Medical Licensing Issues
The right to define and regulate medical practice is reserved to the states. Since ERISA has denied the states the right to regulate most private insurance plans, state legislatures and medical licensing boards are asserting their authority to regulate how physicians practice in MCOs. The central target of this regulation will be medical directors because they are the nexus between the plan and patient care. The two main risks will be improper supervision of NPPs and breach of the physician’s fiduciary duty.
If an MCO does not ensure proper supervision of NPPs, the medical director could be held liable for facilitating the unauthorized practice of medicine. For example, many states require an NPP to be supervised by a specific physician, and limit the number of NPPs that any given physician can supervise. These rules include the use of protocols approved by the supervising physician, and the ready availability of the supervising physician. If the MCO does not meet these requirements, such as by allowing the NPP and the supervising physician to work different shifts or in different locations, or by not following the letter of the law as regards the documentation required for proper supervision, the NPP will be engaged in the unauthorized practice of medicine. The medical director with the responsibility for supervising the medical personnel could then be charged with the crime of aiding in the unauthorized practice of medicine, or could lose his or her license to practice medicine in the state. Given the unpopularity of MCOs in many communities, it is not unreasonable to expect that a prosecutor would find such a prosecution politically attractive, especially if there were a well-publicized death or injury at the plan due to improper supervision, perhaps of a triage nurse.
As discussed earlier in this section, most states criminalize the bribery of physicians as a breach of the physician’s fiduciary duty. A medical director engaged in any patient care–related decision making that violates those laws could be prosecuted under these laws, as could the plan administrators who set up the improper incentives. Since ERISA does not preempt state criminal law proceedings, this could be another attractive avenue for a prosecutor or medical licensing board attempting to meet a public call for action against overreaching MCOs.