National Practitioner Data Bank Provides Guidance on Medical Malpractice Payment Reports

The National Practitioner Data Bank has published an article in the October 2015 NPDB Insights to help clarify when a medical malpractice payment is reportable to the Data Bank. Since a Medical Malpractice Payment Report (“MMPR”) can have significant professional and economic ramifications, it is important for all health care providers to understand when a report is required and when one can be avoided.

For Data Bank purposes, a medical malpractice payment is an exchange of money that is the result of a written complaint or claim demanding payment for damages based on a health care provider’s provision of or failure to provide health care services. The payment must be the result of a written claim or complaint that results in a judgment, arbitration, or settlement. At times, medical malpractice claims may be settled for convenience and do not necessarily reflect the professional competence or professional conduct of a practitioner; nevertheless, all payments, regardless of amount, made for the benefit of individual health care providers must be reported.

However, in some instances payment to resolve medical malpractice claims pursuant to a high-low agreement are not reportable to the Data Bank. A high-low agreement is a contractual agreement between a plaintiff and a health care provider’s insurer that establishes the parameters of the payment the plaintiff will receive after a trial or arbitration proceeding. In some cases, a medical malpractice payment is made, but the health care provider is not found to be liable in the case. In those instances, the payment is not reportable to the Data Bank because the payment is not being made for the benefit of the health care provider in the settlement of a medical malpractice claim.

A payment made at the low end of a high-low agreement must be reported to the Data Bank, unless the fact-finder (such as a judge, jury, or arbitrator) rules in favor of the health care provider and assigns no liability to them. If the fact-finder does so, the payment is not being made for the benefit of the health care provider in settlement of a medical malpractice claim. Instead, it is being made pursuant to an independent contract between the health care provider’s insurer and the plaintiff.

A report to the Data Bank can significantly impact a health care provider’s reputation and career. State licensing authorities, hospitals and other health care entities, and professional societies query the Data Bank when investigating qualifications. A response that contains an adverse report can result in a denial of credentialing, loss or limitation of hospital privileges, loss or limitation of licensure, exclusion from participation in health plans, and increases in premiums or exclusion from professional liability insurance. As a result, health care providers should carefully explore all options available to prevent a Data Bank report and avoid the resulting professional damage and economic implications. For additional information or assistance, contact a Wachler & Associates attorney at (248) 544-0888.