Physician Licensing and Insurance Credentialing

To maintain a physician’s ability to practice medicine and provider status with public and commercial insurance networks after criminal charges, attorneys should develop a thorough plan for addressing the anticipated concerns of numerous entities. When a physician has been charged with any crime, there are a number of critical steps to take to avoid an avalanche of disciplinary actions and terminations of participation in public and commercial insurance programs. If the alleged crime is arguably related to the practice of medicine, controlled substances, or insurance billing practices, or if it could reasonably imply that the physician might not meet the professional or ethical qualifications required by credentialing entities, the physician will face an uphill battle to maintain his or her license, certifications, and insurance provider contracts. Moreover, if there is a highly prejudicial disciplinary action (e.g., any loss of license or material restriction on practice, etc.) reported against a physician, anticipate disciplinary or legal “piling on” by other health care entities and insurance networks. In modern medicine, physicians increasingly practice in multiple states. Federal laws and regulations governing the Medicare and Medicaid programs and the National Practitioner Data Bank (NPDB) are of paramount importance in the insurance and credentialing contexts for the medical profession. However, in order to develop an effective strategy for defending the physician’s ability to practice medicine and participate as a provider in government and commercial insurance networks, it is necessary to understand the entire physician licensing and credentialing framework and the relationship between federal, state, and commercial health care programs. 

Resolving the Criminal Complaint

The manner in which criminal charges against a physician are resolved will have a profound impact on what actions, if any, health care credentialing entities will take. The criminal defense attorney and physician should consider the likely ramifications of each proposed disposition of the case. Depending on what state(s) the physician is licensed in, a felony conviction for any crime could cause the automatic revocation of the physician’s medical license.1 Even if the license revocation is not automatic, the physician will very likely face a disciplinary inquiry from the medical board(s). Entering a plea of no contest where adjudication is withheld may afford little benefit because health care credentialing entities will often treat this disposition the same as a conviction.2 Additionally, state or local records that are expunged generally cannot be removed from the NPDB. 

Depending on the nature of the alleged crime, the physician may be able to enter into a treatment plan with a state physician health program. These programs are typically designed to promote the treatment, documentation, and monitoring of physicians to prevent their illnesses from impacting the care they render to patients. The Federation of State Physician Health Programs maintains a directory of physician health programs on its website.3 A criminal court, state medical board, peer review organization, or insurance network may get some level of comfort from a physician’s participation and monitoring in such a diversion program, which might help avoid the harshest disciplinary options or terminations of provider contracts. 

National Practitioner Data Bank

The primary health care provider disciplinary action reporting regime is the NPDB. This federally mandated4 clearinghouse is maintained by the U.S. Department of Health and Human Services’ (HHS’s) Health Resources and Services Administration, and is widely used by public and commercial health care entities to protect the public and reduce health care fraud. Federal and state government agencies and health plans, state medical boards, hospitals, peer review organizations, medical malpractice payers, and other private accreditation organizations report to the NPDB. As mandated under Section 6403 of the Patient Protection and Affordable Care Act (ACA), effective May 6, 2013, the previously separate Healthcare Integrity and Protection Data Bank (HIPDB) used by certain government agencies was merged into the NPDB.

Considerations related to NPDB reports may include the following:

1. When a physician has been charged with a crime, he or she should promptly request an NPDB selfquery report. Counsel cannot request the report on behalf of the physician.

2. Review whether there have been any previous adverse actions reported against the physician, and if so, confirm their accuracy. If an adverse action is reported incorrectly, the physician must notify the reporting entity to request that it submits a correction. If the reporting entity does not make the requested correction, the physician may initiate a dispute, which can include requesting the Secretary of HHS to intervene.

3. If appropriate, have the physician add his or her own statement concerning the circumstances, up to 2,000 characters, to any adverse action report, which would be provided to any entities that receive the report in the future.

4. Review which entities have previously received copies of the physician’s NPDB report, which may help identify to whom the physician may have self-reporting obligations or with whom the physician may face future credentialing challenges.

The NPDB Guidebook describes when an entity is required to report an adverse action to the data bank.5 This will be important to take into consideration when negotiating any settlement agreement because there may be reasonable actions credentialing entities could take that would not require reporting to the NPDB. 

It is the position of HHS that the expungement of disciplinary records pursuant to a state law may require that state’s licensing board to remove the information from its own records, but that state laws do not authorize reporting agencies to entirely remove or void these reports from the NPDB.6 However, if the matter was reversed or overturned on appeal, the action may be voided (deleted) from the NPDB. 

State Medical Boards

A physician and his or her attorney should conduct an assessment of the disciplinary laws and selfreporting procedures for each state where the physician holds a medical license. For example, if a physician’s principal office is located in State A, but he or she also maintains medical licenses in States B and C, the physician should determine the necessity for continuing to hold licenses in all of these jurisdictions. If the physician has no plans to practice medicine in State C in the future, he or she might consider whether to relinquish this license before having to face another potential disciplinary investigation. From a credentialing perspective, entities will often ask physicians if they have ever surrendered any medical license under threat of a disciplinary action, and if so, to provide a full explanation. So, even if State A reviewed the criminal matter and declined to revoke the license or materially restrict the physician’s medical practice, State B and/or State C could still impose a harsher penalty.

Various types of disciplinary actions by a state medical board are reportable to the NPDB. Additionally, states typically have their own online physician databases that include disciplinary information. Remember that even if a settlement with a medical licensing board is not reportable to the NPDB, the adverse action and settlement agreement may be publicly available from the state medical board’s own physician credentialing website. The Federation of State Medical Boards (FSMB) publishes an annual summary of board actions for each state showing the level of prejudicial versus nonprejudicial actions.7 The data from the FSMB Summary of 2011 Board Actions by medical and osteopathic boards illustrates that prejudicial actions accounted for 83 percent of board actions, versus only 17 percent for nonprejudicial board actions (see Table 1 on page 10).

The FSMB also maintains the Federation Physician Data Center, which makes board actions against physicians available to the public via the FSMB Physician Profile8 for a nominal fee. Again, certain disciplinary actions that are not reportable to the NPDB might be reportable to the FSMB Physician Profile. If one state reports a disciplinary action against a physician related to a criminal matter on one of these reporting systems, anticipate all other states where the physician is licensed will eventually launch their own disciplinary investigations. 

HHS Office of Inspector General

The Office of the Inspector General of HHS (OIG) is authorized under the Social Security Act to exclude professionals from participation in federal health programs including Medicare and Medicaid. Tables 2 and 3 (see page 10) summarize the OIG’s mandatory and permissive exclusion categories, corresponding minimum exclusion periods, and statutory authorities.

If the OIG is contemplating excluding a physician, it will send a notice of intent to exclude, including the basis for the proposed exclusion.9 The physician then has 30 days to respond in writing with any evidence or rationale as to why he or she should not be excluded. If the physician is excluded by the 
OIG, appeals may be made to an HHS administrative law judge, then to the HHS Departmental Appeals Board, and finally through judicial review in federal court. The OIG maintains the searchable list of excluded individuals/entities on its website.10

The Medicare Enrollment Application, CMS-855I, requires participating physicians to notify Medicare of a final adverse action within 30 days of the reportable event. Below are certain reportable events (regardless of whether an appeal is pending): 

Convictions

1. The provider . . . within the last 10 years preceding enrollment or revalidation of enrollment [was] convicted of a Federal or State felony offense that CMS has determined to be detrimental to the best interests of the program and its beneficiaries. Offenses include: “Felony crimes against persons and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pre-trial diversions; financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pre-trial diversions; any felony that placed the Medicare program or its beneficiaries at immediate risk (such as a malpractice suit that results in a conviction of criminal neglect or misconduct); and any felonies that would result in a mandatory exclusion under Section 1128(a) of the Social Security Act.”

2. Any misdemeanor conviction, under Federal or State law, related to: (a) the delivery of an item or service under Medicare or a State health care program, or (b) the abuse or neglect of a patient in connection with the delivery of a health care item or service.

3. Any misdemeanor conviction, under Federal or State law, related to theft, fraud, embezzlement, breach of fiduciary duty, or other financial misconduct in connection with the delivery of a health care item or service.

4. Any felony or misdemeanor conviction, under Federal or State law, relating to the interference with or obstruction of any investigation into any criminal offense described in 42 C.F.R. Section 1001.101 or 1001.201.

5. Any felony or misdemeanor conviction, under Federal or State law, relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

Exclusions, Revocations, or Suspensions

1. Any revocation or suspension of a license to provide health care by any State licensing authority. This includes the surrender of such a license while a formal disciplinary proceeding was pending before a State licensing authority.

2. Any revocation or suspension of accreditation.

3. Any suspension or exclusion from participation in, or any sanction imposed by, a Federal or State health care program, or any debarment from participation in any Federal Executive Branch procurement or non-procurement program.

4. Any current Medicare payment suspension under any Medicare billing number.

5. Any Medicare revocation of any Medicare billing number.11

Because Medicare and Medicaid are federal programs, exclusion by the OIG would impact the physician’s participation nationally, ultimately terminating all state Medicare and Medicaid provider contracts. It should be noted that even if the OIG does not exclude a physician at the national level, an individual state’s Medicaid credentialing authority may restrict a physician from participation within the state

State Medicaid and Medicare Programs

Physicians licensed in a particular state are often providers in that state’s Medicaid and/or Medicare programs. The physician should thus consider any need to maintain provider contracts with these programs. Depending on the nature of the crime or action taken by a state medical board, a state Medicaid credentialing authority or state Medicare administrative contractor could revoke or restrict the physician’s provider status. Even if a state medical board chooses not to discipline a physician’s license, the state Medicaid and/or Medicare program may still revoke or restrict the physician’s provider status. Similarly, the reinstatement of a state medical license also does not guarantee the reinstatement of a physician’s provider status with these programs in that state. If a state Medicaid or Medicare program reports a disciplinary action to the NPDB, anticipate investigations by other governmental insurance programs and commercial insurance companies. If the physician is not billing under these programs in a particular state and/or intends to surrender his or her medical license in that state, promptly consider the necessity for maintaining these contracts. 

U.S. Drug Enforcement Agency and State Pharmacy Boards

Physicians that require the ability to prescribe certain controlled substances must be registered with the U.S. Department of Justice’s Drug Enforcement Agency (DEA) Office of Diversion Control. A state may also require licensing by its pharmacy board. The DEA assigns registered physicians a federal DEA number. Under the Controlled Substances Act (CSA), the attorney general has the authority to deny, suspend, or revoke a DEA registration upon the finding that a registrant has: (1) materially falsified any application filed; (2) been convicted of a felony relating to a controlled substance or certain chemicals; (3) had his or her state license or registration suspended, revoked, or denied; (4) committed an act that would render the DEA registration inconsistent with the public interest; or (5) been excluded from participation in a Medicaid or Medicare program.12 The liability section of the Renewal Application, DEA-224a, will ask the physician questions pertaining to these types of disciplinary actions.

Under the CSA, factors to be taken into consideration for a registration revocation include: (1) the recommendation of the appropriate state licensing board or professional disciplinary authority; (2) the applicant’s experience in dispensing or conducting research with respect to controlled substances; (3) the applicant’s conviction record under federal or state laws relating to the manufacture, distribution, or dispensing of controlled substances; (4) compliance with applicable state, federal, or local laws relating to controlled substances; and (5) such other conduct that may threaten the public health and safety.13 It should be expected that the loss of a DEA registration would ultimately result in the loss of a state pharmacy board license because there may be a reporting obligation, and the pharmacy board application/renewal should ask whether the physician’s registration with the DEA has been revoked or suspended. If the physician is not prescribing medicine in a particular state and/or intends to surrender his or her medical license in that state, promptly consider the necessity for maintaining the state pharmacy board license. 

Peer Review Organizations and Medical Specialty Boards

Physicians are often credentialed by medical specialty boards. The three umbrella medical specialty organizations are the American Board of Medical Specialties (ABMS), American Board of Physician Specialties (ABPS), and American Osteopathic Association Bureau of Osteopathic Specialties (BOS). Each has several subspecialty boards where a physician can be certified, such as the American Board of Radiology, Board of Certification in Radiology, and American Osteopathic Board of Radiology, respectively. These peer review organizations may impose self-reporting obligations on their members.

If a criminal matter did not reasonably relate to the practice of medicine, it should be emphasized in explanatory documentation because it will be reviewed by credentialing staff and/or a governing body made up of physicians. Disciplinary actions by a peer review organization may be reportable on the NPDB. Additionally, an umbrella specialty organization may maintain its own credential verification 14 system. Hospitals, physician practice groups, or commercial insurance networks may require that a physician be certified (or eligible to be certified) by a particular medical specialty board to maintain his or her affiliations or provider status. Therefore, the loss of certification or diplomate status with a medical specialty board may have other ramifications. 

Hospitals

Hospitals are the only entities required to query the NPDB for the granting, maintenance, or expansion of a physician’s clinical privileges, including temporary locum tenens privileges. Therefore, any adverse actions reported on the NPDB will be scrutinized by a prospective hospital employer. Additionally, hospitals must report to the NPDB and applicable state licensing board any professional review actions reasonably related to professional competence or conduct adversely affecting clinical privileges for a period longer than 30 days. Therefore, should a hospital revoke a physician’s clinical privileges based on a criminal matter, its report to the NPDB will likely trigger disciplinary inquiries by other entities. 

Commercial Insurance Networks and Accountable Care Organizations

An inventory of all commercial insurance companies with whom the physician’s practice is credentialed should be reviewed. A contract with an insurance company may impose certain reporting requirements related to criminal matters and/or disciplinary actions by other health care entities, with clauses such as: “Physician shall notify Insurance Company immediately upon the initiation of any complaint, inquiry, investigation, or review with or by any licensing or regulatory authority, peer review organization, hospital committee, or other committee, organization, or body that reviews quality of medical care, which complaint, inquiry, investigation, or review, directly or indirectly, evaluates or focuses on the quality of care provided by Physician either in any specific instance or in general.”

If the insurance company becomes aware of a criminal matter from the NPDB report or other source and the physician did not meet any contractual self-reporting requirement, it may choose to terminate the physician’s contract. Alternatively, the contract may allow for termination based on the failure of the physician to maintain his or her license; suspension, termination, or reduction of privileges or medical staff membership at any hospital; or any action that could subject the physician to discipline by a licensing or regulatory agency, professional entity, or organization. Many national insurance networks have robust credentialing staff, committees, and even appellate bodies that include physicians, nurses, attorneys, and administrators. When arguing that a physician should continue to be a provider in their network, needing to explain why the physician did not meet a contractual reporting requirement is an unnecessary strike against the physician.

The ability for a physician to maintain his or her provider status with a commercial insurance network may be highly impacted by the type of discipline imposed by state medical boards, governmental insurance programs, hospitals, or peer review organizations. However, the insurance company possesses discretion over whether to continue to allow a physician in its provider network. As previously noted, depending on the nature of the criminal matter, participation in a state physician treatment program might prove helpful. If necessary, a physician can seek to enter into an agreement stipulating enhanced reporting requirements or other undertakings to maintain his or her participation in the insurance network.

A new type of health care entity gaining traction is the accountable care organization (ACO). ACOs are generally groups of doctors, hospitals, and other health care providers who work together to provide health care services to a particular Medicare patient population. ACO performance is evaluated by HHS’s Centers for Medicare & Medicaid Services (CMS) on a number of criteria, one of which is patient safety. If a physician is disciplined by or terminated from any Medicare-related program, his or her participation in an ACO will be jeopardized. 

Medical Malpractice Insurance Coverage, Practice Group, and Other Contracts

Besides health care licensing and insurance entities, physicians should determine if they have other contractual reporting obligations. For example, does their individual or group medical malpractice insurance carrier require the reporting of criminal actions and/or disciplinary actions? A physician’s employment, partnership, or membership agreement with the practice group may impose certain reporting or professional standing requirements. Below are examples of boilerplate clauses that may be contained within a physician’s employment agreement that could allow for his or her termination for “good cause”: 

• the physician’s failure to obtain or maintain (whether through revocation, suspension, or termination) his or her license to practice medicine in State X;

• the physician’s failure to acquire, or the subsequent termination, loss, or suspension of, his or her medical staff and/or other appropriate clinical privileges at any hospital, clinic, or other facility at which the employer provides medical services, where such privileges are not reinstated within 30 days from the date of suspension;

• the physician is charged with or indicted for any felony, crime of moral turpitude, or other serious offense;

• the determination of professional misconduct of the physician by the employer or any professional organization having jurisdiction thereof; 

• the physician’s receipt of a final, nonappealable suspension or termination from the Medicaid or Medicare program or any other payer; or

• the physician commits an act of fraud, dishonesty, impropriety, or unethical practice in connection with the performance of services hereunder or his or her association with the employer, or the physician otherwise engages in any conduct that may, in the employer’s reasonable but sole discretion, damage the professional or personal reputation of the employer and/or any of its owner physicians within the community. 

If a physician utilizes third-party billing and/or credentialing services, these service providers should be apprised of any disciplinary issues so that careful attention is paid to insurance billing/reimbursement issues and the legal or compliance staff has the opportunity to review responses to insurance network credentialing questions about disciplinary actions. The same scrutiny should also be used by any in-house credentialing staff. 

Settlement and Other Considerations

There are a number of things for physicians and their attorneys to take into consideration when negotiating any settlement, whether it is with a prosecutor, licensing board, peer review organization, hospital, or public or commercial insurance program.

• In any settlement agreement, to the extent appropriate, try to avoid any statement or admission that the crime relates to the practice of medicine, patients, controlled substances, or involves insurance billing, moral turpitude, fraud, deceit, or other dispositions that could be highly prejudicial to credentialing bodies.

• Carefully review what types of actions are reportable on the NPDB and other applicable reporting regimes. Certain actions do not require reporting and therefore may avoid “piling on” disciplinary actions by other entities.

• Focus on the positive when talking to credentialing bodies. Has the physician avoided medical malpractice claims? Demonstrate, if possible, that the physician has accepted full responsibility for his or her actions and taken meaningful steps to ensure there will be no recidivism. Show that the physician has been fully rehabilitated from any temporary illness. Does the physician volunteer or work in medically underserved areas? Obtain written professional and personal reference letters that speak to the continued confidence in the physician.

• While the typical patient might not have access to NPDB reports or conduct due diligence on state medical board websites, physicians should be cognizant that the reporting of disciplinary actions or public commentary from patients are more prevalent through consumer focused websites such as healthgrades.com, Angie’s List, etc.

• Once a physician has been convicted or pleads guilty to a crime, it will be important to pay careful attention to how all future credentialing documentation is completed and to keep track of any ongoing reporting obligations and other undertakings. 

Conclusion

The portability of physician medical practices, telemedicine, expansion of federal health programs and commercial insurers, physician review Internet sites, and increased information sharing and sophistication of credentialing bodies will continue to increase the level of scrutiny on physicians. Early intervention and advocacy after a physician has been charged with a crime can often have a dramatic impact on maintaining a physician’s practice and on the rest of his or her future career in the medical field. 

Notes

1. 1. See, e.g., MO. REV. STAT. § 334.103.
2. 2. See, e.g., FLA. STAT. § 458.331(1)(c).
3. 3. FED’N ST. PHYSICIAN HEALTH PROGRAMS, www.fsphp.org (last visited Sept. 24, 2013).
4. The NPDB was originally established by the Health Care Quality Improvement Act of 1986 tit. IV, Pub. L. No. 99-660.
5. HEALTH RES. & SERVS. ADMIN., U.S. DEP’T HEALTH & HUMAN SERVS., NATIONAL PRACTITIONER DATA BANK (NPDB) GUIDEBOOK (2001), available atwww.npdb-hipdb.hrsa.gov/resources/NPDBGuidebook.pdf. Both the NPDB Guidebook and HIPDB Guidebook are available on this site. HHS has announced that a new NPDB Guidebook reflecting the merger with the HIPDB should be released in Fall 2013.
6. See Data Bank News, NAT’L PRAC. DATA BANK (Aug. 2013), www.npdb-hipdb.hrsa.gov/enews/ Aug2013enews.jsp.
7. Summary of Board Actions, FED’N ST. MED. BOARDS, www.fsmb.org/pub_basummary.html (last visited Sept. 24, 2013).
8. DocInfo, FED’N ST. MED. BOARDS, www.docinfo.org (last visited Sept. 24, 2013).
9. 42 U.S.C. § 1320a-7(f).
10. Search the Exclusions Database, OFFICE INSPECTOR GEN., http:// exclusions.oig.hhs.gov (last visited Sept. 24, 2013).
11. Ctrs. for Medicare & Medicaid Servs., Medicare Enrollment Application: Physicians and NonPhysician Practitioners, CMS-855I § 3 (July 2011), available atwww.cms.gov/Medicare/CMS-Forms/ CMS-Forms/downloads/cms855i.pdf.
12. 21 U.S.C. § 824.
13. 13. Id. § 823.
14. See, e.g., CERTIFICATION MATTERS, www.certificationmatters.org (last visited Sept. 24, 2013).