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Commentary: it's time to rewrite the healthcare quality Improvement Act of 1986.

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The 31-year-old federal law doesn't reflect today's medical landscape, in which nonphysicians are shouldering more responsibility.


Improvement Act of 1986 for several reasons:

* Because of the "increasing occurrence of medical malpractice and the need to improve the quality of medical care."

* Because of "a national need to restrict the ability of incompetent physicians to move from state to state without disclosure or discovery of the physician's previous damaging or incompetent performance."

* Because the "threat of private money damage liability under federal laws, including treble damage liability under federal antitrust law, unreasonably discourages physicians from participating in effective professional peer review."

* And because this "nationwide problem can be remedied through effective professional peer review."

The act contains provisions for conducting peer review and for a health care entity to report to the National Practitioner Data Bank when it takes a "professional review action that adversely affects the clinical privileges of a physician for a period longer than 30 days." (1)

The law was enacted at a time when few physicians or other practitioners were employed by hospitals and health systems. With the exception of hospital-based physicians such as anesthesiologists, most physicians were in an independent private or group practice. Today's health care environment is quite different. According to a 2016 survey by The Physicians Foundation, almost 58 percent of the more than 17,000 physicians who responded describe themselves as employees of a hospital or medical group--up from 52.8 percent in 2014 and 43.7 percent in 2012. (2)

One of the unanticipated outcomes of that trend is that some physicians who previously would have been reported to the data bank are no longer being reported, and they're free to find a new job without having a record.

Then there's the issue of advanced practice providers--the act doesn't require reporting to the database of actions taken against nurses or physician assistants, many of whom provide health care in hospitals. And what of physicians who are involved in medical malpractice claims that aren't reported to the database when plaintiffs sue the hospital or health care organization instead?


The act provides immunity from damages for hospitals and medical staff members taking professional review actions based on the competence or professional conduct of an individual physician that adversely affects--reduces, restricts, suspends, revokes, denies, etc.--a medical staff member. One of the requirements to be granted immunity is that the professional review action be taken "after adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances." In days past, this meant most physicians practicing at a hospital would be allowed due process.

The American Medical Association addresses hearing rights for employed practitioners in its Principles for Physician Employment. (3) In this policy, the AMA says "[p]eer review should follow established procedures that are identical for all physicians practicing within a given health care organization, regardless of their employment status" and "[e]mployed physicians should be accorded due process protections, including a fair and objective hearing, in all peer review proceedings."

In recent years, however, hospitals have been including in their contracts with physician employees a "clean sweep provision," in which the physician agrees to waive all fair hearing and appeals rights set forth in the hospital's medical staff bylaws in lieu of using the hospital's employment termination grievance process. Since the termination is done by the hospital pursuant to an employment agreement, it does not meet the definition of a "professional review action" under the act, and no report is required.

When no adverse action is taken and no report is made to the national data bank, the physician can seek employment elsewhere without having a record of the termination. Many hospitals have policies that allow them to provide only information about whether an individual is currently employed, his or her current or last job title, and the dates of employment. When the medical staff office at a hospital where a physician is seeking membership and privileges contacts the medical staff office at the hospital where the physician formerly worked, they are typically provided a letter with dates on staff and a comment that "the practitioner's medical staff membership and privileges were linked to the employment contract and are no longer active" or that the physician left "in good standing." If no adverse action was taken by the medical staff, there is none to report. Hospital medical staffs then must decide whether they have enough detail about the competency of the practitioner or if they should try to find out more from other sources.

Although not reporting the dismissal of a physician to the national registry is acceptable under the federal act, hospitals and medical staffs need to evaluate whether it's in the best interest of safe, quality patient care to bypass the medical staff's peer review and hearing processes by using such contract language.


The Centers for Medicare & Medicaid Services' Conditions of Participation allow a hospital's governing body, in accordance with state law, to grant medical staff privileges and membership to nonphysician practitioners. (4)

Although the Healthcare Quality Act requires querying the national data bank when a physician, dentist or other health care practitioner applies for medical staff appointment or clinical privileges, it does not require reporting of those other practitioners. It simply specifies reporting of adverse actions taken against physicians--meaning a doctor of medicine or osteopathy, or a doctor of dental surgery or medical dentistry. It does include a provision for "permissive reporting" on other licensed health care practitioners, as if the practitioner were a physician, but reporting is not mandatory.

According to the American Association of Nurse Practitioners, there were more than 205,000 nurse practitioners licensed in the United States as of November 2015, of which 44.8 percent hold hospital privileges. (5) Meanwhile, the Bureau of Labor Statistics reports there were 94,400 physician assistant jobs in 2014 (6)--a job field that's projected to grow by 30 percent through 2024.

Other practitioners who might hold clinical privileges include dietitians or nutrition professionals, speech or hearing service providers, social workers or rehabilitative professionals, surgical nurse assistants, pharmacists and psychologists.

Advanced practice nurses, physician assistants and other nonphysician providers are providing care and making independent medical diagnosis and treatment decisions in many health care organizations. Although they are granted clinical privileges, they are not subject to the same reporting requirements under federal law that physicians face.


Some medical malpractice payments made after a practitioner's negligence aren't reported to the NPDB. Health care attorneys often negotiate with plaintiffs to drop employed physicians from their lawsuits, leaving the hospital or other health care entity as the sole plaintiff. This avoids a medical malpractice report in the physician's name being submitted to the national database.

According to the 2015 NPDB Guidebook, "Each entity that makes a payment for the benefit of a health care practitioner in settlement of, or in satisfaction in whole or in part of, a written claim or judgment for medical malpractice against that practitioner must report the payment information to the NPDB. A payment made as a result of a suit or claim solely against an entity [for example, a hospital, clinic or group practice] that does not identify an individual practitioner should not be reported to the NPDB." (7)

Public Citizen, a nonprofit organization that champions citizen interests, has filed suit to close what it calls a "corporate shield loophole" by requiring that reports to be submitted to the NPDB in the name of a health care practitioner on whose behalf the malpractice payment is made, regardless of whether the practitioner is named as a defendant. (8) This complaint asks a federal judge to order the Department of Health and Human Services and the Health Resources and Services Administration to act on a May 2014 petition by Public Citizens to close the loophole.

The Healthcare Quality Improvement Act of 1986 does not meet the needs of today's health care climate. It should be revised to include mandatory reporting of employed physicians who have their contracts terminated for reasons of competence or conduct. It also should include mandatory reporting of actions taken against advanced practice nurses, physician assistants and other nonphysician health care providers. And it should include mandatory reporting of all medical malpractice claims paid on behalf of a practitioner.

Such changes are necessary to meet the original intent of the act: to restrict the ability of incompetent practitioners--to borrow a phrase--to move from state to state without disclosure or discovery of the previous damaging or incompetent performance.


The National Practitioner Data Bank Guidebook outlines a scenario in which a hospital can use termination instead of professional review to dismiss a practitioner without "taking action." It says:

Q: A hospital filed a report with the NPDB announcing the revocation of a practitioner's clinical privileges. The reporting hospital had established a system of professional review under its bylaws, and it also had an employment termination procedure. In this case, the hospital used the employment termination procedure, not the professional review process. The practitioner's privileges were revoked by the employment termination process, but no action was taken through the professional review process. The practitioner was not given a choice of which process (system of professional review or employment termination procedure) the hospital would use. Should the hospital have filed the report with the NPDB?

A: No. The termination was not a result of a professional review action and, therefore, was not reportable. It does not matter that the employment termination, which was a result of the hospital's employment termination process, automatically resulted in the end of the practitioner's clinical privileges. However, if the hospital had performed a professional review of the practitioner's clinical privileges and revoked the practitioner's privileges as a result of the review, the professional review action would have been reportable, even if the action started as an employment termination. In order to be reportable to the NPDB, adverse actions must be the result of professional review. Generally, the reporting entity decides when a professional review has occurred.

Source: U.S. Department of Health and Human Services, Health Resources and Services Administration, 2015.

Kathy Matzka, CPMSM, CPCS, FMSP, is a health care industry consultant and speaker based in Lebanon, Illinois.


(1.) Title IV of Public Law 99-660, The Health Care Quality Improvement Act of 1986, as amended 42 USC Sec. 11101 01/26/98.

(2.) The Physicians Foundation. 2014 Survey of America's Physicians: Practice Patterns and Perspectives, healthcareresearch/2014-survey-of-americas-physicians- practice-patterns-and-perspectives.

(3.) H-225.950 AMA Principles for Physician Employment. hub/161605/file-18180526-pdf/docs/ama-principles-for-physicianemployment.pdf?t=1477417283402.

(4.) State Operations Manual Appendix A--Survey Protocol, Regulations and Interpretive Guidelines for Hospitals. andGuidance/Guidance/Manuals/downloads/som107ap_a_hospitals.pdf.

(5.) NP Fact Sheet,, visited May 15, 2016.

(6.) Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Physician Assistants, healthcare/physician-assistants.htm, visited May 15, 2016.

(7.) The NPDB Guidebook, aboutGuidebooks.jsp.

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Author:Matzka, Kathy
Publication:Physician Leadership Journal
Date:Jan 1, 2017
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