Settle a medical malpractice claim outside of court? It still must be reported to the NPDB

HHS has ruled all payments made under state liability laws in response to medical malpractice claims — a written claim or demand for payment — are required to be reported to the National Practitioner Data Bank as medical malpractice payments, even when the claims are settled outside of court.

HHS' decision specifically addressed state laws in Massachusetts and Oregon, as those states have, through legislation, implemented programs designed to settle medical malpractice claims outside of court. In those two states, healthcare providers' apologies for medical errors cannot be used against them in court, and the models incorporate the potential for financial restitution outside of the court system. This promotes full disclosure by providers and also helps parties settle claims without lengthy legal battles.

Although HHS' decision only considered the programs in two states, the ruling is far reaching, with other states, including Florida and Georgia, examining similar models for future implementation.

Under the NPDB's medical malpractice reporting requirements, if a payment is made by an insurance company, hospital or other third party in settlement of a claim or judgment against a healthcare provider, it must be reported to the NPDB. The payments must be reported even when the provider is found not to be at fault.

HHS' decision focused on the Disclosure, Apology and Offer law in Massachusetts and Oregon's discussion and resolution model. In its decision, HHS highlighted the Oregon law "was explicitly designed to avoid medical malpractice reporting to the NPDB." According to the Oregon law, any adverse event filed against a healthcare provider is not "a written claim or demand for payment," — which is identical to the language used in the NPDB statute to define reportable payments.

HHS interpreted the NPDB statute as requiring all payments that include a written claim or demand for payment made under the models used in both Massachusetts and Oregon as reportable.

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