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Davis Brown Health Law Blog  

Special termination and reporting considerations for healthcare providers - October 13, 2017

A recent USA Today article spotlights terminations at VA Hospitals across the country, including fining providers apparently accused of poor medical care or in some instances violations of state or federal law. On the Labor and Employment blog, we highlight negligent references and reporting issues, including removing negative items from personnel files, allowing resignations instead of terminations, providing neutral references rather than references which fully articulate problems with the employee’s performance. 

Healthcare is a highly regulated industry with specific rules. These rules vary by the type of provider, and the entity, such as long-term care verses a hospital setting. As such, healthcare providers have higher levels of complexity as well as responsibility for reporting poor conduct, particularly if that conduct leads to negative patient outcomes. 

For the purposes of licensure and ethical boards, license holders, such as physicians, are required to report other physicians who have engaged in certain inappropriate practices, including potentially the diversion of drugs or impaired practice. 

In addition, physicians have an individual obligation to report themselves for certain kinds of conduct including, but not limited to:

  • reporting judgments or settlements
  • disciplinary actions in another jurisdiction
  • hospital disciplinary action
  • actions taken to avoid disciplinary action if they relate to the “physician’s professional competence or conduct which results in a limitation, restriction, suspension, revocation, relinquishment or non-renewal of the licensee’s hospital privileges or any voluntary limitation, restriction, suspension, revocation or relinquishment, non-renewal of the licensee’s hospital privileges to avoid an investigation or other hospital disciplinary action,” unless such restriction or limitation is fewer than 10 days. (See Iowa Medical Board Duty to Report and Iowa Board of Nursing). 

Various other agencies may require licensure reporting as well. Certainly, in termination circumstances a provider is required to report certain radiology terminations, and other reporting requirements apply to other groups of employees. 

In the healthcare setting, it is always incumbent upon the provider to assess whether there have been issues relating to billing, for example, an allegation that a provider billed for more services than provided. This may require reporting to CMS in relationship to billing, and self-reporting to the Department of Inspections and Appeals (DIA). Certainly, if there is patient or resident injury in a long-term care facility this requires self-reporting to the DIA. Failure to report if you are a license holder or if you otherwise have an obligation to report can lead to fines, other sanctions, loss of licensure, and loss of Medicare/Medicaid certification, as well as placement on the state and federal debarred providers list. 


National Practitioner’s Data Bank (NPDB)

The NPDB is a federal registry for healthcare professionals which requires the reporting of certain actions taken by healthcare providers against “healthcare practitioners, entities, providers and suppliers who do not meet professional standards.” Healthcare organizations are required to register with the NPDB and be authorized to report as required by federal regulations. Reportable items include: 

  •  malpractice payments (which must be submitted within 30 days of the date the action is taken)
  •  adverse licensure actions related to professional competence or conduct
  •  for hospitals, professional review actions which adversely affect clinical privileges for a period longer than 30 days. This includes voluntary surrender or restriction of clinical privileges to avoid an investigation. 

Sanctions take a variety of forms including that any hospital or healthcare entity that “fails substantially to report adverse actions will have its name published in the Federal Register and the organization will lose its immunity from liability under Title IV with respect to professional review activities for a period of three years...” The NPDB goes on to state that the Secretary of HHS shall publish a public report identifying those government agencies that have failed to report information on adverse actions as required, which would appear to encompass the VA Hospital system. (See

Privacy Is Never Guaranteed

Many employers guarantee privacy regarding termination actions or decisions. After the 2017 legislative session, Iowa public employers can no longer guarantee such privacy to terminated employees, employees who resign in lieu of termination, or who accept a demotion rather than being terminated. Changes to the public records laws in the last year require that all such documentation be marked as subject to the Open Records Law and may be requested through an Iowa Open Records request. While certain personnel documentation may be private, termination decisions, demotions in lieu of termination, and resignation in lieu of termination are not. 

Bottom Line

By failing to properly report, particularly in the healthcare arena, the healthcare entity simply passes the problem along to a new group of patients who are not afforded protection as set forth under law. This can be a huge issue, especially in an era of Google and social media, when it is easy for news to boomerang back. Protect your company, your patients, as well as other patients and residents in care by properly reporting, documenting and terminating those who have violated policies.