Attempt to Track Malpractice Cases Is Often Thwarted – How: Delete Physician's Name From Suit Before Settling -- We report, you decide

On a summer day six years ago, Elizabeth Riley entered Northwestern Memorial Hospital. She was vomiting and complaining of the worst headache of her life.

The 33-year-old cosmetics saleswoman was diagnosed with a neck sprain and sent home. Ten days later, Ms. Riley suffered a massive stroke. Part of her brain had to be removed and she was left a paraplegic.

Ms. Riley's father, Gerard, acting on her behalf, sued Northwestern and the doctor who treated her, contending they should have detected a bulging and leaking blood vessel inside her skull. The doctor responded that Ms. Riley hadn't followed his advice to see her own doctor in two or three days and to come back if her symptoms worsened. In 2002, after nearly three years of litigation, the lawsuit took a strange turn. Just before the case went to the jury, Mr. Riley agreed to dismiss the doctor as a defendant in the suit. The following day, the doctor's employer settled the case for $17.5 million.

It was one of the largest medical malpractice awards ever in Illinois. But it was never reported to the nation's only central repository for malpractice information, a government-run facility known as the National Practitioner Data Bank. That's because such cases are allowed to go unreported under a widely used but little-known clause in the rules governing the Data Bank's operation.

The clause is known in the medical and insurance worlds as the "corporate shield." It comes into play when individuals filing malpractice claims remove a doctor's name from the claim, leaving only the hospital or another corporate entity identified as the responsible party. The Data Bank's rules require the reporting only of doctors named in final malpractice settlements, so a payment doesn't have to be reported when a doctor's name is removed from the claim.

Such an omission appears to undermine the main purpose of the Data Bank. It was created by Congress nearly 20 years ago to improve patient safety, after a number of cases surfaced showing that states and individual organizations had failed to restrict the practices of possibly incompetent physicians. The Data Bank was designed to make it easier for hospitals and state licensing boards to check on doctors' qualifications before hiring or licensing them.

Instead, the Data Bank could be missing information on as many as half of malpractice payments. Without the corporate shield, the number of malpractice payments reported to the Data Bank each year could double to 38,000, according to an estimate prepared in 1998 by the federal government agency charged with administering the Data Bank.

In Ms. Riley's case, the doctor was employed by Northwestern Medical Faculty Foundation Inc., a not-for-profit corporation that employs doctors who work at Northwestern hospital. A spokesman for the foundation, which settled the case, confirmed that the case wasn't reported to the Data Bank. "We'd prefer not to get into" whether the foundation asked Ms. Riley's attorneys to dismiss the doctor from the suit prior to settlement, the spokesman said.

Northwestern hospital conducted an internal review of the case, a hospital spokeswoman said, but she declined to comment on the results.
The federal agency that administers the Data Bank, the Health Resources and Services Administration, has known of the impact of the corporate shield for more than a decade. It has tried twice to change the rules governing the Data Bank, in 1998 and 2000. But its efforts were stymied by medical groups and malpractice-insurance companies, many of which are represented on a 30-member executive committee that advises the HRSA on the Data Bank.

At least one of those groups on the committee, the American Medical Association, wants the Data Bank abolished. The AMA argues that malpractice claims data are not a good indicator of a doctor's skills. Doctors also worry that a listing in the Data Bank could hurt their prospects for employment. However, some hospital executives say malpractice suits are so common that a notation in the Data Bank wouldn't necessarily hurt a doctor's chances of getting hospital privileges.

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