STATE  MEDICAL  BOARDS  AND 

MEDICAL  DISCIPLINE 

Richard  P. Kusserow 
INSPECTOR  GENERAL 
AUGUST  1990 
OEI-01-89-00560  EXECUTIVE  SUMMARY 

PURPOSE 

The purpose  of this inspection  is to assess the disciplinary  practices  of State medical  boards. 

It examines  the changes taking  place that have an important  bearing  on these practices  and the 

impediments  to improved  board performance. 

BACKGROUND 

This report  is a follow-up  to a 1986 Office  of Inspector  General report  addressing  the 

licensure  and disciplinary  responsibilities  of State medical  boards.  It concentrates  on board 

disciplinary  activities  because of their relevance  to heightened  national  concerns  about 

medical  malpractice  and the quality  of medical  care.  It is based on a review  of pertinent 

literature  and documents,  an examination  of disciplinary  action  data from  the States, a survey 

seeking detailed  information  about disciplinary  actions  taken in a random  sample of eight 

States, and case studies of board disciplinary  operations  in California,  New  York, 

Pennsylvania,  and Texas. 

FINDINGS 

Identification  Of Cases 
Through  mandatory  reporting  laws, immunity  protections,  and self-reporting  laws,  State 
governments  and their  medical  boards have facilitated  the identification  of physicians  who 
may warrant  disciplinary  action. 
In recent years, the annual number  of referrals  or complaints  received  by boards has been 
increasing,  often  significantly. 
The Medicare-funded  Peer Review  Organizations  (PROS), which  regularly  review  quality  of 
care cases, still refer few  cases to the boards. 
Review Of Cases 
Case backlogs  remain  a serious problem  for State medical  boards.  Although  some States have 
been successful  in reducing  the backlogs,  their  successes have tended to be limited  in duration 
and scope. 
Significant  staff shortages continue  to impede  the boards  disciplinary  efforts.  Medical  license 
renewal  fees, which  can serve as a major  funding  source for addressing  these shortages, have 
been increasing.  However,  much of the revenue  that State governments  have obtained  from 
these fees has not been going  to the boards. 
1  Many  other factors  continue  to constrain  the boards  capacity  to review  cases expeditiously 
and effectively.  They  include: 
Limitations  on the boards  authority  to investigate  and prepare  cases, conduct  hearings, 
and impose disciplinary  actions. 
Limitations  on authority  of Federal  or federally  funded  agencies  to share care 
information  with  the boards. 
Standards  of proof  calling  for  clear  and convincing  evidence. 
Lack  of clear-cut  standards  concerning  competent  medical  care. 
Infrequent  information  sharing  among State boards  concerning  investigative 
approaches. 
Disposition  Of Cases 
The annual number  of actions  that medical  boards have been reporting  to the Federation  of 
State Medical  Boards  has been increasing.  However,  when  certain  considerations  involving 
the data and the practice  of medicine  are taken into  account,  the increase is of modest 
significance. 
There  are widespread  variations  in the rate of actions taken by State boards.  They  reflect 
some statistically  significant  correlations  by region  and size, but not by fee. 
The majority  of disciplinary  actions  that State boards have been taking  against physicians  are 
based on consent  agreements. 
A number  of States are beginning  to devote more investigative  attention  to quality  of care 
cases.  Yet, as in the mid-1980s  the great majority  of disciplinary  actions  taken by the State 
boards concern  the improper  use of drugs or alcohol-be  it inappropriate  prescribing, 
unlawful  distribution,  or self-abuse. 
Disciplinary  actions  of medical  boards in other  States, information  from  other  State agencies, 
and information-gathering  initiatives  of the boards themselves  appear to be the three most 
prominent  sources for the disciplinary  actions taken by the boards.  Those actions emerging 
from  medical  malpractice  suits and from referrals  from  physicians,  medical  societies, PROS, 
and Medicare  carriers  account  for a relatively  small share of the total. 
The majority  of the disciplinary  actions taken by medical  boards involve  violations  that 
occurred  in a physicians  office.  At the other extreme,  few  such actions concern  violations 
that took place in nursing  homes. 
ii  In cases where  there is some basis for concern,  but not enough  to warrant  disciplinary  action, 
many  boards take private,  nondisciplinary  action  that is not reported  to the Federation.  Some 
boards are making  increased  use of such actions.  Others are relying  less on them or 
discontinuing  them altogether. 
Overall Board Performance 
Notwithstanding  the many constraints  they still  face, medical  boards have made significant 
progress  in improving  their disciplinary  capacity.  Thus far, however,  they have not developed 
a data base that provides  useful  indicators  of their  actual performance. 
RECOMMENDATIONS 
State Governments 
2-	 State governments  should  assure that all licensure  fees collected  from  physicians  and 
other professional  groups  under the purview  of medical  boards are used to support  board 
operations. 
United States Department Of Health And Human  Services(HHS) 
The Public  Health  Service (PHS)  should  collect,  analyze,  and disseminate  State-by-State 
data on staffing,  revenue,  expenditure  and caseload levels of the State medical  boards. 
The PHS should  convene  a national  meeting  to focus attention  on the importance  of the 
boards  oversight  role and to examine  how  the boards  resource  and other limitations 
should  be addressed. 
The PHS, in collaboration  with  the Health  Care Financing  Administration  (HCFA), 
should  determine  ways in which  HHS  could  encourage  and assist the State boards to 
contract  with  PROS to conduct  reviews  of quality  of care cases. 
The PHS should  provide  financial  support  for the development  of performance 
indicators  suitable  for widespread  use by State medical  boards. 
The PHS should  provide  financial  support  for technical  assistance efforts  intended  to 
improve  the boards  investigative  efforts. 
The PHS, through  its Agency  for Health  Care Policy  and Research,  should provide 
demonstration  funding  concerning  the use of practice  standards and guidelines  to guide 
investigative  efforts  in quality  of care cases. 
. . . 
111  The HCFA  should propose  legislation  mandating  that the PROS share case information 
with  the medical  boards when  the first  sanction  notice  is sent to a physician. 
The HCFA  should  amend Medicaid  regulations,  or, if necessary, propose  legislation  to 
allow  State Medicaid  agencies to share with  the medical  boards case information  on 
physicians  against whom  they have taken adverse action. 
The HCFA  should  assure that Medicare  carriers  adhere to their responsibility  to refer 
cases of apparent  unethical  practice  or unprofessional  conduct  to State medical  boards. 
The Administration  on Aging  (AoA)  and HCFA  should  assure that the Long  Term  Care 
Ombudsman  Program  and the State survey and certification  agencies, respectively, 
provide  assistance to State medical  boards in identifying  instances of improper  medical 
care provided  to nursing  home residents. 
Federation Of State Medical Boards (FSMB) 
2- The FSMB  should  facilitate  assessments of the performance  of State medical  boards. 
> 	 The FSMB  should  help State boards improve  their effectiveness  in reviewing  quality  of 
care cases. 
National  Governors Association (NGA), Council Of State Governments (CSG), And Nation
al Conference Of State Legislatures (NCSL) 
> 	 The NGA,  the CSG, and the NCSL  should  take actions  that foster  greater State 
government  awareness of the crucial  roles of  State medical  boards and of the specific 
measures that can be taken to improve  their capability  and performance. 
COMMENTS 
Within  the Department,  we received  comments  on the draft report  from  the PHS, HCFA,  AoA, 
and the Assistant  Secretary for Planning  and Evaluation  (ASPE).  The PHS and AoA  agreed 
with  the recommendations  directed  to them.  However,  HCFA  and ASPE  disagreed  with  a 
number  of the recommendations. 
Among  the national  organizations  commenting  on the report,  the FSMB,  the American 
Association  of Retired  Persons (AARP),  and the Public  Citizen  Health  Research Group 
expressed support  for the report  and the recommendations.  The AMA  supported  two  of the 
recommendations  but disagreed  with  or opposed most of the remaining  ones. 
Our recommendation  calling  for PROS to be mandated  to share case information  with  State 
medical  boards when  the first  sanction  notice  is sent to a physician  generated  a particularly 
iv  . 
strong response.  The FSMB  and AARP  endorsed it, believing  it would  provide  valuable 
information  to the boards.  The HCFA,  AMA,  and ASPE  opposed it, citing  concerns  about its 
necessity  and appropriateness.  We have considered  all these responses and continue  to believe 
that the recommendation  should  be carried  out. 
We provide  further  information  on the comments  and on our response to them at the end of 
the report  and in appendix  A. 
V  INTRODUCTION 
In recent years, as in the mid- 1970s  the nation  has been experiencing  a crisis in medical 
malpractice  insurance.  In both periods  the crisis has been triggered  by significant  increases in 
the number  of medical  malpractice  claims  and awards,  in the dollar  awards made by juries, 
and in the associated insurance  costs for physicians.  The result  at both times has been to 
inhibit  the access to medical  care, to contribute  to the practice  of defensive  medicine,  and to 
add strain to the doctor-patient  relationship. 
The search for  solutions  to these crises have focused for the most part on the legal  system.  In 
the 1970s and 198Os, nearly  all States passed tort reforms  that among other things  established 
caps for pain  and suffering  awards,  imposed  limits  on attorneys  fees, and reduced  the 
applicable  statutes of limitations.  Yet various  inquiries  into  the phenomenon  have made it 
clear that to a considerable  degree the crises are also rooted  in problems  associated with  poor 
medical  care, and that over the long  term one of the most effective  ways  to address these 
problems  would  be to assure that effective  quality  assurance mechanisms  are in place.* 
Notwithstanding  the efforts  of the Medicare-funded  Peer Review  Organizations  (PROS), 
liability  insurers,  professional  associations,  and others, there are three basic quality  assurance 
mechanisms  now  in place.  Each functions  independently  of the payment  source for the care 
being provided.  Each addresses specific  instances of possibly  improper  medical  practice. 
Each tends to be regarded  as having  a deterrent  effect on such practice.  They  are the medical 
malpractice  litigation  system itself,  the review  mechanisms  carried  out by hospital  quality 
review  committees,  and the oversight  conducted  by State medical  licensure  and discipline 
boards. 
In this report,  we focus on the State medical  boards (hereafter  referred  to as the boards).  For 
more than a century,  dating  back to the first  modem  medical  practice  act in Texas in  1873, 
State governments  have charged  these boards with  the responsibility  of licensing  and when 
necessary disciplining  physicians.  For the past 25 years, the Federal  Government  has relied 
upon  these boards to determine  whether  a physician  is legally  authorized  to participate  in the 
Medicare  and Medicaid  programs  and to discipline  physicians  for any transgressions  that do 
not directly  relate to these programs.  The boards have provided  these services at no cost to 
the Federal  Government,  or for that matter  to State governments,  as their revenues derive  from 
fees imposed  on the licensees. 
The report  is a follow-up  to one we issued in  1986.3  That report,  which  focused  on the 
licensure  and disciplinary  responsibilities  of the boards, identified  a number  of vulnerabilities 
in both of these spheres.  It was widely  disseminated  and received  considerable  attytion  in 
the print  and visual  media, in governmental  circles,  and in the medical  community. 
In this report,  in contrast  to the earlier  one, we focus strictly  on the disciplinary 
responsibilities  of the boards.  We do that because these responsibilities  are more directly 
associated  with  the malpractice  concerns  mentioned  at the outset, because many of the prior 
1 
 concerns  about  the boards  licensure  operations  have abated,5 and because a narrower  focus 
allows  for  a more in-depth  look  at the disciplinary  sphere than we could  undertake  in  1986. 
Thus,  the purpose  of our inquiry  is to assess the disciplinary  practices  of State medical 
boards.6  Toward  that end, we conceptualize  the disciplinary  sphere as including  three major 
components:  (1) the identification  of cases, (2) the review  of cases, and (3) the disposition  of 
cases.  For each of these components,  we examine  the extent and type of changes occurring, 
particularly  since 1986, and any major  impediments  to board performance. 
In addition,  we explore  the nature, extent,  and implications  of the boards  involvement  with 
quality  assurance activities.  Our background  investigations  indicated  that such activities, 
which  encompass  various  educational  and preventive  activities,  may be of increasing 
significance.  Our findings  and recommendations  concerning  the quality  assurance activities 
will  be presented  in a brief  follow-up  report. 
Our methodology  for the study is based on five major  lines of inquiry:  (1) a review  of 
pertinent  literature  and documents,  (2) a review  of data from  the disciplinary  action  data bank 
of the Federation  of State Medical  Boards  (FSMB),  (3) a mail  survey of a random  sample of 
eight  States for information  on all disciplinary  actions  taken in those States in 1988, (4) case 
studies of board disciplinary  operations  in the four  States having  the largest number  of 
practicing  physicians  (California,  New  York,  Pennsylvania,  and Texas), and (5) telephone 
discussions  with  board officials  in other States and in three Canadian  provinces  involved  with 
quality  assurance activities.  (For further  elaboration  on our methodological  approaches,  see 
appendix  A.) 
2 
 FINDINGS 

IDENTIFICATION  OF  CASES 
Through  mandatory reporting laws, immunity  protections, and self-reporting  laws, State 
governments and their medical boards havefaciritated  the identification  of physicians who 
may warrant disciplinary  action. 
State medical  boards rely  primarily  on referrals  or complaints  to identify  cases for 
investigation.  Thus,  if those in good position  to identify  possible  violations  of State medical 
practice  acts fa.iI to do so, the capacity  of the boards to provide  adequate protection  to the 
public  can be severely  compromised. 
It was because of this concern  that Congress,  in  1986, passed Title  IV  of the Health  Care 
Quality  Improvement  Act.  That legislation  extended  legal protection  to those providing  case-
specific  information  to State medical  boards and mandated  that hospitals,  other  health  care 
entities,  boards,  and professional  associations  send information  on adverse actions  they have 
taken against  physicians  to a national  practitioner  data bank.  The bank is expected  to begin 
operation  in  1990. 
Figure  I 
States  with  Mandatory  Reporting  Laws, 
by  Reporting  Source,  1986  &  1989 
No.  of  States
50  r _.._........__._._.,__...____._......__._._..._....._..._..._.___....._................................................... 
__._....._...
40 
._....__.... 
30 
20 
10 
r\
 
Hospitals  Insurance  All  Health  St  Med  St  Prof  Courts 
Companies  Licensees  Providers  Societies  Societies 
Reporting  Source 
m  1986  - 1989 
Source:  Federation  of  State  Medical 
Boards,  m,  1988  8  1989-90 
editions. 
data  not  available 
l 
3 
 Although  many  States had immunity  protections  and mandatory  reporting  laws prior  to the 
passage of the Title  IV  legislation,  many  more  have enacted or strengthened  such laws  since 
then.  In regard  to mandatory  reporting  laws,  the increased  numbers  are apparent  in all 
categories  (figure  1). Hospital  reporting  laws  now  apply  in nearly  all the States, with  the 
requirements  typically  covering  revocations,  surrenders,  suspensions,  and restrictions  of 
hospital  privileges.  Also  notable  is that by  1989,33  States passed a law requiring  liability 
insurance  carriers  to report  medical  malpractice  cases to the board.  In 22 of these States, the 
reporting  requirements  covered  all claims,  in 23 all payments,  and in 8 payments  over a 
certain  amount,  ranging  from  $5,000  to $100,000. 
In regard  to immunity  protection,  a substantial  majority  of States have applied  it to board 
members;  somewhat  smaller  majorities  have applied  it to board  staff, to those mandated  to 
report  violations  to the board,  and to those not mandated  to report  but who  nevertheless  report 
in good  faith  (figure  2). 
Figure  2 

States  with  Immunity  Protection  Laws, 

by  Indivs/Orgs  Covered,  1986  &  1989 

No.  of  States 
Board  Board  Orgs  Reqd  Good  Faith 
Members  Staff  To  Report  Reporting 
m  1986  - 1989 
Source:  Federation  of  State  Medical 
Boards,  E&w)gg,  1988  8  1989-90 
editions. 
4 
 I  .
Finally,  in the late 198Os, a majority  of the boards have come to view  the liceysure  renewal 
process as a means of obtaining  markers  to identify  problem  physicians.  Specifically, 
they have required  that all physicians  seeking to renew  their  medical  licenses provide 
information  on various  actions  or conditions  that would  be of concern  to the boards. 
These include  disciplinary  actions  imposed  by other entities  as well  as relevant  physical 
impairments  (figure  3). 
Figure  3 
States  Using  Renewal  Forms  to  Identify 
Problem  Physicians, 
By  type  of  Information  Required,  1986  &  1989 
No.  of  States
40  r _._._._._._..._._._._._._._._._._..._..._._..._........._........................_.._..._................................. 
0th  Bd  Felony  Hsps  Addiction  Prof  Sot  Ins  DEA  Hlth  Prob 
Acts  Conviction  Acts  Drug/Ale  Act8  Award8  Act8  Phy/Mental 
m  1986  - 1989 
Source:  Federation  of  State  Medical 
Boards,  m,  1988  CL1988-90 
editions. 
data  not  available 
l 
In recent years, the annual  number of referrals or complaints  received by boards has been 
increasing, often significantly. 
There  is no national  data base on the number  of complaints  or referrals  being received  by 
boards.  However,  the signs of an increasing  annual number  of such complaints  or referrals  are 
widespread.  They  are apparent  in the annual  reports  issued by the boards, in discussions  with 
board officials,  and in the information  obtained  from  our case study  States.  In New  York,  for 
instance,  the number  of referrals  and complaints  increased  from  1,699 in  1985 to 4,076  in 
1988, and to an estimated  5,000  in  1989. 
5 
 instance,  the number  of referrals  and complaints  increased  from  1,699 in  1985 to 4,076  in 
1988, and to an estimated  5,ooO in  1989. 
In general,  the mandatory  reporting  laws and the immunity  protections  appear to have had the 
intended  stimulative  effect.  At the same time, it is clear that there is much variation  among 
the States.  For example,  while  hospital  reporting  laws seem to be working  relatively  smoothly 
in some States, they appear to have little  effect in others. 
Consumer  complaints,  typically  the major  source of case identification  for the boards,  still 
tend to predominate.  Yet, in most States they seem to be accounting  for a decreasing 
proportion  of complaints  and referrals.  The increasing  shares tend to be accounted  for by 
referrals  from  malpractice  sources, law enforcement  agencies, and hospitals. 
The Medicare-funded Peer Review Organizations (PROS), which regularly  review quality of 
care cases,still refer few  casesto the boards. 
In our  1986 report,  we noted that the PROS tended to be an especially  unproductive  source of 

information  for the boards.*  Since that time there have been some developments  that bear on 

this relationship.  Under  the third  scope of work  that became effective  for all PROS in April 

1989, the Health  Care Financing  Administration  (HCFA)  called  for the PROS to develop 

closer interactions  with  boards and, in fact, to consider  sharing  confidential  case 

information  with  them when  serious quality  of care problems  are found.  In response,  some 

PROS have developed  or begun to negotiate  the development  of memoranda  of agreement 

with  the boards.  Furthermore,  to identify  ways of achieving  closer operational  relationships, 

the American  Association  of Retired  Persons (AARP),  in December  1989, held a workshop 

involving  representatives  of PROS and medical  boards from  10 States. 

In general,  the relationship  between  the two  entities  appears to be reasonably  cooperative.  In 

a May  1989 survey conducted  by the Missouri  PRO, about 55 percent  of the 38 PROS 

responding  reported  that the relationship  was good or excellent.  Yet, about two-thirds  of the 

PROS responding  to the survey indicated  that they had not reported  any physicians  to the 

boards during  the past 12 months. lo  The experiences  of our case study and sample survey 

States reveal a similarly  low  level of referral  activity. l1  Thus, despite efforts  to address the 

matter, the PROS still  are relatively  unproductive  sources of information  for the boards. 

REVIEW  OF  CASES 

Case backlogs remain a serious problem for  State medical boards. Although  some States 
have been successful in reducing the backlogs, their successeshave tended to be limited in 
duration  and scope. 
As in the mid-1980s,  many  boards still report  that they face significant  case backlogs.* 
Through  various  prioritizing  and expediting  techniques,  they attempt  to reduce  these backlogs, 
but the rising  number  of referrals  and complaints  often  frustrates  their  attempts. 
6 
 The backlogs  tend to be most apparent  at the point  of cases awaiting  investigation.  However, 

they also exist at various  other junctures  of the review  process, such as those involving  case 

reviews  by prosecuting  attorneys,  hearing  officers,  or board officials  themselves. 

In the 1985 to 1987 period,  each of our four  case study States faced major  backlogs  in cases 

awaiting  investigation  and to varying  degrees, each has made progress  in addressing  them. 

Yet, at the beginning  of the 1990s  in these as in other States, the gains are not necessarily 

enduring  ones.  For instance,  in California,  the State with  the most licensed  physicians,  the 

number  of cases not yet assigned to an investigator  rose substantially  during  the la;:  6 months 

of  1989, after dropping  even more substantially  between  mid-1988  and mid-1989. 

Moreover,  progress  that is made in decreasing  the number  of cases awaiting  investigation  is 

not necessarily  matched  at the subsequent junctures  of the review  process.  Thus,  the 

expeditious  opening  of a case does not preclude  a long,  laborious  review  process for that itse. 

In fact, cases going  through  a full  evidentiary  hearing  often  take 2 years or more to settle. 

They  then are subject  to appeals that can take another 2 years or more, with  the physician 

often continuing  to practice  through  the appeal process. 

Significant  staff shortages continue to impede the boards disciplinary  efforts.  Medical 
license renewal fees, which can serve as a major funding  sourcefor  addressing these 
shortages, have been increasing.  However, much of the revenue that State governments 
have obtained from  thesefees has not been going to the boards. 
Concerned  about large case backlogs,  some State governments  have allowed  boards to hire 
additional  investigative  staff.15  Overall,  however,  the level and scope of the increases are 
modest.  For 31 State boards for which  comparative  data arr available,  17 had no increase at 
all between  1986 and 1989 in full-time  investigative  staff.  During  this period  the average 
number  of such staff for the 31 States rose from  4.2 to 4.8, the median  from  1 to 2. 
With  current  staffing  levels, boards often  find  each of their investigators  handling  caseloads of 
50-60  or more.  They  find  themselves  hard pressed to conduct  thorough  investigations  of 
hospital  referrals,  which  tend to involve  multiple  incidents  and patients,  or even more so, of 
quality  of care complaints  from  an entity  which  has not already  conducted  some investigation 
of its own.  And  they find  it very difficult  to monitor  compliance  with  various  probation 
orders or licensure  restrictions  which  they have imposed  on physicians.  In this milieu,  as the 
number  of referrals  and complaints  continue  to climb,  the pressure intensifies  to find  the 
quickest  possible  way  to handle each case. 
States can improve  this situation  without  cost to taxpayers  by increasing  medical  license 
renewal  fees.  Between  1986 and 1989,38  States (75 percent  of the States) did  so atll+east 
once.  During  that period  the median  annual renewal  fee increased  from  $50 to $75. 
Yet, as has long  been indicated  by many  board officials,  State governments  do not necessarily 
use all the revenue  derived  from  these fees to help the boards carry  out their responsibilities. 
In Texas, for instance,  the State legislature  in Fiscal  Years 1988 and 1989 imposed  a 
temporary  $110 increase in renewal  fees for physicians  and other professional  groups  to help 
7 
 the State government  to balance its budget.  The temporary  fee raised $110 million  across all 
the professional  groups. 
More  recently,  in Connecticut,  the State government  increased  the annual  medical  license 
renewal  fee from  $150  to $450,  the highest  in the country.  The increase went  into  effect in 
July  1989 and is expected  to increase yearly  revenues from  about $4 million  to about $11.5 
million.  As of April  1990, the State government  had not provided  any additional  revenue in 
support  of board operations.  In fact, plans were being proposed  for possible  reductions  in 
staff. 
Many other factors continue to constrain the boards capacity to review casesexpeditiously 
and effectively.  The more significant  of them are identified  and discussedbelow. 
. 	 Limitations  on the boards  authority  to investigate  and prepare cases, conduct  hearings, 
and impose  disciplinary  actions 
In recent years, nearly  all State legislatures  have amended their medical  practice  acts to 
strengthen  the authority  of their boards.  Some of the changes, as in Massachusetts,  Florida, 
and Maryland,  have been major  ones, substantially  enhancing  the oversight  authority  of the 
boards.  The great majority,  however,  have been relatively  minor  ones, typically  involving 
some incremental  elaboration  of the grounds  upon  which  physicians  can be disciplined  (for 
example,  a specification  of abusive billing  practices  as a basis for disciplinary  action). 
In actuality,  most boards still  function  under  some major  restrictions  to their operational 
authority.  Probably  the most consequential  of these are those that limit  a boards  involvement 
to only  certain  parts of the review  process.  In California,  for instance,  the board conducts  the 
investigation,  but the Attorney  Generals  office  is responsible  for the preparation  of a formal 
accusation.  If the board does not enter into  a stipulated  agreement  with  the physician  but 
proceeds  with  a formal  hearing,  the case is then assigned to the Office  of Administrative 
Hearings.  The Attorney  Generals  office  then prosecutes  the case before the administrative 
judge.  Clearly,  under  such a fragmented  system, the board alone cannot  be held accountable 
for the review  process.  Referring  to the responsibilities  of the other participating  offices,  the 
executive  director  of the board has stressed,  These  people  dont  work  for us.  Were  subject 
to their  calendars  and their processes and the delays that go along  with  that.I* 
In New  York,  the review  process has been more fragmented,  with  a multi-tiered  process 
involving  the Department  of Health  and the Board  of Regents in the Department  of Education. 
At  a recent hearing  of the New  York  State General  Assembly,  a representative  of the State 
Department  of Health  commented  as follows  about the process: 
(Its not structured  to yield  the best results.  It takes too long.  It addresses too 
few physicians.  It imposes unnecessary  costs both on the physicians  and on the 
state, and itS totally  incomprehensible  to the public.  The result is inadequate 
protection  of the public  health.  I9 
8 
 Other  widespread  restrictions  on board authority  relate more directly  to the investigative 

process.  They  concern  statutory  provisions  that preclude  or inhibit  boards from  reviewing 

records  of patients  not directly  involved  in an incident  being  investigated;  rigorous  and time 

consuming  procedures  that discourage  boards from  imposing  emergency  suspensions,  even 

though  patients  may be in danger;  and considerable  limitations  concerning  the conduct  of 

undercover  work. 

Still  other restrictions  involve  the grounds  on which  disciplinary  actions can be taken, 

notwithstanding  the incremental  additions  that State legislatures  have granted  in this area.  Of 

particular  note in this regard  are the limitations  governing  the capacity  of boards  to take 

disciplinary  actions  on the basis of such actions taken by a medical  board in another  State.  In 

1989, only  nine  States could  impose  a disciplinary  action  on such a basis without  conducting  a 

new hearing.  More  typically,  the allowable  grounds  are only  for specified  t  pes of 

28 

disciplinary  action  taken by another  State and a new hearing  must be held. 
. 	 Limitations  on authority  of Federal  or federally  funded  agencies to share case 
information  with  the boards 
On the relatively  infrequent  occasions  when Federal  or federally-funded  entities  such as 
PROS, Medicaid  State agencies, and the HHS  Office  of Inspector  General  send referrals  to 
State boards,  they typically  do not provide  detailed  information  from  the case files.  This 
omission,  which  is based on guiding  statutes and regulations,  leaves the boards in the position 
of having  to conduct  their own  investigations  to obtain  information  already  in the possession 
of the referring  source. 
The problem  is particularly  serious with  respect to the PROS, because they could  provide  a 
large number  of high quality  cases for board review.  Yet PRO officials  point  to insufficient 
statutory  and regulatory  specificity  to support  such a sharing  of case information.  They  also 
point  out that State redisclosure  laws may result  in disclosure  of information  which  PROS 
must keep confidential.  None  of us,  said one PRO executive  director,  wants  to become  a 
landmark  case. 
.  Standards  of proof  calling  for clear  and convincing  evidence 
In accord  with  guiding  statutes and/or  existing  case law, most boards must b;;e  any 
disciplinary  actions  they take on a clear  and convincing  standard of proof.  This  is more 
rigorous  than the preponderance  of evidence  standard that is typically  required  to justify  tort 
damages for negligence  in civil  cases.  The more rigorous  standard provides  greater protection 
for physicians,  but adds complexity  to the investigative  process and appears to make it less 
likely  that a board  will  persevere on a case through  a full  evidentiary  hearing. 
Some State legislatures  have amended their  statutes to introduce  preponderance  of evidence 
as a standard.  At least one, Wisconsin,  has allowed  a court finding  of physician  negligence  in 
a medical  malpractice  case to serve as conclusive  evidence  before the medical  board.  But  at 
9 
 this time,  there does not appear to be any significant  movement  across the States to ease the 
standard of proof  that boards must use. 
.  Lack  of clear-cut  standards concerning  competent  medical  care 
The clear  and convincing  rule becomes especially  burdensome  in quality  of care cases, 

because with  rare exceptions  there are not clear-cut,  widely  endorsed  standards for the boards 

to rely  upon in such cases.  One executive  director  of a board, himself  a physician, 

commented  as follows  on the matter: 

One  of the most difficult  problems  facing  boards  and society  today  is to 
determine  how  to define an adequate  standard  of care.  You could  getJive 
physicians  together  to look at some aspect of medical  care and they would  tell 
you  ifit  was acceptable  medical  care, but they still  couldnt  give you standards 
they used to make that decision. 
In such a situation,  unless an act is especially  egregious,  boards tend to look  for another  basis 
to take action.  If they pursue  the quality  of care angle, they face what  could  well  be a long, 
nettlesome  process that leads to a hearing  where  opposing  medical  experts give conflicting 
opinions  on the appropriateness  of the care provided. 
.  Infrequent  information  sharing  among  State boards concerning  investigative  approaches 
As caseloads have increased  and become more complex,  it has become increasingly  important 
that boards handle  their case investigations  in a sound, cost-effective  manner.  How  they 
prioritize  their cases, how  they deploy  their  scarce investigative  resources,  how  they identify 
potentially  productive  leads and other  such matters have become increasingly  significant 
considerations. 
Yet, even though  51 boards are regularly  coping  with  such considerations,  there tends to be 
little  interaction  among  them, particularly  at the investigative  level.  Investigators  from 
different  States rarely  are able to take advantage of valuable  lessons learned  by one another. 
This  void  is especially  striking  with  respect to the quality  of care cases, which  confront  boards 
with  many  new and difficult  choices-among  which  are those concerning  the ways  to build 
greater clinical  expertise  into  their investigative  process. 
DISPOSITION  OF  CASES 
The annual number of actions that medical boards have been reporting  to the Federation of 
State Medical Boards (FSMB)  has been increasing.  However, when certain considerations 
involving  the data and the practice of medicine are taken into account, the increase is of 
modest significance. 
10 
 . 
As in the early  to mid-1980s,  the annual  number  of actions  which  State medical  boards report 
to the FSMB  disciplinary  action  data bank have continued  to increase.  From  1985 to 1987 
(the latest date for which  validated  data are available)F2  the yearly  total  of reported  actions 
increased  by 29 percent,  from  2,019  to 2,597.  During  that period,  the more  serious 
actions-revocations,  suspensions,  and probations- increased  at an even higher  rate, 37 
percent,  from  1,089 to 1,495.  (Figure  4 below  provides  annual  totals  for each of the four 
categories  used by the FSMB.) 
Figure  4 
State  Board  Actions  Reported 
to  the  FSMB,  19851987 
No.  of  Actions
,200  r ...__..__._...._____...._..._..._.._.___.............._.....__.~................................................... 
 
Revocations  Suspensions  Probations  Other 
@%985  m  1988  - 1987 
Source:  Federation  of  State  Medical 
Boards,  Federation  Bulleth  1985-1987 
editions. 
These data, which  derive  from  all the State boards, reflect  an increasingly  activist  posture  on 
their part.  Yet, upon analysis,  the activism  is less imposing  than initial  impressions  would 
suggest. 
First  of all, it is important  to recognize  what  the data actually  represent.  They  include  initial 
adverse actions,  such as revocations,  suspensions,  probations,  and other  lesser sanctions. 
They  include  modifications  to these actions  that in some way  affect  the terms of discipline. 
And  they include  various  favorable  actions  involving  a physician  who  has previously  been 
disciplined.  For instance,  in  1988, in reviewing  the monthly  disciplinary  action  reports  which 
11 
 the FSMB  sends to State medical  boards and various  other entities,  we counted  at least 225 
actions  under the category  license  restored  or reinstated. 
Further,  as is implied  in the above discussion,  the data include  multiple  actions  involving  the 
same physician.  Thus,  if a board put an individual  physician  on probation,  subsequently 
modified  the probation,  and at a still  later point  terminated  it, that physician  would  account  for 
three board  actions reported  to the FSMB.  Similarly,  if a physician  were disciplined  in one 
State and, on the basis of that action,  also disciplined  in two  other States in which  he or she is 
licensed,  that physician  would  account  for three actions,  one action reported  by each of the 
three States.  In our tabulations  of the 1988 data, we found  that about one-third  of all the 
license revocations  reported  to the FSMB  during  that year were based on actions  taken in 
other  States. 
The key question  thus becomes:  Across  the United  States, how  many physicians  are State 
medical  boards disciplining  each year ? The FSMB  at present does not provide  that 
information.  It is clear, however,  that the number  of physicians  disciplined  by the boards each 
year is much  less than the number  of total actions reported  by the FSMB.  In our review  of the 
1988 data, about 25 percent  of all actions clearly  were not initial  disciplinary  actions  against a 
physician. 
A second important  consideration  that can help put the FSMB  data in perspective  revolves 
around  the question  of how  many physicians  should  be disciplined  each year.  How  many are 
acting  or practicing  in a manner  that would  warrant  disciplinary  action? 
There is, of course, no definitive  basis for answering  such a question.  But  some recent studies 
suggest quite  strongly  that, even when  all appropriate  caveats are taken into  account,  the 
universe  of potentially  actionable  events far exceeds the number  of disciplinary  actions 
actually  imposed  by the boards.  One recent study, based on a national  survey of 40 physician-
owned  insurance  companies,  found  that the overall  rate at which  these companies  disciplined 
physicians  for substandard  performance  was much higher  than that of State medical 
boards.23  Another,  based on a review  of patient  records of 30,195  randomly  selected patients 
in 5 1 New  York  State hospitals,  found  that the rate of negligent  care provided  to these patients 
was far greater than the rate of physicians  being disciplined  by the New  York  State board.Z 
There are widespread variations in the rate of actions taken by State boards.  They rejlect 
some statistically signijicant  correlations by region and size, but not byfee. 
During  the 1985 to 1987 period,  the rate of all board actions taken per 1,000 licensees ran  ed 
ii 
from  2.6 in one State to 32.2  in another.  The median rate for the 3-year  period  was  14.3.
When  the State actions  are compared  by region,  size of State (in terms of number  of practicing 
physicians),  and annual renewal  fee, substantial  variations  are, once again, quite  apparent 
(figure  5).  Although  overall  variations  generally  are not at a statistically  significant  level,  two 
particular  comparisons  are at such a level.  One reveals that boards in southern  States were 
significantly  more likely  than those in northern  States to have taken some kind  of serious 
12 
 . 
Figure  5 
Serious  Disciplinary  Actions  (Revocations,  Suspensions,  and  Probations) 
and  Total  Actions  Per 1,00 Licensees,  by Region,  Size of State,  & Annual  Renewal  fee 
1985-l  987 
No. of  Aotlona 
20  .  .  .  .  ______...________._.._______..________..________..  .  . 
6 
n 
Northeast  South  Mldwert  wert 
Actions  by Region 
E2  Serlouo  per  1,000  m  Total  per  1.000 
No. of  Action8 
__.........._..........  ,............ 
26r.... 
  X-large  Large  Medium  Small  X-small 
Actions  by Size 
tZ3  Serious  per  1,000  m  Total  per  1,000 
_._________.....____......... ...-
No. of  Aotlonr 
.  .  .  .  . 
Source: Federation of State 
Medical Boards Exchange, 
19851987 editions; American 
Medical Associations U.S. 
Medical  Licensure  Statistics  &  Hlgh  Medium  Low 
Actions  by Fee 
Licesure  Requirements. 
1984/1985-1986/1987editions: 
E3  Serlou8  per  1,000  m  Total  per  1,000 
and United  States Census data. 
13  action  against physicians  in the 1985 to 1987 period.  Another  indicates  that boards in 
medium-size2dgStates were  significantly  more likely  to take action,  of any kind,  than boards in 
other  States. 
There  are, of course, many possible  factors  that might  account  for the wide  variations  in rates 
of actions  taken by State boards.  To varying  degrees they might  be attributable  to certain 
inaccuracies  or discrepancies  in the reporting  or even to differing  levels of physician 
incompetence,  negligence,  or impairment  across the States.  Yet, as the editor  of the New 
England  Journal  of Medicine  noted some time ago when  considering  such variations:  ...the 
primary  expla;%?tion must lie in the relative  vigor  and effectiveness  of the regulatory  apparatus 
of each State. 
The majority  of disciplinary  actions that State boards have been taking against physicians 
are based on consent agreements. 
The evidence  on this point  is compelling.  In our survey encompassing  disciplinary  actions 
taken in  1988 in eight randomly  selected States, 57 percent  of the actions  were based on 
consent  (or as they are often  called stipulated)  agreements.  Similarly,  in each of our four 
case study States, a clear majority  of actions have been resolved  in this manner  in recent years. 
Trend  data concerning  this issue are not usually  available  in the States, but there are strong 
signs that the proportion  of cases being resolved  through  consent  agreements has been rising 
sharply.  Whereas only  21 States had the authority  to settle cases in this manner in  1986,41 
did by  1989.  And  board officials  and reports  suggest that the boards have been quite  active in 
taking  advantage of this authority.  In Connecticut,  for instance,  the proportion  of cases 
decided  through  consent  agreements rose from  69 percent  in  1986 to 72 percent  in  1987 to 89 
percent  in  1988.  In Texas, the rise during  the same period  was from  76 percent  to 77 percent 
to 89 percent.  In  1989, the increase continued,  reaching  95 percent. 
Given  the increasing  numbers  of referrals  and complaints,  the staff shortages, and the 
cumbersome  review  processes, it is understandable  why  boards find  a consent  agreement  so 
attractive  compared  with  the alternative  of a full  evidentiary  hearing.  As one board official 
noted, It  allows  appropriate  action  to be taken without  taking  up a lot of board time.  Yet, as 
the proportion  of cases so settled exceeds 50 percent  and, indeed,  nears 100 percent  in some 
places, one wonders  if the appropriate  board action is always  being  taken-if  the pressure to 
settle might  not be leading  some boards in some cases to act more leniently  than the violation 
would  warrant. 
One also wonders  about the extent to which  such settlements,  when  they represent  the initial 
disciplinary  action  against a physician,  will  impede  or complicate  actions  against that same 
physician  by other  States in which  he or she is licensed.  Without  a prior  action  involving  a 
full  evidentiary  hearing,  another jurisdiction  may face the prospect  of conducting  additional 
investigative  work  of its own. 
14 
 A number of States are beginning to devote more investigative attention to quality of care 
cases.  Yet, as in the mid-1980s, the great majority  of disciplinary  actions taken by the State 
boards concern the improper use of drugs or alcohol- be it inappropriate prescribing,  un
lawful  distribution,  or  self-abuse. 
In response to increasing  public  concerns  about the quality  of medical  care, a number  of 
boards are increasingly  inclined  to conduct  case reviews  that bear in some way  on the 
adequacy  of the medical  care provided.  The Texas board is a notable  example.  In  1986, with 
the board having  a substantial  backlog  of quality  of care cases, the State legislature  authorized 
additional  funding  to address these cases.  With  the additional  money,  they added part-time 
medical  consultants  and hired an attorney  and four clinical  investigators  trained  as nurses or 
physician  assistants. 
As noted previously,  quality  of care cases tend to be among the more complex  ones for boards 
to investigate  and thus can take a substantial  amount  of time before  they result  in some kind  of 
disciplinary  action.  Thus,  in the coming  years such actions may begin  to account  for a 
significant  proportion  of all disciplinary  actions,  as those now  in the pipeline  reach the point 
of disposition.  Through  1988, however,  they still  account  for a small share of all actions. 
In our sample of eight  States, actions taken on the basis of incompetence  accounted  for  11.5 
percent  of the cases in  1988.  In our review  of the monthly  FSMB  reports  sent to the States in 
1988, cases coded in the category  titled  incompetency,  malpractice,  negligence  accounted 
for about 5 percent.  In both cases, the proportions  surely  under-represent the extent to which 
actions respond  to quality  of care problems,  because when  it is possible  for a board to take 
action  on the basis of another more provable  grounds  it will  often  do so.  How  much  these 
cases are underrepresented  remains  unclear. 
It is clear, however,  that a majority  of actions  are based one way  or another on cases involving 
the improper  use of drugs or alcohol.  In our sample, 57 percent  of the actions  involved 
misprescribing,   impairment,  or narcotics  violations.  In our review  of the FSMBs  1988 
reports,  66 percent  were in the alcoholism  or narcotics  violations  categories.  The latter 
was by far the larger  component  and involves  such violations  as the over prescribing  of 
pain-killers,  the failure  to keep proper  records  on drugs prescribed  or dispensed,  and the 
personal  abuse of drugs. 
Disciplinary  actions of medical boards in other States, information  from  other State agen
cies, and information- gatheting  initiatives of the boards themselvesappear to be the three 
most prominent  sourcesfor  the disciplinary  actions taken by the boards.  Those actions 
emerging from  medical malpractice suits and from  referrals from  physicians, medical 
societies,PROS, and Medicare carriers account for  a relatively small share of the total. 
Because of definitional  discrepancies  and incomplete  information,  it is not possible  to provide 
a definitive  or precise delineation  of how  board disciplinary  actions are first  identified.  Yet, 
on the basis of our sample survey, discussions  with  State board officials,  and review  of board 
annual reports,  it appears that the three above-noted  sources are the leading  ones.  In our 
15 
 sample survey,  the  account  for about 41 percent  of the disciplinary  actions  taken  by the eight 
28y 
States (figure  6). 
Figure  6 
Disciplinary  Actions,  by  Referral 
Source,  Sample  States,  1988 
Other  State 
Board 
Hospi  tal  .ZTZ? 
Board 
9% 
, Initiated 
Health  Care 

Prof 

9% 

Dont  Know  11KXA\\V  Other 
w
9%  11% 
Other 
Physician 
Agency 
5% 
8%  Court 
Public 
FSMB  8%
8% 
Report
6% 
Source:  Office  of 
Inspector  General. 
7With greater  certainty,  we can report  relatively  few  disciplinary  actions  are taken  as a result of 
information  generated  from  medical  malpractic%;ases  and by referrals  from  physicians, 
medical  societies,  PROS, and Medicare  carriers.  Given  the degree of public  concern  about 
medical  malpractice,  and given the fact that 33 States have mandatory  malpractice  reporting 
laws  of one kind  or another,  the relative  insignificance  of those cases to the boards  may be 
surprising.  Yet, board  officials  report  that such cases seldom prove  to be viable  for their 
purposes.  This  is most especially  true of cases which  have not involved  any payment.  But it 
is also true, albeit  to a lesser extent,  for malpractice  cases which  have resulted  in settlements 
or jury  awards.  Even in such cases, the complexities  associated with  developing  clear  and 
convincing  evidence  and the lack of clear-cut  practice  standards tend to inhibit  board  action. 
16 
 In attempting  to compare  the sources of disciplinary  action  with  the sources of complaints  or 
referrals,  we find  the available  information  to be even more fragmented  and sparse.  Yet, what 
is available  indicates  that referrals  from  liability  insurers  and/or  courts  and from  consumers 
account  for a far higher  proportion  of complaints  than of disciplinary  actions.  On the other 
hand, referrals  from  State agencies, out-of-State  medical  boards, and hospitals  seem to 
account  for  a much  larger proportion  of disciplinary  actions  taken than do other referral 
sources.30 
The majority  of the disciplinary  actions taken by medical boards involve violations that oc
curred in a physicians office.  At the other extreme,few  such actions concern violations 
that took place in nursing homes. 
State boards seldom provide  or even assemble information  on the setting of a violation  that 
led to a board disciplinary  action.  In our sample survey, the boards could  not identify  the 
setting for  52 percent  of the disciplinary  actions  they took in  1988. 
Yet, for the remaining  actions,  those for which  they could  identify  the setting,  the boards 
indicated  that 68 percent  clearly  involved  violations  that took  place in the physicians  office. 
Such violations,  which  are typically  outside  the purview  of hospital  quality  review  committees 
or PROS, involved  a wide  variety  of unlawful  actions concerning  improper  conduct  as well  as 
improper  medical  care. 
At the other extreme,  the boards in our sample States did not identify  a single disciplinary 
action  they took  in  1988 that was attributable  in any way  to care provided  in a nursing  home. 
In view  of the numerous  complaints  that the Long  Term Care Ombudsman  Program, 
administered  by the Administration  on Aging,  receives about medical  care provided  in nursing 
homes, the lack of board actioqsuggests  insufficient  board oversight  of the care provided  to 
the residents  of;iese  facilities.  A recent study of nursing  home care in California  reached a 
similar  finding. 
In caseswhere there is some basisfor  concern, but not enough to warrant disciplinary  ac
tion, many boards take private, nondisciplinary  action that is not reported to the Federa
tion.  Some boards are making increased use of such actions.  Others are relying less on 
them or discontinuing  them altogether. 
Such actions  are particularly  common  in relation  to impaired  physicians,  who  are increasingly 
treated in a rehabilitative  rather  than punitive  manner.  In Connecticut,  for instance,  between 
1986 and 1988,42  of the 88 disciplinary  actions that the board imposed  were confidential, 
unreported  ones involving  physicians  who  agreed to participate  in an impaired  physicians 
program. 
In other  situations  where  a physicians  actions involve  a borderline  violation  or there is 
insufficient  evidence  to prepare  a case, many boards will  respond  by issuing  a private  letter of 
concern,  reprimand,  or warning  of some kind.  They  regard  such a response  as a useful  way of 
alerting  a physician  to the danger of certain practices  and urging  appropriate  corrective  actions. 
17 
 The California  board has relied  particularly  heavily  on this approach.  For instance,  in  1988, 
when  it reported  78 disciplinary  actions to the FSMB,  it also enrolled  78 physicians  in a 
treatment  program  for impaired  physicians,  sent about  100 warning  letters to physicians,  and 
conducted  medical  education  conferences  with  another 257 physicians.  At these conferences, 
the physicians  and board officials  discuss the practices  that presented  cause for concern  and 
the types of corrective  actions that might  be taken.  Any  follow-up  actions on the physicians 
part are voluntary,  but if he/she is again brought  to the boards  attention,  board officials  report 
they are likely  to respond  in a less understanding  manner. 
i  At the other extreme,  some States, such as Texas, have discontinued  the use of such private 
approaches.  Typically,  the basis for terminating  or phasing  down  such approaches  rests in 
public  suspicions  of boards being too understanding  or lenient  toward  physicians. 
OVERALL  BOARD  PERFORMANCE 
Notwithstanding  the many constraints they still face, medical boards have made significant 
progress in improving  their disciplinary  capacity.  Thus far,  however, they have not 
developeda data base that provides useful indicators of their actual performance. 
Even with  the numerous  limitations  noted in this report,  State medical  boards  are much better 
equipped  to carry  out their  disciplinary  responsibilities  than they were 25, 10, or even 5 years 
ago.  Twenty-five  years ago, as the Medicare  and Medicaid  programs  were beginning,  boards 
focused  almost entirely  on their  licensure  responsibilities  and on the development  and 
administration  of their own  licensure  exams.  Ten years ago, in the aftermath  of the medical 
malpractice  crisis of the mid-1970s,  they began devoting  more attention  to disciplinary 
activities,  but had little  wherewithal  to provide  more than minimal  oversight.  Five years ago, 
in response  to intensified  public  scrutiny  and criticism,  boards,  as documented  in our previous 
report,  gained  considerable  authority  and began disciplining  physicians  more frequently,  but 
still  were  severely  underfunded  in relation  to the responsibilities  before them. 
During  the past 5 years the improvement  has continued.  Nearly  all boards now  have the 
authority  to revoke  and suspend physicians  licenses, to issue emergency  suspensions,  to 
impose  probations,  and to invoke  other lesser forms  of discipline,  such as reprimands,  letters 
of concern,  or fines.33  Because of supportive  changes by their  State legislatures,  most are 
experiencing  significant  increases in the number  of referrals  and complaints  sent to them and a 
broadening  of the grounds  available  to them for imposing  disciplinary  action.  Not 
insignificantly,  in terms of their  accountability  to the public,  most have?Jso  experienced  an 
increase in the number  of public  (i.e., nonphysician)  board members. 
Yet, if one were to ask how  a particular  board or boards in general were actually  performing  at 
the current  time, one would  be hard pressed to offer  more than an impressionistic  answer. 
This  is because boards typically  do not prepare and issue data that allow  for meaningful 
assessments of performance.  Most  boards issue annual reports,  incorporating  some statistical 
information,  but the information  provided  tends to be fragmented  and minimal.  Further,  it is 
18 
 seldom expressed in terms of ratios  or percentages  that facilitate  comparisons  of a boards 

own  performance  over time and/or  of one boards  performance  with  another. 

Thus, even though  most board officials  decry  assessments of their performance  based strictly 

on the number  of disciplinary  actions  they take, the reality  is that, with  rare exceptions,  there 

is little  else available  upon which  to base meaningful  assessments.  Moreover,  as weve  noted, 

even the disciplinary  action  data as currently  provided  is subject  to some important 

qualifications  that limit  their usefulness.  It is rare that in annual reports  or even internal 

agency reports  one can obtain  data that allow  for useful comparisons  on matters  such as case 

processing  time or case dispositions  by source and type of case.  Thus,  the public  and its 

representatives  are deprived  of potentially  important  indicators  of board performance  and 

boards themselves  are deprived  of information  that can help them improve  their  overall 

performance. 

In assessing the performance  of boards in recent years, we can point  out, with  confidence,  that 

they and their  State legislatures  have made important  progress  in putting  in place many of the 

elements that enable them to perform  more effectively.  Yet, in view  of the minimal 

quantitative  data available  concerning  board processes and outputs,  neither  we nor anyone  else 

can assert with  equal confidence  that the boards  actual performance  has been improving. 

At  a time when  board performance  is more important  than ever, when  the growth  of high 

technology  medicine  enhances the ability  of physicians  to do harm as well  as good, when 

expectations  of boards are far greater than in the past, this distinction  between  enabling 

elements  and actual performance  is more than of academic  interest.  Indeed,  in the 1990s  as 

pressures intensify  for some kind  of national  initiatives  concerning  the nations  health  care 

system, the future  role and effectiveness  of boards could  depend in large measure on their 

capacity  to develop  meaningful  indicators  of their performance,  to collect  data on a regular 

basis concerning  these indicators,  and not least of all, to draw  upon the data as guides to 

improved  performance.  It is a major  challenge,  and one that is vital  to address. 

19 
 RECOMMENDATIONS 
As one of the nations  basic quality  assurance mechanisms,  State medical  boards can play  an 
important  role in mitigating  and even averting  medical  malpractice  crises.  In so doing,  they 
can be instrumental  in facilitating  access to medical  care, improving  the quality  of care, and 
reducing  the excessive costs associated with  high malpractice  insurance  rates and the practice 
of defensive  medicine. 
The boards  role in this regard is especially  crucial  in regard  to medical  care provided  in a 
physicians  office  and by physicians  who  are not on hospital  staffs or certified  by specialty 
organizations.  In such settings and for  such physicians,  the boards serve by and large alone in 
protecting  the public  from  improper  medical  care. 
The primary  responsibility  for assuring  that the boards carry out this role effectively  rests, of 
course, with  State governments.  We strongly  encourage  State legislatures,  State governors 
and agency heads, and State boards themselves  to address the limitations  indicated  in this 
report.  At  the same time,  we recognize  that in part their  success in doing  so can depend on the 
supportive  actions  of the Federal  Government,  of the Federation  of State Medical  Boards,  and 
of other entities  representing  State government. 
STATE  GOVERNMENTS 
> 	 State governments  should  assure that all licensure fees collected from  physicians  and 
other professional  groups  under  the purview  of medical  boards  are used to support 
board  operations. 
DEPARTMENT  OF  HEALTH  AND  HUMAN  SERVICES  (HHS) 
In line with  the Federalism  Executive  Order  issued by President  Reagan on October  26, 1987 
and reaffirmed  by President  Bush on February  16, 199035, the Departments  actions 
concerning  State boards, to the maximum  extent possible,  should  be supportive  of State 
government  roles. 
That has been the thrust of the actions  which  the Department  has taken thus far.  In particular, 
the Public  Health  Service  (PHS)  in recent years has provided  some financial  support  to the 
FSMB  to help develop  its computerized  data bank and to develop  useful reference  materials 
for the State boards.  In coming  months  and years, PHS  involvement  with  the boards will 
become more regularized  and operational  through  its oversight  of the national  practitioner 
data bank.  The data bank, once established,  will  serve as an additional  resource  which  State 
boards can draw  upon in identifying  and reviewing  cases. 
Our recommendations  concerning  the Department  are directed  to PHS, HCFA,  and the 
Administration  on Aging  (AoA).  The ones directed  to PHS call for it to take a more active and 
supportive  role  to the boards and identify  ways in which  it might  provide  such support.  The 
20 
 ones directed  to HCFA  identify  actions it can take to facilitate  the flow  of useful  information 
to the boards.  The one to AoA  calls for it to increase the relevance  of the Long  Term Care 
Ombudsman  Program  to the State boards. 
The Public Health Service 
In our prior  report,  we urged the States to increase license renewal  fees of practicing 
physicians  in order to  support  expansion  and improvement  of the enforcement  activities  of 
State medical  boards.36  In its  1987 report,  the HHS  Task Force on Medical  Liability  and 
Malpractice  urged the States to assess the adequacy  of funding  available  to their  licensing 
boards  and develop  plans to assure that !h#r  medical  boards have sufficient  funds to 
conduct  an effective  disciplinary  program. 
As we have noted in this report,  there has been little  progress  in this direction.  Boards  still  are 
well  short of having  sufficient  funds  to carry  out their disciplinary  activities  effectively,  and 
although  renewal  fees have increased  in many  States, the additional  revenue  is not necessarily 
flowing  to the boards.  Without  a concerted  effort  to address this funding/staffing  shortfall,  all 
other reform  efforts  are likely  to have minimal  effect.  Moreover,  as caseloads rise, some 
dysfunctional  effects,  such as an excessive reliance  on consent agreements,  could  intensify. 
Thus,  the matter, we think,  is of sufficiently  national  interest  for the PHS,  as the HHS 
component  most closely  linked  with  the boards, to exert leadership  in determining  how  the 
Federal  Government  might  address the shortfall  as well  as other limitations  confronting  the 
boards.  In that regard,  we urge the PHS to consider  the future  Federal  relationship  with  the 
boards more in terms of a partnership  addressing joint  concerns  than one involving  separate 
spheres of responsibility  addressing  separate concerns.  Such a relationship  clearly  fits within 
the nations  tradition  of federalism  and the framework  of the Presidents  Executive  Order. 
> 	 The PHS should  collect,  analyze,  and disseminate  State-by-State  data on stafing, 
revenue,  expenditure  and caseload  levels of the State medical  boards. 
An  information  gathering  and distribution  effort  of this kind  would  be of considerable  value in 
clarifying  the extent and nature of the resource  shortfall  of the medical  boards.  If presented  in 
terms of ratios  and percentages  as well  as absolute numbers,  it would  also facilitate  useful 
comparisons  among  boards in different  States. 
> 	 The PHS should  convene a national  meeting  to focus  attention  on the importance  of the 
boards  oversight  role  and to examine how the boards  resource  and other  limitations 
should  be addressed. 
Such a meeting,  which  should  involve  widespread  participation  of officials  representing  State 
medical  boards and other parts of State governments,  should  focus on the kind  of actions that 
should  be taken by State governments  and the Federal  Government  to improve  both the 
capacity  and performance  of the boards.  If information  such as that called  for in the prior 
21 
 recommendation  were distributed  prior  to the meeting,  the deliberations  of the attendees 
would  be enhanced. 
> 	 The PHS in collaboration  with  HCFA  should  determine  ways in which  HHS  could 
encourage  and assist the State boards  to contract  with  PROS to conduct  reviews  of 
quality  of care cases. 
The PROS typically  have much more health care expertise  available  to them.  Such expertise 
could  be of great assistance to the boards in preparing  cases involving  quality  of care 
deficiencies.  Moreover,  the development  of such an association  could  help foster a more 
extensive  sharing  of information  between  the two  entities. 
2=-	 The PHS should provide  financial  support for  the development  of performance 
indicators  suitable for  widespread  use by State medical  boards. 
By doing  so, PHS, with  a relatively  small inves\yent,  could  serve as a catalyst  in a vital  area 
in which  there appears to be increasing  interest.  The PHS effort  should  involve  widespread 
participation  by board officials  and others knowledgeable  and/or  interested  in this field.  It 
should  seek the development  of relatively  few  but specific  indicators  which  are expressed in 
terms of ratios  or percentages  and which  have substantial  credibility  and support  among  board 
officials.  Such indicators  could  be of considerable  significance  not only  to State medical 
boards but to many other  State boards, such as those concerned  with  dentistry  and optometry. 
To the maximum  extent possible,  PHS should  foster the development  of indicators  that 
facilitate  comparisons,  both of a particular  boards  performance  over time and between  boards 
in different  States.  Even though  each State board is in some way  different  and functions  in a 
unique  State milieu,  inter-State  comparisons  can serve as useful  guides and stimuli  to 
improved  performance.  For example,  if in using a case processing  time measure, one State is 
found  to have a much  slower  processing  time than most other  States, the major  explanation 
may well  be attributable  to a highly  fragmented  review  process that divides  accountability 
among various  parties.  An expanded  awareness of this fragmented  process and of the 
implications  it has for processing  time could  enhance the prospects  for constructive  reform  in 
that State. 
> 	 The PHS should provide  financial  support for  technical  assistance  efforts  intended  to 
improve  the boards  investigative  efforts. 
The funding  should  be directed  to an organization  or to organizations  that can assemble some 
expertise  on the dos  and donts  of investigations  and that can make that expertise  available 
to boards,  in their  own  settings, for limited  periods  of times.  The effort  should  attempt  as 
much  as possible  to build  on prior  experiences  and focus on key details  involving  how  cases 
are prioritized,  investigations  conducted,  and evidence  assembled.  It should  give particular 
attention  to the quality  of care cases, which  tend to be among the more complex  ones facing 
boards and which  are becoming  increasingly  prominent  in some boards  caseloads. 
22 
 > 	 The PHS, through  its Agency for  Health  Care Policy  and Research,  should provide 
demonstration  funding  concerning  the use of practice  standards  and guidelines  to guide 
investigative  efforts  in quality  of care cases. 
In recent years, largely  in response to the medical  malpractice  crisis,  increasing  attention  has 
been devoted  to producing  practice  related  information  that can minimize  or eliminate 
avoidable  medical  injuries.  The Agencys  medical  treatment  effectiveness  research efforts  are 
expected  to generate data that can be useful in this regard  7; well  as in promoting  more 
effective  treatments  and better patient  outcomes  generally.  In the near term, guidelines  or 
standards which  insurers  and professional  associatiot$  have developed  for certain  medical 
specialties  have even more operational  significance.  Also,  as a preventive  measure some 
boards themselves  have been distributing  some practice  information,  for instance  on 
procedures  for treating  chronic  back pain, to licensed  physicians. 
Yet, there has been little  effort  to date to integrate  the use of practice  standards and guidelines 
into  the investigative  and case preparation  process.  Given  the link  between  clear practice 
standards and boards  capacity  to review  quality  of care cases effectively,  this would  seem to 
be a fertile  area for PHS to provide  demonstration  support  to some boards.  It could  provide 
useful  feedback  on the viability  of certain  standards and guidelines  and at the same time 
enhance the boards  effectiveness  in handling  these cases. 
The Health Care Financing  Administration 
> 	 The HCFA  should propose  legislation  mandating  that the PROS share case information 
with  the medical  boards  when the first  sanction  notice  is sent to a physician. 
In our  1986 report,  we called  for HCFA  to amend the PRO regulations  to require  more 
extensive  and timely  reporting  to State medical  boa.rds.A1  Since that time, in addition  to 
introducing  the PRO scope of work  changes calling  for closer interaction  with  the boards4* 
HCFA  has proposed  a regulatory  change that, if enacted, would  provide  a somewhat  stronger 
base for PRO  sharing  of information  with  the boa.rds.43 Yet, given the scope and intensity  of 
PRO concerns  about how  much  and how  soon they can share information  with  the boards, 
neither  of the;? HCFA  initiatives,  according  to PRO officials  themselves,  are likely  to have 
much impact. 
Thus,  we strongly  urge a statutory  mandate  as indicated  above.  Such a mandate  would 
provide  the PROS with  the unambiguous  protection  they feel they need to share detailed  case 
information  with  the medical  boards.45  Moreover,  by calling  for such information  to be 
shared at a point  when  a physician  is first provided  with  a sanction  notice  rather  than when  a 
sanction  recommendation  is sent to the Office  of Inspector  General,  it would  provide  medical 
boards with  many  more PRO referrals  on cases involving  serious quality  of care problems. 
23 
 > 	 The HCFA  should  amend Medicaid  regulations,  or, if necessary, propose  legislation  to 
allow  State Medicaid  agencies  to share with  the medical  boards  case information  on 
physicians  against  whom they have taken adverse action. 
Current  Medicaid  regulations  concerning  confidentiality  provisions  require  that case 
information  shared with  a board must pasf purposes  directly  connected  with  the 
administration  of the (Medicaid)  plan.  This requirement  has precluded  Medicaid  agencies 
from  sharing  their  investigative  records  with  the boards, even y7instances  where  they have 
terminated  a providers  participation  in the Medicaid  program.  This  situation  provides  an 
unnecessary  impediment  to board action  and should  be corrected  by HCFA. 
z-	 The HCFA  should  assure that Medicare  carriers  adhere  to their  responsibility  to refer 
cases of apparent  unethical  practice  or unprofessional  conduct  to State medical  boards. 
The Medicare  Carrier  Manual  requires  that such cases be reported  to the boards.  Yet, as we 
have noted, such cases account  for few  of the disciplinary  actions  taken by the boards.  The 
HCFA,  as part of its oversight  of carrier  activities,  should  assure that the carriers  are being 
sufficiently  diligent  in referring  cases to the boards.  Such cases, as the manual  points  out, can 
involve  overutilization  or misutilizaton  of services, overcharging,  a harmful  pattern  of 
treatment,  and a violation  of ethics. 
The Administration  on Aging  and the Health Care Financing  Administration 
2-	 The  Administration  on Aging  and HCFA  should  assure that the Long  Term Care 
Ombudsman  Program  and State survey and certification  agencies,  respectively,  provide 
assistance  to State medical  boards  in identifying  instances  of improper  medical  care 
provided  to nursing  home residents. 
The Long  Term Care Ombudsman  Program,  funded  under the Older  Americans  Act,  serves as 

an important  vehicle  in the States for  addressing  the conditions  of nursing  home residents  and 

complaints  by or on behalf  of these residents.  Similarly,  the State survey and certification 

agency  has responsibility  for assuring  the adequacy of nursing  home care and for addressing 

complaints. 

Because of concerns  raised about the adequacy  of medical  care offered  to nursing  home 

residents  in California  and other  States, because of the numerous  complaints  concerning 

medical  care in nursing  homes received  by the Ombudsman  program,  because of a recent 

Office  of Inspector  General  study indicating  the inadequacy  of State and Federal  efforts  to 

prevent  abuse of nursing  home residents49, and because boards have not had much 

involvement  with  such cases, the AoA  and HCFA  should  determine  if the training  provided  to 

the Ombudsman  staff and volunteers  and State survey and certification  staff could  provide 

more and better information  about the medical  boards.  Further,  AoA  should  determine  if there 

are ways in which  the program  could  help nursing  home residents  and their  families  become 

24 
 more informed  about the medical  boards as a forum  for addressing  complaints  about improper 
medical  care. 
FEDERATION  OF  STATE  MEDICAL  BOARDS  (FSMB) 
For many decades, the FSMB  has served as a valuable  resource  for  State medical  boards, 
mainly  in relation  to licensure  matters.  During  the past decade, the FSMB,  as the boards 
themselves,  has become increasingly  focused  on disciplinary  matters.  This  focus has resulted 
in the development  and operation  of its computerized  disciplinary  action  data bank and, 
among other  things,  in the issuance of extremely  useful reference  documents,  such as 
Exchange,  Guide  to the Essentials  of a Modern  Medical  Practice  Act, A Model for  the 
Preparation  of a Guidebook  on Medical  Discipline,  and, most recently,  Elements of a Modern 
State Medical  Board:  A Proposal.  The later document,  based on considerable  inquiry,  is a 
particularly  valuable  reference  point  that States can draw  upon in determining  how  they might 
increase the capability  of boards. 
For the FSMB,  we urge that in the 199Os, at a time when  most State boards are likely  to face 
severe challenges  and stresses, it continue  and, indeed,  intensify  its efforts  to assist boards to 
carry  out their disciplinary  responsibilities  more effectively.  In this context,  we urge that the 
FSMB  give particular  attention  to mechanisms  for assessing board performance  and to 
approaches  boards might  take to enhance their effectiveness  in addressing  cases involving  the 
quality  of medical  care. 
>  The FSMB  should facilitate  assessments of the performance  of State medical  boards. 
Such an effort  would  be a logical  and timely  follow-up  to the Elements  document  noted 
above.  Indeed,  we urge the FSMB  to undertake  a similar  effort  resulting  in a companion 
document  which  might  be called  Assessing  the Performance  of a Modern  State Medical 
Board.  Such a document  might  encompass the licensure  as well  as the disciplinary 
responsibilities  of the boards.  In any case, it should identify  some very precise quantitative 
measures that could  be used to facilitate  assessments of board performance. 
In addition,  we urge the FSMB  to determine  what  other actions  States can take to facilitate  an 
assessment of boards  performance.  One such action  that would  be especially  helpful  would 
be a detailed  specification  of the disciplinary  data that should  be included  in the annual reports 
of the State boards.  The Elements  offers  a general review  of information  that might  be 
included  but does not address the specific  ways in which  data might  be presented. 
Another  action  would  be for the FSMB  to issue its annual  summary  of State board  actions in a 
manner  that at a national  level clearly  distinguishes  the number  of disciplinary  actions taken 
and the number  of physicians  disciplined.  Presenting  the data in this fashion,  at least at an 
aggregate  national  level, would  foster  a more precise and meaningful  understanding  of one 
very important  aspect of board performance:  the imposition  of disciplinary  actions. 
25 
 > 	 The FSMB  should  help State boards  improve  their  effectiveness in reviewing  quality  of 
care cases. 
In large measure, the effectiveness  of the boards in the 1990s is likely  to rest on how  and how 
well  they address such cases.  In this regard,  we urge the FSMB,  to the maximum  extent 
possible,  to serve as a helpful  reference  point  to the boards.  To a considerable  degree, it can 
achieve this end by serving  as a vehicle  for the identification  and distribution  of best 
practice  information.  Such information  could  concern  particular  techniques  found  to be 
effective  in investigating  quality  of care cases.  It might  also cover educational  or other 
nondisciplinary  interventions  which  some boards have found  to be useful  in responding  to 
physicians  whose  actions raise concern  but may not be serious enough  to warrant  disciplinary 
action. 
NATIONAL  GOVERNORS  ASSOCIATION  (NGA),  COUNCIL  OF  STATE 
GOVERNMENTS  (CSG),  AND  NATIONAL  CONFERENCE  OF  STATE 
LEGISLATURES  (NCSL) 
Each of these organizations  is a national  one that addresses a wide  variety  of issues 
concerning  State government.  Because of their  broad purview  and their credibility  with  State 
governments,  we urge each of them to take initiatives  aimed at enhancing  the capability  and 
performance  of State medical  boards. 
> 	 The NGA,  the CSG, and the NCSL  should  take actions  that foster  greater  State 
government  awareness  of the crucial  roles of  State medical  boards  and of the specific 
measures  that can be taken to improve  their  capability  and performance. 
The specific  kinds  of actions  that should  be taken are most appropriately  determined  by those 
organizations  themselves.  What is most important  from  our perspective  is that they encourage 
State government  efforts  to strengthen  the boards.  Inevitably,  this would  call for  some 
attention  to the staffing  and funding  limitations  but also to the many other factors  identified  in 
this report  that impede  the effectiveness  of the boards. 
In regard  to the latter, the National  Clearinghouse  on Licensure,  Enforcement  and Regulation 
(CLEAR),  which  is run under the auspices of the CSG, is in a particularly  good position  to 
provide  assistance.  Formed  in  1980, CLEAR  functions  as an informational  resource  for State 
officials  involved  with  occupational  licensure  and regulation  issues.  Through  its conferences 
and publications,  it can serve as a particularly  important  vehicle  for identifying  ways in which 
State medical  and other boards can become increasingly  effective  entities  in the 1990s. 
26 
 COMMENTS  ON THE  DRAFT  REPORT 
Within  the Department  of Health  and Human  Services (HHS),  we received  comments  on the 
draft report  from  the Public  Health  Service (PHS),  the Health  Care Financing  Administration 
(HCFA),  the Administration  on Aging  (AoA),  and the Assistant  Secretary  for Planning  and 
Evaluation  (ASPE).  In addition,  we received  comments  from  the Federation  of State Medical 
Boards  (FSMB),  the American  Association  of Retired  Persons (AARP),  the Public  Citizen 
Health  Research Group,  and the American  Medical  Association  (AMA). 
In appendix  A, we present the detailed  comments  offered  by these HI-IS components  and 
national  organizations  and our response to their comments.  As indicated  there, the responses 
to our recommendations  were mixed.  The PHS concurred  with  each of the six 
recommendations  we directed  to it, and the AoA  agreed with  the one directed  to it.  On the 
other  hand, HCFA  and ASPE  disagreed  with  a number  of the recommendations. 
Among  the national  organizations  commenting  on the report,  FSMB  and AARP  concurred 
with  all of our recommendations,  albeit in some instances with  qualifications.  The Public 
Citizen  Health  Research Group  indicated  general  support  for the report,  but expressed concern 
about how  we assessed the benefits  of good medical  quality  assurance.  Finally,  the AMA 
indicated  support  for our recommendations  calling  for States to assure that licensure  fees are 
used to support  board operations  and for PHS to convene  a national  meeting  on State medical 
boards.  However,  the AMA  disagreed  with  or expressed reservations  about most of our 
remaining  recommendations. 
Among  our recommendations,  one generated a particularly  strong response by the 
commenters.  This  is the recommendation  urging  HCFA  to propose  legislation  mandating  that 
the PROS share case information  with  the medical  boards when  the first  sanction  notice  is sent 
to a physician. 
The FSMB  supported  the recommendation,  noting  that if enacted it would  provide  the State 
medical  boards with  useful  information.  Such information,  it added, could  be used to initiate 
appropriate  action  if the remedial  efforts  of the PRO are ineffective,  or if the physician 
attempts  to avoid review  by relinquishing  his participation  in Medicare.  The AARP  had a 
similarly  positive  response, but urged that the mandated  data sharing  be extended  even further 
to  include  material  produced  by PROS quality  review,  beneficiary  complaint,  and utilization 
review  processes.  Finally,  during  a June 8, 1990, Congressional  hearing  focusing  on our 
report,  Congressman  Ron Wyden,  Chairman  of the Subcommittee  on Regulation,  Business 
Opportunities  and Energy  of the Committee  on Small Business  of the U.S. House  of 
Representatives,  also supported  the recommendation.  He indicated  that he would  be 
introducing  legislation  to carry  it out. 
However,  three of the commenters  clearly  opposed  the recommendation.  The HCFA,  to 
whom  the recommendation  was directed,  believes  that current  legislation  and regulations 
allow  for data exchange  when  it is appropriate.  The AMA  indicated  that the sharing  of case 
27 
 information  at a time when  the first  PRO sanction  notice  was sent to a physician  would  be 
premature  - that it would  violate  the due process rights  of the physicians  involved.  Finally, 
ASPE  noted the same kind  of concerns  and added that the justification  was lacking  in 
evidentiary  support. 
We regret  this opposition.  We continue  to think  that the proposed  legislation  is very 
important.  We base our position  on the following  considerations. 
First,  it is quite clear that if the PROS are to refer more than a very small number  of cases to 
the State medical  boards, a Federal  mandate is, indeed,  necessary.  This was strongly  indicated 
by a number  of PRO representatives  at a December  1989 workshop  on PRO-State  medical 
board relationships  that was convened  by the American  Association  of Retired  Persons.  Those 
representatives  expressed considerable  concern  about the legal liabilities  they faced under 
existing  law  by sending case information  to the boards. 
There is considerable  documentation  that reveals that the PROS are, in fact, referring  few 
cases to the boards.  As we cited in our report,  a May  1989 survey conducted  by the Missouri 
PRO indicated  that of 38 responding  PROS, two-thirds  had not reported  any physicians  to a 
State medical  board during  the past 12 months.  Further,  HCFAs  own  data on PRO quality 
interventions  reveal that from  October  1, 1988, to December  31, 1989, only  seven of the 
PROS referred  one or more cases to a board.  Still  further,  in our own  sample survey of 8 
States, we found  that only  1 of 199 State board disciplinary  actions  taken in  1988 originated 
from  a PRO referral. 
A second consideration  that underlies  our support  for the proposed  legislation  is that a PROs 
decision  to send a sanction  notice  to a physician  is a very serious and infrequent  one.  It 
represents  a finding  that a physician  has committed  a substantial  violation  of his or her 
Medicare  obligations  in  a substantial  number  of cases or a gross  and flagrant  violation  in 
a single case.  While  many of these cases result  in corrective  actions  imposed  on a physician, 
it is true that extremely  few  of them result in an actual sanction  by the Office  of Inspector 
General.  Yet, it is also true that some of the physicians  involved  may have committed  a 
violation  of a State medical  practice  act and/or  may also be under investigation  by the State 
board. 
We do not believe  that the PROS would  be violating  a physicians  due process rights  by 
sharing  case information  with  the medical  boards at the time they send a first  sanction  notice 
to a physician.  A referral  to the board is not tantamount  to a disciplinary  action.  The board, if 
it is to pursue the case, would  still  have to assemble the necessary evidence  and assure that the 
physicians  due process rights  are upheld. 
Finally,  there is little  likelihood,  as some have suggested, that the PROS would  add 
significantly  to the boards  case backlog  problems  by referring  to them those cases for which 
they have sent an initial  sanction  notice.  From  October  1, 1988, to December  31, 1989, HCFA 
reports  that throughout  the United  States, the PROS issued only  349 sanction  notices  to 
physicians. 
28 
 APPENDIX  A 
DETAILED  COMMENTS  ON  THE  DRAFT  REPORT 
AND  O/G  RESPONSE  TO  THE  COMMENTS 
In this appendix  we present the full  comments  of all the parties that responded  to the draft 
report  and our brief response to each set of comments.  Our response supplements  that offered 
in the final  section of the text. 
Within  the Department  of Health  and Human  Services, we received  comments  on the draft 
report  from  the Public  Health  Service  (PHS),  the Health  Care Financing  Administration 
(HCFA),  the Administration  on Aging  (AoA),  and the Assistant  Secretary  for Planning  and 
Evaluation  (ASPE).  In addition,  we received  responses from  the Federation  of State Medical 
Boards  (FSMB),  the American  Association  of Retired  Persons (AARP),  the Public  Citizen 
Health  Research Group,  and the American  Medical  Association  (AMA). 
A-l  DEPARTMENT  OF  HEALTH  &  HUMAN  SERWCES  Public  Health  Serwce 
Memorandum 
Assistant  Secretary  for  Health 
From 
Office  of  Inspector  General  Draft  Report,  "State  Medical  Boards 
Subject 	
and  Medical  Discipline,"  OEI-0#1-89-00560 
Inspector  General,  OS 
To 
Attached  are  the  comments  of  the  PHS  on  the  subject  draft  report. 
PHS  strongly  supports  the  intent  of  the  draft  report's 
recommendations.  The  Agency  for  Health  Care  Policy  and  Research 
has  already  begun  discussions  with  the  Federation  of  State 
Medical  Boards  on  the  need  to  strengthen  and  accelerate  the 
Medical  Boards'  research  and  evaluation  capabilities. 
The  draft  report  acknowledges  that  the  primary  responsibility  for 
assuring  the  effectiveness  of  Medical  Boards  rests  with  the  .j 
States.  In  implementing  recommendations,  we  consider  it 
important  to  maintain  and  support  the  current  role  relationship 
of  the  Public  Health  Service  with  the  Boards,  the  Federation  of 
State  Medical  Boards,  and  the  States. 
Attachment  COMMENTS OF  THE  PUBLIC  HEALTH  SERVICE  ON  THE  OFFICE  OF 
INSPECTOR  GENERAL  (OIG)  DRAFT  REPORT,  "STATE  MEDICAL 
BOARDS AND MEDICAL  DISCIPLINE,"  OEI-011-89-00560 
General  Comments 
State  Medical  Boards  are  integral  to  the  Nation's  efforts  to 
assure  the  quality  of  medical  care.  Their  endeavors  have  been, 
and  should  continue  to  be,  promoted  by  the  Public  Health  Service 
(PHS).  As  noted  in  the  draft  report,  PHS has  provided  support  to 
the  Federation  of  State  Medical  Boards  (FSMB),  the  Boards' 
national  membership  organization  for  several  significant 
projects.  We consider  it  important  to  maintain  that  supportive 
relationship  while  avoiding  any  actions  that  could  be  interpreted 
as  encroachment  on  State  prerogatives  or  interference  with  the 
State  functions  of  professional  licensure  and  discipline. 
The  primary  responsibility  for  assuring  that  the  Boards  function 
effectively  rests  with  the  States.  Because  of  competing 
priorities  at  the  State  level,  the  Boards  have  been  underfinanced 
and  understaffed  and  resources  available  to  the  FSMB  have  also 
been  limited.  We are  pleased  to  see  the  report  emphasizing  these 
points. 
We  believe,  however,  that  the  report  might  further  acknowledge 
one  Federal  activity,  the  National  Practitioner  Data  Bank,  and 
the  role  it  could  eventually  play  as  a  resource  to  State  Medical 
Boards. 
OIG  Recommendation 
PHS  should  collect,  analyze,  and  disseminate  State-by-State  data 
on  staffing,  revenue,  expenditure,  and  caseload  levels  of  the 
State  Medical  Boards. 
PHS  Comment 
We agree  that  this  information  should  be  collected,  analyzed,  and 
distributed.  The  FSMB  already  collects  some  of  this  information, 
and  with  assistance,  would  have  the  capacity  to  expand  its 
efforts  to  include  additional  data  elements. 
OIG  Recommendation 
PHS  should  convene  a  national  meeting  to  focus  attention  on  the 
importance  of  the  Boards'  oversight  role  and  to  examine  how  the 
Boards'  resources  and  other  limitation  should  be  addressed.  PHS  Comment 

We concur,  orovided  that  it  is  clear  that  sponsorship  of  such  a 

conference  is  not  taken  to  signal  a  change  in  the  current  roles 

of  the  Federal  Government  and  the  States  in  professional 

licensure  and  discipline.  Federal  sponsorship  of  a  conference 

may  be  helpful  in  drawing  public  attention  to  problems  faced  by 

the  Boards,  provided  it  is  done  in  a  way  that  cannot  be 

interpreted  as  Federal  meddling  in  State  responsibilities. 

OIG  Recommendation 

PHS,  in  collaboration  with  the  Health  Care  Financing 

Administration  (HCFA),  should  determine  ways  in  which  HHS  could 

encourage  and  assist  the  State  Boards  to  contract  with 

Professional  Review  Organizations  (PROS)  to  conduct  reviews  of 

quality  of  care  cases. 

PHS  Comment 

We  see  this  as  essentially  a  HCFA  concern.  In  general,  we  would 

encourage  the  fostering  of  active  working  relationships  between 

the  PROS and  State  Medical  Boards  and  would  support  exploration 

of  Nays  such  relationships  could  be  promoted. 

OIG  Recommendation 

PHS  should  provide  financial  support  for  the  development  of 

performance  indicators  suitable  for  widespread  use  by  State 

Medical  Boards. 

PHS  Comment 

We concur.  PHS  intends  to  continue  promoting  efforts  intended  to 

strengthen  State  Medical  Boards.  Support  for  the  development  of 

methods  for  assessing  Board  performance  could  be  a  logical  next 

step. 

OIG  Recommendation 

PHS  should  provide  financial  support  for  technical  assistance 

efforts  intended  to  improve  the  Boards'  investigative  efforts. 

PHS  Comment 

We  concur.  Identification  of  investigative  "best  practices"  and 

technical  assistance  in  their  use  might  logically  follow  the 

development  of  methods  for  assessing  State  Medical  Board 

performance. 
 OIG  Recommendation 
PHS,  through  its  Agency  for  Health  Care  Policy  and  Research 
(AHCPR),  should  provide  demonstration  funding  concerning  the  use 
of  practice  standards  and  guidelines  to  guide  investigative 
efforts  in  quality  of  care  concerns. 
PHS  Comment 
We concur.  AHCPR,  on  its  own  initiative,  has  begun  discussions 
with  FSMB  on  the  need  to  strengthen  and  accelerate  the  Boards' 
research  and  evaluation  capabilities.  Initially  this  will  take 
the  form  of  developing  evaluation  methods  and  a  protocol  for 
monitoring  State  medical  Board  performance.  Further  attention 
will  be  shown  to  FSMB  as  AHCPR's  work  expands  in  the  general 
areas  of  quality  assurance  and  medical  liability. 
3 
 OIG  RESPONSE  TO PHS  COMMENTS 
We appreciate  PHS  positive  response to our recommendations.  We believe  that PHS can play 

an important  leadership  role in helping  State medical  boards address their limitations.  Its 

response indicates  that it is ready to play  that role. 

The PHS  agreement  to convene a national  meeting  on State medical  boards is particularly 

encouraging.  We urge that that meeting  be held in Washington,  D.C.,  and that it involve 

representatives  from  various  parts of State government,  not just  from  the boards, as well  as 

researchers  and others who  can contribute  to the deliberations.  We also urge that the meeting 

devote major  attention  to how  boards can become more effective  in reviewing  quality  of care 

cases in the 1990s. 

With  respect to the National  Practitioner  Data Bank,  which  PHS mentioned  in its response, we 

do believe  it can eventually  serve as a useful resource  to the boards.  However,  it is not 

directly  related  to the major  needs and limitations  identified  in our report. 
 Health  Care 
DEPARTMENT  OF  HEALTH  &  HUMAN  SERVICES  Financing  Admtnistration 
Memorandum 
3tA.  191990 
n 
Date  J 
Gail R. Wilensky, Ph.D.  LIT
From  Administrator 
OIG  Draft  Report  - State Medical Boards and Medical Discipline 
Subject 	
(OEI-01-89-00560) 
TO 	 The Inspector General 
Office  of the Secretary 
We have reviewed the subject report which finds that State medical boards 
have made significant progress in improving their disciplinary capability.  However, 
case backlogs remain a serious problem due to increasing numbers of referrals and 
severe staff shortages. The report  also claims that the Peer Review Organizations 
(PROS) refer few casesto the boards, and that lack of clear authority  to share 
information  with  the boards prevents PROS and Medicaid State agenciesfrom 
providing detailed information  when casesare referred. 
The report  contains five recommendations that involve HCFA.  Our 
comments on these recommendations, as well as general and technical comments 
are attached. 
Thank you for the opportunity  to review and comment on this draft report. 
Please advise us whether you agree with  our position at your earliest convenience. 
Attachments  Comments  of the Health  Care Financing Administration 

on the OIG  Draft  Reoort  - State Medical Boards 

and Medical Discioline 

OEI-01-89-00560 

Recommendation  1 

HCFA  should propose legislation mandating that the Peer Review Organizations 

(PROS) share case information  with medical boards when the first sanction notice 

is sent to a physician. 

Resoonse 

We nonconcur with  this recommendation, becausewe believe that legislation is 

unnecessary. We believe that the current  legislation and regulations allow 

for  data exchange when it is appropriate.  Licensing and certification 

bodies have accessto relevant PRO information  upon request under the current 

regulation  at 42 CFR 476.138(a)(l).  The PRO may also provide the information  r 

without  a request when it believes it is appropriate. 

We also are currently working on two initiatives that should further  facilitate  the 

disclosure of sanction information  to licensing and certification  bodies.  One 

initiative  is a possible regulatory change that would require PROS to provide the 

appropriate  licensing and certification  bodies with a copy of the Medicare sanction 

report  at the time the PRO forwards its recommendation to OIG.  Subject to 

clearance by our Office of General Counsel, we also plan to advise all PROS that 

relevant sanction information  can be released to these bodies under the authority 

of 42 CFR 476.138(a)(l).  We had previously maintained that any information 

about sanction activities prior  to the final  sanction action was not disclosable. This 

revised disclosure policy will  provide PROS with a clear understanding of their 

obligations and options, and PROS should then be more willing  to initiate 

disclosure of information  to medical boards. 
 Page 2 
Recommendation 2 
HCFA  should amend Medicaid regulations, or if necessary,propose legislation to 
allow State Medicaid agencies to share case information  on physicians against 
whom they have taken adverse action with medical boards. 
ResDonse 
Although  we agree with the intent  of this recommendation, we do not believe this 
action is necessary. The release of provider information  is not covered by Federal 
law, but rather by State law.  If  recipient  information  is contained in the 
transferred  information,  the purpose of the transfer must be related to the 
administration  of the Medicaid program.  Paragraph (d) of 42 CFR 431.302 states 
that transfer of recipient information  is allowed for  conducting or assisting an 
investigation, prosecution, or criminal proceeding related to the administration  of 
the plan. 
It  is our interpretation,  based on advice from the Office of the General Counsel, 
that recipient  information  can be released to medical licensing boards under 
paragraph (d) for the purpose of assisting an investigation.  We view the role of 
State medical licensing boards as an integral part of maintaining the quality of care 
within  the  Medicaid  program. 
Recommendation  3 
HCFA  should assure that Medicare carriers adhere to their  responsibility to refer 
casesof apparent unethical practice or unprofessional conduct to State medical 
boards. 
Resoonse 
In  accordance with  Medicare Carrier  Manual section 10040.E.4.b-c,carriers are 
expected to refer to State medical boards or PROS physicians suspected of 
practicing in a manner that could endanger the health of, or otherwise harm, their 
patients.  We sent a letter  to our regional offices in June 1989 for  distribution  to 
carriers to dispel any confusion concerning their obligations in such cases(See 
Attachment  A).  Therefore, we believe that we have carried out the #intent of this 
recommendation.  Page 3 
Recommendation 4 
The Public Health  Service (PHS) in collaboration with HCFA  should determine 
ways in which HI-IS could encourage and assistthe State boards to contract with 
PROS to conduct reviews of quality of care cases. 
Resoonse 
We agree with  this recommendation, and would be happy to work with  PHS to 
accomplish this.  Currently, PROS can conduct private reviews as long as these 
reviews do not conflict with their  contracts with HCFA  This type of private 
review could enhance the PROs effectiveness in its Medicare quality review 
efforts. 
Recommendation 5 
The Administration  on Aging and HCFA  should assure that the Long Term  Care 
Ombudsman Program and State survey and certification  agencies,respectively, 
provide assistanceto State medical boards in identifying  instances of improper 
medical care provided to nursing home residents. 
Response 
We are not clear what assistanceHCFA  is to provide the State medical boards 
under this recommendation.  It would be helpful  if this recommendation could be 
clarified  and made more specific in the fmaI report. 
General and Technical Comments 
The report  reflects our ongoing problem with  the State medical boards.  As 
0 	
we have previously discussedwith OIG,  the lack of communication with the 
boards is two-sided.  The State medical boards give no information  to the 
PROS, but this problem  is not reflected in the report. 
The report  states in endnote 42 that HCFA  requires PROS to consider 
0 	
sharing information  about a weighted severity score of 25 for  one quarter 
with  the State licensure boards.  The implication  of this statement is that 
OIG  believes this consideration is insufficient.  We continue to believe that 
a score of 25 may not truly reflect a practice pattern that should be 
reported  to the board.  If  PROS were to report  all of these cases,the 
boards would be burdened with  information  about casesnot severe enough  Page 4 
for  them to act upon.  The PROs contract with HCFA  states that 
there must be documentation of the consideration and a written 
rationale  for  not referring  the physician.  Our regional offices will 
monitor  the PROs to determine whether the action taken was 
appropriate. 
In paragraph 3 on page 9, the report  indicates that detailed information 
may not be available to medical boards.  Under  42 CFR 476.138(a)(l), 
information  on confirmed quality problems is available to the boards. 
Further,  after  OIG  imposes a sanction, the PRO sanction report  on the case 
is also available. 
Paragraph 4 on page 9 indicates that PROS are hindered in disclosing 
information  by insufficient statutory and regulatory support.  However, 
42 CFR 476.138(a)(1) clearly provides the authority  for the PRO to 
disclose appropriate  information.  Further, any State redisclosure laws 
would be subordinate to the related Federal statute. 
Endnote  6 of Appendix  B (page B-l)  states that all references to State 
boards include the District  of Columbia as well as the 50 States. To avoid 
confusion, we recommend that the endnote explain whether this statement is 
applicable to both the graphs and the text.  (For  example, figures 1 and 2 
say that there are 50 States.) 
We recommend that the first sentence of paragraph 2 on page 4 be revised 
to read as follows: Regarding immunity  protection, in  1986 only one-fourth 
of the States had extended it to those not mandated to report  violations to 
the board.  In  1989, the amount increased to two-thirds of the States. 
In paragraph 3 on page 6, it should state that there are now 53 PROS, not 
54. 
In the first  paragraph on page 12, the first full  sentence should be revised 
as follows:  Similarly, if a physician were disciplined in one State and, on 
the basis of that action, also disciplined in two other States in which he or 
she is licensed, that physician would account for  three actions, one action 
, 
reported  by each of the three States. 
We note that the percentages in Figure 6 on page 16 total  102 percent.  If 
this is not due to rounding, this should be changed.  Page 5 
On Page 23, last paragraph, 2nd sentence,the last word PROS 
0 	
should be changed to medical boards. 
On page B-6, endnote 46, it should read:  See Title  42 Code of Federal 
0 	
Resulations, section 431.302.  .  . 	 PO.  Box  1465, 
Nasrwlie.  fh  $7202 
615-244.  56s 
. 
April  18,  1989 
fearI  A  Hard 
Director 
Division  of  Cvrier  Procedures 
Two  issues  of  artier  communications  have developed  in  Tcnresse. 
The  first  concerns  our  rdations  with  Tennesrrr  .Mcdica.l Society,  the  &I- Board  of 
Medical  Examiners  and  the  Medical  Director  of  the  IMA  Impaired  Physician  Program.  In  the 
course  of  my  involvement  in  medical  mew,  appeals  and  post-payment  analysis,  patterns  of 
provider  practice  strongly  suggat  the  probability  of  impairment  or  dysfunction.  hs an 
example,  I currently  have on  my desk  the  EJe of a physician  in  his  40s  who  shows  a parcem 
of  practice  that  is more  consistent  with  that  of  a third  yur  mcdioli  student.  He  is unable 
to  identify  clues  to  disease  diagnosis  and,  as a TeSult, has a marked  over-utilization  pattern 
that  brought  him  to  the  attention  of  our  post-payment  rcvicw  s&f.  He  apparently  attempted 
to  rake a raidcncy  in  the  last few  years  but  did  not complete  the  txxining.  I believe  that  my 
rcvicw  indicates  the  need  for  peer  Valuation  for  podsible  impairment  or  dysfunction.  Does 
HCFA  have a position  in  writing  to  support  a confidential  referral  to  the  Impaired  Physician 
Program  Medical  Dirmor? 
My second  need  for  communication  is with  the  Medical  Director  of  the  Tennessee  PRO. 
During  preliminary  meetings,  it quickly  beamc  obvious  that  we  are  both  working  on  ~SSUCS 
of  over-utilization  and  quality  concerning  the  Same providers.  The  PRO reccntiy  rcceivcd 
communiations  from  the  HCFA IG  encouraging  such  communication,  but  there  does  not 
appear  to  be  concrete  authorization  fat  the  specific  discussion  concerning  a given  provider. 
Is such  authorization  currently  present  or  is it  in  the  process  of  being  issued?  Only  by 
evaluation  of  the  total  partem  (inpatient  and  outpatient)  of  pnctice  can we  cffcctivciy  detect 
quality,  abuse  and/or  fraud  issues. 
Sincerely, 
, 
Medical  Director  .  Attachment  F  Page  2 
DEPARTMENT  OF  HEALTH  AND  HUMAN  SERVICES 
Refer to: BP&o11 
Robert M. Zare, M.D. 

Msdlcal Directa 

EQUICOB, Medicare Administration 

P.O. Box 1465 

Nashville, Tenneme  37202 

Deer Dr. Zoner 

Thank  you fpr your letter  to Jean A. HaHs  concerning dbcIarure  of phydcian

Mormrtlo&to  the PRO, the TMA Imp&r&  Physiuian Program, the.Board of Medial 

Examiners and  the  State Medical Society.  I apologize fa  the  delay  in my response. 

You not only may, but should  refer  lnformrthn  on  in&&bal  ph#ciana  such M you

described, to the Impaired Physician Program Medkal  Director.  Section 10040 

E.l.b.(l)  of  Part III of the MedIcare  Carrie  Manual  ad&we8  thatbereferrals 

(enclosed). Such dbclowre  is permitted  under the Privacy Act. 

You may also ire&y  exchange infamatlon  concvnfng  Lndlvidual physicfans with the 

PRO and flacal intermediaries  in support of  quality,  abuse, end/or fraud related  bum. 

T?n govemkq  dtation  is 42 CPR  476.103   

I my  m~ornaga such exchangeaof information,  and &.greethat  evaluation of the 

total  pattern  of  practice  enhanas  detection  of  poor, fraudulent  and abusive provide. 

Slnccrely, 
Carol  J. Wllton 
Director 
. Office  of  Program Operation8  Procedures 
DATE 
SU/ RNAMI E  - OF-FICE  I  SURNhwf  - -
Flile 
COPY 
\ Hrtacnment  A  Pac)e  3 
11-79  DISCLOSURE OF INFORMATION 
lOOLO (Coat .> 
0.  Referral  to  St;tt  Llctnsinp:  Boarda,  Medical  Rtvitv  Boards,  and 
Proftasional  Soclttita.
s.  Referral  of  Suspended  Practitioners.--Section  1862(t)(Z)(B)  of 
tht.Social  Security  Act  requires  the  Secretary  to  notify  the  appropriate  State 
or  local  licensing  authority  (i.e.,  State  llc&ing  board  or  medical  t&w 
board)  vhtntvtr  a  physici8n  or  other  practltiontr  har  been  l usptndtd  from 
participation  in  tht  Medicare  program.  Thus,  vhtntver  HCFA suspends  8 
practitioner  from  participation  ln  the  Medicare  program  bemuse  the  practt
tiontr  has  been  convicted  of  a  criminal  offense  related  to  his  participation 
in  thttitlc  XVIII  or  XIX  program,  HCFA  vi11  promptly  notify  the  appropriate 
State  or  local  licensing  8uthority(its)  to  (1)  make  appropriate  investigations, 
(2)  invoke  any  sanctions  8vailablt  under  Sratt  18~  which  the  l uthorlty(its) 
deems  appropriate,  and  (3)  keep  HCTA and  the  Inspector  Central  fully  and 
currtncly  informed  of  any  action  it  takes. 
b.  Referral  By  Medicare  Carriers  .---In  8ddition  to  the  referrals  made 
by  HCFA  under  section  1862,  Xtdicart  carriers  8re  8uthorittd  to  refer  title 
XVIII-related  casts  of  apparent  unethical  practices  or  unproftaslonal  conduct 
to  medical  or  other  professional  soclttlts,  8nd  State  or  local  licensing 
authorities  (licensing  boards  or  medical  rtvttv  boards).  (Set  tht  routine 
uses  for  the  Medicare  C8rritr  Clatis  accords  system  ss  described  in  the 
system  notice  published  in  the  Federal  Rtgistt;.) 
Khtn  considering  a  cast  for  referral,  the  carrier  should  assure 
itself  that  substantial  basis  for  referral  exists;  fhat  more  than  mere 
suspicion  is  involved.  It  need  not  conpile  tvldtnct  sufficient  to  prove 
mlsconducr  before  referral;  it  should  ascertain  the  probability  and 
stvtriry  of  misconduct  and  leave  further  investigation,  ~tvitv,  and 
disciplinary  action  to  the  oppropriart  society  or  board.  Isol8ttd 
lnstancts  of  questionable  practices  or  conduct  should  not  normally  bt 
referred. 
Further,  referral  of  apparent  unethical  practices  or  a  course  of 
ucproftssional  conduct  by  a  practftiontr  should  only  be  made  after  proper 
professional  advice  has  been  obtained  from  the  carriers  physictin  staff 
members,  medical  consultants,  or  othtr  professional  advisors. 
Since  Start  licensing  boards  and  medical  rsvisu  boards  art  rtsponrlblt 
for  the  licensing  and  ssnctioniag  of  practitioatrs,  cases  should  be 
referred  to  those  boards  only  vhtrt  the  8ppartnt  uotthicsl  practices  or 
uaproftssional  conduct  is  of  a  swtritp  to  possibly  vatrant  such 
sanct$ons;  casts  involving  less  severe  impropriatirs  should  typicsllp 
be  referred  only  to  proftsmlonsl  or  medical  sochties  for  setion. 
The  folloving  art  txamplts  of  cases  tbt  should  be referred: 
(1)  Ovtrutllitatioa.  -This  refers  to  a  pattern  of  medical 
cart  vhich  consists  of  providing  more  strviccm  than  art  msdiully 
xtv.  773  N-26.1  Attachment  A  Paqe  4 
12-83  DISCLOSURE OF INFORMATION  10040&t) 
When a case fs pending prosecution,  or  when a decision fs pendfrrg on whether to proceed
with  prosecution,  delay  referral  to  the  professional  society  until  (1) the  prosecutfon
actfon  t  completed,  (2) the decision  is made  not  to prosecute, or (3) BQC authdrfzes the 
referral 
Reauests for  A  oards, or State  or Local 
A  ROs and carrien  with 
ed, there  seemsto be 
three  distinct  situations  fn which these boards mfght request as&take: 
(l)  When a case has been referred  to a State  or local Lfcensfng/medfcal review 
board  for  investigation  and  possible  sanctfons  (either  by  HCPA  as  a  result  of  the 
conviction  and suspension of  the  subject  practitioner,  or  by  a  carrier),  it  would  wrn, 
appropriate  for  HCFA and carriers  to provide  assistance to  the board fn its  fnvestfgatlve
activity,  provided the demands on staff  time  and resources  do not become burdensomeor 
unreasonable.  All  requuts  for  carrier  assistance should, however  be channeled through
the servfcfng HCPA RO for  a determination  regarding the reasonableness of  the requeti
Appearance by HCFA personnel before  board meetings involving  a case which has been 
previously  referred  would also be permitted. 
(2)  When a State  or local  licensing/medical  review board  requests information 
or assistance on a case which was seLf-fnitfatcd  (f.e., not previously  referred  to the board 
by  HCFA  or  a  Medicare  carrier)  as a result  of  a complaint,  allegation,  fnqufry,  etc., 
relatfve  to a specific physician/practitioner9  practices,  this request should be treated  as a 
Freedom  of  Information  Act  request.  Therefore,  any  rquested  material  should  be 
screened for sensitive information,  with  the decision to rcleuse/wfthhoid  such information 
made on a case-by-case  basis.  Further,  the  board would  be  responsible for  the Coas 
involved  fn providing such information  (sehrchfng costs, duplicatfng  costs, etc.).  fn such 
instances, the appearance of HCPA penonnel  at a board hearing would be discouraged
(3)  When the  State  or  local  lf~ensfng/medfcal  review  boards request b  for 
gene&  fnformatfon  pursuant  to  a  study  or  fnvestfgatfon  of  physfcfan/practftfoncr
impropriety  or abuse, and is not related  to a complaint,  allegation,  etc.,  against a specific
physician/practitioner;  or  when  the  request  would  represent  a  clearly  unwarranted 
fnvarion  of  peftonaf  privacy,  cooperation  by  HCPA  or  contractor  personnel would be 
dfscouraged  In such instances  it  would be  approprfate  to  release general  or statfstfoaf 
fnformatfon  which  did  not  Jdentffy  speciffc  fndfvfduals,  however,  the  rquut  for 
identifying  information  would constitute  an improper search for  fnformatfon. 
Rev.  1010  10-27  OIG  RESPONSE  TO HCFA  COMMENTS 
For each of the recommendations  directed  only  to HCFA,  HCFA  either disagrees or notes that 

no additional  action  is needed. 

On the matter of PROS sharing case information  with  the boards, we urge HCFA  to reconsider 

its position.  We elaborated  on our rationale  in support  of this recommendation  in the 

comments  section concluding  the report.  We agree, as HCFA  indicates  in the General  and 

Technical  Comments  portion  of its response, that it is also important  for the boards to share 

information  with  the PROS.  That is an issue that the PROS and boards should  address, but it 

was not part of the scope of our study. 

On the matter of allowing  State Medicaid  agencies to share case information  with  medical 

boards on physicians  against whom  they have taken adverse action,  HCFA  responds  that no 

Federal  regulatory  or statutory  change is necessary - that the matter  is covered  by State, not 

Federal,  law.  It adds, based on advice from  the Office  of the General  Counsel,  that State 

Medicaid  agencies, under Federal  law, can share case information  with  the boards. 

We are pleased to receive this response, but it is contrary  to advice previously  given  to the 

Pennsylvania  Department  of Public  Welfare  by the Region  III  Office  of the General  Counsel 

of the U.S. Department  of Health  and Human  Services.  If HCFAs  interpretation  is to be the 

guiding  one, then we urge HCFA  to communicate  this position  to each of the State Medicaid 

agencies.  Such follow-up  would  help reduce the confusion  and facilitate  referrals  to the 

boards. 

Similarly,  we urge HCFA  to take some action  to assure that Medicare  carriers  are, in fact, 

referring  cases of apparent  unethical  practice  or unprofessional  conduct  to State medical 

boards.  Based on the minimal  number  of referrals  sent by carriers  to the boards, the June 

1989 memorandum  on the subject to the carriers  appears to have had little  effect. 

On the recommendation  calling  for HCFA  to assure that State survey and certification 

agencies provide  assistance to State medical  boards in identifying  instances of improper 

medical  care provided  to nursing  home residents,  HCFA  asked for clarification  on the type of 

assistance envisioned.  In that regard,  we note that our recommendation  was based on the 

widely  documented  indications  of improper  medical  care in nursing  homes and on the 

minimal  involvement  of boards in addressing  such cases.  State survey and certification 

agencies as well  as the Long  Term Care Ombudsman  Program  can serve as useful  channels for 

helping  nursing  home staff and the families  of nursing  home residents  become better informed 

about the roles and responsibilities  of the State boards. 

Finally,  we made a number  of minor  changes in the report  based on HCFAs  technical 

comments. 
 DEPARTMENT  OF HEALTH  & HUMAN  SERVICES  Office  of the Secretary 
Administration  on  Aging 
Washington,  D.C.  20201 
TO: 	 Richard  P.  Kusserow 
Office  of  the  Inspector  General 
FROM:  U.S.  Commissioner  on  Aging 
SUBJECT:  Draft  Inspector  General  Report  - State  Medical  Boards 
This  memorandum  provides  a  response  from  the  Administration  on 
Aging  (AoA)  to  the  draft  report  on  "State  Medical  Boards  and 
Medical  Discipline." 
Page  24  of  the  draft,  third  arrow,  refers  to  activities  to  be 
undertaken  by  AoA  regarding  training  of  staff  and  volunteers  in 
the  Ombudsman  program  to  alert  nursing  home  residents  and  their 
families  about  medical  boards  providing  a  forum  for  complaints 
about  improper  care. 
Our  response  to  the  recommendation  is  that  AoA  will  be  pleased 
to  disseminate  information  about  State  medical  boards  and  their 
role  in  identifying  improper  medical  care  for  nursing  home 
residents.  When  the  final  report  on  this  subject  is  issued, 
AoA  will  disseminate  the  report  to  State  and  Area  Agencies  on 
Aging  and  the  LTC  Ombudsmen.  In  addition,  AoA  will  work  with 
the  National  Center  for  State  Long  Term  Care  Ombudsman 
Resources  to  incorporate  information  in  training  materials  for 
professional  ombudsman  and  volunteers  about  the  role  and 
function  of  State  medical  boards  in  pursuing  disciplinary 
action  with  physicians  who  warrant  such  actions. 
Thank  you  for  the  opportunity  to  comment  on  this  report. 
Berry,  Ph.D.  OIG  RESPONSE  TO AOA  COMMENTS 
We are delighted  with  AoAs  response.  We believe that over time the follow-up  activities  it 
has identified  can be quite  helpful  in alerting  State medical  boards to cases involving  improper 
medical  care to nursing  home residents.  . 

I\l.L.lll 
+- J. 
i 
.  DEPARTMEKTOFHEALTHbHUMANSERVlCES 
r
:  Otfce  of  the  Secretark
i 
5  -4 
c  & 
*-7dIC  Washmgton,  D C  20201 
TO: 	 Richard  P.  Kusserow 
Inspector  General 
FROM: 	 Assistant  Secretary  for 
Planning  and  Evaluation 
SUBJECT: 	 OIG  Draft  Report:  State  Medical  Boards  and  Medical 
Discipline  --  COMMENTS 
The  objectives  of  the  recommendations  are  ones  I  strongly 
support  --  to  identify  and  discipline  physicians  who  are 
delivering  substandard  care.  I  recognize  the  challenge  of 
identifying  "substandard  care"  when  standard  practices  are  just 
being  defined,  sometimes  by  specialty  societier;  and  quality  care 
is  largely  undefined.  Furthermore,  some  critics  of  the  health 
care  system  are  calling  for  fundamental  changes  in  the  way  health 
care  is  managed,  including  limiting  external  regulation  of 
medical  practices.  Because  of  these  difficulties,  I  think  your
work  deserves  praise  for  its  ability  to  showcase  some  of  the  best 
practices  in  the  states  and  reach  toward  continued  improvement  in 
state  medical  board  efforts. 
Because  the  report  is  necessarily  succinct,  it  does  not  specify
how  its  recommendations  might  be  executed.  I  have  therefore  a 
number  of  questions  about  them  as  well  as  some  suggestions.  Let 
me discuss  the  recommendations  in  turn. 
1. 	 The  Public  Health  Service  (PHS)  should  collect,  analyze,  and 
disseminate  State-by-State  data  on  staffing,  revenue, 
expenditure  and  caseload  levels  of  the  State  medical  boards. 
According  to  PHS,  collecting  analyzing  and  distributing  the 

information  itself  would  be  a  major  change  in  PHS responsibility.

Currently,  PHS contracts  with  the  Federation  of  State  Medical 

Boards  (FSMB)  to  collect,  analyze  and  advise  states  on  ways  to 

improve  their  practices. 

The  OIG  recommendation  raises  a  question:  Does  OIG  intend  any 

major  change  or  is  the  recommendation  simply  an  exhortation  for 

PHS to  continue  to  support  FSMBs  data  collection  and  analysis?

If  a  major  change  is  being  recommended,  why?  It  seems  unwise  for 

PHS or  the  Department  to  take  on  an  activity  currently  conducted 

by  a  private  organization  and  financed  partially  by  the  states. 

A  second  and  more  significant  concern  to  me is  the  utility  of  the 

information  on  staffing,  revenue  and  expenditures.  Will  expanded 

availability  of  the  specified  information  improve  states'  ability 

to  discipline  physicians  who  deliver  substandard  care?  The  IG's 
 2 

report  suggests  it  will  not.  The  problem,  as  identified  in  the 
IG's  report,  is  not  simply  that  states  do  not  have  enough  funds 
but  that  a  state  may  intentionally  withhold  revenues  from  the 
Boards,  even  when  it  collects  sufficient  funds  through  licensure 
fees.  If  the  IG's  report  is  correct,  is  the  purpose  of  the 
recommendation  simply  to  shame  outlier  states  into  increasing 
support  for  their  medical  boards? 
2. 	 The  HCFA should  propose  legislation  mandating  that  the  PROS 
share  case  information  with  the  medical  boards  when  the 
first  sanction  notice  is  sent  to  a  physician. 
I  have  two  objections.  First,  the  case  information  ought  not  be 

shared  when  the  first  sanction  notice  is  sent  because  of  the 

likelihood  of  successful  appeal.  I  understand  that  more  than 

half  the  sanctions  are  appealed  and  most  are  overturned.  Second, 

legislation  requiring  PROS to  give  state  boards  the  case 

information  is  not  necessary.  Current  regulation  (42  Cq

476.137)  requires  PROS to  give  case  information  to  state 

licensing  and  certification  bodies  upon  request.  Even  absent  a 

request  from  the  state  board,  a  PRO ~n,pyprovide  the  case  data  to 

the  state  board. 

The  OIG  justification,  that  PROS are  reluctant  to  give  out  the 

information  because  of  the  threat  of  violation  of  anti-trust, 

lacks  evidentiary  support.  OIG  does  not,  for  example,  identify

instances  where  PROS failed  to  give  the  requested  information. 

Based  on  information  in  the  OIG's  report  on  case  backlogs  that 

state  boards  face,  it  is  questionable  if  boards  could  handle  any 

more  opportunity  to  investigate. 

3. 	 The  HCFA should  amend  Medicaid  regulations,  or,  if 
necessary,  propose  legislation  to  allow  State  Medicaid 
agencies  to  share  with  the  medical  boards  case  information 
on  physicians  against  whom they  have  taken  adverse  action. 
I  understand  there  is  a  difference  of  opinion  within  the  Office 
of  the  General  Counsel  as  to  whether  Medicaid  agencies  may  now 
share  the  case  information.  I  defer  to  GC to  resolve  the  need 
for  any  change  in  regulation  or  legislation. 
4. 	 The  PHS,  in  collaboration  with  HCFA,  should  determine  ways
in  which  HHS could  encourage  and  assist  the  State  boards  to 
contract  with  PROS to  conduct  reviews  of  quality  of  care 
cases. 
I  question  whether  it  is  wise  to  dilute  the  duties  of  PROS which 
were  created  principally  to  serve  HCFA. 
A  second  concern  to  me  is  the  absence  of  any  generally  accepted
methodology  for  evaluating  care  in  a  non-institutional  setting.
Our  Department  has  major  efforts  underway  to  attempt  to  develop  3 

methods  for  measuring  quality  of  care  in  physician  offices  and 
other  non-institutional  settings  and  to  determine  optimum  patient 
outcomes  that  maximize  patient  satisfaction.  For  example,  HCFA 
has  had  underway  for  more  than  one  year  the  "design  of  an 
approach  to  the  assessment  of  quality  of  care  in  the 
noninstitutional  setting."  According  to  HCFA,  the  purpose  is  to 
"develop  a  methodology  to  characterize  patient  populations,  the 
patterns  of  care  they  receive  and  the  effects  on  their 
health....w  The  project  began  in  May  1989  and  will  be  completed 
in  1991.  It  might  be  appropriate  to  refer  briefly  to  the 
measurement  problem  and  HHS research  efforts  as  background,  if 
the  recommendation  is  to  be  made. 
5. 	 The  PHS should  provide  financial  support  for  technical 
assistance  efforts  intended  to  improve  the  boards's 
investigative  efforts. 
The  PHS should  provide  financial  support  for  the  development
of  performance  indicators  suitable  for  widespread  use  by
State  medical  boards. 
Again,  I  assume  OIG  intends  that  these  would  be  funded  through
the  FSMB.  The  second  of  these  recommendations  is  timely  since,  I 
understand,  FSMB has  begun  development  of  performance  indicators 
and  is  looking  for  additional  funding. 
6. 	 The  PHS,  through  its  Agency  for  Health  Care  Policy  and 
Research,  should  provide  demonstration  funding  concerning
the  use  of  practice  standards  and  guidelines  to  guide
investigative  efforts  in  quality  of  care  cases. 
As  I  indicated  above,  since  we  are  only  beginning  to  look  at 
measurements  of  quality  of  re  in  non-institutional  settings,  it 
seems  premature  to  recommen  a  demonstration  at  this 
time.  . 
OIG  RESPONSE  TO ASPE  COMMENTS 
Below  we respond  to ASPEs  comments  on each of the six recommendations  it addressed. 
1. 	 We recognize  that PHS has had a close and effective  relationship  with  FSMB. 
We urge it to continue  that relationship.  At the same time, in response to the 
question  posed by ASPE,  we note that there are also other organizations  that PHS 
might  contract  with  on specific  matters concerning  medical  and other kinds  of 
State boards. 
With  respect to the comment  on the utility  of State-by-State  information  on 
staffing,  revenue,  and expenditures,  we believe  that the collection  and widespread 
dissemination  of such information  can contribute  to constructive  change.  It 
would  identify  the outlier  States and raise legitimate  questions  about the 
performance  of the boards in those States. 
2. 	 We urge ASPE  to reconsider  its position  on the basis of the rationale  we 
developed  in the comments  section of the report.  As noted there, we believe  that 
there is more than ample evidentiary  support  for our recommendation  and that the 
proposed  legislation  is, indeed,  necessary. 
3. 	 Our position  on this recommendation  is stated in response to HCFAs  comments 
concerning  it. 
4. 	 We do not believe  that the enactment  of this recommendation  would  dilute  the 
duties of PROS.  Further,  as HCFA  notes in its response:  This  type of private 
review  could  enhance the PROs effectiveness  in its Medicare  quality  review 
efforts. 
5. 	 Once again, while  we recognize  the importance  and leadership  role of FSMB,  we 
do not regard  it as the only  possible  vehicle  of financial  support  concerning  State 
boards. 
6. 	 Given  the significance  of the work  of State medical  boards, we believe  it is 
important  for PHS to move immediately  in providing  some demonstration 
funding  concerning  the use of practice  standards and guidelines  to guide 
investigative  efforts  in quality  of care cases. We are pleased that PHS concurs 
with  the recommendation.  July 31, 1990 

Richard P. Kusscrow 

THE PEDERATION OF 

Inspector General 

STATE MED1CA.L %MRDS 

Health  and Human Services 

OF THE  UNKTED STATES, 1NC 

330 Independence Ave., SW 

Km  WErnRN  PLACE  Washington, DC 20201 

SUITE 707 
2:  wRrH*  -s  Dear  Mr  Kusserow 

817 73~844s 
Tux  117 738.6629 
The Federation of State Medical Boards of the United  States appreciates 

this opportunity  to comment on the draft  of the report  titled  State 

OFFICERS  Medical  Boa&  a&  Medical  Discipline recently released by your office. 

MeSlDt3NT 

WNN6TH  C  YOHN,  MD 

IS0 N.  RANDOLPH  AVBNUB 
 As you know, I presented the Federations views on the report  on June 

BUPAULA.  AL  3017 

8, 1990, during testimony before the Subcommittee on Regulation, 

PRESIDENT  ELECT 

RARB4RA  9  SCtiNEIDMAN.  HD 
 Business Opportunities and Energy of the House Committee on Small 

140 LAKESIDE  AYE,  MO 

SEATTL6.  WA WI22 
 Business.Rather than repeat those remarks here, I  am attaching a copy 

VICE  PRESIDENT 
 of that testimony to this letter. Please consider it  the Federations formal 

MELVIN  E  ~ICE.L  MD 

2211 PARX  AVIINIJE  SOUTH 

MINNEAPOLIS.  MN  3%4&I 
 response to your request for comment, 

TREASURER 

SUSAN  H  SPAULDINO 

P.0  BOX  112 
 Sincerely 

MoNT?e.LIBR.  VT  o%oI 

DIRECTORS 
SUSAN  P DEHRPNS.  MD 
IDDS HLEBBE  PKWY 
nELoIT,  WI  ml1 
BTEPHEH  P. KELLW,  JD 
1600 T.C.F.  TOWER 
MINNMPOLIC,  MN  0402  James R. Winn, MD 

EARLE  M.  WBRNOIS.  MD  Executive Vice President 

lbts CMPUS  tn. 
KLAHATH  MLLS.  OR  WIaOl 

0W01O RRMlD0O2E   IASSTS. EAKCWS,  
 MD 
 JRW:lm  ..  
COUNCIL  DulPF& IA SlKlJ 

ANDREW  0,  WDNAR  MD,  ID 

10 EMERSON  PLACE.  ht.f 

106toN.  MA  02114 

LBKOY  I  DUCKLOR  MD 

yo&mD~~rr~  d. 

RENDEL  L.  LBVONLAN.  MD 

P.O.  ROX  ?$b 

PICO RW3RA.  CA  KM0 

~.R.o~  EXON 
MONTOOMERY,  AL  lb102 
JAMES  R  WINN.  MD 
EXECUTIVE  VICE  PRILSIDENT 
DALE  0  BREADEN 
ASSOCIATE  eXECUfrVE 
VICE  PReslDeh7 
I  XATHRYh  HILL.  MM 
ASSISWlc?  BXEWTIVE 
VICE  PIIESIDWT  UNITED  STATES HOUSE  OF REPRESENTATIVES 
SUBCOMMITTEE  ON  REGULATION,  BUSINESS OPPORTUNITIES 
AND  ENERGY  OF THE  COMMITTEE  ON  SMALL  BUSINESS 
June 8, 1990 
James R. Winn,  M.D. 

Executive Vice President 

Federation  of State Medical  Boards of the United  States, Inc. 
 TESTIMONY  ON THE  REPORT  OF THE  INSPECTOR  GENERAL, 
DHHS,  ON  STATE  MEDICAL  BOARDS  AND  MEDICAL  DISCIPLINE 
Good afternoon,  Mr  Chairman and members of the committee. I am James R. Winn, 
MD,  executive vice president of the Federation  of State Medical  Boards of the United 
States. Founded in  1912, the Federation  is the national voluntary  association of state medical 
boards, both  allopathic  and osteopathic, and is comprised of sixty-six member boards. The 
Canadian provincial  medical licensing authorities  hold affiliate  membership in the Federation 
as well. The Federation  is a parent and member organization of the National  Board of 
Medical  Examiners, the Educational  Commission for  Foreign Medical  Graduates, the 
Accreditation  Council  for  Continuing  Medical Education, and the American  Board of 
Medical  Specialties. It  also maintains liaison with  major medical organizations in the United 
States and with  the medical licensing authorities of several foreign  countries. 
Through  its FLEX  Board and in cooperation with  the National  Board of  Medical 
Examiners, the Federation  structures and conducts the Federation Licensing Examination 
(FLEX),  the test instrument for  medical licensure used by all states and several other 
jurisdictions.  In  early  1988, the Federation  introduced the Special Purpose Examination 
(SPEX),  a test instrument  designed to assist boards in assessingthe qualifications  of 
candidates for  licensure by endorsement who have not been examined for  some years. A 
complete computer record of FLEX  and SPEX scores, along with  appropriate  biographical 
information  on examinees, is maintained by the Federation. 
Today, the Federation  and the National  Board of Medical  Examiners are cooperating in 
the development of the United  States Medical  Ikensing  Examination,  a three step test 
instrument that will  provide, for  the first  time, a single examination program for  medical 
1 
 licensure. As a result, within  a few years, all  eligible  candidates for  medical licensure will  sit 
the same examination sequence. This will  be a major accomplishment in  medical licensure in 
this country, a step thought almost impossible not many years ago. 
The Federation  also operates the nationally  recognized Board Action  Data  Bank, the 
preeminent system for  collecting, recording, and distributing  to state medical boards and 
appropriate  agencies data on disciplinary  actions taken  against licensees by the boards and 
other governmental authorities,  including  the military  and the Department  of Health  and 
Human  Services. In  the past six years, over 550,000 inquiries  have been processed by the 
data bank. In  1988 and 1989, the Federation  developed and implemented  the Direct  Access 
System (DAS),  a program for  allowing  secure on-line  accessto the Board Action  Data Bank 
by state medical boards and other  authorized users. The Board Action  Data Bank is the 
most sophisticated and reliable  resource of its kind.  It  has effectively assured that no board 
-sanctioned licensee can move within  the medical system undetected. 
Along  with  its other  activities, the Federation collects and publishes the most complete 
information  available on physician licensing and disciplinary boards and maintains a resource 
library  of  the various practice acts and rules under which its member boards operate. That 
library  is the only central collection  of such material  in the country. The Federation  also 
offers the states and the boards specific policy recommendations related to  medical licensure 
and discipline. Those recommendations are actively promoted  in several publications, such as 
the Guide  to  the Essentials of  a Modem  Medical  Practice Act  and the Model  for  the 
Preparation  of  a  Guidebook  on Medicai  Discipline.  The Federations educational activities 
include its Annual  Meeting  and publication  of the monthly Federation  BuZZetin, the quarterly 
FSMB  Newsletter,  and the biennial Exchange. The  Federation  Bulletin,  by the way, is the 
worlds only journal  devoted exclusively to medical licensure and discipline. Under  federal 
2 
 contract, we have also developed and disseminated the Elements  of  a Modem  State Medical 
Board  designed to encourage boards to review and assessthe effectiveness of their  structure 
and function. 
The Federation, as I believe you can see, is the national  clearinghouse, forum., and 
representative body for  state medical boards. It  occupies a unique position  of responsibility 
in relation  to  its member boards and the people of the states they are charged to serve. It 
makes and will  continue to make significant contributions  to the effectiveness and integrity 
of the medical licensing and disciplinary  systemsthat are essential components of medical 
quality  in the United  States. 
For your information,  I  have attached to these prepared remarks copies of the Federation 
publications I  have mentioned. 
I deeply appreciate this opportunity  to share with  you the views of the Federation 
relative to the report  titled  State Medical  Boards and Medical  Discipline  recently prepared 
and issued by the Office  of the Inspector General of the Department  of Health  and Human 
Services.Like  you, we have looked forward  to the appearance of this report.  We cooperated 
closely with  those who prepared it  and believe it  reflects a thoughtful  effort  to summarize 
the current situation  in  medical discipline. I should note that we also worked with  the Office 
of the Inspector General in  1986 when it  produced its first  report  on state medical boards. 
That  study was a healthy exercise that reinforced  and supported many positions advocated by 
the Federation  for  years. Our  response to that earlier  effort  was presented in  detail  in an 
editorial  in  the JoumaZ of  the American  Medical  Association,  a copy of which I have attached 
to these remarks and also ask be included in  the record. 
I  should like  to compliment you, Mr  Chairman, and the members of this committee for 
your recognition  of the role  of state medical boards in  enhancing the quality  of medical care 
3 
 in this country. Your  interest in the current report  clearly indicates your concern. Those of 
us who have served on and work with  state medical boards appreciate, possibly better than 
any other group, the importance of  this issue. Based on  our  real and sometimes painful  day-
to-day experience, we recognize the need to assure the qualifications  and fitness of licensed 
physicians in an effective and practical way. 
As you know, in  this country, the duty and responsibility for  medical licensure resides in 
the states. We who function  within  that pluralistic  system and strive to make it  as effective 
as possible feel our obligations deeply. We are always pleased to find  support for  our efforts 
and a recognition  of our problems in the halls of Congress. 
The power exercised by the people of the states, acting through their  legislatures, to 
establish those systemsthey believe would best protect  their  interests is fundamental to 
responsive and responsible government. One of the strongest elements of our state-based 
pluralistic  licensing structure is the flexibility  it  allows the people of the states to develop 
and test a variety of approaches to the problems facing all boards. From  the oversight of 
residency training  to initial  licensure, from  license reregistration to disciplinary process, 
improvements have been dramatic over the past two decades,thanks in many ways to the 
power of the states to seek better  approaches to meeting their  responsibilities. Yet  we have 
far to go. 
As the IGs  report  makes clear, many state boards must struggle to fulfill  their  regulatory 
obligations within  financial  and/or  statutory constraints that can effectively block their  efforts 
to protect  the public.  Board revenues should be dedicated to board use and boards should 
be authorized  to set fees at levels adequate to provide the funds required  to do the job 
expected of them. Obviously the boards should be fully  accountable for  their  use of funds 
and reports to the legislature and the public  should demonstrate the level of their 
4 
 performance. Many of the suggestionsmade in the report  must focus, f%r~a.llyo,n the question 
of proper  financial  support of the boards. The Federation has done all  in its power over the 
past few years to emphasize the importance of this issue. 
The clear and convincing evidence rule, most common now, should not be applicable in 
board cases.That  standard of evidence is unrealistic when measured against the potential 
danger presented the public  by the unqualified  or the unfit  practitioner.  The public interest 
would be best served if  the preponderance of the evidence rule were applied in board 
cases.We have been urging this change on the states for  some time. 
In  many states, there is room for  significant improvement in board structure, function, 
and authority.  I would urge you to review our Guide  to the Essentials of  a Modem  Medical 
Practice Act  and the Elements  of  a Modem  State Medical  Board  for  detailed proposals 
relating to this point.  I will  not attempt to outline  all  those proposals here. 
I would  like,  however, to emphasize the vital  importance of a systematic and coordinated 
effort  to find  and act on problem physicians. 
I am presenting materials to you today for  inclusion in the record that describe a concept 
of license reregistration  that centers on the steadily improving identification  of unqualified, 
unfit,  and impaired  physicians. Building  on information  that is generated every day reflecting 
physician performance and behavior, it  places attention  where it  belongs -- on the problem 
physician. The system is based on mandatory reporting  to boards by health professionals, 
health care institutions,  liability  insurance carriers, courts and law enforcement agencies, 
professional and specialty organizations, specified state agencies, and others. This mandatory 
reporting  is complemented by an annual or biennial  self-reporting program requiring  the 
licensee to report  to the board all  relevant adverse information  about himself or herself that 
may have developed during the reregistration period. At  the same time, the licensees 
5 
 professional  profile  (practice  location,  specialty,  professional  memberships,  hospital  privileges, 
CME  activities,  licenses held,  etc)  is updated,  allowing  a review  of  sudden  changes or 
patterns  of  change. Taken  together,  mandatory  reporting  and  self-reporting  permit  a board, 
operating  as all  do  with  finite  resources, to  concentrate  time  and  effort  on  markers  and 
indicators  of  possible  problems  - red  flags for  board  attention  and potential  board  action. 
Today,  most  states are  moving  to  such a system. Data  accompanying  the  material  I  have 
made  available  for  the  record  will  provide  you  a clear  idea  of  the  progress  that  has been 
made  over  the  past  several years. 
But  I  must  add  that  the  system of  license  reregistration  I  have described  could  have stiIl 
more  impact  if  professional  review  organizations  were  mandated  to  communicate  more 
effectively  and  promptly  with  state  medical  boards.  Peer  review  organizations  are  currently 
funded  to  evaluate  the  quality  of  care rendered  to  Medicare  patients.  As  a result  of  their 
quality  assurance review,  PROs  identify  those physicians  who  are  deemed  to  have a 
substantial  number  of  quality  issues in  a substantial  number  of  cases and  they  subsequently 
institute  corrective  action  plans  for  the  physicians  so identified.  State  licensing  agencies 
should  be promptly  notified  of  all  physicians  who  have been  identified  as requiring  corrective 
action  in  order  to  establish  an effective  monitoring  plan  by the  medical  board.  State 
medical  boards  could  then  initiate  appropriate  action  if  the  remedial  efforts  of  the  PRO  are 
ineffective,  or  if  the  physician  attempts  to  avoid  review  by  relinquishing  his participation  in 
Medicare. 
Here  is a specific  area where  federal  legislation  is appropriate  and needed.  The  Congress 
can establish  parameters  for  mandatory  reporting  to  the  boards  by  PROS. I would  urge  you 
to  concentrate  on  such an effort  as soon as possible.  Unfortunately,  effective  reporting  by 
the  PROS may  not  develop  without  the  specific  mandate  of  Congress. I  believe  the 
6 
 commendable  purpose  behind  the  IGs  report  would  be well-served  at  the  federal  level  by 
swift  action  to  enhance  the  reporting  responsibilities  of  PROS: already  existing  and  funded 
agencies whose  role  in  quality  assurance would  be dramatically  improved  by  effective 
cooperation  with  the  state boards.  The  states are  doing  their  job  better  each year,  as the 
IGs  report  indicates.  Appropriate  action  by Congress in  this  area would  assist them  in  doing 
it  still  more  effectively. 
Enhance  and  fund  the  quality  review  activities  of  the  PROS and  mandate  their  reporting 
to  the  boards.  Focus the  energy  and  resources we  have available  on  the  problem  physician. 
Let  me  say a word  about  the  recommendations  made  by  the  report,  because, finally,  they 
are  its  substance. 
I  have already  expressed to  you  our  strong  support  of  the  first  recommendation,  directed 
to  the  states, about  adequate  board  funding.  I  will  not  repeat  the  point  but  only  stress again 
its vital  importance. 
The  second recommendation,  directed  to  the  Public  Health  Service like  the  five  that 
follow  it,  calls for  the  collection  and  analysis of  state-by-state  data  relating  to  board  staffing, 
etc. I  would  suggest that  this  is a task  best left  to  the  Federation,  though  it  would  be  helpful 
if  Congress would  authorize  funding  in  the  credentials  area that  could  be  awarded  through 
HRSA  to  assist in  such an endeavor.  The  Federations  already  existing  publication,  the 
Exchange, would  be  the  ideal  vehicle  for  the  collection  of  data.  It  is our  understanding  that 
Congress has not  included  funds  that  can be used to  support  programs  related  to  state 
licensure  and  discipline  in  recent  PHS  appropriations.  This  should  be  corrected  if  the  federal 
government  is to  be  of  service to  the  states in  this  area. 
The  third  recommendation,  calling  for  a national  meeting  on  the  role  of  state medical 
boards,  should  be pursued  by working  in  conjunction  with  the  Federations  Annual  Meeting, 
7 
 at which  every state  board  is represented  and  to  which  key  state  legislators  are  invited.  We 
would  be  happy  to  discuss this  with  the  PHS  at  any time. 
The  fourth  recommendation,  related  to  boards  contracting  with  PROs  to  conduct  reviews 
of  quality  of  care  cases, is worthy  of  discussion  in  an age when  the  quality  improvement 
question  is becoming  more  and  more  central  to  board  concerns. 
The  fifth  recommendation  calls  for  funding  of  the  development  of  performance  indicators 
for  use by  the  boards.  It  correlates  with  the  twelfth  recommendation,  calling  on  the 
Federation  to  facilitate  board  performance  assessment. The  thrust  of  these recommendations 
is the  same, and  I  am  pleased  to  tell  you  the  Federation  has already  initiated  a project  that 
will  develop  a performance  self-assessment instrument  for  the  state boards  over  the  next 
fourteen  months.  This  project  has been  in  the  planning  stages for  some  time  and will 
complete  the  cycle  of  studies  that  has produced  the  Guide  to the EssentiaLs of  a Modem 
Medical  practice  Act,  A  Model  for  the Preparation  of  a  Guidebook  on Medical  Discipline,  and 
the Elements  of  a Modem  State Medical  Board:  A  Proposal  Needless  to  say, the 
recommendations  in  the  IGs  report  encourage  us in  our  effort  and  we  appreciate  the 
support  they  provide. 
Recommendation  six, which  encourages  PHS  funding  to  support  the  improvement  of  the 
investigative  efforts  of  boards,  is commendable.  The  Federation  has appreciated  the  financial 
support  it  has received  from  PHS  in  the  past. That  support  has been  of  great  benefit  in 
several  Federation  programs  that  have led  to  significant  changes and  improvements  in 
boards.  Further  assistance, such as that  proposed,  could  be  of  great  value. 
Recommendation  seven calls  on  the  PHS  to  provide  demonstration  funding  concerning 
the  use of  practice  standards  and  guidelines  in  the  investigation  of  quality  of  care cases. 
That  would  ?e useful,  of  course, but  only  when  such standards  and  guidelines  have been 
8  effectively  developed  with  significant  input  from  and  acceptance by the  medical  profession. 
At  that  time,  boards  will  certainly  seek efficient  methods  for  using  them  - an effort  that  will 
justify  such funding. 
Recommendation  eight  concerning  the  sharing  of  PRO  information  with  boards  is clearly 
important.  I  have already  discussed that  issue at  some length.  Recommendations  nine,  ten, 
and  eleven  also deal  with  providing  additional  information  to  boards  from  Medicaid, 
Medicare,  and  several  other  sources. As you  can tell  from  my  previous  remarks,  having 
access to  such information  is an essential  part  of  an effective  markers  and  indicators  system. 
Our  major  concern  is that  the  boards  have the  funds  necessary to  use the  information 
promptly  and  well. 
Recommendation  thirteen,  concerning  the  continuing  efforts  of  the  Federation  to  assist 
boards  in  improving  their  licensing  and  regulatory  processes, is, I  can assure you,  a 
fundamental  part  of  the  Federations  organizational  commitment.  Even  the  most  cursory  look 
at  our  efforts  over  the  past decade indicate  that  fact.  I  sincerely  believe  that  much  if  not 
most  of  what  appears  in  the  report  and  much  of  the  debate  concerning  licensure  and 
discipline  in  the  country  today  stems from  work  the  Federation  has done  throughout  these 
years. Recently,  thanks  to  changing  professional  and public  attitudes  and  to  media  attention, 
people  have begun  to  listen.  State  legislatures  have begun  to  feel  the  pressure.  Needless to 
say, we  do  not  intend  to  stop. 
We  certainly  agree with  the  final  recommendation,  number  14, that  state governors  and 
legislators  should  make  every  effort  to  address the  problems  of  the  boards  more  effectively. 
As  suggested, their  various  national  organizations  can serve a role  as stimulus  in  this,  but  we 
would  suggest they  begin  with  a careful  study  of  all  the  material  already  developed  and 
disseminated  by  the  Federation  and  the  IGs  office.  Efforts  to  reinvent  the  wheel  will  only 
9 
 slow  the  process. The  time  has come  to  move. 
On  page twenty  of  the  report,  the  statement  is made  that  the  actions  of  DHHS 
concerning  State  boards...should  be supportive  of  State government  roles.  We 
wholeheartedly  agree with  that  and  consider  it  a healthy  recognition  of  the  obligation  of  the 
states. We  are  a bit  less comfortable,  I  must  tell  you,  with  the  statement  on page 21 that 
PHS  consider  the  future  Federal  relationship  with  the  boards  more  in  terms  of  a 
partnership  addressing joint  concerns  than  one  involving  separate  spheres of  responsibility 
addressing  separate  concerns.  I  agree we  have joint  concerns. That  is patently  obvious.  But 
there  are  separate,  recognized  spheres of  responsibility  that  cannot  be  allowed  to  blur  simply 
because we  find  them  inconvenient.  Support  and  cooperation  are  appropriate  and  necessaty 
BSthey  are  essential.  But  the  word  partnership  may  be  seen by  many  to  imply  something  else 
- to  suggest some  level  of  direct  federal  authority  in  medical  Iicensure.  I  believe  even the 
hint  of  that  should  be avoided.  This  responsibility  falls  to  the  states and  they  must  meet  it 
directly. 
A  question  that  rather  naturally  arises from  this  report  - and  one  I  have often  been 
asked - is how  one  differentiates  between  a good  board  and  a bad  one.  I  wish  there  were  a 
simple  answer  to  that,  but  there  isnt.  The  issues and  forces  involved  are  too  complex.  But  I 
must  say, I  believe  the  question  itself  is wrong.  Boards  are  not  good  or  bad.  They  are  strong 
or  weak  -- and  their  strength  or  weakness is largely  attributable  to  the  statutes  and policies 
of  their  states. 
Underfunded,  understaffed  boards  attempting  to  function  with  outmoded  statutes, 
inexperienced  legal  counsel,  and  inadequate  investigative  resources will  be weak  and will 
perform  accordingly.  States that  fail  to  empower  and  equip  their  boards  and  make  them 
accountable  - all  at  the  expense of  licensees, please  recall  - fail  in  their  duty  to  the  public. 
10 
 That  is inexcusable  and  the  public  should  demand  corrective  action  by state legislators.  The 
media,  I  should  note,  have provided  a valuable  service in  the  past ten  or  fifteen  years in 
focusing  attention  on  this  issue and  on  stimulating  that  public  demand.  We  hope  they 
continue  to  do  so. 
The  Federation  does not  pretend  there  is one best form  of  medical  statute  or  medical 
board.  In  its Essential  and  the Ekments,  however,  it  has tried  to  provide  some suggestions 
to  stimulate  a useful  dialogue  in  and  among  the  states. There  is no  doubt  that  stronger 
boards  are being  created  as a result  of  that  dialogue. 
At  the  same time,  through  the  self-assessment program  now  being  developed  by the 
Federation.,  states and  their  boards  will  be  enabled  to  evaluate  overall  board  performance 
more  efficiently,  determine  board  needs more  precisely,  and  strengthen  board  efforts  more 
effectively. 
Unfortunately,  there  are  no  legislative  magic  wands, either  state  or  federal,  with  which  we 
can wave  away the  challenges  that  face the  boards  or  conjure  perfect  solutions.  We  are 
dealing,  after  all,  with  human  beings functioning  in  human  systems and limited  by human 
knowledge  and  experience.  Working  together,  however,  in  our  appropriate  roles, with  the 
commitment  and  concern  that  motivates  us all,  the  states and  their  medical  boards,  the 
federal  government,  and  the  medical  community  can realistically  address the  issue of  quality 
improvement.  Dr  Oliver  Wendell  Holmes  once wrote  that  the  great  thing  in  this  world  is 
not  so much  where  we  stand,  as in  what  direction  we  are  moving.  I  believe  we  have been 
moving  in  the  right  direction  and  that  the  IGs  report  is a valuable  signpost  along  the  way. 
Thank  you. 
11 
 .  . 
OIG RESPONSE TO FSMB COMMENTS 
We appreciate  FSMBs  positive  response to the report  as a whole  and to the recommendations. 
We believe  that FSMB  can make particularly  valuable  contributions  in the 1990s by leading 
efforts  to develop  and disseminate  quantitative  indicators  of State medical  board performance 
and to improve  the boards  effectiveness  in reviewing  cases involving  the quality  of medical 
care rendered.  Bringing  lifetimes  of experience  and leadership  to serve  all  generations. 
August  15,  1990 
Richard  P.  Kusserow 

Office  of  the  Inspector  General 

Department  of  Health  and  Human  Servi 

330  Independence  Ave.  S-W. 

Washington,  D.C.  20201  . 

Dear  Inspector  Kusserow, 
The  American  Association  of  Retired-Persons  is  very  pleased 
to  submit  these  comments  on  your  draft  report  entitled  tlState 
Medical  Boards  and  Medical  Discipline." 
The  Association  commends  the  authors  of  the  report  for  their 
excellent  work.  The  document  makes  a  significant  contribution  to 
the  effort  to  improve  state  boards,  patients'  @@front-line@' 
defense  against  incompetent  medical  practice. 
AARP  has  been  increasingly  active  in  that  effort,  and  we  are 
delighted  that  the  report  acknowledges  several  recent  activities. 
We have  reviewed  the  findings  and  recommendations  of  the 
draft  and  find  that  we  are  in  agreement  with  most  of  its  thrust, 
focus  and  content.  Accordingly,  the  following  comments  address 
those  areas  where  we  have  additional  suggestions. 
Peer  Review  Organization-Medical  Board  Data  Sharing 
AARP  applauds  the  report's  emphasis  on  the  importance  of 
increased  data  sharing  between  Peer  Review  Organizations  (PROS) 
and  medical  boards.  In  particular,  we  support  the  move  to 
mandate  specific  kinds  of  PRO data  sharing. 
The  interests  of  patients  require  earlier  rather  than  later 
PRO notification  to  the  appropriate-medical  board  of  quality  of  -
care  concerns.  Towards  this  end  the  draft  report's  data  sharinq 
recommendation  needs  to  be  exuanded  bevond  sanctions-related 
information  to  include  material  produced  by  PROS'  quality  review, 
beneficiary  complaint,  and  utilization  review  processes.  In 
addition,  medical  boards'  sharing  of  information  with  PROS,  i.e., 
a  two-way  flow  of  information  would,  we  believe,  enhance  and 
facilitate  PROS'  quality  assurance  responsibilities. 
Mandated  data  sharing  related  to  the  various  PRO review 
activities  will  need  to  encompass  a  number  of  decisions  on  the 
timinq  of  board  notification,  as  well  as  the  severitv  of  problems 
triggering  communication.  In  this  connection,  a  mandated  sharing 
prescription  will  need  to  differentiate  between  data  sharing  for 
,\nwrican  Aaociarion  of  Retired  Persons  I 909  K Stwet.  9.W..  Wahinpn.  D.C.  20049  (201j  X72-4700  supervision  of  staff,  high  staff  turnover,  low  staff  to  resident 
ratios,  and  the  use  of  temporary  services  were  deemed  to  be 
contributory  factors. 
It  concerns  us,  therefore,  that  in  this  latest  report 
nursing  home  administrator  boards  are  not.identified  as  agencies 
in  a  position  to  monitor  or  correct  these  problems.  Neither, 
apparently,  were  nursing  home  administrator  board  organizations 
interviewed  by  the  IG  in  the  course  of  the  study.  We urge  that 
nursing  home  administrator  boards  be  included  as  part  of  the 
solution  to  the  problem.of  improper  care,  working  as  they  do  with 
their  "cousin"  *agencies,  the  medical  boards,  in  the  state 
regulatory  apparatus. 
Improved  Effectiveness  in  Reviewing  Quality  of  Care  Cases 
We  agree  that  the  FSMB  is  well  suited  to  help  state  boards 
improve  their  effectiveness  in  reviewing  quality  of  care  cases. 
However,  we  would  like  to  see  the  list  of  groups  in  a  position  to 
help  boards  expanded  to  include  other  organizations  such  as 
advocacy  and  public  interest  groups. 
Development  of  Performance  Indicators 
We strongly  support  the  need  for  developing  performance 
indicators  suitable  for  widespread  use  by  state  medical  boards. 
Towards  that  end,  a  very  promising  source  of  input  into  the 
development  of  such  indicators,  namely,  public  members  of  medical 
boards,  has  been  proposed  by  the  OIG  draft  report's  director,  Dr. 
Mark  Yessian. 
Speaking  to  those  members  at  a  1989  meeting  conducted  by 
AARP's  Citizen  Advocacy  Center,  Mr.  Yessian  observed: 
It  it  would  be  important  to  begin  to  develop  some 
.  .  . 
consensus  about  those  variables  that  really  are  key 
indicators  of  board  performance  and  that  should  be  used 
to  compare  performance  in  different  states. 
. ..This  is  a  aood  area  for  nublic  members  of  medical 
boards  to  exert  some  leadershin....(including)  making 
the  case  for  the  kind  of  indicators  that  will  help 
boards  have  more  credibility  with  the  public. 
These  aren't  matters  of  medical  discretion.  These  are 
matters  that  intelligent  people  can  address  and  that  depend 
on  good  common  sense."' 
1 The  full  text  of  his  address  is  attached. 
3  Conclusions: 
We  strongly  commend  the  draft  report  and  appreciate  this 
opportunity  to  share  our  reactions.  In  particular,  we  welcome 
the  emphasis  on  data  sharing  between  PROS and  state  medical 
boards,  as  well  as  greater  involvement  by  other  agencies  and 
associations  to  help  state  boards  improve  their  effectiveness  in 
reviewing  quality  of  care  cases.  We also  strongly  support  the 
commitment  of  the  report  to  improve  and  evaluate  the  boards' 
oversight  role  through  increased  funding  and  greater  national 
attention.  We  look  forward  to  further  communication  with  your 
office  and  other  interested  parties  concerning  these  important 
matters. 
Sincerely, 
k+ 
n  Rother 
irector
Legislation  and  Public 
Policy  Division 
4 
 DARE  TO  COMPARE: 
ASSESSING  THE  PERFORMANCE  OF  STATE 
MEDICAL  BOARDS 
Luncheon  Address  by  MARK R.  YESSIAN,  Ph.D.,  Regional
Inspector  General,  HHS,  at  the  Citizen  Advocacy  Center 
Fall,  1989  meeting  of  public  members of  medical  boards 
MY remarks  today  have  to  do  with  a  perplexing  question:  How 
do  you  know  a  g&d  medical  board  when  you  see  one? 
Based  on  documents  such  as  Ken  Wagstaff's  reports  to  the 
California  Joint  Legislative  Budget  Committee;  AARP@s report,
Effective  Physician  6versi_a-h--t-: - P--r-e~s -c--r-iotion-- -~- f-o~r-  M---e~d~i-c~a-l~A  Licensing
Board  Reform;  Bob  Felln ne Code  Blue  Emersencv  the 
ths  report: 
Federation  of  State  Medical  B  'Modern  -State 
Medical  Board:  A  Proposal;  my  office's  reports;  and  other  such 
"enlightened"  sources;  a  good  medical  board  might  have  the 
following  characteristics:  -
It  would  have  a  full  complement  of  enforcement  tools,
including  revocation,  suspension,  probation,  reprimand,  and  fines 
of  a substantial  size.  A good  board  would  have  authority  to  impose
immediate  suspensions,  to  issue  subpoenas,  and  to  .require  a  . 
licensee  to  come in  to  take  a medical  exam when there  is  reasonable 
cause. 
It  would  have  annual  license  renewal  fees  of  or  more 
$200-$300 
that  would  be  put  in  a  special  fund  just  for  the  board.  The money
would  be  used  to  hire  ample  investigatory  and  legal  staff,
computerize  records,  establish  a tracking  system,  and provide  board 
member training.  The  board  would  be  composed of  12-24  members --
at  least  25% of  whom are  public  members  --  who  are  adequately
compensated  for  their  time,  maybe  at  a  rate  of  314  the  salary  of 
the  State  Commissioner  of  Health. 
A  good  board  would  have  a  sophisticated  system  for 
prioritizing  cases.  It  would  have  guidelines  for  determining
appropriate  sanctions.  It  would  have  close  cooperative
relationships  with  PROS, with  state  medical  societies,  with  state 
Medicaid  fraud  units,  and  with  state  Attorneys  General.  It  would 
provide  immunity  for  all  those  reporting  cases  to  the  board.  It 
would  conduct  computerized  detections  of  patterns  of  errant 
behavior.  It  would  take  on  complex  cases.  It  would  issue  its 
phone  number  in  all  the  white  pages  and  yellow  pages  throughout
the  state.  It  would  have  a  toll-free  number. 
I  think  if  any  of  us  saw  a  board  with  all  of  these 
characteristics,  we  would  tend  to  say  it  was  a  good  board.  It 
would  probably  impress  us.  Yet,  as  important  as  all  these  elements 
1  . 
are,  they  leave  out  one  essential  factor:  actual  performance.  For 
instance,  who Is  to  say  that  a board  with  ample  resources  and  ample
authority  will  necessarily  use  these  resources  and  authorities 
effectively?  If  I  might  get  a little  closer  to  home,  who is  to  say
that  a  board  with  25 percent  or  more  public  members is  necessarily 
an  effective  one? 
I  would  say  that  all  the  elements  I  have  run  through  quickly
and  haphazardly  are  really  only  enabling  elements.  They  are 
elements  which,  if  put  in  place,  enable  a  board  to  function 
effectively.  .You  might  even  call  them  prerequisites,  although  we 
might  argue  about  some  of  them.  Essentially,  they  are  not 
performance  indicators,  but  rather  enabling  elements. 
So,  if  we  want  to  answer  the  question,  "1s  the  board  a  good
one?"  don't  we  have  to  go  the  next  step  and  look  at  actual 
performance  --  that  is,  at  the  actual  work  being  done  and  the 
outputs  of  the  board?  If  the  answer  is  "yes,"  the  question  is 
still  the  same.  How do we know  a  good  board  from  a mediocre  board 
from  a  poor  one?  Or,  maybe  better  yet,  how  do  we  compare  the 
performance  of  a  particular  board  from  one  year  to  the  next?  How 
do  we know  if  it  is  doing  better,or  worse? 
There  is  a  school  of  thought  out  there  that,  except  perhaps 
at  the  margin,  you  can't  and  probably  even  shouldn't  ask  this 
question  about  performance.  It  is  a  well  ingrained  school  of 
thought,  I  would  say,  and  will  exert  significant  constraints  on 
any  initiative'  to  address  performance.  The  arguments  against
performance  assessment  go  something  like  this: 
Each  case  reviewed  by  a medical  board  is  unique,  with  its  own 
particular  circumstances  and  characteristics.  The  board  has  a 
responsibility  to  recognize  these  distinctive  features  and -to 
respond  in  a  fair  manner,  balancing  the  rights  of  the  individual 
with  those  of  the  public.  Its  job  is  to  dispense  justice,  not  to 
generate  statistics. 
This  leads  to  a  concern  about  quotas  --  about  the  pressures 
to  produce  increasing  numbers  of  scalps.  To  that  I  might  add that 
the  critiques  by  the  Sidney  Wolfes  and  the  Bob Fellmeths  and  even 
the  Mark  Yessians  tend  to  add  to  these  pressures.  Such  pressures
could  lead  some  boards,  I  think  it  is  fair  to  say,  to  act  hastily
and  to  focus  on  easier'cases  to  generate  more  numbers.  I  am sure 
there  are  various  other  ways  these  pressures  could  lead  to 
unhealthy  distortions. 
Another  argument  against  performance  assessment  is  that  boards 
tend.  to  deal  with  complex  matters  involving  the  performance  of 
highly  trained  professionals.  In  determining  whether  these 
professionals  should  be  sanctionned,  particularly  in  cases 
involving  the  quality  of  care,  the  boards  need  substantial  latitude 
to  make decisions  based  on  expertise.  They  need  to  operate  with 
2  a  good  bit  of  independence  and  public  trust. 
Finally,  just  as  each case  is  unique,  each  state  medical  board 
is  unique  and  works  within  a  different  political,  economic,  and 
administrative  context.  A  board  is  a  product  its  state 
of 
government  and  can't  be  held,  accountable- for  matters  it  can't 
control.  Thus,  comparison  of  boards  across  states  is  inherently
flawed. 
Well,  have  I  destroyed  the  case  for  performance  assessment? 
I  don't  raise  these  issues  cynically,  or  dismiss  them.  There  is 
a  lot  of  truth  in  these  arguments.  There  are  Inherent  limitations 
to  addressing  board  performance.  If  handled  unwisely,  performance
assessments  CM  be counterproductive  and  very  detrimental.  Without 
question,  there  are  many sensitivities  and subtleties  that  surface 
reviews  can  easily  miss. 
But,  where  does  that  leave  us?  In  this  era  of  bottom-line 
accountability,  are  we  then  to  conclude  that  boards  shouldn't  be 
held  accountable  for  their  performance?  that  there  aren't  any
specific  quantitative  ways  performance  CM  be  measured?  that  it
is  enough  just  to  focus  on  the  enabling  elements? 
Obviously,  I  think  not. 
Isn't  it  obligation  of  public  entities  such  as  boards  to 
M 
develop  yardsticks  that  be  used  as  guides  --  not  proof
CM 
positive,  but  guides  --  in  assessing  their  performance?  Shouldn't 
taxpayers  expect  this?  wouldn't  such  yardsticks  be  useful  in  the 
sunset  reviews  that  are  performed  In  40-some  states?  Corporate
leadership  has  all  kinds  of  quantitative  measures  of  their
performance.  IS  our  world  of  public  boards  so  much more  complex, 
so  much more  unique,  that  we can't  expect  to  do  some of  the  same? 
while  the  job  is  a  difficult  and  sensitive  one,  I  really  do 
think  the  difficulties  here  are  muchmore  political  than  technical. 
Boards,  I  think,  and  should  develop  specific  quantitative
CM 
indicators  of  performance  expressed  in  terms  of  ratios  and 
percentages  that  facilitate  comparison.  True,  such  indicators
might  expose  boards  to  more  "pot  shots"  by  people  like  us  and 
others  in  your  own  state,  but  you're  going  to  get  those  anyway.
Might  they  not  also  let  the  boards  be more proactive  in  determining
the  bases  on  which  they  are  to  be  evaluated? 
I  would  argue  that  specific  indicators  of  this  sort  over  time,
would  add  a  lot  of  credibility  to  the  boards  and  would  help
significantly  in  improving  their  performance. If you  buy  that
CM 
for  a moment at  least,  how do we go  about  doing  it?  How do  we even 
start?  The  first  thing  I  think  is  to  promote  the  idea  --to  make 
a  case  that  addresses  some of  the  concerns  I  raised  earlier.  It 
is  important  to  stress  that  in  trying  to  get  specific  quantitative 
measures  of  performance,  we  are  looking  just  for  indicators  of 
3  .  . 
Let  me start  with  the  most  provocative  part  --  the  disposition
of  cases.  This  includes  reported  disciplinary  actions,  informal 
settlements,  and  cases  that  are  dismissed.  Reported  disciplinary 
actions  is  easy  to  focus  on.  It's  tangible  and  readily  available. 
The AARP report  says,  "The  simplest  way to  ask  how well  a  board  is 
performing  is  to  ask  how many disciplinary  actions  it  takes."  In 
defense  of  this  simple  indicator,  I  think  it  is  a  pretty  useful 
yardstick,  especially  if  it  is  used  as  a  ratio  --  disciplinary
actions  per  licensed  physician  or  per  active  physician  --  and  if 
it  is  aggregated  over  two  or  three  years.  The  data  should  reveal 
actions  by  type  and  actions  based  on  the  grounds,  the  reason  for 
the  action. 
If  all  we  focus  on  is  the  number  of  disciplinary  actions,
there  can  be  some of  the  negative  consequences  I  mentioned.  But, 
consider  this:  if  a  board  is  consistently  on  top,  it  is  fair  to 
ask  if  that  board  is  being  overzealous.  Good performance  is  not 
necessarily  just  more  scalps.  It  is  reasonable  for  physicians  and 
others  at  some point  to  say,  hey,  that  board's  not  being  fair  to 
physicians.  I  think  that  should  be  part  of  the  debate. 
What  other  kind  of  indicators  might  be  developed  concerning
the  disposition  of  cases.3  What about  the  educational  interventions 
and  other  remedial  actions  not  reported  in  the  Federation's  data 
bank?  Frankly,  I  am surprised  that  the  boards  and  the  Federation 
have  not  put  more  emphasis  on  documenting  such  dispositions.  If 
such  data  were  tabulated  along  with  data  on  formal  disciplinary
actions,  the  boards  and  the  Federation  would  be  in  a  better 
position  to  respond  to  the  critics  who suggest  they  are  not  doing
enough. 
In  the  sphere  of  case  review,  I  would  say  the  most  important
thing  to  measure  Is  processing  time.  How long  does  it  take  to 
process  cases,  however  you  define  the  beginning  and  ending  points?  a 
Wouldn't  such  data  provide  a  powerful  comparative  tool?  In  the 
sphere  of  identification  of  cases,  California  leads  the  parade  by
publicizing  detailed  statistics  in  annual  report,  including  even 
M 
disciplinary  actions  by  type  of  referral  source.  I  think  that  kind 
of  data  be  enormously  helpful. 
CM 
The  last  sphere,  quality  of  care,  is  tougher  to  define  and 
more  qualitative.  We see  significant  stirrings  as  boards  get  more 
involved  in  preventive  actions  that  are  informational  rather  than 
disciplinary.  Some  boards  are  actually  doing  peer  review  or 
overseeing  the  peer  review  activities  of  hospitals.  We even  hear 
of  practice  audits,  and  things  of  that  nature.  Well,  these  actions 
should  have  more  status  than  just  "other."  If  this  kind  of 
activity  increases  in  scope  and  significance,  we  need  to  develop 
measurement  indicators  to  determine  whether  a board  is  doing  a good
job. 
Let  me tease  you  with  one  final  thought.  In  1994  or  1996,  or 
5  . 
1998,  or  whenever,  there  wiUprobably  be  a time  when there  is  some 
kind  of  universal  medical  coverage  at  the  national  level.  Who will 
have  the  prime  public  responsibility  for  overseeing  minimum 
standards  of  care?  Will  It  be  the  medical  board3  Will  It  be  the 
some successor  federally  funded  entity?  Or,  will  It  be 
PRO,  or 
both?  And,  if  It's  both,  what  are  the  complications  associated 
with  that?  I  pose  the  question  because  I  think  the  answer,  at 
least  in  part,  can  be  determined  by  what  the  boards  do  today  and 
in  the  ensuing  years. 
Now,  let'me  wrap  up  by  telling  you  the  criteria  we  use  in 
evaluating  boards.  We  did  a  study  three  years  ago  and  are 
initiating  another  one  right  now of  state  medical  boards.  In  our 
prior  work  in  this  area,  we  have  used  essentially  two  basic 
criteria.  One focuses  on  those  enabling  elements  I  talked  about. 
We do  some  counts  and  are  able  to  say  things  like,  X  number  of 
boards  don't  have  sufficient  authority  or  sufficient  resources. 
The  second  criterion  is  the  "how  many"  questions  --  how  many
disciplinary  actions  are  being  taken  by  each  state?  Such  a  review 
always  reveals  significant  variations  that  raise  questions  about 
the  performance  of  some boards. 
With  the  upcoming  study,  we're  going  to  add  something  new. 
I  think  it  will  provide  some data  that  will  be  helpful  in  moving 
us  toward  some of  the  performance.indicators  I  have  been  talking
about.  What  we  will  do  is  seek  Information  on  all  disciplinary
actions  taken  In  1988  In  a  randomly  selected  sample  of  states. 
This  will  involve  about  200  cases.  For  each  case,  we are  going  to 
ask  questions  about  the  referral  source,  the  date  of  the  initial 
complaint,  the  date  of  the  final  action,  whether  the  action  was 
stayed  or  appealed,  the  reason  for  the  action,  even  the  setting  for 
the  action.  I  think  this  will  be  the  first  time  anyone  has 
gathered  quantitative  information  about  a sample  of  cases  that  will 
provide  us  with  a  good  profile  of,  disciplinary  action.  Most 
important,  It  will  let  us  make  some correlations  by  disciplinary
action,  by  processing  time,  by  basis  for  referral. 
Lastly,  we will  take  a look  at  the  quality  of  care  realm,  more 
in  a  descriptive  than  an  evaluative  way.  We want  to  try  to  get  a 
picture  of  whether  these  preventive-type  actions  that  boards  are 
taking  are  only  marginal  activities  or  perhaps  indicators  of 
M 
evolving  board  role  that  will  be  more  significant  in  the  future. 
With  plenty  of  limitations  and  caveats,  we  hope  the  data  we 
gather  will  let  us  say  a  little  bit  more  about  a  board's 
performance.  But,  most  importantly,  I  hope  it  will  stimulate 
broader  discussion  of  performance  indicators.  If  critics  don't 
like  the  indicators  we  have  used,  perhaps  they  will  think  of  a 
better  way  to  do  it.  The  fundamental  challenge  to  the  leadership
in  this  field  is  to  dare  to  compare  --  to  develop  a  few  basic 
indicators  of  medical  board  performance  and  then  to  use  these 
indicators  as  comparative  guides  to  performance. 
6  OIG RESPONSE TO AARP COMMENTS 
We are pleased by the AARPs  supportive  comments  on the report.  Below  are some of our 
own  comments  responding  to particular  points  made by the AARP. 
On PRO-State  board  data sharing.  We welcome  further  consideration  of even  more 
extensive  data sharing  along  the lines proposed  by AARP.  We also recognize  that it may be 
useful  to make some distinctions  between  data sharing  intended  as an early warning  and that 
concerning  cases where  there is compellng  evidence  of poor  quality  care.  Our major  concern 
is that there should  be more exchange  of detailed  case information  between  PROS and boards 
in cases involving  serious quality  of care problems  and that in some way  such sharing  be 
mandated. 
On a national  meeting.  We agree that AARP  and other consumer  and public  interest 
organizations  should  be part of the meeting.  The participation  should  be broadly  based, 
involving  many participants  not directly  associated with  State medical  boards.  It should  be 
convened  under the PHS  auspices in Washington,  D.C. 
On the Ombudsman  Program.  We suggest that the AARP  take note of the AoAs  response to 
our recommendation  on the Ombudsman  Program.  We find  it encouraging  and expect that 
AoAs  efforts  can contribute  to better opportunities  to identify  cases of improper  medical  care 
in nursing  homes.    PtiBL!C  CITIZEN  Jun  25,90  I::55  Nc.OC5  P. 
I 
PUBLIC CITIZEN 
Memo to: 	 Richard  Kusserow 
Inspector  General 
U.S.  Department  of  Health  and  Human Services 
From: 	 Sidney  Wolfe,  M.D. 
Director,  Health  Research  Group 
Re:  Comments on  #State  Medical  Boards  and  Medical  Discipline" 
~4=-O/-sq-~O5~@ 
Public  Citizen's  Health  Research  Group  applauds  the  Office 
of  Inspector  General  for  its  report "State  Medical  Boards  and
Medical  Discipline."  The  report,  and  Inspector  General  Richard 
Kusserow'a  accompanying  Congressional testimony,  lay  out  the  . 
unvarniohed  facts  about  our'nation'e  appallingly  lax  mystem of 
medical  discipline. 
We  disagree,  however,  with  the  report's  implication  that  the 
major  benefit  of  good  quality assurance  is.to  roduco 
medical 
medical  malpractice  insurance  rator. 
.
The  true  aoal  of@  who  SW&  tOadat- tha  v 
I 
ga  svaam  mwt  be  to  reduce  mew 
A  of  thoum.nW  of  deathsi
causFte each  y,ar, 
malpractice 
Public  Citizen  submits  the  following  recommendations  to 
bolster  medical  dlsciplino  in  thi6  country.  TheBe recommendations 
are  l xoerpted  from  our  Juno  1990  report,  @6892  Quamtionablo
Doctorl."  RECCH'MENDATIONS 

I.  To  the  federal  government. 
should  be  tied  to  the  board@  agrermrntm  to  meet  certain 
performance  standards,  to  be  developed  by  the  Public  Health 
Service,  a8  the  Department  of  Health  and  Human Services 
Office  of  Inspector  General  ham rocantly  rscomended.41 
The  etandards  should  include:  processing  complaint8  within  a 
certain  time  llmit;  maintaining  a  certain  love1  of  staffing
and  having  staff  meet  certain  qualifications;  disseminating
disciplinary  information  to  the  public;  and  more, 
2.Require  cooperation.  Congress  should  promptly  remove  any
legal  barriers  to  the  sharing  of  investigative  information 
between  the  Medicare  Peer  Review  Organizations,  the  &ate 
Medicaid  agenciee,  the  Drug  Enforcement  Adminhtrat~on  anb 
state  medical  boards.  *l  It  should  mandate  such  information-
sharing.  Rep.  Ron  Wyden,  D-gge.,  has  promieed  to  introduce 
IegiBlation  on  thiu  matter. 
3,The  Medicare  Peer  Review  Organizations,  which  have  been 
practically  moribund  in  disciplining  physicians  For 
mbstandard  care,  should  become more  aggreesive.  The  PROS 
should  hire  inveetigatore  and  advisers  trained  in  law 
enforosment,  o  that  fewer  of  their  sanction8  will  be 
l 
overturned. 
AE a  recent  Institute  of  Medicha  report  noted,  the  PROmare 
not  evaluated  on  their  ability  to  detect  and  oorrect  poor
quality  cam.  28  The  Department  of  Mealth  and  Human Service@
should  change  its  evaluation  procedures  to  place  more 
emphasis;  on  quality. 
4.Open  the  databank.  The  Bureau  of  Health  Profeesions  should 
keep  the  National  Practitioner  Data  Bank,  which  will  collect 
and  disseminate  Qisciplinary  information  on  health  uara 
practitioners,  on  track  to  bogin  operations  in  September. 
Congress  should  paas  legislation  to  open  the  data  bank  to  the 
public. 
5.The  Drug  Enforcement  Administration  should  release  a  monthly
list  of  all  practitionorm  whome  oontrollmd  rubrtanco 
proscription  licenses  have  boon  revoked,  restricted  or 
denied,  whether  by  voluntary  agroexmnt  or  publication  in  the 
Federal  Rogimtor.  The  list  should  be  widely  distributed  to 
pharmacies,  rtate  pharmacy  and  medical  boarda,  and  the  I 
general  public. 
too  many doctors  continue  to  prescribe  controlled 
Far  after  their  DEA licenrac  have  expired  or  been 
substances 
revoked.  The  DEA should  consider  requiring  phannaciea  to 
eubecribe  to  an  on-lint  l crvice  with  which  they  could  check 
the  validity  of  these  numbaro. 
6.Requits  doctor  reorrtification.  Congresc  should  conaiher 
legislation  proposed  by  Rep.  Pato  &ark,  D-Calif.,  to  require
phyeicfans  who  accept  Medicare  patient8  to  be  periodically
recertified  for  competency. 
12.  To  the  statee: 
l.Strengthen  the  etatutee.  Statee  that  have  not  already  dorm  so 
should  adopt  a  modified  version  of  the  Model  Medical  Pra  ice 
EZ 
Act  developed  by  the  Federation  of  State  Medical  Board@.
2.Reetructure  the  board.  States  should  sever  any  remaining 
links  between  state  licensing  board6  and  state 
formal  medical 
eocletiee.  Membero  of  medical  boards  (and  separate  dimcfplinary 
boarda,  where  present)  should  be  appointed  by  the  governor,  and 
the  governor'o  choice  of  appointees  ohould  be  unconstrained,  not 
limited  to  a  medical  society's  nomineoo. 
At  least  30  percent  of  the  members of  each  medical  board  and 
disciplinary  board  should  be  public  menboro  who have  no  ties 
to  health  care  providers. 
The  governor  should  appoint  medical  board  raernbers  to  the 
Medical  Board  whose  top  priority  not  assistance 
h  providing 
to  physicians,  but  protecting  the  publics  health. 
3~Inform  the  public.  Each  state's  Open Records  L,w  and  it6 
Medical  Practice  Act  should  rtate  that  all  formal 
di6Ciplinary  against  licanlied  professionals  are 
action6  fully
public  records. 
Each  LBgiSlatUre  should  require  widespread  d~csemination  of 
final  disciplinary  orderm,  Li6ts  of  thooe  dieclplincd  and 
full  disciplinary  orders  6hould  bo  promptly  available  to  all 
who  as&,  through  the  aail. 
Noticmo  of  dimiplinary  actions  ohould  be  sent  to  the  new@
media  and  to  all  hospitals,  HMO&, and  other  health  care 
pxovfders  in  the  otate,  as  well  a6  to  other  l tate  agencies,
the  federal  Department  of  Health  and  Runan services,  and  the 
federal  Drug  Enforcement  Administration. 
4,Strengthen  board  authority.  Every  aodical  board  should  have 
the  authority  to  lmpoeo  l morgmnay l umpenmionm pending  formal 
haaring  where  them  in  a  potential  danger  to  the  public  health. 
Boards  should  aggrewively  um  thir  Authority  when they  learn 
of  a  potentially  dangerous  doctor. 
Every  medical  board  should  have  the  authority  to  impose  civil 
fines  of  up  to  $100,000  for  violationo.  Board8  6hould 
xxviit  aggressively  use  this  authority  to  enforce  the  requirements 
for  all  health  care  providers  to  report  violations. 
Medical  boards  should  have  the  authority  to  accept  the 
findings  of  other  state  boar&  and  of  the  federal  Department
of  Health  and  Human Services  and  the  Drug  Enforcement 
Administration,  If  a  physician  has  been  disciplined  by 
another  atato,  the  second  state's  medical  board  should  be 
required  to  impose  sanctions  at  least  as  stringent  as  those 
imposed  by  first  state. 
the 
States  should  require  already-licensed  physicians  to  submit 
affidavits  that  they  are  not  under  investigation  elsewhere 
before  resuming  practice  in  the  state.  Physicians  who  are 
under  investigation  should  not  to  return. 
be  permitted 
Each  Legislature  should  provide  the  Board  with  authority  to 
examine  physlcians  for  physical,  mental  and  professional 
competence  and  to  test  them  for  alcohol  and  drug  USC. 
4,Encourage  complaints.  Each  Legislature  should  provide  the 
protection  of  confidentiality  and  immunity  those  who 
to 
report  violations  of  the  Medical  Practice  Act  to  the  Board 
and  to  board  members,  staff  and  consultants. 
Each  Lsgislature  should  require  all  licensed  health  care 
practitioners  to  report  Medical  Practioe  Act  violations  by 
other  practitioners  to  the  medical  board,  with  large  civil 
penalties  for  failure  to  do  90.  It  should  require  hospitals 
to  report  all  revocations,  restrictions,  or  voluntary
surrenders  privl,leges. 
of 
It  should  roguire  courts  to  report  all  indictments  and 
convictions  of  physicians  to  the  medical  disciplinary  board,
Xt  should  roquiro  liability  insurers  to  report  all  claims, 
paymente,  and  policy  canoellationr.  It  should  require  reports
from  other  state  agencies,  Medicare,  thr  DEA and  other 
Federal  agencies.  It  should  require  impaired  physicians 
program  to  report  the  names of  doctors  who  fail  to 
successfully  complete  thm  program. 
Modlcal  boards  should  conduct  random  audits  of  institutions 
to  cheok  compliance  with  those  reporting  roquiromants,  and 
should  fine  those  who  fail  to  oomply.  After  a  doator  is 
disciplined,  a  board  should  fine  any  other  prectftionors  who 
know  of  that  doctors  offense,  but  failed  to  report  it. 
5.Keep  the  oourts  $n  crheok.  Each  Legislature  should  instruct 
its  state's  courts  to  give  deferonco  to  disciplinary 
decisions 
by  the  board.  Stays  should  be  prohibited1  medical  board  actions 
should  always  taka  effect  prnding  appeal. 
Each  Legislature  should  adopt  the  'Preponderance  of  the 
Evidence'  standard  of  proof  in  medical  disciplinary  casss, 
xxix  I  ,
!/   . 
replacing  the  tougher-to-meat  'Clear  and  Convincing  Evidence0 
standard  now  in  affect  in  most  rtatas. 
6.Baaf  up  funding  and  staffing.  Each  Laglslatura  should  permit
the  medical  board  to  set  its  own  farm  and  spand  all  the 
resulting  revenue,  rather  than  being  forced  to  give  part  to 
the  state  Treasury.  The  medical  boards  should  raise  thair 
fees  to  $500  a  year. 
All  boards  could  benefit  from  hiring  new  investigators  and 
legal  staff,  Boards  should  ensure  adequate  staff  to  process
and  investigate  all  complaints  within  30  daybt,  to  review  all 
malpractice  claims  filed  with  the  board,  to  monitor  and 
regularly  who have  been  disciplined  to  ansura 
visit  doctors 
their  compliance  and  to  ensure  compliance  with  reporting
requirements. 
They  should  hire  investigators  to  Beck  out  errant  doctors,
through  review  of  pharmacy  records,  rpeaking  with  medical 
examiners,  and  targeted  office  audits  of  those  doctors 
practicing  alone  and  suspected  of  poor  uare.  "Physicians  who 
have  problems,  R comments  Department  of  Health  and  Human 
Services  Inspector  General  Richard  Kusserow,  l have  retreated 
to  areas  where  they  cannot  be  observed.* 
7.Raquire  risk  management.  States  should  adopt  a  law,  similar 
to  one  in  Massachusetts,  that  requires  all  hospitals  and  other 
health  care  providers  to  have  a  maaningful,  functioning  risk 
management program  designed  to  prevent  injury  to  patients.
Massachusetts  also  requires  all  adverse  incidents  occurring  in 
these  institutions  or  in  doctors'  offices  to  ba  raported  to  tha 
medical  board. 
8.Require  periodic  racartificatLon  of  doctors  based  on  a 
written  exam and  audit  of  their  medical  care  records. 
III.  To  patients... 
1.Conplain.  Use  the  addresses  in  this  report  to  fila  your 
OOmplaint8  about  poor  medical  care  or  madioal  misconduct  with 
your  state  medical  board  and  with  the  federal  Department  of 
Health  and  Human Servioam,  If  the  otfansa  oocurrad  in  a 
hospital,  also  fila  a  COmplalnt  with  the  hospital  poor  revhw 
coxunittee. 
Your  oamplainte  are  nerd&  to  othore1 
proteat 
Z.Organit@.  Form  cStieena  action  or  victim  right8  groups  to 
improve  medical  quality  assuranoa  Ln  your  arma.  The  American 
Association  of  Retired  Perrona  publirpom  a  quid.  that  oan 
help  you  mobilize  a  group  for  reform.  Try  to  got  a 
representative  of  your  group  appointed  to  the  l tate  medical 
board  or  the  Medicare  Peer  Review  Organization  for  your
state. 
XXX  .  I 
I 
/ 
OIG RESPONSE TO PUBLIC CITIZEN COMMENTS 
We appreciate  Public  Citizens  positive  assessment of the report.  However,  we do not intend 
to imply  that the major  benefit  of good medical  quality  assurance is to reduce medical 
malpractice  insurance  rates.  In this regard,  we now  state on page 1 that to  a considerable 
degree  the malpractice  crises are rooted  in problems  associated with  poor medical  care, and 
that over the long  term one of the most effective  ways  to address these problems  would  be to 
assure that effective  quality  assurance mechanisms  are in place.  ANERICAN  MEDICAL  ASSOCIATION 

JAMES  S  TODD  M D 
Actmg  Executwe  Vice  PrestYenl 
June  11,  1990 
Richard  P.  Kusserow 

Office  of  inspector  General 

Room 5350 

Cohen Building

330  Independence  Avenue,  SW 

Washington,  D.C.  20201 

Dear  Inspector  General  Kusserow: 
We are  pleased  to  comment on  the  April  1990 draft  report  of  the 
Office  of  Inspector  General,  State  Medical  Boards  and Medical 
Discipline.  We understand  that  this  report  is  a draft  and  is  subject  to 
revision.  We commendyou  for  devoting  the  time  and  resources  to  develop 
this  report  on  the  important  issue  of  medical  discipline. 
In  examining  the  medical  disciplinary  functions,  we believe  that  it 
is  important  to  keep  in  mind  that  quality  assurance  is  a broad  concept
which  encompasses many activities,  e.g.,  medical  education,  facility 
accreditation,  continuing  education,  technology  assessment,  medical 
licensure,  peer  review,  risk  management and medical  discipline.  Medical 
discipline  should  be  viewed  as  one  end of  the  spectrum  of  quality 
assurance  activities. 
The AMAhas  an  extensive  history  of  working  to  assure  quality  of  care 
and  to  reduce  the  excessive  costs  associated  with  the  liability  crisis. 
We have  long  advocated  that  medical  boards  should  be  strengthened,  and 
accordingly  we strongly  agree  with  the  recommendation  that  state 
governments  should  assure  that  all  licensure  fees  collected  from 
physicians  and other  professional  groups  under  the  purview  of  medical 
boards  are  used  to  support  board  operations.  This  is  long-standing  AMA 
pol icy. 
We also  agree  that  the  medical  discipline  system  has  progressively 
improved  over  the  past  decade.  This  is  due primarily  to  several 
factors.  First,  states  have  amended their  statutes  to  expand  board 
authority,  reporting  requirements,  and grounds  for  discipline.  Also,  the 
Federation  of  State  Medical  Boards  (FSMB) has  become an  increasingly 
active  player  in  improving  board  operations  through  the  development  of 
A  Guide  to  the  Essentials  of  a Modern Medical  Practice  Act,  A 
Guidebook  on Medical  Discipline,  The  Exchange,  and development  of  a  .  1 
sys tern of  markers  for  identification  of  problem  physicians.  The  FSMB 

also  distributes  a monthly  report  of  adverse  licensure  actions  reported

by  the  state  boards.  We note  that  the  draft  report  recommends that  the 

Public  Health  Service  collect  data  regarding  board  staffing,  revenue,  and 

expenditures.  We believe  such  an effort  would  duplicate  existing 

activities  since  FSMB is  already  in  the  process  of  collecting,  analyzing,

and disseminating  this  information. 

We support  the  draft  reports  recommendation  that  a national  meeting
be  convened  to  focus  attention  on  the  importance  of  state  medical  board 
oversight  of  physicians  and  to  examine  how to  further  improve  board 
resources  and  efficiency.  We believe  that  an  important  topic  for 
discussion  at  such  a conference  would  be  federal  financial  support  to 
states  for  technical  assistance  efforts  intended  to  improve  board 
operations  and  investigative  efforts.  We strongly  believe  that  the  AMA, 
the  FSMD, state  agencies,  and  state  legislators  all  should  play  prominent
roles  in  the  discussions  that  would  take  place  at  any  national  conference 
on  state  medical  boards. 
We are  continuing  our  study  of  the  OIG Report  but  at  this  time  wish 
to  state  a number of  concerns  regarding  certain  recommendations  contained 
in  the  draft  report.  The  report  recommends an expanded  role  for  PROSin 
the  medical  disciplinary  process.  Specifically,  it  calls  for  legislation 
mandating  that  PROSshare  case  information  with  medical  boards  when the 
first  sanction  notice  is  sent  by  the  PRO to  a physician.  Differentiation 
must  be  made between  sanctions  for  matters  of  physician  incompetence  and 
those  for  Medicare  infractions  not  affecting  health  care.  In  any  event, 
we oppose  sharing  of  case  information,  including  that  obtained  from  the 
Quality  Improvement  Program,  with  state  medical  boards  prior  to  final 
resolution  of  the  recommended sanction.  The AMAbelieves  that  before  any 
physician  is  reported  to  a  state  licensing  body  for  alleged  quality 
deficiencies,  the  physician  should  be  provided  a due process  hearing  to 
include  representation  by  an  attorney,  a  record  of  the  proceedings,  an 
opportunity  to  call!  examine,  and  cross-examine  witnesses,  and  an 
opportunity  to  submit  a written  statement  at  the  close  of  the  hearing. 
Our process  must  also  include  an  appropriate  appeal  process.  Statistics 
excerpted  from  a past  OIG report  indicate  that  approximately  SOSCof 
sanction  recommendations  are  overturned  on  appeal.  On balance,  PRQshave 
been  cautious  regarding  the  types  of  information  that  they  release.  We 
believe  that  extreme  caution  is  warranted.  A report  of  substandard 
physician  care,  where  that  report  is  later  found  to  be unjustified,  could 
become a permanent  unfair  mark  against  the  physicians  reputation.  The 
severity  of  this  unjust  mark  against  the  physicians  reputation  is 
magnified  in  the  current  environment  of  computerized  information-sharing, 
as  exemplified  by  the  establishment  of  the  National  Practitioner  Data 
Bank.  The AMA is  opposed  to  this  potentially  onerous  activity  proposed
in  the  draft  report.  f 

-Y-

The draft  report  also  recommends that  state  boards  contract  with  PROS 
to  conduct  reviews  of  quality  of  care  cases.  We believe  that  this  idea 
warrants  extreme  caution.  In  addition,  while  we would  generally  support
cooperative  endeavors  where  appropriate,  we would  do  so only  with  the 
proviso  that  the  due process  rights  of  the  physician  under  review  be 
fully  and completely  protected  throughout  the  process. 
We are  also  concerned  that  the  draft  report  fails  to  make a 
distinction  between  medical  malpractice,  which  relates  injury  due  to 
negligence  (i.e.,  an  error  or  omission)  and  professional  incompetence,
which  is  the  inability  to  practice  medicine  with  reasonable  skill  and 
safety.  The  discussion  on page  12 and page  16 seems to  indicate  that  the 
rate  of  physician  discipline  should  be  equivalent  to  the  incidence  of 
negligence.  Data  shows,  however,  that  the  number of  medical  negligence
claims  fail  to  be  reliable  indicators  of  negligence.  The  recent  New 
York  State  Harvard  Study  showed that  80?4of  the  claims  for  medical 
negligence  filed  in  New York  did  not  correspond  to  a negligent  adverse 
event.  In  addition,  we must  point  out  that  the  draft  reports
characterization  of  the  New York  State  Harvard  Study  (page  12)  ignores
the  fact  that  the  Harvard  study  examined  ~11  tweg  of  hospital 
negligence,  not  iust  those  directlv  involvinp  ohvsician  care  (e.g.,
falling  out  of  bed  incidents),  thus  making  the  rate  correlation  argument 
specious. 
We also  note  the  reports  concern  that  clear  practice  standards  and 
guidelines  have  not  been  integrated  into  the  disciplinary  process.  This 
observation  assumes that  such  guidelines,  or  parameters  as  they  are 
known  in  much of  the  medical  field,  exist  and are  appropriate  indicators 
of  physician  competency.  In  fact,  practice  parameters  address 
utilization  issues  as well  as  physician  competency  and patient  safety 
concerns  and  therefore  will  not  always  be  relevant  to  the  competency 
evaluation  process.  We agree,  however,  that  as  appropriate
patient-safety  oriented  parameters,  such  as  those  disseminated  in  the 
anesthesia  field,  are  developed,  they  may be  indicators  of  appropriate 
practice. 
We also  are  concerned  that  the  draft  report  repeatedly  suggests 
changes  in  statutes  that  will  allow  shortcuts  and medical  board  action 
without  the  boards  own full  investigation.  We oppose  such  statutory
modifications.  Medical  boards  have  a  responsibility  - a duty  - to  fully
investigate  the  facts  of  each  case  prior  to  taking  disciplinary  action. 
Licensure  action  is  a grave  matter  that  should  never  be  undertaken  using
shortcuts.  Where an urgent  situation  is  presented  to  a board,  boards 
have,  in  all  jurisdictions,  the  authority  to  issue  a  restraining  order 
during  the  pendency  of  its  investigation. 
Lastly,  we are  concerned  about  the  discussion  contained  in  the  draft 
report  regarding  the  modification  of  the  standard  of  proof  in 
disciplinary  actions  from  a  clear  and convincing  standard  to  a 
preponderance  of  evidence  standard.  Such a major  change  in  the  -4-
required  standard  of  proof  could  have  far-reaching  negative  effects  on 
the  due process  protections  for  individuals  who are  subject  to  government 
oversight. 
Again,  we are  pleased  to  have  had  the  opportunity  to  comment on  the 
draft  report  of  the  Office  of  Inspector  General.  We welcome  the 
opportunity  to  work  with  all  interested  parties  on  an ongoing  basis  to 
formulate  improved  mechanisms  to  address  physician  discipline  and  to 
continue  to  better  the  performance  of  the  state  medical  boards. 
JST/lp 
:  Mark  R.  Yessian,  Ph.D. 
&3x  OIG  RESPONSE  TO AMA  COMMENTS 
We completely  agree with  the AMAs  assertion that the due process rights  of a physician  under 
review  should  be fully  and completely  protected  during  the review  process.  However,  unlike 
the AMA  and for reasons we have already  indicated,  we believe  that the PROS sharing of case 
information  with  boards and the PROS contracting  of boards to conduct  reviews  are quite 
compatible  with  the protection  of those rights.  We must also note that the boards, in addition 
to assuring  that physicians  rights  are upheld,  also are responsible  for protecting  the public 
from  unscrupulous  and/or incompetent  medical  practice. 
With  respect to the AMAs  concern  about shortcuts,  we believe  that in States where  a case 
going  through  a full  evidentiary  hearing  takes two years or more, some expediting  of that 
process is vital  if the boards are to carry  out their responsibilities  to the public.  We believe 
that a quicker  process can still  afford  ample protection  of physicians  due process rights.  APPENDIX  B 

METHODOLOGICAL  NOTES 

Literature  and Document  Review 

We reviewed  the 1986 through  1989-90  editions  of the FSMBs  Exchange,  which  include 

up-to-date  information  on the State boards.  The Exchange  provided  us with  data on the 

boards  structure,  operations,  review,  and disciplinary  functions.  This included  information 

regarding  statutory  reforms,  budget  allocations,  board composition,  disciplinary  grounds  and 

other  basic board facts. 

In addition,  we reviewed  the annual reports  of most State medical  boards and numerous 

publications  from  entities  that were in some way  associated with  or interested  in State medical 

boards and their disciplinary  processes.  Some of these entities  included  the American 

Association  of Retired  Persons, the American  Medical  Association,  the Public  Citizen  Health 

Research Group,  the Office  of Inspector  General,  the U.S. Public  Health  Service, and the 

American  Medical  Peer Review  Association. 

FSMB  Data 

We obtained  validated  disciplinary  data for the years 1985 through  1987 from  the FSMBs 

publication  entitled  the Federation  Bulletin.  (See endnote  22.)  These yearly  compilations 

consist  of State board  actions reported  to the FSMB  during  the year broken  down  by four 

major  categories:  revocations,  suspensions, probations,  and other  actions. 

As FSMB  validated  data was not available  for  1988, we examined  the unvalidated  data from 

the FSMBs  Disciplinary  Action  Reports  for the months  of January  1988-March  1990.  Since 

all the 1988 actions  were not reported  in 1988 we felt it necessary to capture  those 1988 

actions reported  late in the 1989 reports.  We reviewed  these 1988 actions  not to obtain  a 

precise count  of the number  of disciplinary  actions taken, but to gain a better understanding  of 

the types of actions  being  undertaken  in that year. 

We performed  a trend  analysis of the 1985- 1987 data.  This included  comparisons  of 

revocations,  suspensions,  probations,  and other actions, as well  as total  actions, from  year to 

year and over the 3-year period.  We also made comparisons  on the basis of annual physician 

renewal  fees, size of State medical  doctor  populations,  and regions.  Information  concerning 

renewal  fees and physician  populations  were taken from  the FSMB  and the AMA 

publications,  regional  groupings  were obtained  from  U.S. census data.  In analyzing  the data, 

statistical  measurements  were made to judge  the significance  of the data. 

B-l  Random  Sample  of States and Cases 
We obtained  a random  sample of States stratified  by the number  of practicing  doctors  and the 
number  of actions  taken by the medical  boards in those States in 1988.  To identify  the actions 
we used the 1988 disciplinary  action report  data as reported  to the FSMB  by individual  States 
(as discussed above). 
The stratified  sample consists of four  sample categories:  large States taking  many  actions, 
large States taking  few  actions,  small States taking  many actions,  and small States taking  few 
actions.  Within  each category,  we randomly  selected two  States, resulting  in a sample of eight 
States. 
Within  each of the selected States, we examined  all the disciplinary  actions  taken in  1988. 
This resulted  in  199 disciplinary  actions in the eight  States. 
For each case we obtained,  if available,  the referral  source (hospital,  insurance  company, 
consumer,  PRO,  state medical  society, etc.), initial  complaint  date, date action  went  into  effect, 
whether  the action  was stayed-pending  appeal-r  overturned  on appeal, the basis for the 
action,  and the setting in which  the event/events  occurred  (hospital  inpatient  or outpatient, 
private  office,  nursing  home, or other).  These data were analyzed  using cross-tabulation 
statistical  methodologies. 
Initially,  it was our intention  to draw  on the survey data to determine  how  long  it took  the 
States to process cases, from  time of initial  complaint  until  time of case disposition.  We also 
intended  to correlate  this processing  time variable  with  other variables,  such as basis for 
action,  type of action,  and referral  source.  Such an effort  appears to be achievable,  but did not 
succeed in our study. 
Our failure  in this regard is attributable  to inconsistencies  and gaps in the initial  complaint 
data provided  to us by the State boards.  The inconsistencies  were based on different 
definitions  of initial-that  is, of when  the board first received  a complaint.  In many 
instances,  boards have multiple  complaints/referrals  on a particular  physician  that have come 
in at different  times.  The first  such complaint/referral  is not necessarily  the one that trigger 
the case review. 
The gaps in initial  complaint  data reported  to us were attributable  to limitations  in the data 
readily  available  to the boards.  In some cases, information  could  not be garnered  from  the 
case records  held by the boards.  While  we cannot  be certain,  it appears that with  more 
investigation  such information  could  be attained. 
Site Visits and Other  Contacts 
Visits  were made to the four  States having  the largest numbers  of medical  doctors.  These 
included  California,  Texas,  Pennsylvania,  and New  York,  which  together  account  for 
approximately  37 percent  of the practicing  doctors  in the country.  Prior  to the site visits we 
B-2 
 conducted  pre-inspection  site visits to the Connecticut  and Maryland  boards.  During  the site 
visits it was our aim to talk with  the primary  people  involved  in the process of disciplining 
physicians  at each of the boards.  These visits included  numerous  discussions  with  executive 
directors,  chief  prosecuting  attorneys,  chief investigators,  and hearings  officers.  For one State 
we were allowed  to attend the investigative  hearing  committee  meeting  of the board. 
For each of the interviews  we followed  discussion  guides which  focused  on the issue areas of 
the study.  Numerous  questions  were asked concerning  the identification  of cases, the case 
review  process, case dispositions,  and impediments  in those areas.  Telephone  discussions 
were held with  representatives  of the Peer Review  Organizations  in the four  site States.  The 
questions  asked of PROS centered  on the relationship  of the board and the PRO in regard  to 
the referral  of cases between  them. 
Questions  were  also asked about the State or boards  efforts  in assuring  quality  medical 
practice.  Additional  contacts  were made with  other  State boards and other associated entities 
to discuss quality  assurance efforts.  Contacts  were also made with  Canadian  Provinces  to 
discuss their  efforts  in this area.  We will  address the extent and results of these efforts  in 
detail  in a subsequent report. 
B-3 
   .
APPENDIX  C 

ENDNOTES 

1.  See United  States Department  of Health  and Human  Services, Report  of the Task Force 
on Medical  Liability  and Malpractice,  August  1987; Office  of Inspector  General,  Medi
cal Malpractice:  A Monograph  of Current  Information,  May  1989; United  States 
General  Accounting  Office,  Medical  Malpractice:  No Agreement  on the Problems  or 
Solutions,  February  1986; and United  States General  Accounting  Office,  Medical 
Malpractice:  A Framework  for  Action,  May  1987. 
2.  See Medical  Economics,  April  18, 1988. The entire issue is devoted  to an examination 
of medical  malpractice. 
3.  See Office  of Inspector  General,  Medical  Licensure  and Discipline:  An Overview,  June 
1986. 
4.  See, for examples,  Kusserow,  Richard  P., Handley,  Elisabeth  A., and Yessian, Mark  R., 
An  Overview  of State Medical  Discipline,  The Journal  of the American  Medical  As
sociation,  Vol. 257, No. 6, February  13, 1987, pp. 820-824;  and Tighter  Reviews  of 
Doctors  Urged,  The New  York Times, June 6, 1986. 
5.  In  1985, at the time we began our prior  study of State medical  boards, there were 
widespread  concerns  about recent scandals involving  fraudulent  medical  credentials 
from  two  Caribbean  medical  schools and the administration  of the Federation  Licensing 
Exam  (FLEX)  used by the States.  In the ensuing  years, no such scandals have been 
reported  and both State medical  boards and hospitals  have improved  their credential 
verification  processes. 
6.  Throughout  the report,  in referring  to the State boards, we refer to the boards in the 50 
States and the District  of Columbia.  This  includes  data in the figures  as well  as in the 
text. 
7.  For further  explanation  of this development,  see Braeden,  Dale  G., Concentrating  on 
the Problem  Physician:  Perspectives  in Medical  Discipline-Part  II,  Federation  Bul
letin,  Federation  of State Medical  Boards,  Vol. 76, No. 3, March  1989, pp. 71-2. 
8.  Medical  Licensure  and Discipline,  p. 15. 
9.  The workshop  included  representatives  from  Alabama,  California,  Colorado,  Iowa,  Min
nesota, Missouri,  Ohio,  Rhode  Island,  West Virginia,  and Wisconsin.  See American  As
sociation  of Retired  Persons, Proceedings  of a Workshop  to Discuss  Information 
Exchange  between Peer Review  Organizations  and Medical  Licensure  Boards,  April 
1990. 
C-l  10.  See Jaco, Dan and Neikirk,  H.J., Exploring  the Relationships  between  Peer Review  Or
ganizations  and State Medical  Licensing  Agencies:  Results of a Survey of PROS, Mis
souri Patient  Care Review  Foundation,  Paper presented  at the Tri-Regional  PRO 
Conference,  St. Petersburg,  Florida,  June 16, 1989. 
11.  In the 4 case study States, the boards report  that they have been receiving  few referrals 
from  the PROS.  In our 8 sample survey States, only  1 of  199 disciplinary  actions taken 
in  1988 is reported  as originating  from  a PRO referral. 
12.  The Intergovernmental  Health  Policy  Project  of the George Washington  University 
provides  a regular  listing  of changes made in State laws involving  the oversight  and 
regulation  of physicians.  In its September  1988 report  it noted that the  overwhelming 
administrative  backlog  of cases to be investigated  and reported  remained  as one of the 
major  problems  plaguing  State medical  boards.  See Intergovernmental  Health  Policy 
Project,  Focus  on---State  Oversight  and Regulation  of Physicians,  No. 22, September 
1988, p. 7.  See also Weinstein,  Michael,  Medical  Boards  Police Profession  Amid 
Physician,  Public  Criticism,   Observer,  American  College  of Physicians,  Vol. 9, No.  11, 
December  1989, pp. 1,6-7. 
13.  From  June 30, 1988 to June 30, 1989, the number  of complaints  awaiting  assignment  to 
an investigator  declined  from  911 to 671.  From June 30, 1989 to December  15, 1989, 
the number  rose to 731. 
14.  In Pennsylvania,  the board reported  that in Fiscal Year 1988/89  the 45 1 physician  cases 
that were closed took  an average of 642 days to complete.  In New  York,  at a December 
11, 1989 hearing  on physician  discipline  before the Committee  on Health  and the Com
mittee on Higher  Education  of the Assembly  of the State of New  York,  a State health 
department  representative  indicated  that in  1988 the  average case from  the service of 
the charges to the final  service of the order  (p.91)  took  21 months.  That period  of 
time, he noted later in his testimony,  follows  an average 6 to 7 month  period  during 
which  an investigation  would  have been conducted  (p. 93). 
15.  It must be recognized  that some boards depend upon investigative  staff of an umbrella 
agency of which  they are a part.  In such instances individual  investigators  may have 
responsibilities  involving  a number  of different  kinds  of boards. 
16.  For the 1986 to 1989 period,  each of these State boards had responsibilities  for discipli
nary investigations,  hearings,  and decisions  and in each year reported  investigative  staff
ing data in FSMBs  Exchange.  They  are:  AL,  AR,  AZ,  CA,  CO, DC,  GA,  IA,  ID,  KS, 
KY,  LA,  MA,  ME,  MN,  MO,  MS, MT,  ND,  NH,  NM,  NV, OH,  OK,  OR, RI,  SC, SD, 
VT,  WV, and WY. 
17.  American  Medical  Association,  U.S. Medical  Licensure  Statistics  and Licensure  Re
quirements,  1986 and 1990 editions. 
c-2  18.  Zeitlin,  David  I., An  Update  on How-And  What- BMQA  is Doing,  Los Angeles 
County  Medical  Association  Physician,  March  6, 1989, p. 37. 
19.  Assembly  hearing,  December  11, 1989, p. 84. 
20.  Federation  of State Medical  Boards,  Exchange,  1989-1990. 
21.  To our knowledge,  there is not available  at this point  any inventory  that specifies  the 
number  of State boards bound  by the clear  and convincing  rule.  However,  FSMB  of
ficials  note that the majority  are so bound.  Our own  discussions  with  board officials  in 
many  States suggest the same. 
22.  The FSMB  has a thorough  process for checking  the validity  of each of the actions 
reported  in its disciplinary  action data bank and for eliminating  any actions  sub
sequently  overturned  on appeal.  The validated  counts for a calendar  year are regularly 
published  in the Federation  Bulletin. 
23.  Schwartz,  William  B. and Mendelson,  David  N., The  Role of Physician-Owned  In
surance Companies  in the Detection  and Deterrence  of Negligence,  The Journal  of the 
American  Medical  Association,  Vol. 262, No.  10, September  8, 1989, pp. 1342-1346. 
24.  See Hospital  Study Finds  Few Suits, Much  Negligence,  The  New  York Times, 
January  30, 1990.  See also, Hiatt,  Howard  H. et al, Special  Report:  A Study of Medi
cal Injury  and Medical  Malpractice,   New England  Journal  of Medicine,  Vol. 321, 
August  17, 1989, pp. 480-4. 
25.  Data are derived  from  FSMB  data on State board actions  as reported  in Federation  Bul
letin,  1985-1987  editions. 
26.  When  serious actions taken by boards in southern  States were compared  to those by 
boards in northern  States, the difference  was significant  at the .03 level.  When  all ac
tions taken by boards in medium-sized  States were compared  to those in States of all 
other  sizes, the difference  was significant  at the .003 level.  It must be recognized  that 
the disciplinary  activity  of particular  States during  the 1985-1987  period  may be quite 
different  than that in prior  or subsequent periods. 
27.  Relman,  Arnold  J., Professional  Regulation  and The State Medical  Boards,  New 
England  Journal  of Medicine,  Vol. 312, No.  12, p. 785. 
28.  From  one State to another, the Board  initiated  and other  agency  categories  may be 
defined  somewhat  differently  and thus the proportionate  share of referrals  given  to each 
may be somewhat  misleading.  For instance, for boards operating  under an umbrella 
agency or as part of a major  department  of State government,  cases initiated  by the agen
cy or department  may well  be categorized  as board  initiated.  For independent  boards 
not part of a larger entity,  board  initiated  cases are more narrowly  defined  as cases 
c-3  that the board investigators  actually  opened as a result of their  own  information  gather
ing efforts.  It is also important  to note that the increased  use of self-reporting  require
ments on license renewal  forms provides  boards with  increased  opportunities  to initiate 
cases. 
29. 	 For PRO cases that have resulted  in sanctions being  imposed  by the Office  of Inspector 
General  (OIG),  the medical  boards in our four case study  States have typically  followed 
up with  disciplinary  actions of their own.  For the 31 physicians  whom  OIG  sanctioned 
in  1988 in these four  States, we found  that since then 26 have been disciplined  by the 
State boards and that in  1 case action  is pending.  In two  additional  cases, the cases 
were opened  but no action  was taken.  Finally,  for the remaining  2 cases, the boards in
volved  had no record  of the OIG-sanctioned  physicians  actually  being  licensed  in their 
States. 
30. 	 As an illustration,  in New  York  State, from  January  1, 1989 through  October  31, 1989, 
other  State agencies accounted  for 21 percent  of all the cases referred  by the investiga
tive committee  to the hearing  committee,  but only  7.2 percent  of all complaints  during 
that time.  During  that same period,  the comparative  percentages  for out-of-State  agen
cies were  18 and 1, for hospitals-17  and 4, and for consumers-15  and 42. 
31. 	 For Fiscal  Year 1987-88,  the Administration  on Aging  (AOA)  reports  in its National 
Summary  of Ombudsman  Data  that there were  1,450 complaints  about physicians  ser
vices rendered  to patients  in long  term care facilities  and 2,074 complaints  about 
medications  provided  to patients.  These data were compiled  in 44 States.  Comparable 
data for Fiscal  Year 1986-87  were  1,122 complaints  about physicians  services and 
1,786 about medications.  These data were based on reports  from  43 States. 
32. 	 This report,  referred  to as the Little  Hoover  Commission  report,  noted the  absence of 
sanctions  for any physicians  working  in long-term  care facilities  who  may have been lar
gely responsible  for the decrement  in health status of a nursing  home resident.  It 
added: Physicians  who  share in the care of such person with  the nursing  home itself 
should  also be subject to an array of intermediate  sanctions which  are designed,  in part, 
to show  the seriousness with  which  the State regards poor  quality  medical  care provided 
to nursing  home residents.  (pp. 40-l).  See Commission  on California  State Govem
ment Organization  and Economy,  The Medical  Care of Californias  Nursing  Home Resi
dents:  Inadequate  Care, Inadequate  Oversight,  February  1989. 
33. 	 Following  is a listing  of the different  types of sanction  authorities  held by the boards 
and, in each case, the number  of boards having  the authority  to impose  that sanction. 
(As in the report  as a whole,  the universe  being  addressed is the 50 States and the Dis
trict  of Columbia):  Revocations-5  1; summary  suspensions-45;  suspensions-5 1; proba-
tion-49;  license  limitation-5  1; collection  of fine-28;  private  reprimand-30;  letter/decree 
of censure-36;  letter of concern-32;  and collection  of cost of proceedings-17.  FSMB, 
Exchange,  1989-90. 
c-4  34.  According  to FSMBs  Exchange,  the number  of nonphysician  members on the boards 
increased  from  90 in 1986 to 112 in 1989.  The proportion  of board membership  ac
counted  for by nonphysician  members, however,  remains  relatively  low.  In  1989, such 
members  accounted  for 20 percent  or less of total board membership  for 66 percent  of 
the boards;  this compares  with  73 percent  in 1986. 
35.  The White  House, Memorandum  for  the Heads of Executive Departments  and Agencies. 
Subject:  Federalism  Executive  Order,  February  16, 1990. 
36.  Medical  Licensure  and Discipline,  p. 20. 
37.  Report  of the Task Force  on Medical  Liability  ana Malpractice,  p. 23. 
38.  The American  Association  of Retired  Persons, through  its Citizen  Advocacy  Center 
(CAC),  has been devoting  increased  attention  to evaluating  the performance  of medical 
and other  State boards.  The CAC  serves as a communication  link  and backup  support 
for public  members of health care decision  making  bodies, including  professional  licens
ing boards and Peer Review  Organizations.  See Citizen  Advocacy  News,  Vol.  1, No. 4, 
Fourth  Quarter  1989.  See also, American  Association  of Retired  Persons, EfSective 
Physician  Oversight:  Prescription  for  Medical  Licensing  Board  Reform,  1987. 
39.  See Testimony  of James 0.  Mason,  Assistant  Secretary for Health,  Department  of 
Health  and Human  Services, before the Subcommittee  on Health  and the Environment, 
House  Committee  on Energy  and Commerce,  June 16,1989. 
40.  See Report  of the Task Force  on Medical  Liability  ana Malpractice,  pp. 96-7. 
41.  See Medical  Licensure  and Discipline,  p. 18. 
42.  The scope of work  changes call for the PROS to specify  in an Interaction  Plan  their 
relationships  with  the boards as well  as with  local  and State hospital  associations,  medi
cal societies,  and specialty  bodies.  Further,  they also call for the PROS to consider 
sharing  information  with  a board when  a physician  in any one quarter  has reached a 
weighted  score of 25 in the PROS system for ranking  the severity  of quality  of care 
problems. 
43.  The proposed  change appears in the Federal  Register,  Vol. 53, No. 51, March  16, 1988. 
It is as follows:  A  PRO may without  a request, and must, upon request, disclose  to 
State and Federal  licensing  bodies responsible  for the professional  licensure  of prac
titioners  or providers  and to national  accreditation  bodies acting  in accordance  with  sec
tion  1885 of the Act,  confidential  information  relating  to a specific  case (or) a possible 
pattern  of substandard  care.  Confidential  information,  including  PRO medical  necessity 
and quality  of care deterrninations  must be disclosed  by the PRO but only  to the extent 
that it is required  by an agency to carry out a function  within  the jurisdiction  of the agen
cv in accordance  with  Federal or State law. 
c-5  44. 	 This point  was strongly  endorsed  by the PROS participating  in the AARP  conference 
noted in endnote  9. 
45. 	 In this regard,  the Office  of Inspector  General,  once it imposes  a sanction  on the basis of 
a PRO referral,  should  also make detailed  case information  available  to the medical 
board.  The necessary regulatory  or statutory  changes to allow  for such sharing  should 
be addressed at the same time that such changes are being  addressed with  respect to 
PRO  sharing  of data. 
46.  See Title  42 Code of Federal  Regulations,  section 43 1.302. 
47. 	 The Pennsylvania  Department  of Public  Welfare  has been involved  with  a recent case of 
this kind.  Because of HHS  interpretations  concerning  the purposes  directly  connected 
with  the administration  of the plan,  it has not been able to share with  the State medical 
board its investigative  files on a provider  who  it has terminated  from  the Medicaid  pro
gr=n* 
48. 	 See Medicare  Part B Carrier  Manual,  Section  10040.  See also United  States General  Ac
counting  Office,  Medicare  and Medicaid:  More  Information  Exchange  Could  Improve 
Detection  of Substandard  Care, March  1990.  This  study found  that there was minimal 
exchange  of case information  among Medicare  carriers,  State Medicaid  agencies, and 
PROS. 
49. 	 See Office  of Inspector  General, Resident Abuse in Nursing  Homes:  Resolving  Physical 
Abuse Complaints,  November  1989. 
C-6 
 APPENDIX  B 

METHODOLOGICAL  NOTES 

Literature  and Document  Review 

We reviewed  the 1986 through  1989-90  editions  of the FSMBs  Exchange,  which  include 

up-to-date  information  on the State boards.  The Exchange  provided  us with  data on the 

boards  structure,  operations,  review,  and disciplinary  functions.  This included  information 

regarding  statutory  reforms,  budget  allocations,  board composition,  disciplinary  grounds  and 

other  basic board facts. 

In addition,  we reviewed  the annual reports  of most State medical  boards and numerous 

publications  from  entities  that were in some way  associated with  or interested  in State medical 

boards and their disciplinary  processes.  Some of these entities  included  the American 

Association  of Retired  Persons, the American  Medical  Association,  the Public  Citizen  Health 

Research Group,  the Office  of Inspector  General,  the U.S. Public  Health  Service,  and the 

American  Medical  Peer Review  Association. 

FSMB  Data 

We obtained  validated  disciplinary  data for the years 1985 through  1987 from  the FSMBs 

publication  entitled  the Federation  Bulletin.  (See endnote  22.)  These yearly  compilations 

consist  of State board  actions reported  to the FSMB  during  the year broken  down  by four 

major  categories:  revocations,  suspensions, probations,  and other actions. 

As FSMB  validated  data was not available  for  1988, we examined  the unvalidated  data from 

the FSMBs  Disciplinary  Action  Reports  for the months  of January  1988-March  1990.  Since 

all the 1988 actions  were not reported  in  1988 we felt it necessary to capture  those 1988 

actions reported  late in the 1989 reports.  We reviewed  these 1988 actions  not to obtain  a 

precise count  of the number  of disciplinary  actions taken, but to gain a better understanding  of 

the types of actions  being  undertaken  in that year. 

We performed  a trend  analysis of the 1985-1987  data.  This included  comparisons  of 

revocations,  suspensions,  probations,  and other actions,  as well  as total actions,  from  year to 

year and over the 3-year period.  We also made comparisons  on the basis of annual physician 

renewal  fees, size of State medical  doctor  populations,  and regions.  Information  concerning 

renewal  fees and physician  populations  were taken from  the FSMB  and the AMA 

publications,  regional  groupings  were obtained  from  U.S. census data.  In analyzing  the data, 

statistical  measurements  were made to judge  the significance  of the data. 

B-l  Random  Sample  of States and Cases 
We obtained  a random  sample of States stratified  by the number  of practicing  doctors  and the 
number  of actions  taken by the medical  boards in those States in  1988.  To identify  the actions 
we used the 1988 disciplinary  action report  data as reported  to the FSMB  by individual  States 
(as discussed  above). 
The stratified  sample consists of four  sample categories:  large States taking  many  actions, 
large States taking  few  actions,  small States taking  many actions,  and small States taking  few 
actions.  Within  each category,  we randomly  selected two  States, resulting  in a sample of eight 
States. 
Within  each of the selected States, we examined  all the disciplinary  actions  taken in  1988. 
This resulted  in  199 disciplinary  actions in the eight  States. 
For each case we obtained,  if available,  the referral  source (hospital,  insurance  company, 
consumer,  PRO,  state medical  society, etc.), initial  complaint  date, date action  went  into effect, 
whether  the action  was stayed-pending  appeal--or  overturned  on appeal, the basis for the 
action,  and the setting in which  the event/events  occurred  (hospital  inpatient  or outpatient, 
private  office,  nursing  home, or other).  These data were analyzed  using cross-tabulation 
statistical  methodologies. 
Initially,  it was our intention  to draw  on the survey data to determine  how  long  it took the 
States to process cases, from  time of initial  complaint  until  time of case disposition.  We also 
intended  to correlate  this processing  time variable  with  other variables,  such as basis for 
action,  type of action,  and referral  source.  Such an effort  appears to be achievable,  but did not 
succeed in our study. 
Our failure  in this regard is attributable  to inconsistencies  and gaps in the initial  complaint 
data provided  to us by the State boards.  The inconsistencies  were based on different 
definitions  of initial-that  is, of when  the board first received  a complaint.  In many 
instances,  boards have multiple  complaints/referrals  on a particular  physician  that have come 
in at different  times.  The first  such complaint/referral  is not necessarily  the one that trigger 
the case review. 
The gaps in initial  complaint  data reported  to us were attributable  to limitations  in the data 
readily  available  to the boards.  In some cases, information  could  not be garnered  from  the 
case records  held by the boards.  While  we cannot  be certain,  it appears that with  more 
investigation  such information  could  be attained. 
Site Visits and Other  Contacts 
Visits  were made to the four  States having  the largest numbers  of medical  doctors.  These 
included  California,  Texas,  Pennsylvania,  and New  York,  which  together  account  for 
approximately  37 percent  of the practicing  doctors  in the country.  Prior  to the site visits we 
B-2 
 conducted  pre-inspection  site visits to the Connecticut  and Maryland  boards.  During  the site 
visits it was our aim to talk with  the primary  people  involved  in the process of disciplining 
physicians  at each of the boards.  These visits included  numerous  discussions  with  executive 
directors,  chief  prosecuting  attorneys,  chief investigators,  and hearings  officers.  For one State 
we were  allowed  to attend the investigative  hearing  committee  meeting  of the board. 
For each of the interviews  we followed  discussion  guides which  focused  on the issue areas of 
the study.  Numerous  questions  were asked concerning  the identification  of cases, the case 
review  process, case dispositions,  and impediments  in those areas.  Telephone  discussions 
were held with  representatives  of the Peer Review  Organizations  in the four  site States.  The 
questions  asked of PROS centered on the relationship  of the board and the PRO in regard  to 
the referral  of cases between  them. 
Questions  were also asked about the State or boards  efforts  in assuring  quality  medical 
practice.  Additional  contacts  were made with  other  State boards and other associated entities 
to discuss quality  assurance efforts.  Contacts  were also made with  Canadian  Provinces  to 
discuss their  efforts  in this area.  We will  address the extent and results of these efforts  in 
detail  in a subsequent report. 
B-3 
 APPENDIX  C 

ENDNOTES 

1.  See United  States Department  of Health  and Human  Services, Report  of the Task Force 
on Medical  Liability  and Malpractice,  August  1987; Office  of Inspector  General,  Medi
cal Malpractice.*  A Monograph  of Current  Information,  May  1989; United  States 
General  Accounting  Office,  Medical  Malpractice:  No Agreement  on the Problems  or 
Solutions,  February  1986; and United  States General  Accounting  Office,  Medical 
Malpractice:  A Framework  for  Action,  May  1987. 
2.  See Medical  Economics,  April  18, 1988. The entire issue is devoted  to an examination 
of medical  malpractice. 
3.  See Office  of Inspector  General,  Medical  Licensure  and Discipline:  An Overview,  June 
1986. 
4.  See, for examples,  Kusserow,  Richard  P., Handley,  Elisabeth  A., and Yessian, Mark  R., 
An  Overview  of State Medical  Discipline,  The Journal  of the American  Medical  As
sociation,  Vol. 257, No. 6, February  13, 1987, pp. 820-824;  and Tighter  Reviews  of 
Doctors  Urged,  The New  York Times, June 6, 1986. 
5.  In  1985, at the time we began our prior  study of State medical  boards, there were 
widespread  concerns  about recent scandals involving  fraudulent  medical  credentials 
from  two  Caribbean  medical  schools and the administration  of the Federation  Licensing 
Exam  (FLEX)  used by the States.  In the ensuing  years, no such scandals have been 
reported  and both State medical  boards and hospitals  have improved  their credential 
verification  processes. 
6.  Throughout  the report,  in referring  to the State boards, we refer to the boards in the 50 
States and the District  of Columbia.  This includes  data in the figures  as well  as in the 
text. 
7.  For further  explanation  of this development,  see Braeden,  Dale  G., Concentrating  on 
the Problem  Physician:  Perspectives  in Medical  Discipline-Part  II,  Federation  Bul
letin,  Federation  of State Medical  Boards,  Vol. 76, No.  3, March  1989, pp. 71-2. 
8.  Medical  Licensure  and Discipline,  p. 15. 
9.  The workshop  included  representatives  from  Alabama,  California,  Colorado,  Iowa,  Min
nesota, Missouri,  Ohio,  Rhode Island,  West Virginia,  and Wisconsin.  See American  As
sociation  of Retired  Persons, Proceedings  of a Workshop  to Discuss  Information 
Exchange  between Peer Review  Organizations  and Medical  Licensure  Boards,  April 
1990. 
C-l  10. 	 See Jaco, Dan and Neikirk,  H.J., Exploring  the Relationships  between  Peer Review  Or
ganizations  and State Medical  Licensing  Agencies:  Results of a Survey  of PROS, Mis
souri Patient  Care Review  Foundation,  Paper presented  at the Tri-Regional  PRO 
Conference,  St. Petersburg,  Florida,  June 16, 1989. 
11. 	 In the 4 case study States, the boards report  that they have been receiving  few referrals 
from  the PROS.  In our 8 sample survey States, only  1 of 199 disciplinary  actions  taken 
in  1988 is reported  as originating  from  a PRO referral. 
12. 	 The Intergovernmental  Health  Policy  Project  of the George Washington  University 
provides  a regular  listing  of changes made in State laws involving  the oversight  and 
regulation  of physicians.  In its September  1988 report  it noted that the  overwhelming 
administrative  backlog  of cases to be investigated  and reported  remained  as one of the 
major  problems  plaguing  State medical  boards.  See Intergovernmental  Health  Policy 
Project,  Focus  on-State  Oversight  and Regulation  of Physicians,  No. 22, September 
1988, p. 7.  See also Weinstein,  Michael,  Medical  Boards  Police  Profession  Amid 
Physician,  Public  Criticism,  Observer,  American  College  of Physicians,  Vol. 9, No.  11, 
December  1989, pp.  1,6-7. 
13. 	 From  June 30, 1988 to June 30, .1989, the number  of complaints  awaiting  assignment  to 
an investigator  declined  from  911 to 671.  From  June 30, 1989 to December  15, 1989, 
the number  rose to 73 1. 
14. 	 In Pennsylvania,  the board reported  that in Fiscal  Year 1988/89  the 45 1 physician  cases 
that were closed took  an average of 642 days to complete.  In New  York,  at a December 
11, 1989 hearing  on physician  discipline  before the Committee  on Health  and the Com
mittee on Higher  Education  of the Assembly  of the State of New  York,  a State health 
department  representative  indicated  that in 1988 the  average case from  the service of 
the charges to the final  service of the order  (p.91)  took 21 months.  That period  of 
time, he noted later in his testimony,  follows  an average 6 to 7 month  period  during 
which  an investigation  would  have been conducted  (p. 93). 
15. 	 It must be recognized  that some boards depend upon investigative  staff of an umbrella 
agency of which  they are a part.  In such instances individual  investigators  may have 
responsibilities  involving  a number  of different  kinds  of boards. 
16. 	 For the 1986 to 1989 period,  each of these State boards had responsibilities  for discipli
nary investigations,  hearings,  and decisions  and in each year reported  investigative  staff
ing data in FSMBs  Exchange.  They  are:  AL,  AR,  AZ,  CA,  CO, DC,  GA,  IA,  ID,  KS, 
KY,  LA,  MA,  ME,  MN,  MO,  MS, MT,  ND,  NH,  NM,  NV, OH,  OK,  OR, RI,  SC, SD, 
VT, WV, and WY. 
17. 	 American  Medical  Association,  U.S. Medical  Licensure  Statistics  and Licensure  Re
quirements,  1986 and 1990 editions. 
c-2  18.  Zeitlin,  David  I., An  Update  on How-And  What- BMQA  is Doing,  Los Angeles 
County  Medical  Association  Physician,  March  6, 1989, p. 37. 
19.  Assembly  hearing,  December  11, 1989, p. 84. 
20.  Federation  of State Medical  Boards,  Exchange,  1989-1990. 
21.  To our knowledge,  there is not available  at this point  any inventory  that specifies  the 
number  of State boards bound  by the clear  and convincing  rule.  However,  FSMB  of
ficials  note that the majority  are so bound.  Our own  discussions  with  board officials  in 
many  States suggest the same. 
22.  The FSMB  has a thorough  process for checking  the validity  of each of the actions 
reported  in its disciplinary  action  data bank and for eliminating  any actions  sub
sequently  overturned  on appeal.  The validated  counts  for a calendar  year are regularly 
published  in the Federation  Bulletin. 
23.  Schwartz,  William  B. and Mendelson,  David  N., The  Role of Physician-Owned  In
surance Companies  in the Detection  and Deterrence  of Negligence,  The Journal  of the 
American  Medical  Association,  Vol. 262, No.  10, September  8, 1989, pp. 1342-1346. 
24.  See Hospital  Study Finds Few  Suits, Much  Negligence,  The  New  York Times, 
January  30, 1990.  See also, Hiatt,  Howard  H. et al, Special  Report:  A Study  of Medi
cal Injury  and Medical  Malpractice,  New England  Journal  of Medicine,  Vol. 321, 
August  17, 1989, pp. 480-4. 
25.  Data are derived  from  FSMB  data on State board actions  as reported  in Federation  Bul
letin,  1985- 1987 editions. 
26.  When  serious actions taken by boards in southern  States were compared  to those by 
boards in northern  States, the difference  was significant  at the .03 level.  When  all ac
tions taken by boards in medium-sized  States were compared  to those in States of all 
other  sizes, the difference  was significant  at the .003 level.  It must be recognized  that 
the disciplinary  activity  of particular  States during  the 19851987  period  may be quite 
different  than that in prior  or subsequent periods. 
27.  Relman,  Arnold  J., Professional  Regulation  and The State Medical  Boards,  New 
England  Journal  of Medicine,  Vol. 312, No.  12, p. 785. 
28.  From  one State to another, the Board  initiated  and other  agency  categories  may be 
defined  somewhat  differently  and thus the proportionate  share of referrals  given  to each 
may be somewhat  misleading.  For instance, for boards operating  under an umbrella 
agency  or as part of a major  department  of State government,  cases initiated  by the agen
cy or department  may well  be categorized  as board  initiated.  For independent  boards 
not part of a larger entity,  board  initiated  cases are more narrowly  defined  as cases 
c-3  that the board investigators  actually  opened as a result  of their own  information  gather
ing efforts.  It is also important  to note that the increased  use of self-reporting  require
ments on license renewal  forms provides  boards with  increased  opportunities  to initiate 
cases. 
29. 	 For PRO cases that have resulted  in sanctions being  imposed  by the Office  of Inspector 
General  (OIG),  the medical  boards in our four case study States have typically  followed 
up with  disciplinary  actions of their own.  For the 31 physicians  whom  OIG  sanctioned 
in 1988 in these four  States, we found  that since then 26 have been disciplined  by the 
State boards and that in  1 case action  is pending.  In two  additional  cases, the cases 
were opened  but no action  was taken.  Finally,  for the remaining  2 cases, the boards in
volved  had no record  of the OIG-sanctioned  physicians  actually  being licensed  in their 
States. 
30. 	 As an illustration,  in New  York  State, from  January  1, 1989 through  October  31, 1989, 
other  State agencies accounted  for 21 percent  of all the cases referred  by the investiga
tive committee  to the hearing  committee,  but only  7.2 percent  of all complaints  during 
that time.  During  that same period,  the comparative  percentages  for out-of-State  agen
cies were  18 and 1, for hospitals-17  and 4, and for consumers-15  and 42. 
31. 	 For Fiscal  Year 1987-88,  the Administration  on Aging  (AOA)  reports  in its National 
Summary  of Ombudsman  Data  that there were  1,450 complaints  about physicians  ser
vices rendered  to patients  in long  term care facilities  and 2,074  complaints  about 
medications  provided  to patients.  These data were compiled  in 44 States.  Comparable 
data for Fiscal  Year 1986-87  were  1,122 complaints  about physicians  services and 
1,786 about medications.  These data were based on reports  from  43 States. 
32. 	 This report,  referred  to as the Little  Hoover  Commission  report,  noted the  absence of 
sanctions  for any physicians  working  in long-term  care facilities  who  may have been lar
gely responsible  for the decrement  in health status of a nursing  home resident.  It 
added: Physicians  who  share in the care of such person with  the nursing  home itself 
should  also be subject to an array of intermediate  sanctions  which  are designed,  in part, 
to show  the seriousness with  which  the State regards poor  quality  medical  care provided 
to nursing  home residents.  (pp. 40-l).  See Commission  on California  State Govem
ment Organization  and Economy,  The Medical  Care of Californias  Nursing  Home Resi
dents:  Inadequate  Care, Inadequate  Oversight,  February  1989. 
33. 	 Following  is a listing  of the different  types of sanction  authorities  held by the boards 
and, in each case, the number  of boards having  the authority  to impose  that sanction. 
(As in the report  as a whole,  the universe  being  addressed is the 50 States and the Dis
trict  of Columbia):  Revocations-5  1; summary  suspensions-45;  suspensions-5 1; proba-
tion-49;  license  limitation-5  1; collection  of fine-28;  private  reprimand-30;  letter/decree 
of censure-36;  letter of concern-32;  and collection  of cost of proceedings-17.  FSMB, 
Exchange,  1989-90. 
c-4  34.  According  to FSMBs  Exchange,  the number  of nonphysician  members  on the boards 
increased  from  90 in 1986 to 112 in 1989.  The proportion  of board membership  ac
counted  for  by nonphysician  members,  however,  remains relatively  low.  In  1989, such 
members  accounted  for 20 percent  or less of total board membership  for 66 percent  of 
the boards;  this compares  with  73 percent  in  1986. 
35.  The White  House, Memorandum  for  the Heads of Executive Departments  and Agencies. 
Subject:  Federalism  Executive  Order,  February  16,199O. 
36.  Medical  Licensure  and Discipline,  p. 20. 
37.  Report  of the Task Force  on Medical  Liability  and Malpractice,  p. 23. 
38.  The American  Association  of Retired  Persons, through  its Citizen  Advocacy  Center 
(CAC),  has been devoting  increased  attention  to evaluating  the performance  of medical 
and other  State boards.  The CAC  serves as a communication  link  and backup  support 
for public  members of health care decision  making  bodies, including  professional  licens
ing boards and Peer Review  Organizations.  See Citizen  Advocacy  News,  Vol.  1, No. 4, 
Fourth  Quarter  1989.  See also, American  Association  of Retired  Persons, EfSective 
Physician  Oversight:  Prescription  for  Medical  Licensing  Board  Reform,  1987. 
39.  See Testimony  of James 0.  Mason,  Assistant  Secretary  for Health,  Department  of 
Health  and Human  Services, before  the Subcommittee  on Health  and the Environment, 
House  Committee  on Energy  and Commerce,  June 16, 1989. 
40.  See Report  of the Task Force  on Medical  Liability  and Malpractice,  pp. 96-7. 
41.  See Medical  Licensure  and Discipline,  p. 18. 
42.  The scope of work  changes call for the PROS to specify  in an Interaction  Plan  their 
relationships  with  the boards as well  as with  local  and State hospital  associations,  medi
cal societies,  and specialty  bodies.  Further,  they also call for the PROS to consider 
sharing  information  with  a board when  a physician  in any one quarter  has reached a 
weighted  score of 25 in the PROS system for ranking  the severity  of quality  of care 
problems. 
43.  The proposed  change appears in the Federal  Register,  Vol. 53, No. 51, March  16, 1988. 
It is as follows:  A  PRO may without  a request, and must, upon request, disclose  to 
State and Federal  licensing  bodies responsible  for the professional  licensure  of prac
titioners  or providers  and to national  accreditation  bodies  acting  in accordance  with  sec
tion  1885 of the Act,  confidential  information  relating  to a specific  case (or) a possible 
pattern  of substandard  care.  Confidential  information,  including  PRO medical  necessity 
and quality  of care determinations  must be disclosed  by the PRO  but only  to the extent 
that it is required  by an agency to carry out a function  within  the jurisdiction  of the agen
cy in accordance  with  Federal or State law. 
c-5  44. 	 This point  was strongly  endorsed  by the PROS participating  in the AARP  conference 
noted in endnote  9. 
45. 	 In this regard,  the Office  of Inspector  General,  once it imposes  a sanction  on the basis of 
a PRO referral,  should  also make detailed  case information  available  to the medical 
board.  The necessary regulatory  or statutory  changes to allow  for such sharing  should 
be addressed at the same time that such changes are being  addressed with  respect to 
PRO  sharing  of data. 
46.  See Title  42 Code of Federal  Regulations,  section 431.302. 
47. 	 The Pennsylvania  Department  of Public  Welfare has been involved  with  a recent case of 
this kind.  Because of HHS  interpretations  concerning  the purposes  directly  connected 
with  the administration  of the plan,  it has not been able to share with  the State medical 
board its investigative  files on a provider  who  it has terminated  from  the Medicaid  pro-
gram. 
48. 	 See Medicare  Part B Carrier  Manual,  Section  10040.  See also United  States General  Ac
counting  Office,  Medicare  and Medicaid:  More  Information  Exchange  Could  Improve 
Detection  of Substandard  Care, March  1990.  This  study found  that there was minimal 
exchange  of case information  among Medicare  carriers,  State Medicaid  agencies, and 
PROS. 
49. 	 See Office  of Inspector  General,  Resident Abuse in Nursing  Homes:  Resolving  Physical 
Abuse Complaints,  November  1989. 
C-6 
 ,  ,