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by Richard D. Weber, J.D.
MDA Legal Counsel
Published in the September 1995 issue of the Journal

Question: Must managed care entities report termination or rejection of dentists from their networks to the National Practitioner Data Bank?

Answer: As a general proposition, adverse actions based on economics are not reportable, because they do not involve professional competence or conduct. Therefore, even if a managed care entity was deemed to be a "health care entity" under the Data Bank law, there would generally be no reporting requirement for terminations based upon economic criteria.

If the action of the managed care entity is based upon competence or conduct and not economics, the answer becomes less clear. Under the Data Bank, reporting obligations are limited to "health care entities" which are entities that do two things:

  • Provide health care services, and
  • Engage in formal professional review activities.

If a managed care entity does both, it is considered a health care entity and has the obligation to report adverse actions that relate to a dentist's competence or professional conduct. The question in this instance, therefore, is whether the entity meets the "provide health services" prong of the Data Bank test. Typically, such entities are formed to contract to provide health care, not to actually deliver health care directly. Assuming the network performs peer review, it is unclear whether the contracting function is tantamount to providing health services.

If the managed care entity simply serves as an intermediary between third-party payers and independent practitioners who provide the services, it probably would not qualify as a "health care entity." If the entity contracts with employers or payers and assigns member professionals to provide care to particular enrollees, it may look more like a "health care entity."

Despite requests for clarification on this issue, the U.S. Department of Health and Human Services (HHS), which oversees the Data Bank, has provided no guidance. Legislation proposed in Congress (but not passed) would have altered the definition of "health care entity" to include entities that provide health services "directly or through contracts."

Question: Do managed care entities have the right to query the Data Bank about dentists?

Answer: The analysis would be the same relative to the reporting requirement discussed in the answer to the previous question. If the managed care entity met the definition of "health care entity" under the Data Bank legislation, it would have the right to obtain this information. Again, the entity would have to establish the two-pronged test: provide health care services and engage in formal professional review activities.

Question: How can dentists determine whether a managed care entity qualifies as a "health care entity" to determine whether it has the right to query the Data Bank for information related to dentists and/or the obligation to report adverse actions?

Answer: The Data Bank does not have a procedure to verify whether an entity is a "health care entity" with the right to query or the obligation to report. The Data Bank relies on self certification forms submitted by entities that assert that they are "health care entities," i.e. that they perform peer review and provide health services. There are currently several disputes pending where practitioners are challenging the validity of adverse action reports filed by entities that provide health services through contracts, but HHS has not taken action to resolve these disputes.

Posted in: Managed Care

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