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Health & Medicine

HRSA Refuses to Close the “Corporate Shield” Loophole for Malpractice Reporting

— September 27, 2016

On September 21, 2016, the U.S. Health Resources and Services Administration, HRSA, denied a 2014 request submitted by Public Citizen’s Health Resource Group. The group had asked HRSA to issue a notice of proposed rulemaking that would amend the National Practitioner Data Bank, NPDB, to close the “corporate shield” loophole.  Public Citizen is a nonprofit consumer advocacy organization that represents consumer interests on a national level.

The NPDB was created to comply with a federal statute that established the data bank. It was created to record information, including malpractice payments and the disciplinary history of doctors and other health care professionals. Its purpose was to help ensure patient safety by through a comprehensive information bank on medical professionals that provide substandard care to their patients. It is used by health maintenance organizations, HMOs, hospitals and state licensing boards to provide background and credentialing checks.

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The corporate shield loophole is a requirement in HRSAs rules that allow physicians and others to avoid submitting malpractice information to the data bank if malpractice is alleged, even if a malpractice payment is made on his or her behalf. According to Public Citizen, the loophole allows health care providers to evade the reporting requirements related to malpractice and “deprives hospitals and state licensing boards of vital information needed to protect patient health and safety”.

Nothing more was done by HRSA on the matter and, in July 2016, Public Citizen filed a lawsuit against the agency. The suit, filed in the U.S District Court for the District of Columbia, is an action to compel HRSA to take action on its 2014 request since it had not been granted or denied. That lawsuit is apparently what prompted the September denial letter. In that letter, HRSA stated that it had responded in 2014 and informed Public Citizen that it regularly considered all options to improve reporting, and thought that letter was a sufficient response.

In a press release published by Commondreams, Public Citizen’s director, Dr. Michael Carome, stated “HRSA’s refusal to close the corporate shield loophole signals that the agency is less interested in protecting patients and more interested in aiding physicians and other health care providers who provide substandard or negligent care.” It is not clear what, if any, steps will now be taken to close the corporate shield loophole.

I agree with Dr. Carome! How much good does a data bank that only gives partial information and allows some to escape reporting requirements really do? Most of those that use the loophole work for large hospitals and corporations. This is but another example of big business interests in money as opposed to protecting the very people they are there to serve.


Public Citizen

Public Citizen Press Release

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