STATE MEDICAL BOARDS AND 

MEDICAL DISCIPLINE 

Richard P. Kusserow 

INSPECTOR GENERAL 

OEI-01-89-00560 AUGUST 1990 
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 physician’s 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 

demonstration funding concerning the use of practice 

investigative efforts in quality of care cases. 

. . . 111 

and Research, should provide 

standards and guidelines to guide 
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 National 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 casespecific 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. l data not available 

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 Req’d 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. l data not available 

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 board’s involvement 

to only certain parts of the review process. In California, for instance, the board conducts the 

investigation, but the Attorney General’s 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 General’s 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 don’t work for us. We’re 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: 

“(It’s 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 

disciplinary action taken by another State and a new hearing must be held. 28 

. 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 couldn’t 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 physicianowned 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 

from 2.6 in one State to 32.2 in another. The median rate for the 3-year period was 14.3.ii 

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 Board’s Exchange, 

19851987 editions; American 

Medical Association’s U.S. 

Medical Licensure Statistics & Hlgh Medium Low 

Licesure Requirements. Actions by Fee 

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, unlawful 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 FSMB’s 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 agencies, 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 

States (figure 6). 28y 

Figure 6 

Disciplinary Actions, by Referral 

Source, Sample States, 1988 

Other State 

Board 

Hospi tal .ZTZ? Board 

9% , Initiated 

Health Care 

Prof 

9% 

Don’t Know 11KXA\\V Other 

9% 11% 

Other 

Agency Physician 

8% Public 

wCourt 5% 

FSMB 8% 8% Report

6% 

Source: Office of 

Inspector General. 

7

With 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 occurred in a physician’s 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 physician’s 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 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. 

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 physician’s 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 physician’s 

part are voluntary, but if he/she is again brought to the board’s attention, board officials report 

they are likely to respond in a less understanding manner. 

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 

i 
seldom expressed in terms of ratios or percentages that facilitate comparisons of a board’s 

own performance over time and/or of one board’s 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 we’ve 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 nation’s 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 nation’s 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 

physician’s 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 Department’s 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 nation’s tradition of federalism and the framework of the President’s 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 board’s 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 “do’s and don’t’s” 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 Agency’s 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 pa”sf”’ “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 provider’s 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, HCFA’s 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 PRO’s 

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 physician’s 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 

physician’s 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 

From Assistant Secretary for Health 

Subject Office of Inspector General Draft Report, "State Medical Boards 

and Medical Discipline," OEI-0#1-89-00560 

To Inspector General, OS 

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 

3tA. 191990 Memorandum 

n 

Date 

Gail R. Wilensky, Ph.D. LITJ 

From Administrator 

Subject OIG Draft Report - State Medical Boards and Medical Discipline 

(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 PRO’s 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 

0 The report reflects our ongoing problem with the State medical boards. As 

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. 

0 The report states in endnote 42 that HCFA requires PROS to “consider” 

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 PRO’s 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 PRO’s 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 

0 On Page 23, last paragraph, 2nd sentence,the last word “PROS” 

should be changed to “medical boards.” 

0 On page B-6, endnote 46, it should read: “See Title 42 Code of Federal 

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 40’s 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 

SURNAME OFFICE I SURNhwf DATE - - - - / I l

File 

‘\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 HCF’A suspends 8 

practitioner from participation ln the Medicare program bemuse the practttiontr has been convicted of a criminal offense related to his participation 

in tht‘titlc 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 carrier’s 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 board’s 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 HCFA’s 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 HCFA’s 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 AoA’s 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 +-

I\l.L.lll J. 

r

. DEPARTMEKTOFHEALTHbHUMANSERVlCES Otfce of the Secretark : 

i 

5 -4 c *-‘dIC 7 & 

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 FSMB’s 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, 

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. 

I 
. 

OIG RESPONSE TO ASPE COMMENTS 

Below we respond to ASPE’s 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 HCFA’s 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 PRO’s 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. 
. 

THE PEDERATION OF 

STATE MED1CA.L %MRDS 

OF THE UNKTED STATES, 1NC 

Km WErnRN PLACE 

SUITE 707 

2: wRrH* -s 

817 73~844s 

Tux 117 738.6629 

OFFICERS 

MeSlDt3NT 

WNN6TH C YOHN, MD 

IS0 N. RANDOLPH AVBNUB 

BUPAULA. AL 3017 

PRESIDENT ELECT 

RARB4RA 9 SCtiNEIDMAN. HD 

140 LAKESIDE AYE, MO 

SEATTL6. WA WI22 

VICE PRESIDENT 

MELVIN E ~ICE.L MD 

2211 PARX AVIINIJE SOUTH 

MINNEAPOLIS. MN 3%4&I 

TREASURER 

SUSAN H SPAULDINO 

P.0 BOX 112 

MoNT?e.LIBR. VT o%oI 

DIRECTORS 

SUSAN P DEHRPNS. MD 

IDDS HL’EBBE PKWY 

nELoIT, WI ml1 

BTEPHEH P. KELLW, JD 

1600 T.C.F. TOWER 

MINNMPOLIC, MN 0402 

EARLE M. WBRNOIS. MD 

lbts CMPUS tn. KLAHATH MLLS. OR WIaOl 

WORM02 IASSEKW, MD 

001 RlDOE ST. AC’S 

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 

July 31, 1990 

Richard P. Kusscrow 

Inspector General 

Health and Human Services 

330 Independence Ave., SW 

Washington, DC 20201 

Dear Mr Kusserow 

The Federation of State Medical Boards of the United States appreciates 

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

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

As you know, I presented the Federation’s views on the report on June 

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

Business Opportunities and Energy of the House Committee on Small 

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

of that testimony to this letter. Please consider it the Federation’s formal 

response to your request for comment, 

Sincerely 

James R. Winn, MD 

Executive Vice President 

JRW:lm . 

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 Federation’s 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 

world’s 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 dayto-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 IG’s 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.lly, on 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 licensee’s 

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, PRO’s 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 IG’s 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 

IG’s 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 Federation’s 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 Federation’s 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 PRO’s 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 IG’s 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 Federation’s 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 IG’s 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 isn’t. 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 IG’s report is a valuable signpost along the way. 

Thank you. 

11 
. . 

OIG RESPONSE TO FSMB COMMENTS 

We appreciate FSMB’s 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, 

n Rother k+ 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 6versiaht: _----- Prescriotion ---~ ---- ---~- for 

-~- Medical ---~~-~-~ A Licensing Board Reform; Bob Felln neth’s Code Blue Emersencv report: the 

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 $200-$300 or more 

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 
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-- 

. 

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 of its state 

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 M obligation of public entities such as boards to 

develop yardsticks that CM be used as guides not proof 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, CM and should develop specific quantitative 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. for a moment at least, how do we go about doing Ifit? you CM buy that 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 M annual report, including even 

disciplinary actions by type of referral source. I think that kind 

of data CM be enormously helpful. 

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 

PRO, or some successor federally funded entity? Or, will It be 

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. 

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 

If 

will stimulate 

broader discussion of performance indicators. 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 

I 
OIG RESPONSE TO AARP COMMENTS 

We are pleased by the AARP’s 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 AoA’s response to 

our recommendation on the Ombudsman Program. We find it encouraging and expect that 

AoA’s 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 

Kusserow'a accompanying Congressional unvarniohed facts about our'nation'e 

medical discipline. 

We disagree, however, with the 

major benefit of good medical quality medical malpractice insurance rator. 

Inspector General Richard 

testimony, lay out the . appallingly lax mystem of 

report's implication that the 

assurance is.to roduco 

. The true aoal of@ who SW& tOadat- tha v 

ga I svaam mwt be to reduce mew 

A of thoum.nW of deathsimalpractice causFte each y,ar, 

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 informationsharing. 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, l o that fewer of their sanction8 will be 

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. 

Far too many doctors continue to prescribe controlled 
substances after their DEA licenrac have expired or been 

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 

Act developed by the Federation of State Medical Board@.EZ 

2.Reetructure the board. States should sever any remaining 

formal links between state licensing board6 and state 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 h not providing assistance 

to physicians, but protecting the public’s health. 

3~Inform the public. Each state's Open Records L,w and it6 

Medical Practice Act should rtate that all formal 

di6Ciplinary action6 against licanlied professionals are 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 the first state. 

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 be permitted to return. 

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 to those who 

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 of privl,leges. 

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 doctor’s 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 visit doctors who have been disciplined to ansura 

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 proteat othore1 

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 Citizen’s 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 

Richard P. Kusserow 

Office of inspector General 

Room 5350 

Cohen Building 330 Independence Avenue, SW 

Washington, D.C. 20201 

June 11, 1990 

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 report’s 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 physician’s reputation. The 

severity of this unjust mark against the physician’s 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 -YThe 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 report’s

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 report’s 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 board’s 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 AMA’s 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 AMA’s 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 FSMB’s 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 FSMB’s 

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 FSMB’s 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 board’s 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. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

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, Medical 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. 

See Medical Economics, April 18, 1988. The entire issue is devoted to an examination 

of medical malpractice. 

See Office of Inspector General, Medical Licensure and Discipline: An Overview, June 

1986. 

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 Association, Vol. 257, No. 6, February 13, 1987, pp. 820-824; and “Tighter Reviews of 

Doctors Urged,” The New York Times, June 6, 1986. 

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. 

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. 

For further explanation of this development, see Braeden, Dale G., “Concentrating on 

the Problem Physician: Perspectives in Medical Discipline-Part II,” Federation Bulletin, Federation of State Medical Boards, Vol. 76, No. 3, March 1989, pp. 71-2. 

Medical Licensure and Discipline, p. 15. 

The workshop included representatives from Alabama, California, Colorado, Iowa, Minnesota, Missouri, Ohio, Rhode Island, West Virginia, and Wisconsin. See American Association of Retired Persons, Proceedings of a Workshop to Discuss Information 

Exchange between Peer Review Organizations and Medical Licensure Boards, April 

1990. 

C-l 
10. 

11. 

12. 

13. 

14. 

15. 

16. 

17. 

See Jaco, Dan and Neikirk, H.J., “Exploring the Relationships between Peer Review Organizations and State Medical Licensing Agencies: Results of a Survey of PROS,” Missouri Patient Care Review Foundation, Paper presented at the Tri-Regional PRO 

Conference, St. Petersburg, Florida, June 16, 1989. 

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. 

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. 

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. 

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 Committee 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). 

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. 

For the 1986 to 1989 period, each of these State boards had responsibilities for disciplinary investigations, hearings, and decisions and in each year reported investigative staffing data in FSMB’s 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. 

American Medical Association, U.S. Medical Licensure Statistics and Licensure Requirements, 1986 and 1990 editions. 

c-2 
18. 

19. 

20. 

21. 

22. 

23. 

24. 

25. 

26. 

27. 

28. 

Zeitlin, David I., “An Update on How-And What- BMQA is Doing,” Los Angeles 

County Medical Association Physician, March 6, 1989, p. 37. 

Assembly hearing, December 11, 1989, p. 84. 

Federation of State Medical Boards, Exchange, 1989-1990. 

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 officials note that the majority are so bound. Our own discussions with board officials in 

many States suggest the same. 

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 subsequently overturned on appeal. The validated counts for a calendar year are regularly 

published in the Federation Bulletin. 

Schwartz, William B. and Mendelson, David N., “The Role of Physician-Owned Insurance 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. 

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 Medical Injury and Medical Malpractice, ” New England Journal of Medicine, Vol. 321, 

August 17, 1989, pp. 480-4. 

Data are derived from FSMB data on State board actions as reported in Federation Bulletin, 1985-1987 editions. 

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 actions 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. 

Relman, Arnold J., “Professional Regulation and The State Medical Boards,” New 

England Journal of Medicine, Vol. 312, No. 12, p. 785. 

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 agency 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 gathering efforts. It is also important to note that the increased use of self-reporting requirements 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 involved 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 investigative 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 agencies 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’ services 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 largely 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 Govemment Organization and Economy, The Medical Care of California’s Nursing Home Residents: 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 District of Columbia): Revocations-5 1; summary suspensions-45; suspensions-5 1; probation-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. 

35. 

36. 

37. 

38. 

39. 

40. 

41. 

42. 

43. 

According to FSMB’s Exchange, the number of nonphysician members on the boards 

increased from 90 in 1986 to 112 in 1989. The proportion of board membership accounted 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. 

The White House, Memorandum for the Heads of Executive Departments and Agencies. 

Subject: Federalism Executive Order, February 16, 1990. 

Medical Licensure and Discipline, p. 20. 

Report of the Task Force on Medical Liability ana’ Malpractice, p. 23. 

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 licensing 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. 

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. 

See Report of the Task Force on Medical Liability ana’ Malpractice, pp. 96-7. 

See Medical Licensure and Discipline, p. 18. 

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, medical 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. 

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 practitioners or providers and to national accreditation bodies acting in accordance with section 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 agencv 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 progr=n* 

48. See Medicare Part B Carrier Manual, Section 10040. See also United States General Accounting 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 FSMB’s 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 FSMB’s 

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 FSMB’s 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 board’s 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. 

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APPENDIX C 

ENDNOTES 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

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, Medical 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. 

See Medical Economics, April 18, 1988. The entire issue is devoted to an examination 

of medical malpractice. 

See Office of Inspector General, Medical Licensure and Discipline: An Overview, June 

1986. 

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 Association, Vol. 257, No. 6, February 13, 1987, pp. 820-824; and “Tighter Reviews of 

Doctors Urged,” The New York Times, June 6, 1986. 

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. 

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. 

For further explanation of this development, see Braeden, Dale G., “Concentrating on 

the Problem Physician: Perspectives in Medical Discipline-Part II,” Federation Bulletin, Federation of State Medical Boards, Vol. 76, No. 3, March 1989, pp. 71-2. 

Medical Licensure and Discipline, p. 15. 

The workshop included representatives from Alabama, California, Colorado, Iowa, Minnesota, Missouri, Ohio, Rhode Island, West Virginia, and Wisconsin. See American Association of Retired Persons, Proceedings of a Workshop to Discuss Information 

Exchange between Peer Review Organizations and Medical Licensure Boards, April 

1990. 

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10. See Jaco, Dan and Neikirk, H.J., “Exploring the Relationships between Peer Review Organizations and State Medical Licensing Agencies: Results of a Survey of PROS,” Missouri 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 Committee 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 disciplinary investigations, hearings, and decisions and in each year reported investigative staffing data in FSMB’s 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 Requirements, 1986 and 1990 editions. 

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18. 

19. 

20. 

21. 

22. 

23. 

24. 

25. 

26. 

27. 

28. 

Zeitlin, David I., “An Update on How-And What- BMQA is Doing,” Los Angeles 

County Medical Association Physician, March 6, 1989, p. 37. 

Assembly hearing, December 11, 1989, p. 84. 

Federation of State Medical Boards, Exchange, 1989-1990. 

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 officials note that the majority are so bound. Our own discussions with board officials in 

many States suggest the same. 

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 subsequently overturned on appeal. The validated counts for a calendar year are regularly 

published in the Federation Bulletin. 

Schwartz, William B. and Mendelson, David N., “The Role of Physician-Owned Insurance 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. 

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 Medical Injury and Medical Malpractice,” New England Journal of Medicine, Vol. 321, 

August 17, 1989, pp. 480-4. 

Data are derived from FSMB data on State board actions as reported in Federation Bulletin, 1985- 1987 editions. 

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 actions 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. 

Relman, Arnold J., “Professional Regulation and The State Medical Boards,” New 

England Journal of Medicine, Vol. 312, No. 12, p. 785. 

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 agency 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 

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that the board investigators actually opened as a result of their own information gathering efforts. It is also important to note that the increased use of self-reporting requirements 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 involved 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 investigative 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 agencies 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’ services 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 largely 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 Govemment Organization and Economy, The Medical Care of California’s Nursing Home Residents: 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 District of Columbia): Revocations-5 1; summary suspensions-45; suspensions-5 1; probation-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. 

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34. 

35. 

36. 

37. 

38. 

39. 

40. 

41. 

42. 

43. 

According to FSMB’s Exchange, the number of nonphysician members on the boards 

increased from 90 in 1986 to 112 in 1989. The proportion of board membership accounted 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. 

The White House, Memorandum for the Heads of Executive Departments and Agencies. 

Subject: Federalism Executive Order, February 16,199O. 

Medical Licensure and Discipline, p. 20. 

Report of the Task Force on Medical Liability and Malpractice, p. 23. 

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 licensing 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. 

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. 

See Report of the Task Force on Medical Liability and Malpractice, pp. 96-7. 

See Medical Licensure and Discipline, p. 18. 

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, medical 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. 

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 practitioners or providers and to national accreditation bodies acting in accordance with section 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 agency in accordance with Federal or State law.” 

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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 program. 

48. See Medicare Part B Carrier Manual, Section 10040. See also United States General Accounting 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. 

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