Professional Licensing and Credentialing Litigation
By law, medical and other health boards are required to investigate every complaint. In cases involving patient care, investigations start with a letter to the practitioner stating the general nature of the complaint, and requesting medical records and a narrative summary of the treatment. For several years, Texas has also been sending out practice questionnaires, which seeks general information about the nature of the practice, and also requests information about suspension of privileges and criminal actions.
Apart from standard of care investigations, the most common subject of investigations for medical doctors is substance abuse, followed by inappropriate provider/patient conduct and crimes involving moral turpitude such as insurance fraud.
After the investigation is completed, if there is some evidence of a departure from the standard of care or misconduct, most states provide the licensee with an opportunity to resolve the complaint through an informal settlement conference. This happens before one or more members of the board. This is not a formal hearing, and there is no record or transcript of the conference. It is more of a question and answer session between professionals. Lawyers can make points at these meetings, but the primary spokesman should be the licensee, especially if there is a good medical explanation for the action which is the subject of the complaint. At the end of the settlement conference, the board members will make a recommendation, based on whether they believe there has been a violation of the standard of care or the Medical Practice Act. The recommended disposition is put in writing and sent to the licensee. If there is a proposed sanction, it must be approved by the full board.
If the licensee does not agree to the board suggested disposition, a formal complaint is filed which results in a contested case. Until there is a final disposition by the board, the complaint is confidential and not publicly disclosed.
A contested case results in administrative hearing which is both better and worse than a civil litigation. It is better because it is more informal, does not slavishly follow the all of the rules of evidence, like the hearsay rule, and is much more streamlined and less costly than civil or criminal litigation. This streamlined process is also the downside. A licensee does not have the full panoply of rights, protections, and discovery which civil litigants receive. (oddly, criminal defendants usually have less discovery available than defendants/respondents in civil or administrative cases)
An administrative law judge or professional hearing examiner usually hears the evidence in a contested case and writes up a proposed decision. That decision is reviewed by the full board. In reality, the boards give very little deference to decisions (or technically “recomendations”) by administrative judges, especially decisions about the sanction.
A licensee has the right to appeal a board’s decision, to the state district court (e.g. Texas) or directly to the state appellate division (e.g. New York). The standard for review is usually called “substantial evidence” which means that a board’s decision will not be disturbed if there is substantial evidence supporting it.
Iin reality, however, board decisions are not overturned if there is any evidence supporting the decision. This is because judges are supposed to, and in fact do give great deference to specialty boards making decisions involving technical questions. Therefore, substantial evidence appeals usually fail, because it is rare in a standard of care case that the board offers no evidence on the critical elements. In addition, in all but the most extreme cases, a board’s decision revoking a practitioner’s license will not be overturned on the grounds that a penalty was too severe.
On the other hand, courts are very comfortable with making decisions about whether a licensee has received procedural due process, whether the board has followed its own rules, or has grossly misapplied the law. There are many court cases overturning board decisions on these grounds.
Like in other kinds of health care defense work, a good start and often the best defense is clear and comprehensive SOAP notes.
Practitioners sometimes have problems either in obtaining or maintaining hospital privileges. Although almost all hospitals provide administrative procedures by which a practitioner can challenge an adverse credentialing result, under federal law and the law of most states, there is almost no vehicle or possibility for judicial redress of an adverse final decision, which is usually made by the Hospital’s Board of Directors. When judicial review succeeds in reversing an adverse credentialing decision, it is usually because the hospital did not give the practitioner due process, or did not follow its written procedural rules.
Many physicians feel that the antitrust laws protect them against arbitrary action or a credentialing decision made because of anti-competitive motives. However, there is usually no antitrust remedy available to practitioners in large cities because the antitrust laws protect competition, not competitors. If the relevant market will not be substantially adversely impacted by the removal of one doctor from one hospital in the relevant market, there is no antitrust violation or remedy.
I have represented health care professionals in licensing matters in many states including, New York, New Jersey, Connecticut, South Carolina, Iowa, Washington, California and Texas.