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Must We, May We, Should We Report?

on Friday, 3 November 2017 in Health Law Alert: Erin E. Busch, Editor

A variety of situations raise the question of whether or not a hospital or other licensed health care facility has an obligation to report an individual licensee’s improper behavior, act or omission to the licensee’s state board. Often, it is assumed that what may be a reportable event by an individual licensee also gives rise to a mandatory reporting obligation by a facility—but quite often this is not the case. Typically, individual licensees have broader duties to report under state law than facilities. In both Nebraska and Iowa, the circumstances triggering a mandatory report by a health care facility to a licensing board are more limited than is often assumed.

Iowa Law

Code of Iowa §147.135.3.a. requires a hospital administrator or the chief of the medical staff to report a “hospital disciplinary action” of a physician to the Board of Medicine within ten days. The following combination of events trigger such reporting:

1. The hospital takes final disciplinary action based on a physician’s professional competence;

2. The disciplinary action results in a limitation, suspension or revocation of the physician’s privileges; and

3. The hospital board of trustees approves the disciplinary action.

In addition, the hospital administrator or the chief of the medical staff must report a physician’s voluntary relinquishment or voluntary limitation of privileges in order to avoid a formal hospital disciplinary action.

These reporting obligations apply to “physicians” which is defined as “a person licensed pursuant to chapter 148.” “Persons licensed under Chapter 148” refers to licensees practicing medicine and surgery or osteopathic medicine and surgery.

Nebraska Law

General acute hospitals, critical access hospitals, nursing facilities, skilled nursing facilities, substance abuse treatment centers and other health care facilities licensed under the Health Care Facility Licensure Act have a mandatory duty, under administrative Title 172 NAC 5, to report to the Nebraska Department of Health and Human Services in two situations:

(1) When the facility has made payment due to adverse judgment, settlement or award of a professional liability claim against it or a credential holder, including settlements made prior to suit, arising out of the acts or omissions of the credential holder; or

(2) When the facility takes action adversely affecting the privileges or membership of a credential holder in such facility, due to alleged incompetence, professional negligence, unprofessional conduct or physical, mental or chemical impairment.

The first category requires licensed facilities to report payments made as a result of settlement or adverse legal action based on a claim arising from the acts or omissions of a credential holder, for example, when a hospital settles a malpractice claim against the hospital related to the treatment of a patient by a member of the hospital’s medical staff. The facility also has a duty to report settlements and adverse judgments against the hospital and/or one of its employed practitioners. A hospital would not have a duty to report if one of its medical staff members personally, but not the hospital itself, made payment because of a professional malpractice claim.
Under the second category, reporting is required only if a facility takes action that adversely affects the privileges or membership of a credential holder due to alleged incompetence, professional negligence, unprofessional conduct or physical, mental or chemical impairment.

This means that reports under this category affect only practitioners who have been granted medical staff membership and/or clinical privileges. It does not affect persons performing services in the facility who are not privileged, e.g., registered nurses, or others who do not have independent practice authority or membership or privileges on the facility’s medical staff. It may be necessary to seek the advice of legal counsel when encountering unclear situations, especially when the facility does not wish to report unless it is required to do so. However, a facility may voluntarily make a report in the absence of a mandatory reporting obligation.

Joseph “Joe” Loudon

Julie A. Knutson


1  Which may include “unethical or unprofessional conduct if the behavior interferes with, or has the potential to interfere with, patient care, or the effective functioning of health care staff.”  See Annual Letter to hospitals and physician administrators from the Iowa Board of Medicine.

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