[Federal Register Volume 63, Number 247 (Thursday, December 24, 1998)]
[Proposed Rules]
[Pages 71255-71257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34066]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration

45 CFR Part 60

RIN 0906-AA41


National Practitioner Data Bank for Adverse Information on 
Physicians and Other Health Care Practitioners: Medical Malpractice 
Payments Reporting Requirements

AGENCY: Health Resources and Services Administration, HHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This Notice of Proposed Rulemaking (NPRM) proposes amendments 
to the existing regulations implementing the Health Care Quality 
Improvement Act of l986, establishing the National Practitioner Data 
Bank for Adverse Information on Physicians and Other Health Care 
Practitioners (the Data Bank). The proposed regulations would amend the 
existing reporting requirements regarding payments on medical 
malpractice claims or actions in order to include reports on payments 
made on behalf of those practitioners who provided the medical care 
that is the subject of the claim or action, whether or not they were 
named as defendants in the claim or action. These amendments are 
designed to prevent the evasion of Data Bank medical malpractice 
payments reporting requirements.

DATES: Comments on this proposed rule are invited. To be considered, 
comments must be received by February 22, 1999.

ADDRESSES: Written comments should be addressed to Neil Sampson, Acting 
Associate Administrator, Bureau of Health Professions (BHPr), Health 
Resources and Services Administration, Room 8-05, Parklawn Building, 
5600 Fishers Lane, Rockville, Maryland 20857. All comments received 
will be available for public inspection and copying at the Office of 
Research and Planning, BHPr, Room 8-67, Parklawn Building, at the above 
address, weekdays (Federal holidays excepted) between the hours of 8:30 
a.m. and 5:00 p.m.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas C. Croft, Director, 
Division of Quality Assurance, Bureau of Health Professions, Health 
Resources and Services Administration, Parklawn Building, Room 8A-55, 
5600 Fishers Lane, Rockville, Maryland 20857; telephone: (301) 443-
2300.

SUPPLEMENTARY INFORMATION: The Assistant Secretary for Health, 
Department of Health and Human Services, with the approval of the 
Secretary, published in the Federal Register on October 17, 1989 (54 FR 
42722), regulations implementing the Health Care Quality Improvement 
Act of 1986 (the Act), title IV of Public Law 99-660 (42 U.S.C. 11101 
et seq.), through the establishment of the National Practitioner Data 
Bank for Adverse Information on Physicians and Other Health Care 
Practitioners (the Data Bank). Those regulations are codified at 45 CFR 
part 60.
    Among other items of information that must be reported to the Data 
Bank, section 421 of the Act requires that each entity that makes a 
payment in settlement or satisfaction of a ``medical malpractice action 
or claim'' must report certain information ``respecting the payment and 
circumstances thereof'' (section 421(a)). The information to be so 
reported includes ``the name of any physician or licensed health care 
practitioner for whose benefit the payment is made'' (section 
421(b)(1)). The term ``medical malpractice action or claim'' is defined 
for purposes of the Act in section 431(7), to mean--

    * * * a written claim or demand for payment based on a health 
care provider's furnishing (or failure to furnish) health care 
services, and includes the filing of a cause of action, based on the 
law of tort, brought in any court of any State of the United States 
seeking monetary damages.

    Thus, the Act provides for the reporting, by the payer, of any 
payment made for the benefit of a health care practitioner resulting 
from any ``written claim or demand for payment'' based on ``furnishing 
(or failure to furnish) health care services.''
    In implementing this requirement in the regulations published on 
October 17, 1989, the Secretary included in Sec. 60.7(a), entitled 
``Who must report,'' language stating that the provision applies to a 
payer who makes a payment ``for the benefit of'' a health care 
practitioner

    * * * in settlement of or in satisfaction in whole or in part of 
a claim or a judgment against such * * * health care practitioner 
for medical malpractice. [Emphasis added.]

    It has come to the Department's attention that there have been 
instances in which a plaintiff in a malpractice action has agreed to 
dismiss a defendant health care practitioner from a proceeding, leaving 
or substituting a hospital or other corporate entity as defendant, at 
least in part for the purpose of allowing the practitioner to avoid 
having a report on a malpractice payment made on his or her behalf 
submitted to the Data Bank. The

[[Page 71256]]

Department recognizes that this has occurred especially in cases when 
the counsel of a self-insured hospital or other self-insured corporate 
entity (which employs the defendant health care practitioner) has 
actively pursued having the defendant health care practitioner's name 
dropped from a proceeding, leaving or substituting the hospital or 
other corporate entity as the defendant, to avoid having to report the 
practitioner.
    This 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 Data Bank, since the payment is 
arguably not in satisfaction of a claim or judgment against the 
practitioner. Such a result is clearly inconsistent with the 
Congressional purpose, explicit in the Act, of

restrict[ing] the ability of incompetent [practitioners] to move 
from State to State without disclosure or discovery of the 
[practitioner's] previous damaging or incompetent performance.

    See section 401(2) of the Act. Since the regulation quoted above, 
literally read, does permit a result so at odds with the purposes of 
the statute, the Secretary proposes to revise it. The Department does 
recognize that there are legitimate situations when it is impossible to 
identify a practitioner(s) for whose benefit the payment was made. For 
example, a situation could occur wherein a power failure causes a heart 
monitor to cease functioning leading to an injury or death, which 
ultimately leads to a malpractice payment. In these very limited 
circumstances, the Secretary proposes to require that the reporter 
state the sequence of events that led to the payment, why the 
practitioner could not be identified, and the amount of the payment. 
The Department will use this information to identify medical 
malpractice reporters that appear to make a practice of not identifying 
specific practitioners.
    The Department proposes to amend paragraphs (a) and (b) of 
Sec. 60.7 as follows:
    1. Paragraph (a) would be revised by removing the reference to a 
claim or judgment ``against such physician, dentist, or other health 
care practitioner'' and adding language from section 421(a) of the Act; 
and
    2. Paragraph (b)(1) would be revised to state explicitly that the 
reference in that provision to the practitioner ``for whose benefit the 
payment is made'' includes ``each practitioner whose acts or omissions 
were the basis of the action or claim.''
    A new paragraph (b)(2) would require that in situations where it is 
impossible to identify the practitioner for whose benefit the payment 
was made, the payor must report a statement of the facts and why the 
practitioner could not be identified and the amount of the payment. Due 
to the fact that the hospital is no longer the primary place of 
practice for many practitioners, new paragraph (b)(2) would further 
require the payer to include not only the name of each hospital with 
which the practitioner is affiliated, but also the name of each health 
care entity with which the practitioner is affiliated. Former 
paragraphs (b)(2) and (b)(3) are being redesignated as paragraphs 
(b)(3) and (b)(4) respectively.
    These changes are intended to make clear that the reach of the term 
``practitioner for whose benefit the payment is made'' as it is used in 
the Act and the regulations extends to any practitioner whose acts or 
omissions were the basis for the action or claim, regardless of whether 
that practitioner is a named defendant in a malpractice action. It thus 
becomes the responsibility of the payer, during the course of its 
review of the merits of the claim, to identify any practitioner whose 
professional conduct was at issue in any malpractice action or claim 
that has resulted in a payment, and to report that practitioner to the 
Data Bank.
    The Secretary notes that, consistent with Congressional purpose 
explicit in the Act, Sec. 60.7(d), entitled ``Interpretation of 
Information'' states:

    A payment in settlement of a medical malpractice action or claim 
shall not be construed as creating a presumption that medical 
malpractice has occurred.

This provision remains in the rule and is one of the basic tenets of 
the Data Bank.

Economic Impact

    Executive Order 12866 requires that all regulations reflect 
consideration of alternatives, of costs, of benefits, of incentives, of 
equity, and of available information. Regulations must meet certain 
standards, such as avoiding unnecessary burden. Regulations which are 
``significant'' because of cost, adverse effects on the economy, 
inconsistency with other agency actions, effects on the budget, or 
novel legal or policy issues, require special analysis.
    The Department believes that the resources required to implement 
the requirement in these regulations are minimal. Therefore, in 
accordance with the Regulatory Flexibility Act of 1980 (RFA), and the 
Small Business Regulatory Enforcement Act of 1996, which amended the 
RFA, the Secretary certifies that these regulations will not have a 
significant impact on a substantial number of small entities. For the 
same reasons, the Secretary has also determined that this does not meet 
the criteria for a major rule as defined under Executive Order 12866. 
The NPRM would amend the existing reporting requirements regarding 
payments on medical malpractice claims or actions in order to include 
reports on payments made on behalf of those practitioners who provided 
care that is the subject of the claims, whether or not they were named 
as defendants in the medical malpractice claim or action. As such, the 
proposed rule would have no major effect on the economy or on Federal 
expenditures.

Paperwork Reduction Act of 1995

    The National Practitioner Data Bank for Adverse Information on 
Physicians and Other Health Care Practitioners regulations contain 
information collections which have been approved by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1980 
and assigned control number 0915-0126. One of the approved reporting 
requirements will be affected by the proposed amendments. As required 
by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3507(d)), the 
Department has submitted a copy of this proposal rule to the Office of 
Management and Budget for its review of this information collection 
requirement.
    Collection of Information: National Practitioner Data Bank For 
Adverse Information on Physicians and Other Health Care Practitioners.
    Description: The NPRM would amend the existing reporting 
requirements regarding payments on medical malpractice claims or 
actions in order to include reports on payments made for the benefit of 
those practitioners whose acts or omissions were the basis of the 
action or claim, whether or not they were named as defendants in the 
medical malpractice claim or action.
    Description of Respondents: Business or other for-profit, not-for-
profit institutions.
    Estimated Annual Reporting Burden: The section number and the 
estimated change in reporting burden are as follows:

[[Page 71257]]



                                                   Sec.  60.7
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                                    *Number of     Responses per       Total         Hours per      Total hour
                                    respondents     respondent       responses       response         burden
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Currently approved burden.......             150          105.33          15,800             .75          11,850
Actual current volume...........             425           44.7           19,000             .75          14,250
Total burden after amendment....             625           60.8           38,000             .75          28,500
Reporting due to this NPRM......             300           63.33          19,000             .75         14,250
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*The number of entities reporting payments was underestimated in the last clearance request. The estimate of 150
  entities was based on the fact that fewer than 100 large insurers are responsible for 80-85 percent of the
  reports. A check of the Data Bank records for 1997 showed that many more entities than expected file one or
  two reports per year, and that a total of 425 entities filed reports in 1997. That number is expected to
  increase by about 50 percent (rounded to 625) with the change in the regulation. The total number of reports
  filed is expected to double from the 1997 level of 19,000 to 38,000 per year. The Department believes that the
  resources required to implement the requirement in these regulations are minimal.
There is no reliable way to forecast the increase in medical malpractice reports as a result of this regulation.
  However, in conversations with many individuals such as plaintiffs' and defendants' attorneys, representatives
  from self-insured health care entities, and malpractice insurers, the most common estimate is that the Data
  Bank currently receives reports on 50 percent of the medical malpractice payments being made. Most of the new
  reports will not be made by current reporters. Instead, there will be a sizeable increase in the number of new
  reporters (estimated at 200), with each new reporter filing only a small number of reports in a single year.
  The 63.33 reports per respondent represent an average over all types of respondents, from the large insurers
  who submit hundreds of reports per year to the small reporters (mainly self-insured hospitals and other self-
  insured corporate entities) that may submit one or two reports per year.

    Request for Comment: In compliance with the requirement of section 
3506(c)(2)(A) of the Paperwork Reduction Act of 1995 for opportunity 
for public comment on proposed data collection projects, comments are 
invited on: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the Agency, 
including whether the information shall have practical utility; (b) the 
accuracy of the Agency's estimate of the burden of the proposed 
collection of information; (c) ways to enhance the quality, utility, 
and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.
    Written comments and recommendations concerning the proposed 
information collection should be sent to: Wendy Taylor, Human Resources 
and Housing Branch, Office of Management and Budget, New Executive 
Office Building, Room 10235, Washington, DC 20503. OMB is required to 
make a decision concerning the collection of information contained in 
these proposed regulations between 30 and 60 days after publication of 
this document in the Federal Register. This does not affect the 
deadline of the public to comment to the Department on the proposed 
regulations.

List of Subjects in 45 CFR Part 60

    Claims, Fraud, Health, Health maintenance organizations (HMOs), 
Health professions, Hospitals, Insurance companies, Malpractice, 
Reporting and recordkeeping requirements.

    Dated: October 3, 1997.
Claude E. Fox,
Acting Administrator, Health Resources and Services Administration.

    Approved: August 24, 1998.
Donna E. Shalala,
Secretary.

    Accordingly, 45 CFR part 60 is proposed to be amended as set forth 
below:

PART 60--NATIONAL PRACTITIONER DATA BANK FOR ADVERSE INFORMATION ON 
PHYSICIANS AND OTHER HEALTH CARE PRACTITIONERS

    1. The authority citation for 45 CFR part 60 continues to read as 
follows:

    Authority: Secs. 401-432 of the Health Care Quality Improvement 
Act of 1986, Pub. L. 99-660, 100 Stat. 3784-3794, as amended by sec. 
402 of Pub. L. 100-177, 101 Stat. 1007-1008 (42 U.S.C. 11101-11152).

    2. Section 60.7 is amended by revising paragraph (a); by revising 
the introductory texts to paragraphs (b) and (b)(1); by revising 
paragraph (b)(1)(ix); by redesignating paragraphs (b)(2) and (3) as 
paragraphs (b)(3) and (4) and by adding a new paragraph (b)(2). As so 
amended, Sec. 60.7 reads in pertinent part as follows:


Sec. 60.7  Reporting medical malpractice payments.

    (a) Who must report. Each entity, including an insurance company, 
which makes a payment under an insurance policy, self-insurance, or 
otherwise, for the benefit of a physician, dentist or other health care 
practitioner in settlement (or partial settlement) of, or in 
satisfaction of a judgment in, a medical malpractice action or claim 
shall report information respecting the payment and circumstances 
thereof, as set forth in paragraph (b) of this section, to the Data 
Bank and to the appropriate State licensing board(s) in the State in 
which the act or omission upon which the medical malpractice claim was 
based. For purposes of this section, the waiver of an outstanding debt 
is not construed as a ``payment'' and is not required to be reported.
    (b) What information must be reported. Entities described in 
paragraph (a) of this section must report the following information:
    (1) With respect to the physician, dentist, or other health care 
practitioner for whose benefit the payment is made, including each 
practitioner whose acts or omissions were the basis of the action or 
claim--
* * * * *
    (ix) Name of each hospital and health care entity with which he or 
she is affiliated, if known;
    (2) If the physician, dentist, or other health care practitioner 
could not be identified--
    (i) A statement of such fact and an explanation of the inability to 
make the identification, and
    (ii) The amount of the payment.
* * * * *
[FR Doc. 98-34066 Filed 12-23-98; 8:45 am]
BILLING CODE 4160-15-P