Resource Center

Louis E. Baxter, Sr., M.D, F.A.S.A.M.

Mark F. Seltzer, J.D.

The impaired health care professional has become the focal point of many recent legal proceedings. The problem of practitioner impairment was resurrected in 1999 when the National Institute of Medicine published a report entitled Medical Errors. The report stated that each year nearly 100,000 patient deaths were a result of mistakes made by medical personnel. The question of health care professional impairment was raised. Accordingly, it is important that these health care providers are identified and whenever possible treated.

With the advent of the Joint Commission on Accreditation of Health Organization’s mandate of January 1, 2001, that requires each hospital in America to create and develop a physician impairment committee, it is expected that more physician impairment will be identified and the potential for legal difficulties will increase. The impaired health care provider may face legal difficulties that may arise from hospital staff suspensions and disciplinary actions by a state licensing authority. Disciplinary action will trigger a report from the state licensing authority to the National Practitioner Data Bank. Such a report, as required by law, may lead to disqualification from health maintenance organizations and federally funded insurance plans. Once the impaired health care professional is able to receive treatment for the impairing illness and is able to begin to recover, these potential legal problems will need to be addressed.

Historical

Since the publication of The Sick Physician by the American Medical Association’s Council on Mental Health in 1973, Americans have acknowledged and become more aware of health care professional impairment. The Sick Physician report suggested that health care professionals (physicians were the focus at that time) suffered from diseases of impairment, primarily drug and alcohol dependence. More recently, recognition of psychiatric illnesses as conditions of impairment have occurred.

The report also recommended that committee be formed to help identify, treat, and advocate for these impaired professionals. Finally, the report recommended that legislation be developed to allow these individuals to receive treatment rather than punishment for their medical illnesses. Before The Sick Physician these practitioners were thought to be “bad” people, without disability, who deserved to be punished. The modern view is that impaired professionals are people with disabling conditions, who have rights and protection under the law, and deserve treatment for their illness.

Diseases of impairment

Health care professionals suffer from the various diseases of impairment at rates similar to the general public. The major diseases of impairment (as defined in the Diagnostic Statistical Manual IV-DSM-IV) include alcohol use disorders, drug use disorders, psychiatric disorders, behavioral disorders, metabolic disorders, and psychosexual boundary issue disorders. Any of these disorders at any time can cause or provide impairment.

Metabolic disorders such as diabetes mellitus or thyroid disease or cardiovascular disorders like atherosclerosis and arrhythmia can also be impairing conditions. Physical conditions, such as carpal tunnel syndrome or ulnar nerve entrapment, can impair a surgeon’s ability to perform and, as such, can become diseases of impairment as well.

More and more practitioners are working longer and are becoming subject to the impairing affects of old age. Impaired memory and cognition are becoming issues in medical practice today. The changing medical economy is affecting physicians both young and old. The rising cost of medical liability insurance is forcing many clinicians to modify or otherwise tailor their practices. Some are opting out of medical practice. There is also the mounting stress of other litigation and practice pressures. Medical practice stress is an impairing condition in some instances.

Treatment and monitoring

The most important step in addressing health care professional impairment is making an accurate diagnosis. Once the diagnosis is made the individual needs to be referred to the appropriate level of care. The American Society of Addiction Medicine Patient Placement Criteria-2 were developed to insure that persons with diseases of impairment are matched to the level of care that would give the best treatment outcome. The levels of care range from traditional weekly outpatient individual counseling to long-term residential therapy, an intensive daily experience that may go on for many months. Some individuals have cooccurring disorders and need specialized treatment to effectively address their needs.

After these individuals have undergone the primary treatment for their impairing disorder, they require ongoing monitoring to assure their continued wellness and compliance with the treatment plan that has been developed for their care. In some instances, the monitoring is required as a condition of licensure. The monitoring serves two purposes. It allows the therapist to measure the effectiveness of the treatment plan and it provides documentation of ongoing wellness.

Advocacy

Health care professionals who have been diagnosed and have undergone treatment for their illness often find themselves in need of an advocate. Sometimes there may be licensing board issues that need to be addressed. Some states have mandatory reporting requirements that can result in a temporary loss of license until the licensee is able to demonstrate that he or she is no longer impaired. Most states have a physicians assistance program that can help to coordinate the necessary activities on the physician’s behalf. Unfortunately, the same is not true for many of the other health care practitioners such as nurses, pharmacists, dentists, licensed social workers, psychologists, and others.

Recovering health care professionals may need an advocate to assist with facilitating their relicensure, return to hospital staffs, employment with medical groups, and reenrollment in insurance plan provider panels. Advocacy has also been required in some instances to help recovering practitioners to obtain medical liability and personal health insurance.

Physician Rights

Physicians have legal rights that are well defined and protected by state and federal law. Physicians as patients also enjoy the same rights as nonphysician patients. When health care providers become ill with diseases of impairment, some of these rights are called into question by the possible need to protect the public.

Health care professional’s rights as a patient

The physician-patient relationship has existed since the Code of Hammurabi. The Hippocratic oath also seems to codify rules of a physician-patient relationship that admonishes to “first do no harm.”

Once an impaired health care professional enters into treatment with another provider or agency, the rules and regulations of the physician-patient relationship apply. Under such conditions physician-patient confidentiality applies, as well. The health care professional undergoing treatment should have the same confidence that the non-health care professional has that his or her medical records will be protected. This sanctity is recognized by the American Medical Association, the Principles of Medical Ethics, and is provided for by some state medical societies (e.g., New York). The information contained in the records of some of these health care providers is further protected by Title 42 CFR Part 2 and requires a special authorization for release of that information pertaining to drug and alcohol treatment. There are special federal rules that deal with the confidentiality of information concerning patients treated for or referred for treatment of alcoholism or drug abuse. These rules apply to any facility receiving federal funds for any purpose, including Medicare or Medicaid reimbursement. The regulations preempt any state law that purports to authorize disclosures contrary to the regulations, but states are permitted to impose tighter confidentiality requirements.

Some states have a “duty to report” impaired health care professionals clause in the rules and regulations for licensure. The confidentiality of a patient’s records is waived in situations where the patient may be a threat to him or herself or others. There are many other important issues of ownership and access, privileged communication, testimonial disclosures, approved disclosures, and limitations of disclosure that are discussed thoroughly elsewhere in this volume.

Health care professionals’ rights as a licensee

Once an individual obtains a medical license to practice in a state, he or she must maintain it. Medical licenses are subject to sanctioning for a number of reasons. These include acts that are usually associated with diseases of impairment, such as failure to cooperate with a board investigation, sexual advances toward patients, false or inaccurate patient records, loss of hospital privileges, diverting controlled substances, and unprofessional conduct.

Licenses have been removed for active alcohol and drug dependence. Restoration of a license can occur if the licensee can provide evidence that he or she has sufficiently recovered from their disease of impairment. The restoration of a license hinges upon multiple factors including concern for the public safety and welfare, as well as the welfare of the medical profession.

In situations where a license is suspended, it is assumed that at some point it will be restored. Health care providers who have license suspension as a result of an impairing condition can request to have the license reinstated if they can demonstrate recovery from that impairing condition.

Health care providers as employees

The American with Disabilities Act of 1990 provides protection for those with disabilities, which include those individuals in recovery from alcoholism and drug abuse. This act extends the protection of the 1973 Rehabilitation Act which prohibits discrimination on the basis of a handicap by federal agencies, or any program or activity that receives federal funds, and provides great protections for those recovering health care providers who are also employees of hospitals and other health provider groups. There may also be other federal, state, and/or local statutes and rules that protect the health care provider’s rights as an employee. For example, New Jersey has the Law Against Discrimination and New York City has an Administrative Code that provides protection for employees.

Regulatory Issues: Public Protection

The paramount concern and function of the state licensing agencies is to protect the public safety and welfare by continuing to evaluate a practitioner’s professional practice. Medical practice acts create and define the composition of state licensure agencies, define the requirements for licensure, and vest the agency with powers to manage its charge.

The public is best protected by a mechanism to identify and remove unsafe practitioners from practice. The Medical Practice Act in most states allows for confidential reporting of suspected practitioners and provides a mechanism for treatment. This encourages colleague and self-reporting. Self-reporting of impairment is greater in states that have confidential reporting system than in states that do not. There are more legal questions that may need to be answered in light of the new HIPPA regulations, and the “public right-to-know” legislation regarding the information about recovering health care professional treatment and disciplinary records.

Health care Professional Disability Insurance************

JANUARY 25, 2006

ADDICTION AS A DISABLING ILLNESS

There is no question that disability insurance benefits become an extremely important component of the recovery process. Oftentimes, the insured, as a result of addiction, has suffered significant financial and other related consequences in addition to suffering the illness. The receipt of disability insurance benefits allows the insured to dedicate his/her energy and effort to the recovery process and restoring the insured’s health.

Both the Disability Insurance Companies, as well as the Courts, do accept the disease model of addiction and addiction as a disabling illness. However, the issue is whether or not there is impairment as a result of addiction and whether that impairment satisfies the insured’s policy requirements. It is important to understand the policy provisions and the issues that are likely to arise when the claim is filed. Considering these provisions and issues before and through the claims process increases the likelihood that the claim will be honored and maintained.

Policy Provisions: Individual Disability Income Policies

Total disability. Most policies issued are “own occupation” policies. Total Disability is usually defined as the inability to perform either the material and substantial, essential or important duties insured’s own occupation. In addition there is always a physician’s care requirement. 

Residual disability. Residual (partial) disability is usually defined as the inability to perform one or more of the material and substantial, essential or important duties of the insured’s own occupation or the ability to perform all of the duties but for less time than prior to the disability and a loss of income. Once again, there is a physician’s care requirement. 

Pre-existing condition. A preexisting condition is a “medical condition or impairment” that was not disclosed in the application for issuance of the insurance and was not excluded by name, but which will be excluded from coverage by the company. 

Incontestability clause. Generally, an insurance company cannot contest a disability policy after it has been in effect for two years. However, the company’s right to contest after two years is subject to the language in the incontestability clause in the policy.

If the incontestable clause contains “fraudulent misstatement” language the company retains its right to contest the policy after two years.

Policy Provisions: Group Policies (Long Term Disability)

Generally, group policies are subject to the Employee Retirement Income Security Act of 1974 (ERISA) that sets up the “administrative” procedure used in the claims process. These cases are usually reviewed by an “arbitrary and capricious” standard. In addition, some states’ Insurance Commissioners, such as California and Illinois, have acted to strike discretionary language from LTD contracts thereby changing that burden of proof. There is no question that the trend is in this direction.

Coverage. While it is assumed that the insured has coverage in an individual policy, the insured must satisfy the coverage provision in a group policy in order to receive benefits. Coverage is usually limited to an active, full-time employee. 

Pre-existing conditions. Pre-existing conditions are usually limited to those medical conditions or impairments that existed three months prior to the effective date of coverage and as a result of which disabled the insured within twelve months after the effective date. These conditions will be excluded from coverage. 

Total disability. It is common that the “own occupation” definition of total disability is limited to a specific benefit period, usually two years. After that limited benefit period, it is again common for the definition of total disability to change to a definition of “any occupation.” In addition, there may be a loss of income requirement. 

Residual disability. LTD policies often incorporate a residual or partial disability benefit, which pays a benefit even if the insured is working. There is a loss of income and physician’s care requirement. 

Mental illness and/or drug and alcohol limitation. Group policies often contain a provision or provisions limiting the benefit period for to two years for claims involving mental illness or drug and alcohol addiction.

Legal Issues/Defenses

Pre-existing condition. A pre-existing condition is a non-disclosed medical condition or impairment that existed prior to the issuance of the policy. The company will attempt to exclude these conditions from coverage. This may work in concert with the incontestable clause. 

Incontestable clause. Also, as stated, the critical issue is whether or not the incontestable clause contains “fraudulent misstatement” language. The second paragraph of this clause ties in with the pre-existing condition clause. If the company can show that the application for the policy contains “fraudulent misstatements” it will act to either rescind the policy or deny coverage for the claim even after the two year contestable period has ended. 

Own occupation. Own occupation, for total or residual disability, is the occupation(s) in which the insured was engaged at the onset of the disability. The company will be very thorough in its evaluation of the occupational component in order to either defeat the claim all together or reduce the benefit from total to residual disability. 

Appropriate care. The second part of the definition of total or residual disability requires physician’s care. If that language requires care that is “appropriate” for the condition causing the disability, the insured must establish that the care received rises to the level of being appropriate under the circumstances. 

Legal disability. A “legal disability” is the loss of the ability to work as a result of an intentional act, as opposed to a disabling condition. Common legal disabilities are the loss of a license to work in ones occupation or imprisonment. 

Risk of relapse. Probably the most crucial issue to any insured suffering from addiction with a disability claim as a result of addiction is the “risk of relapse”. This issue will probably be raised by the disability insurance company as a defense to payment of ongoing benefits in most claims. Even though the disease model of addiction is accepted, it is often difficult to determine whether the insured, who is in recovery and has achieved remission and stability, is disabled as a result of addiction. 

Bad Faith. Recent Federal Court decisions, including that of the U.S. Supreme Court and Third Circuit Court of Appeals, have established that there is no state insurance bad faith cause of action in an ERISA- governed matter. Therefore, there is no right to a bad faith action stemming out of a claim brought under an employee benefit group LTD policy. State bad faith causes of action vary from state to state in individual disability income cases. This cause of action is available depending upon the company’s claims practices or factual scenario in an individual claim.

Key points

Listed below are five key points to be remembered when considering a disability insurance claim. 

Dual-purpose medical professionals. You must choose medical professionals who are competent, capable of providing appropriate care, well credentialed, and have experience treating the disabling condition. They must also be willing to participate in the claims process. 

Know the policy. The contractual requirements of the policy must be satisfied in order to obligate the company to pay the benefits. The policies are fact specific and not only differ between companies but also from year to year within the same company. 

Know the issues. Many of the important issues or defenses have been reviewed that may arise in the course of a claim. It is important to recognize when these issues will be raised, to anticipate their application, and to prepare for these circumstances in advance. 

Know your own occupation. It is important that your treating doctors are fully acquainted with the specific duties you are required to perform in your specialty. 

Disability equation. The recovering provider and the treating provider need to establish the restrictions and the limitations that exist as a result of the disabling condition and how those restrictions prevent the recovering provider from performing the material and substantial duties of the occupation. These opinions must be medically based.

References 

_{American Medical Association Council on Mental Health, The Sick Physician (1973). Federal Privacy Act, 5 U.S.C. §552(a) (1974), M.D.-Patient Confidentiality.} 

_{Firestone, “Shh! Patient Privacy and Confidentiality in a Lawsuit”; Physician Privilege v. Discovery, 13 Legal Aspects Med. Practice 1-3 (Feb. 1985).} 

_{Hicks v. Georgia State Board of Pharmacy, 553 F. Supp. 314 (Ga. 1982), citing Meachum v. Fano, 427 U.S. 215, 228 (1976).} 

_{Baxter, Center for Substance Abuse Treatment, Healthcare Professional Impairment Task Force Report (2002).} 

_{American Medical Association Council on Mental Illness, The Sick Physician: Impairment by Psychiatric Disorder Including Alcoholism and Drug Dependence, 233 J.A.M.A. 684-687 (1973).} 

_{P. Reeve, Physicians at Risk: Some Epidemiologic Considerations of Alcoholism, Drug Abuse and Suicide, 26 J. Occup. Med. 503-508 (1984).} 

_{J.N. Robins, et al., Lifetime Prevalence of Specific Psychiatric Disorders in 3 Cities, 41 Arch. Gen. Psychiatry 949-958 (1984).} 

_{G.D. Talbott, Treating Impaired Physicians: Fourteen Keys to Success, 113 V.A. Med. 95-99 (1986).} 

_{Aetna Health, Inc. v. Davila, 124 S.Ct. 2488 (2004)} 

_{Barber v. Unum Provident, (3d Cir. 2004)} 

_{The authors gratefully acknowledge Robert Conroy, J.D., and Gregory Rokosz, D.O.,} 

_{J.D., for their help and contribution to this chapter.} 

_{10 Health Care Professional Impairment} 

_{Medical Licensure, Credentialing, Privileging, and Profiling 10 Health Care Professional Impairment}