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Appearing in the Medical Staff News May, 2000 ©-2000 Wiggin & Dana.

Health care attorneys who represent provider networks are facing a critical question with the advent of the new Healthcare Integrity and Protection Data Bank (HIPDB): whether provider networks fall within the reporting requirements of the HIPDB for purposes of registration and for reporting a provider’s termination from the network.

The HIPDB went into limited service in Fall, 1999, and went into full operation on March 6, 2000. Entities that are required to report to and query the HIPDB must register with the data bank and self-certify their eligibility to report and query. All reporting to HIPDB must be done electronically via the World Wide Web. The HIPDB issues a Data Bank Identification Number and an electronic mailbox password for each entity through which all reporting and querying will take place. A reportable event must be submitted within thirty (30) days of discovery of the event from the date when the reporting entity became aware of the event or the end of the entity’s monthly reporting cycle, whichever is later. Importantly, to comply with HIPDB regulations, all final adverse decisions taken since August 21, 1996 should have been reported by October 1, 1999. Any health plan that fails to report information on an adverse action required to be reported is subject to civil money penalties of not more than $25,000 for each such adverse action not reported.i

The HIPDB joins the National Practitioner Data Bank (NPDB) as a data collection program for the reporting and disclosing of certain adverse actions taken against healthcare providers, suppliers and practitioners.ii The HIPDB, which was mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPPA), is a centralized repository of information on civil judgments (except medical malpractice actions) against, healthcare providers, suppliers and practitioners in state and federal courts related to the delivery of a healthcare item or service; criminal convictions against these groups; final adverse actions by state or federal authorities responsible for licensing and certification; exclusion from participation in a federal or state healthcare program; and federal and state government agencies and health plans must report other adjudicated actions or decisions.iii The Office of the Inspector General of the U.S. Department of Health and Human Services (OIG) oversees the data bank. To be eligible to report to and query the HIPDB, an entity must be a federal or state governmental agency or a “health plan.”

Despite the headaches and paperwork that will inevitably arise from this additional reporting requirement, entities that meet the reporting criteria would be advised to comply with these new reporting requirements because failure to comply can result in severe monetary penalties. And therein lies the dilemma for provider networks with respect to the HIPDB: how to decide who (or what) is a “health plan” for HIPDB reporting. The HIPDB offers the following definition: “a plan, program or organization that provides health benefits, whether directly, through insurance, reimbursement or otherwise, and includes but is not limited to: (1) a policy of health insurance; (2) a contract of service benefit organization; (3) a membership agreement with a health maintenance organization or other prepaid health plan; (4) a plan, program, or agreement established, maintained or made available by an employer or group of employers, a practitioner, provider or supplier group, third party administrator, integrated health care delivery system, employee welfare association, public service group or organization or professional association; and (5) an insurance company, insurance service or insurance organization licensed to engage in the business of selling health care insurance in a State and which is subject to State law which regulates health insurance.”iv Healthcare provider is defined as “any health care entity (including HMO, PPO or group medical practice) that provides healthcare services and follows a formal peer review process for the purpose of furthering quality health care, and any other health care entity that, directly or through contracts, provides health care services.”v

Arguably, a network’s termination procedure would fall within the “Other Adjudicated Actions or Decisions” section of the regulations. “Health plans” are required to report “other adjudicated actions” to the HIPDB: “Other adjudicated actions or decisions means formal or official final actions taken against a healthcare provider, supplier or practitioner by a Federal or State Governmental agency or a health plan; which include the availability of a due process mechanism, and; are based on acts or omissions that affect or could affect the payment, provision or delivery of a healthcare item or service.”vi

So the question of whether a provider network is subject to the HIPDB is a two-part inquiry: is a provider network a “health plan” and is a termination of a provider an “adjudicated action or decision?” Unfortunately, the definition of health plans gives little clue as to whether provider networks, such as PHOs, IPAs, etc. or networks of hospitals or home care agencies fall within it. At first blush, it would seem that a provider network would not fit into the definition because even a network that shares financial risk, performs credentialing and case management and contracts with payors does not generally provide health insurance benefits or engage in insurance practice. However, the “comments” section of the Federal Register indicates that the definition is purposefully broad and will be interpreted as such by the OIG.vii If that is the case, any network that credentials providers may well have mandatory reporting requirements to the HIPDB. Informal response from the helpline staff at the OIG for the newly-opened HIPDB are not completely clear but indicate that provider networks may be considered health plans under the HIPDB.

In order to be subject to reporting requirements as an “adjudicated action or decision”, the action or decision must include a due process mechanism. If a network’s by-laws include notice to a provider of impending action, an opportunity to be heard and and/or an appeal process, the due process requirement presumably would be met. However, if a provider is “at will” or may be terminated without cause, does this mean the action is not reportable? The HIPDB language may have significant implications concerning due process expectations for provider networks. Some states have enacted laws that require that due process be granted physicians or other providers in termination of contracts by health plans. It is important to know one’s state law in this area and to recognize that this area of law is in a state of evolution.viii

Once one has determined that an entity meets the criteria for the HIPDB, the web-site (http://www.npdb-hipdb.com) is quite user-friendly, and the account set-up and reporting instructions are straightforward. However, network attorneys must first navigate a treacherous path to get to that point: ignore the HIPDB and risk severe financial penalties against the client or advise the client to file and undertake a potentially time-consuming review of its actions with respect to member termination from 1996 through the future and report any “final adverse actions” to the data bank.

Now that the question has been presented, how is this dilemma resolved? Two possible solutions are (1) a dialogue and exchange of ideas among healthcare attorneys. No doubt there are other lawyers who have already wrestled with this issue and a sharing of knowledge and experience could be invaluable. This author would volunteer to receive e-mail responses to this article, which would be synthesized and published in a follow-up article. (2) A formal question and answer session with an OIG official by or through the AHLA. In either case, it is important to begin a dialogue in order to begin to find a resolution.

Paul Sean Curtin is a health care attorney with Wiggin & Dana in New Haven, Connecticut. He can be reached at psc@wiggin.com. Jeanette C. Schreiber is a Partner at Wiggin & Dana and the Chair of the firm’s Health Care Department. She can be reached at jcs@wiggin.com Endnotes

i All information gathered from the HIPDB Web site at http://www.npdb-hipdb.com
ii Health Care Fraud and Abuse Data Collection Program, 64 Fed. Reg. 57,740 (1999) (to be codified as 45 CFR 61).
iii Id.
iv Id. at p. 57760.
v Id.
vi Id.
vii Id. at p. 57746.
vii Currently, Oregon, Connecticut, Texas, Kentucky and Maryland have statutory law granting some measure of procedural protection to physicians. Additionally, New Jersey, New Hampshire, Texas and California courts have applied common law principles to afford physicians such protection.