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Legal Services

by Richard D. Weber, J.D.
MDA Legal Counsel
Published in the June 2001 issue of the Journal

Question: A patient filed a peer review complaint against me, alleging that she was dissatisfied with some dental work I performed. I immediately notified my insurance carrier and they worked out a settlement with the patient. I then found out that this settlement was reported by my insurance carrier to the data bank, even though the settlement also resolved the peer review complaint. It was my understanding that settlement of a peer review case was not reportable to the data bank. Please explain what is reportable to the data bank and let me know if this matter could have been resolved in a way that it was not reportable.

Answer: The federal statute that created the National Practitioner data bank applies to physicians and dentists. Four circumstances require reporting. Although your question relates to the settlement of a claim (the fourth reporting requirement below), it is appropriate to briefly review all of the bases for reporting:

Adverse Actions by State Licensing Boards. Any action based on reasons relating to the dentist’s professional competence or professional conduct that revokes, suspends or restricts a dentist’s license, or subjects a dentist to censure, reprimand or probation must be reported.

Adverse Actions by Health Care Entities. Hospitals or other health care entities, which may include an HMO or group or prepaid plan if other criteria are met, must report any professional review action that adversely affects the clinical privileges of a dentist for longer than 30 days.

Adverse Actions by Professional Societies. A professional society, such as the MDA, must report a peer review decision that is based on the professional competence or professional conduct of a dentist that adversely affects the health of a patient and adversely affects the dentist’s membership in the professional society. The MDA is required to report any such adverse decision by the MDA peer review/ethics committee that affects the dentist’s membership.

Settlement of a Claim. Any person or entity, including an insurance company, that makes a payment for the benefit of a dentist or other health care practitioner in settlement of a claim or a judgment must report the payment. Reporting is required only if all of the following conditions are met:

  • There must be a payment of money.
  • The payment must be the result of a written complaint or claim demanding a monetary payment for a refund or damages. The complaint or claim need not be a formal complaint such as is used in litigation or arbitration. A simple written request for payment is all that is required.
  • The claim must be based on a dentist’s provision of or failure to provide dental services.
  • The payment must be made by another person or entity for the benefit of the dentist. The entity can be an insurance company, the dentist’s professional corporation or any other third party. Significantly, a payment made by the dentist from personal funds on his or her own behalf is not reportable.

The MDA peer review system is designed to avoid reporting requirements when a refund is made pursuant to a peer review/dental care decision. The MDA Committee on Peer Review/Dental Care Information Form, which must be signed by a patient to commence a peer review case, provides specifically that a request for refund should not be made in writing. Also, MDA members who submit refunds through the MDA escrow account should do so with personal checks and not checks drawn on the account of their professional corporation, partnership, limited liability company or any third party, such as an insurance company. Direct payment with personal funds is a safe harbor which avoids reporting. This has been upheld by the United States Court of Appeals.

In your situation, the insurance company made the payment on your behalf. Had you settled the claim by payment from your personal funds, no reporting would have been required. I assume the payment was a response to a written claim for money; otherwise, data bank reporting would likely not have been required. You have not indicated whether the insurance company paid the funds through the MDA escrow account. Even if that process was followed, the escrow mechanism would not, in and of itself, preclude the reporting requirement.

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