Policyholder Services

National Practitioner Data Bank reporting

KIMBERLY WYNKOOP, OMIC Senior Legal Counsel

When OMIC settles a claim or pays a judgment against an insured, policyholders often wonder if the payment will be reported to the National Practitioner Data Bank (NPDB). This article will describe under what circumstances federal law requires such reporting.

The NPDB Guidebook states that a payment made by an entity for the benefit of a healthcare practitioner to satisfy a written claim or judgment for medical malpractice must be reported. This sounds simple enough, but breaking this requirement down shows that there are situations where the requirement to report is not always clear.

First, what is “making a payment”? The NPDB considers making a payment to be the exchange of money. A fee refund is considered “making a payment.” A waiver of a patient’s debt, on the other hand, is not considered “making a payment” and therefore should not be reported.

What if the payment is made for the benefit of an entity, not for the benefit of a healthcare practitioner? A medical malpractice payment made solely for the benefit of a corporation, such as a clinic, group practice, or hospital, should not be reported. However, a payment made for the benefit of a business entity that consists of only a sole practitioner must be reported. In other words, a payment made for the benefit of a sole shareholder corporation is considered a payment made for the benefit of the individual sole practitioner.

What constitutes a reportable claim? Only medical malpractice payments resulting from a written complaint or a written claim demanding monetary payment are to be reported. This includes tort actions brought in state or federal court or before another adjudicative body, such as a claims arbitration board, and any form of pre-litigation written communication demanding payment for damages. This could be a letter from a patient alleging a botched surgery and demanding compensation (a specific dollar amount need not be requested). Conversely, payments based solely on oral demands are not to be reported. For example, if a patient calls or comes in person to the office and demands a refund for what he or she considers poor treatment, payment of the refund would not be reportable.

For reporting purposes, the claim must be based on a practitioner’s provision of or failure to provide healthcare services; the NPDB interprets this broadly. For instance, if a suit is brought against a practitioner alleging medical malpractice and other torts, and the medical malpractice counts are dropped, if the insured is still named in the suit and OMIC makes a payment on behalf of the insured practitioner, OMIC must report the payment. The narrative portion of the report can be used to explain why the payment was made, that the medical malpractice allegations were dropped, or any other relevant data.

A report is only required if the practitioner is named, identified, or otherwise described in both (1) the written complaint or claim demanding payment and (2) the settlement release or final adjudication, if any. So if a practitioner is named in the release but not in the demand or lawsuit, that practitioner need not be reported. If a practitioner was named in a lawsuit but is later dismissed and is not identified in the settlement release, a payment need not be reported for that practitioner unless his or her dismissal resulted from a condition in the settlement or release.

Even if several ophthalmologists are insured under one policy, a report is made to the NPDB only for the individual practitioner for whose benefit a payment was made. If OMIC makes a payment for the benefit of multiple insureds due to one claim, reports must be submitted for each insured. If it is impossible to determine the amount paid on behalf of each insured individually, the total amount and the total number of practitioners must be reported on each submission. If payment can be apportioned, OMIC must report the actual amount paid for the benefit of each practitioner on their respective reports. If multiple payers contribute to the settlement or satisfaction of a judgment for the benefit of one practitioner, they each must submit a report. For example, if OMIC and a patient compensation fund each pay a share of an award, they report their respective payments to the NPDB.

OMIC is also required to submit a copy of the NPDB report to the appropriate licensing board in the state where the act or omission that was the basis of the claim occurred. Generally, OMIC does not supply any further information on the claim to any state administrative body unless it is necessary to coordinate payment with a patient compensation fund.

As a reminder, the NPDB was created by Congress as an electronic repository of information on medical malpractice payments and certain adverse actions that authorized organizations can access to make licensing, credentialing, privileging, or employment decisions. The reports are confidential and not available to the public, though the subjects of these reports have access to their own information. Federal law makes clear that reporting a medical malpractice payment is not an admission that the practitioner did anything wrong. The law states that a “payment in settlement of a medical malpractice action or claim shall not be construed as creating a presumption that medical malpractice has occurred.” The NPDB recognizes that some claims are settled for convenience and are not a reflection of the professional competence or conduct of a practitioner.