Excerpted from The Biggest Legal Mistakes Physicians Make: And How to Avoid Them
Edited by Steven Babitsky, Esq. and James J. Mangraviti, Esq. (©2005 SEAK, Inc.)

Download Free 646 Page E-book: The Biggest Legal Mistakes Physicians Make and How to Avoid Them

Executive Summary

Physicians often ignore the crucial steps to be taken when early warning signs appear in the credentialing process. They also may ignore the fact that the credentialing process, although sometimes informal and often performed solely by health care personnel in health care institutions, is nevertheless a structured legal process that can trap the unwary and penalize the careless.


Mistake 1        Misrepresenting or Attempting to Hide Prior Adverse Peer Review Actions

By far the most serious credentialing mistake any physician can make is the “cover up.” Failing to disclose a prior adverse peer review action, especially when that fact will be discovered through a National Practitioners Data Bank (NPDB) query or a reference check, creates almost insurmountable problems. This mistake is serious for several reasons:

  • In a profession in which ethics are both important and valued, the cover up itself is a negative event.
  • A misrepresentation is an objective, clear-cut violation of the credentials application process. Most applications have a statement or series of questions concerning prior adverse peer review actions. If a physician fails to disclose, then that nondisclosure is itself a violation. The incident happened: The physician was asked about it and lied. There are no subjective issues, and no defenses.
  • Lying about his or her record taints a physician’s credibility and therefore the physician’s explanation of any underlying events precipitating the peer review action. The underlying event cannot then easily be portrayed as politics, or professional disagreement, or retaliation by competitors because the veracity of the physician’s position is now in doubt.
  • Because of the NPDB, the Joint Committee for Accreditation of Healthcare Organizations (JCAHO) emphasizes quality credentialing, and in the “small world” of the medical community, deception is almost always discovered.


Action Step     Physicians should answer the questions on medical staff applications correctly, and they should not adopt unreasonable definitions of the questions just to provide a questionable excuse for nondisclosure.


Mistake 2        Failing to Report Adverse Peer Review Actions

Many medical staff bylaws and third-party participation agreements require physicians to report adverse peer review actions (e.g., revocation, suspension, or voluntary relinquishment of medical staff membership, clinical privileges, or state or federal Drug Enforcement Administration licenses, and exclusion from third-party programs). Although not as serious as affirmatively or actively concealing adverse peer review actions, the failure to report these adverse actions when required to do so is still a serious mistake for two reasons. First, although perhaps inadvertent, it nevertheless smacks of the dreaded cover-up. Second, the failure to report is itself an independent, separate, and easily established clear and objective violation of the bylaws or agreements. It taints a physician’s reputation. In situations in which the “old MD’s network” or the new CEO is looking to remove a physician, or when the alleged subjective violation is difficult to prove, some disciplinary action for this type of violation is an easy determination. Although the violation itself may have nothing to do with quality of care or the physician’s professional ability, it could still result in the physician’s loss of membership or reduction of privileges.


Action Step     When an adverse peer review action occurs, physicians should review the medical staff applications and participation agreements they have signed. Better yet, they should have a list of the applicable requirements. They will receive a copy of the NPDB report. If appropriate, the physician should submit a supplemental statement (see Mistake 3). In some situations, a physician is best served by sending a brief notice that may convey just the NPDB report and the supplemental statements. There is no harm in sending the report; all queriers will see it anyway, and the voluntary production of it makes it appear as if the physician has nothing to hide. If the reported incident is a serious problem, the physician may want to have a full explanation prepared, with supporting exhibits and maybe letters of reference, to diffuse the situation.


Mistake 3        Failing to Monitor or Respond to Data Bank Reports

Reports to the NPDB should be monitored and contested when appropriate. Data bank procedures permit physicians to request the reporting entities to correct erroneous reports, use the administrative procedures of the federal Department of Health and Human Services to challenge incorrect reports, and file an individual supplemental statement.


Action Step     When notified of an adverse NPDB report, physicians should use all of the procedural safeguards available.


Mistake 4        Believing “Collegial Intervention” Is Collegial

Collegial intervention can be a trap for the unwary. Whenever physicians are approached by an “official” member of the medical staff to discuss quality assurance or quality improvement issues, especially in relation to a physician’s cases or conduct, the physician should both embrace the opportunity as a professional and suspect the worst. Collegial intervention can be used as an excuse by the medical staff/hospital to initiate or conduct an investigation before a physician even knows it is happening and without providing any of the due process protections provided by the bylaws with respect to formal investigations. What the physician perceives as just a series of casual conversations could, in retrospect, be portrayed as a concerted effort by the organized medical staff to correct a problem the physician did not even realize he or she had.


Action Step     Physicians should be careful. They should ask the inquiring medical staff or hospital representatives if this is an “official visit.” Also, they should check their medical staff and credentialing file (see Mistake 9).


Mistake 5        Neglecting the Opportunity to Secure Corroborating Witnesses

Collegial intervention as well as initial investigations usually start with a meeting of some type. This is not the place to “lawyer up”; that is both unprofessional and unnecessarily adversarial, and usually prohibited by the bylaws (see Mistake 10). The intent of the bylaws is usually to provide a professional and a nonadversarial environment to address minor issues before they become major problems. However, the physician should request to be accompanied by another physician (e.g., a partner or another department member) just to have a witness who can corroborate the facts if necessary. If the physician can’t have a witness, then he or she should either record the meeting (with mutual consent) or prepare a written memo immediately after the meeting and send a copy to the person responsible for conducting the meeting to confirm the facts. Using a professional and nonaccusatory memo to confirm the facts is especially helpful when done before the battle lines harden.


Action Step     Physicians should secure potential witnesses and keep accurate records so they are not “unarmed” in future confrontations.

Mistake 6        Failing to Appreciate That Any Peer Review Activity Should Be Taken Seriously

Physicians have an unfortunate tendency to dismiss the seriousness of the initial stages of peer review investigations as unnecessary and unwelcome administrative intrusions that will be resolved when the real doctors become involved. While this may have been true at an earlier time, it is certainly not true now. Liability for negligent credentialing and JCAHO medical staff standards make credentialing a serious business all the time, not just when the controversy erupts into a medical staff hearing. Credentialing professionals take their responsibility seriously, and these “professionals” are now well trained professionals. Gone are the days when the credentialing was just another bookkeeping duty of the medical staff secretary. By the time the credentialing professionals first raise the issue with the physician, their homework will have been done; they will have facts, witnesses, and medical records. Unless the physician investigates and prepares his or her position and defense with the same diligence and zeal as the “prosecutors,” the physician will find himself or herself at a significant disadvantage. The physician will be starting with a handicap that he or she may well not overcome. Physicians should do their homework.


Action Step     Physicians should appreciate the possible adverse consequences of any peer review action.


Mistake 7        Whistleblowing in Retaliation Is Generally a Bad Idea

Physicians sometimes confuse patient advocacy with disruptive behavior, sometimes intentionally. It is almost never effective, on a long-term basis, to threaten exposure of quality assurance concerns or issues as a means to justify their own problem cases. First and foremost, other bad outcomes do not change a physician’s outcomes. However, one clear exception to this policy is when a physician is being held to a different standard. But even in this situation, the identity of other physicians need not be disclosed if the critical facts can be discussed without identification. Second, a physician’s conduct could create unwanted liability for him or her, such as slander or defamation. The peer review statutes of most states immunize the participants, although some states may have overlaying good-faith requirements. This immunity against liability for participation in the peer review process usually applies only to charges and disclosures made as an integral part of the peer review process, such as statements or written communications to a quality assurance committee. Immunity may not apply to unprotected communications, such as impassioned speeches in the doctors’ lounge. Finally, there is no surer way to precipitate retribution than to cast the first stone.


Action Step     Physicians should follow their mother’s advice: “People who live in glass houses should not throw stones.” And, “If you don’t have anything nice to say, don’t say anything.”

Mistake 8        Conspiracy Theorists Win Only in Movies

A variation of the misguided whistleblower’s mistake is maligning the motives of others. The best defense might be a good offense on the gridiron but unless one has solid facts, blaming the situation on scheming competitors, jealous physicians, and clueless hospital staff is not a winning strategy. Although truth is always an exception to any warning, and there are a significant number of medical staff cases in which the conspiracy and the liability have been proven, all cases are unique.


Action Step     Physicians should not create an entire class of adversaries and undermine their legitimate defenses by making unfounded accusations.


Mistake 9        Neglecting to Monitor One’s Own Medical Staff Records

Physicians should not wait until a peer review action is threatened to inspect their medical staff or credentials file. When their reappointment application is being filed, they should go to the medical staff office and request to review the file, and the explanation can be simply that the physician heard that it was a good idea to review his or her record at the times of each reappointment. Some medical staff offices might keep separate credentials and peer review files, and physicians should ask to see both. The hospital might object to allowing a physician to review the file, arguing that “peer review laws” make such information confidential. Depending on the state, this may or may not be true. Many peer review protection acts, including the federal Health Care Quality Improvement Act of 1986, which established the NPDB, provide immunity for those who participate in the peer review process, but they do not make the records confidential from the physician. If this claim is made, the physician should ask his or her medical staff to formally review this issue with separate counsel.


Action Step     Physicians should regularly monitor their medical staff and credentials files.


Mistake 10      Refusing to Retain an Experienced Lawyer

Refusing to retain an experienced lawyer is a mistake that falls into the general category of being unprepared. When investigations or inquiries begin, physicians mistakenly believe that legal counsel at this early stage is inappropriate or unnecessary. That’s how some of the other mistakes happen. Even if a physician cannot be represented by a lawyer in the meeting or during the interview process, that does not mean the physician should not know his or her rights. There would not be a list of “the 10 biggest mistakes physicians make” in this area if physicians were effectively represented by counsel.


Action Step     By the time a physician thinks he or she needs legal advice, it may already be too late. Physicians should consult counsel as soon as they realize that anything unusual is happening. Too early is an inconvenience; too late is a serious problem.


Physicians are best served by avoiding these 10 legal mistakes in the credentialing process.

 Written by:

Michael A. Cassidy, Esq.

Peer reviewed by:

W. Theodore Brooks, Esq

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