As healthcare professionals know too well, healthcare is provided in the context of a complex web of professional, business, and governmental relationships. These affiliations often provide substantial support in the delivery of healthcare. In the context of professional discipline, however, each organizational tie is a source of potential legal liability.
Successful legal representation of healthcare professionals against allegations of professional misconduct requires a clear view of the big picture, and careful attention to each of the moving parts. For the healthcare professional, the stakes could hardly be higher ─ both professional standing and personal livelihood are at risk. The task for the healthcare professional’s attorney must be to quickly develop a comprehensive strategy to minimize the potential adverse consequences.
The following paragraphs outline thirteen potential problem areas that should be assessed in any case involving the possibility of professional discipline. With careful planning and attention to each source of potential liability, an ounce of prevention can indeed be worth a pound of cure.
1. Well-Being. The threat of professional discipline is obviously extremely stressful to a licensed healthcare professional, which can exacerbate depression or other mental health problems. Also, the behavior at issue in a disciplinary case may be caused by some treatable mental health problem. For these reasons, it is advisable to be very attentive to any indication of distress. When it appears that the professional is not dealing well with the stress, or if it appears that a mental health problem may have contributed to the problem, the healthcare professional should be referred to a psychiatrist.
2. Foreign States. In any disciplinary case, it is important to determine whether the healthcare professional is licensed in any other states, and, if so, whether the foreign state requires the licensee to provide notice of discipline in other states, and whether the foreign state is likely to impose discipline based upon the current action.
Many state licensing boards do not require licensees to give notice of discipline in a foreign state, but will require disclosure on the licensee’s application for renewal. Other states require licensees to self-report within 30 days of the imposition of discipline in a foreign state.
Most state licensing boards are authorized by statute to impose discipline based upon discipline in a foreign state, without having to prove any of the underlying facts. Because of this, discipline in one state will almost certainly result in discipline in all other states where the healthcare professional is licensed.
3. Criminal Prosecution. It is always advisable to get a criminal defense attorney involved in a case where there is a criminal investigation or the possibility of an investigation into a serious offense.
The most straight-forward cases involve a conviction of a misdemeanor such as driving under the influence of alcohol. In the case of a DUI or substance abuse related offense, it is important to get the healthcare professional into an appropriate recovery program as soon as possible.
In cases involving drug abuse, attorneys should be very cautious about having the client plead no contest with a deferred entry of judgment. While a deferred entry of judgment may be the best resolution in the criminal case, the no contest plea constitutes a conviction for administrative purposes and will expose the healthcare professional to discipline by the licensing board and possible exclusion as a Medicare and Medicaid provider.
4. Medicare and Medicaid Exclusions. In all discipline cases, and especially in cases involving potential criminal liability, poor quality of care, or loss of licensure, the healthcare professional is vulnerable to mandatory or permissive exclusion from participation as a provider for federal health care programs.
There are five grounds for mandatory exclusion: (a) conviction of program-related crimes; (b) conviction related to patient abuse; (c) felony conviction related to health care fraud; (d) felony conviction related to controlled substance; and (e) failure to enter an agreement to repay a Health Education Assistance Loan.
There are sixteen grounds for permissive exclusion from participation as a provider in federal health care programs. The most prominent of the sixteen are: (a) conviction related to fraud; (b) conviction relating to obstruction of an investigation; (c) misdemeanor relating to controlled substance; (d) license revocation or suspension; and (e) exclusion or suspension under federal or state health care program.
5. Medicare and Medicaid Investigations. Most government investigations are initiated because of irregular billing patterns or evidence of poor quality of care. The investigation may be administrative or criminal.
All too frequently, criminal investigations come to the healthcare professional’s attention with the execution of a search warrant. If possible, it is best to have a criminal defense attorney go to the scene during the execution of the warrant. In any event, the healthcare professional or attorney should get a copy of the warrant and the supporting affidavit, if it is not under seal. Beyond that, the healthcare professional should not talk with investigators without an attorney.
Administrative investigations can be as stressful as a criminal investigation, given the financial hardship of administrative sanctions and the possibility of a criminal investigation.
6. DEA Certificate. The Drug Enforcement Administration (DEA) has the authority to supervise and investigate physicians, pharmacists, and others who are registered to prescribe or dispense controlled substances. The DEA has the authority to suspend or revoke a DEA registration upon a finding that the DEA registrant has (a) submitted a materially false application; (b) been convicted of a felony related to controlled substances; (c) had his or her state license or registration to distribute or dispense controlled substances revoked or suspended; (d) committed acts that render registration against the public interest; or (e) been excluded from participation in federal health care programs.
7. Private Insurance. Private insurers often seek to remove providers from their respective panels because of billing irregularities or allegations of substandard care. These cases are generally initiated because of a criminal conviction or discipline by the licensing board. Occasionally, though, the insurer initiates its own action. These cases should be taken very seriously because of the financial losses that accompany removal from the provider panel, and also because insurance companies often share their allegations with the licensing board and the administrators of Medicare and Medicaid.
8. Hospital Staff Privileges. In investigations or disciplinary actions initiated by a hospital medical staff, the deck often seems stacked against the physician. The medical staff executive committee has the power to initiate an investigation, impose summary suspensions, designate a hearing officer, and select physicians to serve on the judicial review committee.
The physician does, however, have substantial protections under the Health Care Quality Improvement Act and state peer review statutes. These cases should be handled by attorneys experienced in this area who can protect the physician’s legal rights.
In many of these cases, after careful review of the legal merits and the political situation at the hospital, the physician may be best advised to settle the case without the risks and considerable expense of a hearing.
9. Specialty Boards. The various specialty boards certified by the American Board of Medical Specialties each have their own standards for membership. Any board certified physician who has been convicted of a crime or disciplined by a medical board may also be subject to an action by his or her specialty board to revoke certification. The specialty board will often allow the physician to appear before the board to present reasons why revocation is inappropriate.
10. Employment. Employees are often overwhelmed by the power and financial resources of their employer in an action to either impose discipline or terminate employment. Employees, however, have substantial protections that should be asserted in appropriate cases. In addition to the protections against discrimination and retaliation, employment contracts in California and many other states include a covenant of good faith and fair dealing requiring that neither party do anything to injure the right of the other to receive the benefits of the agreement.
11. Immigration Status. In any case where a non-citizen is facing possible criminal prosecution or loss of employment, it is imperative to consult with an immigration attorney. The immigration consequences for non-citizens convicted of a crime are simply too severe and the immigration statutes too complex for these cases to be handled without an experienced immigration attorney. Similarly, if a non-citizen’s status in the U.S. is based upon employment, it will be necessary to consult with an immigration attorney.
12. Tort Liability. Any disciplinary case involving allegations of sexual misconduct or substandard care also involves the possibility of a separate law suit alleging tort liability. The key in these cases is to carefully coordinate the defenses in the separate cases. Very frequently different law firms will handle the different cases, which makes it imperative that the attorneys communicate clearly about case strategies.
It should be expected that plaintiff’s counsel will seek to use the administrative proceedings as a source of evidence to be used in the civil case. For this reason, the healthcare professional should be very cautious about making admissions during an administrative investigation or hearing that may influence the course of an existing or potential law suit.
13. Contractual Liability. Disciplinary actions can lead to substantial contractual liabilities. For instance, consulting agreements between physicians and medical device manufacturers will generally have a clause allowing the corporation to terminate the agreement in the event of professional discipline. Given the sums involved in consulting agreements, this can be a substantial financial set-back.
Contractual liabilities can also accrue in the context of recruitment agreements, which typically require that all or a portion of the recruitment bonus be repaid if the relationship is terminated early. If the physician loses his or her license to practice or is terminated from the medical staff, the hospital will seek a full or partial refund of the bonus.
Conclusion
Given the potential consequences outlined above, it is imperative to develop a clear strategy early in the case to prevent a career-threatening cascade of events. With a coherent strategy and careful attention to each area of potential legal liability, the consequences of disciplinary actions can often be minimized, thereby allowing the healthcare professional to continue in his or her chosen career.
Timothy J. Aspinwall is a partner in Nossaman’s Sacramento office and specializes in the areas of health and administrative law. He can be reached at (916) 442-8888 or at taspinwall@nossaman.com.