The state licensing board is authorized to review the complaint, hold hearings, and issue sanctions that can range from none to severe, such as the loss of one's license to practice. In addition to legal defense fees the practitioner may be fined for the cost of the investigation and hearing. A record is made of the proceedings and reported to the national practitioner database. If a practitioner has received an unfavorable ruling, this information will be available to managed care companies and may have a negative impact on the practitioner's ability to generate future referrals. Both situations are serious.
Most practitioners carry professional liability insurance to cover the malpractice suit.
However, their insurance policy may or may not cover the full cost of a legal defense against a licensing board complaint. Anyone can be accused of misconduct, whether the allegation is true or not. It is cheap protection to buy a sufficient rider to cover the cost of a legal defense of a licensing board complaint. This is an area that is evolving and will have to be watched carefully. By saying this I do not mean that we need to diminish standards.