A Malpractice Loophole

If you ever want to know whether your doctor has been involved in malpractice, you might want to consult a little-known federal resource: the National Practitioner Data Bank. Established by a law signed in the 1980s by President Reagan, it is supposed to list all jury awards and out-of-court settlements of lawsuits charging medical malpractice.

But there are two obstacles. First, only certain officials, such as state licensing boards and hospitals, have access to the data bank. Private individuals do not. The other obstacle is a loophole called “corporate shield,” which enables a doctor who has figured in a settlement to keep his or her name out of the data bank. In fact, even the existence of the settlement can be kept secret.

A recent Wall Street Journal article led with a hair-raising example: Elizabeth Riley, a 33-year-old Chicago cosmetic saleswoman, entered Northwestern Memorial Hospital six years ago vomiting and complaining of the worst headache of her life. She was diagnosed with a neck sprain and sent home. Ten days later, she suffered a massive stroke, leaving her a paraplegic with half of her brain removed.

Her father, Gerard Riley, sued the hospital and the doctor who had treated her. After nearly three years of litigation, just before the case went to a jury, Mr. Riley agreed to dismiss the doctor as a defendant in the suit. The next day the hospital, which was the doctor’s employer, settled the case for $17.5 million. But that huge settlement was never reported to the data bank. Under the data bank’s regulations, only settlements involving practitioners are reportable, and no doctor’s name appeared on the settlement papers.

Maine lawyer Jack Simmons thinks patients should also have access to the data bank. “The public has a right to know not only about settlements but about licensing issues and credentialing issues,” he said. Michael McCall, vice president of claims and risk management at the Medical Mutual Insurance Co., which insures many Maine doctors, says, “That makes me squirm.” He notes that a successful claim might not reflect on a doctor’s competency, since some claims are frivolous, some malpractices are by clerks or lab technicians rather than doctors and some settlements don’t even involve malpractice but are simply to avoid the costs of defending a lawsuit.

They agree, however, that the corporate shield loophole should go, although Mr. McCall doubts that it is used much in Maine. He says his firm has repeatedly rejected proposals to keep settlements out of the data bank unless the doctor was clearly not involved in any malpractice. Marycarol Rumsey, credentialing coordinator at St. Joseph Hospital, also would like to see the corporate shield removed but gets around it by thorough questioning of doctors and their insurers. Randall Manning, executive director of the Maine Board of Licensure in Medicine, also would like to see that loophole closed, but he says he has other sources of information not available to hospitals.

Public access to the data bank is questionable, but there is no excuse for permitting doctors to dodge the data bank by using the corporate shield. The U.S. Health Resources and Services Administration, which runs the data bank, has tried and failed several times to close the loophole. Medical and insurance groups always blocked a reform. The American Medical Association wants the data bank abolished.

Here is a simple reform that Congress could and should undertake in the public interest.