Crisis Management: Preventing and Responding to Misconduct

Dealing with a colleague’s misconduct is never pleasant, but always necessary, as the failure to address a problem promptly and appropriately increases the legal, financial, and reputational risks to your organization.

As a physician leader, you probably deal with events that expose your organization to potential legal liability. With the ever-increasing emphasis on quality of care, the ongoing global health emergency caused by COVID-19, and the corresponding increase in scrutiny on healthcare providers, review of alleged misconduct is likely to become even more intense in the coming months.

In addition, patients are increasingly prone to questioning physician behavior and are less forgiving of adverse events than they may have been in years past.

Physician leaders play an essential role in protecting healthcare organizations and their assets. Although the laws vary from state to state, at minimum, physician leaders have a legal duty to their colleagues to exercise appropriate business judgment in any matter involving possible misconduct within their organization. Successful leaders, however, will do more to protect their organizations than simply meet the minimum level of business judgment.

In this article, we highlight some of the potential risk areas facing medical practices, provide recommendations for minimizing those risks, and offer a checklist to help you deal effectively with problems when they arise.

As a physician leader, you may face a wide range of scenarios, such as when a physician:

• Is charged with a felony or a misdemeanor.

• Has been disciplined through revocation, suspension, restriction, or limitation of privileges and/or medical licensure.

• Is practicing medicine without a license, including through telemedicine.

• Has violated a rule or order promulgated by the applicable Board of Medicine or a state or federal law relating to the practice of medicine.

• Is engaging in any unethical conduct, such as conduct likely to deceive, defraud, or harm the public, or demonstrating a willful or careless disregard for the health, welfare, or safety of a patient or staff.

• Is engaging in medical practice that creates unnecessary danger to a patient’s life, health, or safety.

• Has performed a medical or surgical procedure without obtaining appropriate informed consent or, if applicable, the permission of the group or an institution.

• Has failed to supervise another practitioner under an agreement with the Board of Medicine or corrective action plan of the group.

• Has been adjudicated to be mentally incompetent or mentally ill, or a chemically dependent person, a person dangerous to the public, a sexually dangerous person, or a person who has a sexual psychopathic personality by a court of competent jurisdiction.

• Is unable to practice medicine with reasonable skill and safety by reason of illness; intoxication; use of drugs, narcotics, chemicals, or any other type of material; or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills.

• Is addicted or habituated to a drug or intoxicant.

• Has diverted drugs or medical supplies for personal use.

• Has, without authorization, disclosed a privileged communication from or relating to a patient.

• Is exhibiting chronic tardiness in the completion of medical records such that the care of a patient might be compromised or the group might be exposed to an increased risk of liability.

• Has falsified or improperly altered medical records.

• Has engaged in fee splitting, improper referrals, and financial conflicts of interest.

• Is engaging in abusive or fraudulent billing practices, including violations of the federal Medicare and Medicaid laws or state medical assistance laws.

• Is prescribing a drug or device for reasons other than medically accepted therapeutic, experimental, or investigative purposes authorized by a state or federal agency, or referring a patient to any healthcare provider for services or tests not medically indicated at the time of referral.

• Has engaged in misconduct in connection with treating a peer or a colleague, especially in connection with prescriptions for controlled substances.

• Is engaging in conduct with a patient and/or staff member that is sexual or may reasonably be interpreted by the patient or staff member as sexual, or in any verbal behavior that is or may reasonably be interpreted as seductive or sexually demeaning to a patient or to a staff member.

• Is engaging in conduct that might reasonably be interpreted to create a hostile environment in the workplace.

• Has provided false or misleading information that is directly related to the care of a patient unless done for an accepted therapeutic purpose such as the administration of a placebo.

• Has made derogatory or potentially defamatory comments about (1) another healthcare provider or group practice; (2) a hospital, nursing home, other healthcare facility; or (3) a third-party payor.

• Has failed to participate meaningfully in required internal training on matters including billing and coding, HIPAA compliance, quality improvement, and patient safety.

• Has failed to maintain board certification if required under any managed care contract or to maintain hospital privileges.

• Has failed to comply with any corrective action plan.

• Has failed to comply with terms of the organization’s partnership or shareholder agreement and/or employment agreements.

• Has misappropriated or misused any trade secrets or confidential business information of the organization. This includes misconduct while “moonlighting” or acting as an expert witness.

What to Do Before A Problem Arises

The above list of potential problems is daunting and, no doubt, incomplete. The best time to think about these potential problems, however, is before they arise.

Physician leaders should examine existing policies and procedures to determine whether they adequately address the types of problems their organizations are likely to face. If your examination exposes gaps in the existing policies and procedures, you should close the gaps now. Consider adopting specific rules prohibiting the misconduct listed above and spelling out the due process procedures that will apply and the potential discipline that might be imposed. It would be wise to work with an experienced healthcare attorney to ensure that your policies are comprehensive and enforceable under the laws of your state.

It also would be prudent to emphasize the need for proper documentation of all care decisions. Good documentation is critical to providing quality care and, if necessary, responding to any future claim of malfeasance against your organization.

Having an experienced insurance agent or broker review your insurance policies to determine if coverage is adequate to protect your organization is important as well. Is your organization covered if a physician is discharged and then files a defamation action or a charge of discrimination? How large is the deductible on the policy? Are the coverage limits appropriate for the size of the organization and its assets? All too often, organizations find that their malpractice coverage is sufficient but that they are not adequately covered for other legal risks that could be equally devastating to the financial health of the organization.

Also evaluate whether you, as a physician leader, are too insulated from any problem areas in your organization. If staff is reluctant to elevate problems to your attention or to the attention of some other responsible person, such as an HR director, the entire organization is at risk. Emphasize to everyone — ideally through a direct communication with your team that is supported by a specific written policy — that reporting problems is encouraged, expected, and essential to the organization.

Also examine your own behavior and that of any other physician leaders with whom you work. Is anyone sending the wrong message through behavior that conflicts with organizational policy? After all, it is difficult to expect others to comply with the rules if your behaviors suggest the rules are there to be “bent” or that they do not apply equally to everyone.

Finally, as you think about the potential problems that might arise, give some careful consideration to the existing structure of the organization. If the organization is sufficiently large and complex, rather than placing all of these responsibilities on a physician leader, establish a risk management committee or some other subcommittee of the board with the specific charge of managing risks. The key is to be clear as to where the buck stops.

Dealing With Problems When They Arise

One recurring difficulty physician leaders encounter is determining when to intervene. You may be aware of tidbits of information or be alerted to a potential problem “through the grapevine.” The information might be vague or uncorroborated. When do you have enough information to “connect the dots” and formally start an investigation? There is no easy answer, but keep in mind that if you fail to act and someone is injured, your failure to respond promptly will receive intense scrutiny.

Deciding to intervene may be even more difficult when the potential problem involves a valuable contributor who is generally well-liked and respected within your organization. If you make exceptions in certain cases, you are gambling with the assets of your organization and are sending the wrong message. In all events, the worst approach is to ignore a problem and hope that it will go away on its own.

Once you have credible indications of a problem, how you respond will be the key to a successful outcome. The following checklist provides useful guidance:

• Take immediate steps to address any harm already caused and to prevent further harm. If, for example, there are credible allegations of incompetence, take immediate steps to protect patients of that physician. Do not wait for other patients to be harmed.

• Alert legal counsel immediately. Waiting too long to involve counsel can increase the expense and reduce the options available.

• Start an internal investigation, being careful not to compromise any other investigation such as that of law enforcement personnel. This investigation might be best conducted by or under the direction of legal counsel. Most internal investigations will include interviews of the participants and any witnesses.

• Ensure that no one alters, destroys, or discards evidence. Not only is tampering with evidence a criminal act, it makes it difficult to defend any civil lawsuit that might be filed and might be the basis upon which punitive damages are awarded to an injured party.

• Carefully review all potential insurance coverage and provide any formal notice that is required under the policy or policies. Delay in providing notice may jeopardize your coverage.

• Determine in advance whether you will provide comment to the media if the situation becomes public. If you elect to comment, share your anticipated statements with counsel and/or a public relations consultant before making them. If you elect not to comment, be prepared to justify your position (e.g., “ We don’t comment on pending litigation.“). Also ensure that others within your organization know that no public comment will be made.

• Begin appropriate peer review activities so that the facts can be ascertained and appropriate discipline can be imposed in the event that wrongdoing is established.

• Maintain appropriate confidentiality throughout the process. Minimize office gossip and involve only those with a need to know in accordance with policies and procedures.

• Depending on the nature and extent of the problem, determine whether remedial action is appropriate. If members of the organization need help, make sure they receive that assistance.

• If the event must be reported to the police or some other authority, follow reporting requirements. If you do not know what must be reported, ask your state board or check with legal counsel. Keep in mind that the failure to report on a timely basis can jeopardize your own license.

• Review all internal policies and procedures to determine which ones might apply to the event. Unless there is a compelling need to depart from those policies and procedures, be sure that they are faithfully observed by everyone acting on behalf of the organization.

Throughout the handling of the event, act directly and fairly. Do not rush to judgment, but remain decisive. Ensure the accused wrongdoer is afforded due process if that is required. Once again, it is essential to work with counsel throughout the disciplinary process, especially if the physician is an employee who may have certain statutory protections or is a member of a protected class.

At all times, remember that documents created during the investigation of the misconduct and conversations about the issue will be subject to discovery unless they are protected by a valid privilege such as the attorney-client privilege or a peer-review privilege. All people involved should take care in what they say and write. Emails and text messages may be subject to discovery unless some valid privilege applies.

Finally, when your immediate response to the problem is complete, discuss the issues with your organization’s board or governing body and determine whether the event has exposed any gaps in your policies and procedures. Is there a need for additional training or gentle reminders to the staff?

Minimizing Risk

As a physician leader, you will have to deal with unpleasant situations. Your leadership when problems arise will be a crucial factor in determining both the short-term and long-term impact on your organization. Careful preparation and a systematic approach to problem solving will go a long way toward protecting your organization and minimizing legal risks.