Risk Management

Medical Board Investigations Should Not be Faced Alone

By Ryan Bucsi, Mr. Bucsi is a Senior Litigation Analyst with OMIC’s Claims Department.

Digest, Winter 2007

You would never attempt to represent yourself in a medical malpractice lawsuit and assume responsibility for taking all the necessary depositions, preparing your own trial exhibits, examining witnesses during trial, and convincing a jury that your care and treatment met the standard of care. You know that if you are faced with a malpractice complaint, your first course of action should be to call OMIC’s claims department so we can put you in touch with a defense attorney who will represent you throughout the course of litigation.

What you may not know is that OMIC is also here to defend you if you receive a letter of investigation from your state medical board regarding patient care you have rendered. Some insureds have failed to report these letters of investigation until after they have responded on their own. Unfortunately, when there is a significant delay in reporting the investigation to OMIC, the results can be as catastrophic as attempting to defend your own malpractice lawsuit.

For example, an OMIC insured received a letter of investigation from her state board requesting a complete copy of a patient’s chart. There was no request or requirement that the insured provide a written description or narrative of the patient’s care, just a request for the chart. Without contacting OMIC for advice, the insured not only sent the requested records to the medical board but also a detailed narrative outlining her treatment of the patient. The insured did not hear back from the medical board until a year later when she received a letter notifying her that the board had concluded its investigation and was bringing disciplinary charges against her.

In the year that passed between the request for the patient’s chart and the notification of disciplinary action, the state board had been busy retaining experts who testified that the insured’s care was indeed below the accepted standard. Based on this expert testimony, the board proposed the following disciplinary action against the insured: a fine in the thousands of dollars, reimbursement of the costs associated with the state board investigation, a letter of reprimand, community service, and continuing education.

It was at this point that the insured contacted OMIC for assistance. An attorney was assigned to represent her and experts were retained on her behalf. Unfortunately, the insured had put herself at a great disadvantage by directly responding to the medical board, and no facts that OMIC or defense counsel presented could persuade the board to reverse its decision or reduce the proposed penalties. In the process, the insured’s defense coverage limits for this investigation were exhausted. Had the insured contacted OMIC as soon as she received the initial letter of investigation, OMIC would have assigned legal counsel to assist her in writing a response, which could have improved her chances for a more favorable decision from the state board.

OMIC Policy Covers Defense of Medical Board Investigations

Most physicians are not properly trained to respond to medical board inquiries and investigations in a manner that benefits their position. The initial letter from a state medical board may seem like a harmless request for records or information on a patient; however, your initial response is vitally important and may determine whether the board proceeds with an investigation or dismisses the complaint. Significantly, medical board or licensure actions can result in suspension of your medical license, thus making these cases far more risky than a medical malpractice case.

Insureds should treat a notice of medical board investigation the same way they would treat a patient complaint letter or request for information from a plaintiff attorney and contact OMIC before responding. OMIC defense attorneys are experienced in dealing with medical board actions and oftentimes are familiar with the individuals in charge of the investigations. This type of firsthand experience is invaluable when preparing a response to a letter of investigation and may reduce the likelihood that the medical board will pursue the investigation further.

Coverage for state board investigations is included as a part of your OMIC policy: “OMIC shall defend any insured ophthalmologist…against any investigation, disciplinary proceeding, or action for review (hereinafter “investigation”) of the insured’s practice by any federal, state or local regulatory agency arising from a complaint or report by a patient to such an agency of an injury to that patient resulting from a professional services incident involving direct patient treatment provided by the insured. However, OMIC will have no liability for fines, sanctions, penalties, or other financial awards resulting from the investigation.”

Please note that OMIC provides defense coverage only and there is a limit to this coverage: “The most OMIC will pay per insured for the claim expenses for any one such investigation is $25,000. The most OMIC will pay per insured for claim expenses for all such investigations during the policy period or the extended reporting period will be $75,000.”

It has been OMIC’s experience that meeting or exceeding the $25,000 expense limit is rare. In OMIC’s history, only six cases have reached or exceeded the $25,000 coverage limit. In fact, in a review of 46 closed medical board cases, the average expense for these matters was roughly $5,000. The attorneys assigned by OMIC to handle these cases are aware of this limited defense coverage and have negotiated their hourly fees with OMIC accordingly. This gives OMIC insureds the best combination of experience and value as our attorneys will attempt to resolve the matter within policy limits, thus avoiding out-of-pocket defense expenses for the insured.

Patient Complaint Often Precedes Malpractice Claim

A patient complaint to the state medical board has all the attributes of a malpractice claim except that the patient is not demanding money from the insured. OMIC’s rationale for providing defense coverage for medical board investigations is that these cases are often precursors to impending legal actions. A patient who complains to an investigative entity is most likely unhappy with the insured’s care and might later decide to file a medical malpractice claim against the insured.

State medical boards have a duty and a right to investigate patient complaints. Even if the allegations seem frivolous and you do not personally have concerns about your care and treatment of the patient, it is still wise to refer the case to OMIC so an attorney can respond on your behalf. Any OMIC insured is susceptible to these types of complaints; however, the majority of cases historically come from a handful of states, notably Florida, Arizona, and Nevada. OMIC has also defended state board investigations in California, Colorado, Texas, Illinois, Massachusetts, Washington, and Virginia. Regardless of which state you practice in, if you receive a notice of a state board investigation, please contact OMIC immediately.

When OMIC is brought in to defend these investigations early on, it has an excellent history of resolving them without fines or penalties being levied against the insured. Of 46 closed cases involving medical board investigations, 39 were dismissed without any type of adverse outcome for the insured. In all but two of these 39 cases, OMIC had assigned legal counsel on behalf of the insured. In the two cases that went before the state board without legal representation, the insureds did not report the complaint to OMIC until after they had responded to the initial letter of investigation. In the seven cases with adverse outcomes, the insureds were fined anywhere from $1,000 to $10,000 in addition to the costs of the investigation. They also were required to perform hours of community service and undertake continuing medical education. The complaints in these seven cases pertained to wrong site surgery, wrong surgery performed, or incorrect implantation of intraocular lenses.

It is important to note that once disciplinary action has been taken by a state medical board, it reports the action to the federation of State Medical Boards and the National Practitioners Data Bank. Furthermore, the physician is required to report any such action to other states where he or she practices or has a medical license. OMIC recommends that insureds consult with their OMIC-appointed attorney regarding reporting requirements of state board actions.

In summary, the same type of caution that is applied to medical malpractice claims and lawsuits should be applied to state medical board investigations. Insureds should contact OMIC’s claims department as coverage for such occurrences exists within your OMIC policy. OMIC has experienced defense attorneys to assist insureds in responding to such inquiries. The goal of legal representation is to decrease the likelihood that an investigation will proceed past the initial stages and result in the levying of fines or disciplinary action against the insured.

State Medical Board Actions

As a matter of public policy, the practice of medicine is a privilege granted by the people of the state acting through their elected representatives. It is not a natural right of individuals. Therefore, each of the 50 states, the District of Columbia, and the U.S. territories has a medical practice act that defines the practice of medicine and delegates the authority to enforce the law to a state medical board. In most states, the board regulates both allopathic and osteopathic physicians; in others, separate boards exist. There are currently 70 state medical boards authorized to regulate physicians.

Some of the functions of a state medical board include licensing physicians, investigating complaints, disciplining those who violate the law, conducting physician evaluations, and facilitating rehabilitation of physicians where appropriate. State laws require that boards assure fairness and due process to any physician under investigation.

Although medical boards sometimes find it necessary to suspend or revoke a license to practice, regulators have found that many problems can be resolved with additional education or training in appropriate areas.

In other instances, it may be more appropriate to place a physician on probation or place restrictions on a physician’s license to practice. This compromise protects the public while maintaining a valuable community resource in the physician. Probation and restrictions on a medical license may be in place while a physician receives further training or rehabilitation.

If a state medical board determines that a violation has occurred, it may take any of the following actions:

Reprimand or Censure – Physician receives a public admonishment.

Administrative fine/Monetary Penalty – Physician must pay a civil penalty fee imposed by the board.

Restitution – Physician must reimburse a patient or entity for monies improperly earned.

Probation – Physician’s license is monitored for a period of time.

Limitation or Restriction – Physician’s license is restricted in some way (e.g., a physician may be prohibited from performing specific procedures or prescribing certain drugs).

Suspension – Physician may not practice for a period of time.

Summary Suspension – Physician’s license is suspended immediately based on evidence that the physician’s practice presents a threat to public health and safety.

Voluntary Surrender of License – Physician surrenders license to avoid further disciplinary action.

Denial – Physician is not granted a license to practice or license is not renewed.

Revocation – Physician’s license is terminated and physician can no longer practice medicine.

To find out more about your state medical board, go to the federation of State Medical Boards’ website at www.fsmb.org/index.html.