The federal agency that operates the National Practitioner Data Bank is preparing to issue a new proposed rule that would change the way malpractice judgments are reported to the databank.
Those changes may include closing the so-called "corporate shield" loophole, which is used by some physicians who are being sued for malpractice to avoid having their names reported to the databank.
The corporate shield issue is surfacing at a time when Congress is debating whether to open the confidential databank to the public. Lifting the shield could be the first step toward full disclosure, which physicians and hospitals oppose.
The 10-year-old databank, which is run by HHS' Health Resources and Services Administration, tracks malpractice judgments and disciplinary actions against physicians. Hospitals must query the databank before they hire physicians and then must check the databank every two years after that. Health plans may also use the databank.
The payers of malpractice claims--usually malpractice insurers--must report to the databank any payments they make to plaintiffs to either settle or satisfy the judgments in malpractice cases that name individual physicians as defendants.
However, if a physician is not named as a defendant, settlements or judgments do not have to be reported to the databank.
Mark Pastin, president of the Alexandria, Va.-based Council of Ethical Organizations, said the loophole helps plaintiffs win settlements that they otherwise might not get.
"In a good lawsuit, the plaintiff will avoid naming the physician, and in turn, the physician will agree to settle the case," Pastin said.
But the problem is the corporate shield loophole also protects individual physicians who were negligent in care but lucky enough not to be named as defendants in malpractice lawsuits, consumer advocates say.
HRSA tried to remedy the situation with a proposed rule published in the Dec. 24, 1998, Federal Register.
In the 1998 proposal, HRSA sought to limit the use of the corporate shield loophole by requiring malpractice insurers to report the name of the practitioner who provided the care that is the subject of the complaint.
"This (corporate shield) practice makes it possible for practitioners whose negligent or substandard care has resulted in compensable injury to patients to evade having that fact appear in the databank, since the payment is arguably not in satisfaction of a claim or judgment against the practitioner," HRSA wrote in 1998.
HRSA was so overwhelmed with comments on the 1998 proposed rule that the agency decided to scrap it and issue a new one later this year, according to a notice published in the April 17 Federal Register. A 60-day comment period will follow, and the final rule would take effect in early 2001.
"Part of the problem is that if you name one individual, you totally tarnish that person's reputation, but often it's not just one person's fault," said Brent Miller, vice president of public policy and political affairs at the American Medical Group Association, which is opposed to lifting the shield. "It's often an organizational problem."