians are even asked to turn over information to these boards or to provide testimony regarding that friend or colleague. It is rarely a pleasant experience.


Board investigations can involve records inspections, interviews with patients and co-workers, concurrent involvement of federal agencies such as the U.S. Drug Enforcement Administration (DEA) or Food and Drug Administration, or a full hearing either before board members or an administrative agency assigned to conduct such a tribunal on the board's behalf.

The subject of these investigations can involve quality of care, misconduct, fraud, boundary issues, or any number of alleged violations. The term "alleged" is key, since the matter under investigation may be based on fact or fiction, reliable witnesses, or pure innuendo. The potential sources of such referral to a board are abundant. The information may have been referred to the board anonymously or through a source known to the doctor involved.

One of the most memorable cases that I handled as a deputy attorney general in New Jersey involved an obstetrician who performed a hysteroscopy which resulted in a patient's death due to hemolysis. The physician involved had utilized sterile water as a distending fluid for the procedure. That referral to the board, albeit legitimate, came from the physician's former partner who had also sued the accused physician over financial issues relating to their partnership.

In such cases, referring physicians may initially be motivated by anger or vengeance. However, in many states, such physicians are increasingly being compelled by law to make these types of referrals, due to mandatory notification laws and regulations.


Many states have created increasingly strict notification systems that alert other states' medical licensing boards when a physician's license is the subject of a regulatory action affecting his or her practice. Just as home alarms are triggered by untoward events, such as breaking window glass or a forced-in door, alarm systems within the medical regulatory structure are designed to "trip" whenever a physician commits a significant violation of board or hospital rules. These "tripwires" are laws and regulations, at both the state and federal level, which mandate reporting of doctors' actions by other doctors who become aware of their potential misconduct.

A current trend in state law is mandated physician reporting of known violations of board regulations by a fellow doctor or colleague. This policy has been an effective means to detect violations that is being embraced by many states. Another is a requirement that hospitals report to the medical board whenever a doctor's hospital privileges are limited in any way.

In the world of private health entities, there are additional tripwires serving the same type of purpose. All insurance contracts between doctors and malpractice liability insurers (as well as Medicare, Medicaid, and private healthcare payer/providers that cover their patients) require that physicians notify the insurers immediately whenever their licenses or hospital privileges are affected in any manner. Provisions within such contracts have evolved to require notification whenever a physician has undergone a "restriction, limitation, loss, surrender, modification, censure, suspension, revocation, or probation of his or her license to practice, In other words, almost any action against the doctor, however mild or routine, that results in a change of privilege or licensing status.

Physicians should carefully scrutinize the contractual provisions within their agreements with insurers to gain familiarity with the scope of the mandatory reporting requirements within. …

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