Adverse Consequences of Settling a Malpractice Lawsuit Filed Against You-Part 1

Wednesday, July 31, 2013
By Lance O. Leider, J.D., The Health Law Firm and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

It is crucial to understand that settling a malpractice claim prior to trial, or even prior to a suit being filed, is not the end of the matter.  As stressful as having a malpractice claim hanging over your head can be, it is important to know that settling it may only be the beginning of your legal problems.

Be Familiar With These Adverse Legal Ramifications Before Settling Malpractice Claim.
There are a number of adverse legal ramifications that you need to be aware of prior to agreeing to a settlement of a malpractice claim.

1.    Your malpractice carrier is likely compelled by law to report the settlement to the National Practitioner Data Bank (NPDB).
2.    Your malpractice carrier is similarly compelled to report the settlement to the Florida Department of Financial Services.
3.    Your malpractice carrier, the NPDB or the Florida Department of Financial Services will likely report the settlement to the Department of Health (DOH), Board of Medicine, Board of Dentistry or Board of Osteopathic Medicine.
4.    You will be required to report the settlement to your professional licensing board (in Florida and most other states) and it may open a disciplinary investigation against your license.
5.    If you have clinical privileges at hospitals or ambulatory surgical centers, the governing by laws almost always require you to report such settlements to them. Action may then be commenced against you by the hospital or facility.
6.    If you are a member of health insurance plans, your contract may require you to report the settlement to these plans. Regardless, these plans may commence action to drop you from their panels.
7.    The Office of the Inspector General (OIG) may take action to exclude you from the Medicare Program based on the NPDB report; however, this will depend on the facts reported.
8.    If you are board certified in a medical specialty, you may be required to report this to your board. Regardless, this may cause you lose your certification or not be recertified.

These reports can create a cascading effect whereby the reports generated by one entity create reports by other agencies.  Ultimately, a single malpractice settlement can result in discipline on one or more state licenses, credentialing actions by hospitals, loss of membership on HMOs and insurance panels, and possible action against your board certification.

This blog is the first in a series that will explore the effects of a malpractice settlement on a medical doctor, osteopathic physician, or dentist in Florida.  This particular entry will focus on the NPDB in particular.

What is the National Practitioner Data Bank?

Most licensed healthcare providers have at least heard of the data bank, but very little understand where it comes from or what it is supposed to do.  

The NPDB was established as part of the Health Care Quality Improvement Act of 1986.  It was initially created so that there would be a national clearinghouse of information regarding professional actions taken against healthcare providers.  The aim was to prevent bad doctors from fleeing a jurisdiction and getting a license or privileges somewhere else and continuing to practice dangerously.  In the beginning, the database was targeted at physicians and included actions related to malpractice, state licensing, clinical privileges, and Medicare and Medicaid.  The NPDB has since expanded to include other actions and also has profiles for a wider range of healthcare practitioners. To learn more on the NPDB, click here to watch a short video.

What Information is Reported?

With respect to a malpractice action, your insurance carrier will report the claim to the NPDB regardless of the amount or whether the claim was meritorious.  The NPDB, for the purposes of reporting a settlement or other claim defines a reportable incident as:

A payment made for the benefit of a health care practitioner in settlement of, or in satisfaction in whole or in part of, a written claim or judgment against the healthcare practitioner.

The requirements go on to list a few more criteria:

1)     The payment must be an exchange of money;
2)     It must be the result of a written complaint or claim demanding monetary payment for damages; and
3)    The practitioner (insured) must be named in both the complaint or claim, and the settlement release or final adjudication.

See source:

Conspicuously absent from these requirements is any discussion of an amount of money.  This means that any settlement made by your carrier is potentially reportable.

It is also important to notice that the NPDB does not require that a lawsuit be filed to be reportable.  In states like Florida that have a pre-suit screening process, the written Notice of Intent is enough to require a report to the NPDB.  Be aware of anyone who advises you that if you settle before the lawsuit is filed, there will be nothing to report.

Who Sees the NPDB Report?

Although the NPDB claims to be a "confidential clearinghouse" it is accessible by a wide range of persons and entities.  Examples of some of those who can view a practitioner's NPDB report are:

    -    Hospitals
    -    Health care entities with formal peer review
    -    Professional societies with formal peer review
    -    Health plans
    -    State licensing authorities
    -    Quality Improvement Organizations (think JCAHO)
    -    State law enforcement agencies
    -    State Medicaid Fraud Control Units (MFCU)
    -    State agencies administering state healthcare programs (AHCA)
    -    Federal licensing and certification agencies
    -    Federal law enforcement agencies

It is extremely difficult for a physician to go through his or her career without having to apply or otherwise be evaluated by one of these agencies/entities.  An NPDB report has the potential to touch every area of your practice from hiring to reimbursement to credentialing.

Think about the people and entities who will see the NPDB report before you agree to "pay someone to go away."

Know the consequences of your decision before you make it!

What to do if You Have an Adverse Report?

If you think you may have an adverse entry on your NPDB report, I encourage you to perform a self query to see what is out there.  The NPDB report is essentially your professional credit report.  It is imperative that you know what information is out there and what it says about you.

In many instances the NPDB reports are there to stay.  This is all the more reason to understand the ramifications of your decisions.  However, there are circumstances in which a report can be corrected or deleted. Your career may depend on having an attorney who understands the NPDB. Do not wait to contact an experienced health law attorney.

Contact Experienced Health Law Attorneys.
The Health Law Firm attorneys routinely represent physicians, physician assistants (PAs), nurses, nurse practitioners (NPs), dentists and other health professionals in dealing with reports being made to the NPDB, disputing NPDB reports and appealing NPDB reports.  Its attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.
To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at


Have you ever been reported to the NPDB? Have you done a self query on the NPDB? Please leave any thoughtful comments below.

About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Tag Words: Medical malpractice, malpractice claim, settlement of a malpractice claim, National Practitioner Data Bank (NPDB), medical doctor, osteopathic physician, dentist, Florida Department of Financial Services, Department of Health  (DOH), Board of Medicine, Board of Dentistry, Board of Osteopathic Medicine, discipline on license, state licensing, clinical privileges, board certification, Health Care Improvement Act of 1986 (HCQIA), reported to NPDB, NPDB attorney, NPDB lawyer, defense attorney, defense lawyer, The Health Law

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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