Disciplinary Actions and Consequences Generally
The Tenth Amendment to the United States Constitution authorizes states to establish laws and regulations protecting their citizens’ health, safety, and general welfare. The practice of medicine is a highly regulated profession in the United States partly because of the potential harm to the public that incompetent or impaired healthcare providers can pose. Accordingly, each state, the District of Columbia, and each U.S. territory has a medical practice act that defines the practice of medicine and delegates the licensure and enforcement authority to a state medical board. For example, the Oregon Medical Board describes its role as primarily responsible for its licensing functions, conducting investigations, imposing disciplinary action, and supporting rehabilitation, education, and research to further its legislative mandate.
Scope of Actions
An endless number of administrative sanctions may be readily assessed or pursued by a state medical board. These sanctions can range from written warnings and reprimands to the loss of a healthcare provider’s professional license.
Required Reporting of State Medical Board Action
According to data published by the Federation of State Medical Boards (FSMB), a national non-profit representing all state medical boards, there were over 7,000 actions taken by state medical boards against healthcare providers in 2021. Of these, there were over 1,000 reciprocal board actions. Reciprocal board actions occur when a state medical board other than the one that initially took action against a healthcare provider subsequently acts to prevent or limit the physician from practicing in their state.
There are several pathways for state medical boards to become aware of actions taken against a healthcare provider by another state’s medical board. First, as a condition of licensure, network participation, or program participation, healthcare providers are generally required to self-report disciplinary actions. Some common examples of where such required reporting standards may be found include (1) state law, (2) state medical board licensing agreements, (3) commercial payor network provider agreements, and (4) federal law.
Second, each state medical board must report any disciplinary action taken against a healthcare provider to the FSMB. In turn, the FSMB maintains a database that every state medical board can query and a database alert system that can proactively send alerts to each other state’s medical board where the healthcare provider is licensed.
Third and last, state medical boards must report any disciplinary action to the National Practitioner Data Bank (NPDB). The NPDB is overseen and managed by the U.S. Department of Health and Human Services (HHS) and is accessed by the Office of Inspector General (HHS-OIG) to update the List of Excluded Individuals and Entities (LEIE) database. The LEIE database maintains the list of excluded healthcare providers and entities from federally funded healthcare programs.
State Medical Board Action Risks National Exclusion
The HHS-OIG has the authority to exclude individuals and entities from federally funded healthcare programs under Section 1128 of the Social Security Act and from Medicare and state healthcare programs under Section 1156 of the Act. Exclusion from participation in state and federal healthcare programs materially affects a healthcare provider’s ability to practice both because excluded healthcare providers are barred from being an enrolled provider in Medicare, Medicaid, or both programs and because the healthcare provider cannot work for any entity that participates in Medicare or Medicaid programs.
Specifically related to state medical board actions, HHS-OIG has the permissive authority to exclude a healthcare provider under the Act if the provider’s license has been revoked, suspended, or surrendered. If HHS-OIG exercises its permissive authority, the period of exclusion must last for the minimum period imposed by the state licensing authority.
Healthcare Providers Who are Licensed in Multiple States are at Higher Risk for Exclusion
Because there are many reporting pathways for a state medical board action to be nationally broadcasted, and because any action that is taken by one agency can be used as evidence by other agencies or market participants in subsequent investigations or adjudicatory proceedings, a healthcare provider who is licensed to practice in multiple states faces higher risks of exclusion than healthcare providers who have only been licensed by the medical board of a single state. For example, a healthcare provider receiving a minor reprimand by one state medical board could, on the same facts, receive a much more adverse reciprocal action by another state’s medical board; in turn, action by either state medical board could increase the risk of an extended or permanent exclusion from federally funded healthcare programs.
Accordingly, when should a healthcare provider exercise constitutional silence?
Fifth Amendment Right Against Self-Incrimination in Non-Criminal Proceedings
In relevant part, the Fifth Amendment to the United States Constitution states that “[n]o person… shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law.” Despite the right against self-incrimination being limited to criminal cases, Fifth Amendment’s protections have been held by courts to apply to civil, administrative, judicial, investigative, and adjudicatory proceedings. However, the degree to which Fifth Amendment protections may be afforded under judicial review on appeal from non-criminal proceedings will be based on a question-by-question basis. Regardless of whether a party can exercise their Fifth Amendment right against self-incrimination, adverse inferences can be drawn from its invocation in non-criminal proceedings.
The Court established the precedent for allowing an adverse inference to be drawn in civil proceedings in Baxter v. Palmigiano, where an inmate remained silent during a disciplinary hearing when faced with incriminating evidence. The Court held that drawing an adverse inference was appropriate because incriminating evidence had also been presented and because no parallel criminal actions were being taken for which the defendant may be entitled to additional protections.
Unfortunately, regarding the latter entitlements, there is no universally accepted rule for when courts are required to grant additional protections. For example, one year after the decision in Baxter, the First Circuit court in Arthur v. Stern reasoned that a state medical board was entitled to draw an adverse inference from a healthcare provider’s refusal to testify before that board when he was also the subject of a pending criminal indictment. Under Arthur, and in a subsequent First Circuit decision, determining whether to allow an adverse inference in light of parallel criminal proceedings hinged on weighing one party’s constitutional rights against another party’s right to a fair hearing. As later reframed by the Ninth Circuit court in Doe ex rel., “The tension between one party’s Fifth Amendment rights and the other party’s right to a fair proceeding is resolved by analyzing each instance where the adverse inference was drawn, or not drawn, on a case-by-case basis… of the circumstances of that particular civil litigation.” Furthermore, the court clarified the standard by stating that “no negative inference can be drawn against a civil litigant’s assertion of his privilege against self-incrimination unless there is a substantial need for the information and there is not another less burdensome way of obtaining that information.”
Anticipating "Taking the Fifth" and its Downstream Implications
One might say that a critical ingredient to a thriving legal practice is the ability to convince a client that before issuing any recommendation on any legal matter, all facts need to be viewed from every foreseeable angle. Fortunately, when it comes to inquiries by state medical boards, a legal practitioner needs only mention how any misstep by a healthcare provider could cost them their career, open them to possible civil action elsewhere, or be used in future or parallel criminal proceedings.
Accordingly, to provide effective guidance, the legal practitioner should look beyond the prospective state medical board action to see the downstream chain of events (action chain) that such action could set into motion. To do this, the legal practitioner must have developed skills, experience, and technical knowledge of the agencies, their enabling statutes, and the state and federal evidentiary rules governing civil and criminal actions. The abovementioned elements define the rules that should inform strategy-based recommendations at each stage of the administrative review process.
More specifically, any administrative review process can be described as comprising a series of strategic interactions between rational agents acting upon the information they have at the time. However, in the case of state medical board investigative or adjudicatory processes, subsequent actors in the action chain often have access to asymmetric information. Not being able to forecast how information may be shared or used by a state medical board or by subsequent medical boards in other states where the healthcare provider may be licensed or wishes to relocate makes developing a strategy navigating a healthcare provider through the process into more of an art form than a procedure.
For example, a naïve or inexperience legal practitioner may recommend that a healthcare provider sign a consent order—a tool used by state medical boards to avoid a formal investigatory process—stating that in exchange for a lesser penalty than would be imposed if a formal investigation were to conclude a violation, a healthcare provider proactively agrees to be “guilty” of the violation. However, signing such a consent order may attract interest from other actors, such as other state medical boards or the HHS-OIG, who may conduct independent investigations or initiate an enforcement action against the healthcare provider based solely on the consent order. Relating to the latter, the consent order could be used as evidence of wrongdoing, even if the healthcare provider only signed the consent order to avoid the unnecessary cost of a formal investigation.
In this case, because a signed consent order may be considered incriminating evidence and adverse inferences can be drawn in civil actions where silence is exercised when faced with incriminating evidence, an experienced legal practitioner may recommend that the healthcare provider not exercise silence because there is no tangible benefit to doing so.
Conversely, suppose the alleged conduct upon which a state medical board’s investigation or adjudicatory process is founded could implicate a crime. In that case, an experienced legal practitioner may recommend that a healthcare provider exercise silence, even though doing so greatly increases the likelihood that the healthcare practitioner will be assessed a violation. Following the court’s logic in Baxter, exercising silence in any proceedings can be advantageous because adverse inferences are generally barred in criminal proceedings. If a defendant is found to have had the constitutional right to silence on a question but chose not to be silent, then, depending on local evidentiary rules, the information provided may be used in other proceedings, including criminal.
Ultimately, whether a healthcare provider should exercise constitutional silence should be informed by the nature of the action being taken by a state medical board, how other agencies may respond to silence or an adverse finding by the state medical board, and whether the alleged conduct could be used in subsequent civil or criminal actions.