When is a Doctor's Resignation Under Investigation Reportable?
A resignation while under investigation is reportable to the National Practitioner Data Bank even if the doctor was unaware of the investigation. The California Medical Board requires a report only if the doctor was aware of the investigation.
The NPDB Guidebook gives this example:
A hospital reported a clinical privileges action to the NPDB indicating that a surgeon resigned while under investigation. The surgeon objected, saying she did not know she was under investigation. She insisted that an investigation was never mentioned to her and there is no mention of investigations in the hospital bylaws. For these reasons, she said, the report should be removed from the NPDB.
Response: A hospital must submit a report to the NPDB when a physician or dentist resigns his or her clinical privileges while under investigation, regardless of whether the health care practitioner is aware of the investigation. The hospital provided documentation of an ongoing investigation at the time the surgeon resigned her clinical privileges. Therefore, the report was found to be accurate as submitted.
Under NPDB rules:
A hospital must report a resignation (or surrender) of clinical privileges to the NPDB if it occurs while the practitioner is under investigation for issues related to professional competence or conduct.
The practitioner's awareness of the investigation is not required. The report stands as long as the hospital can document that an investigation was ongoing at the time of resignation (e.g., via committee minutes, directives, or other records). Lack of mention in the bylaws or no explicit notification to the practitioner does not invalidate the report.
This rule is consistent across the NPDB Guidebook and related Q&A sections: Practitioner knowledge or formal notification is irrelevant for reporting purposes. Hospitals must provide evidence of the investigation if the report is disputed, but the absence of the practitioner's awareness does not make the report inaccurate.
We researched cases that challenge the "But the Doctor did not know" defense to NPDB reporting. The law is highly unfavorable to the doctor.
A directly relevant case iand negative case is Owens v. Oregon Clinic, P.C., Not Reported in Fed. Supp. (2022), decided by the U.S. District Court for the District of Oregon (within the 9th Circuit). This is not binding law because it is a trial judge's decision but the logic can be used and will be used against a physician who raises the same issues.
In this case Dr. Owens resigned his hospital admitting privileges at Providence St. Vincent Medical Center (PSVMC). He did not know he was being investigated but despite that fact, PSVMC reported to the NPDB that he had surrendered his privileges while under investigation for billing fraud.
Dr. Owens contended that he "had no knowledge of any purported 'investigation' at the time of his resignation" and that PSVMC had failed to provide him with notice of, or an opportunity to be heard on, the investigation before it commenced reporting.
The court rejected this challenge on multiple grounds. First, it held that Dr. Owens improperly conflated "investigation" with "professional review action." The HCQIA's notice and hearing requirements apply only to professional review actions — not to investigations. As the court explained, "there is no requirement of either notice or adequate hearing procedures before an 'investigation' can be commenced — or even while it is proceeding." Second, the court relied on the NPDB Guidebook's explicit statement that the physician's awareness of the investigation is immaterial. Third, the court found that PSVMC's internal inquiry had begun well before Dr. Owens's resignation, even if Dr. Owens had not been formally notified of its scope. The court denied Dr. Owens's motion for a preliminary injunction requiring PSVMC to withdraw the NPDB report Owens v. Oregon Clinic, P.C., Not Reported in Fed. Supp. (2022).
Now this is a bit of an egregious case - billing fraud seems serious. But we have cases of doctors who billed 100% honestly and due to an internal dispute with their hospital were accused of billing irregularities. The hospital was wrong and we were right but had our doctor resigned due to the hostile atmosphere he/she (to hide identity) could have had this false NPDB report against him/her.
A better case was decided in the 9th Circuit in a PUBLISHED opinion which left fraud by the NPDB filer as a legitimate issue for a jury to decide. In Ulrich v. City and County of San Francisco, 308 F.3d 968 (2002), the Ninth Circuit addressed a different angle of an NPDB reporting challenge. There, Dr. Ulrich had received written notice that a formal peer review investigation had been opened before he resigned — so no lack-of-knowledge argument was presented. Instead, he challenged the NPDB report as false and pretextual, arguing the hospital had actually concluded its investigation before his resignation became effective, which would have mooted the reporting obligation under 42 U.S.C. § 11133. The Ninth Circuit found triable issues of fact as to whether the hospital's stated reason for filing the adverse action report was false and pretextual — including evidence that the investigation may have concluded under the hospital's own bylaws before the reporting deadline — and reversed summary judgment on certain constitutional claims. The court's analysis confirms that a valid challenge to an NPDB "resignation under investigation" report must focus on whether an investigation was actually pending at the time of resignation, not on whether the physician was aware of it Ulrich v. City and County of San Francisco, 308 F.3d 968 (2002).
By the way - if you try to challenge yourself be aware that courts have held that physicians must exhaust administrative remedies before seeking judicial relief from an NPDB report. In Straznicky v. Desert Springs Hosp., 642 F.Supp.2d 1238 (2009), the court dismissed a physician's claims as premature where he had not first filed a dispute with the HHS Secretary under 45 C.F.R. § 60.14. So don't let your administrative remedies lapse and then see a lawyer asking to contest! There is no "I did the best I could, I'm not a lawyer" way out.
Does This Apply in the Context of the Medical Board of California?
There are related but separate California-specific requirements:
California Business and Professions Code §805 (and related sections like 805.01, 805.8) requires hospitals and certain peer review bodies to file reports (often called "805 reports") with the Medical Board of California (MBC) for specific adverse actions or proposed actions involving physicians, including denials/rejections of privileges, suspensions, terminations, certain restrictions, or resignations/leaves/withdrawals after receiving notice of a pending investigation for a medical disciplinary cause or reason.
These state reports can overlap with NPDB triggers but are not identical. For example, California law sometimes ties reporting more explicitly to notice of an investigation, whereas NPDB reporting does not require the practitioner's awareness.
When a hospital files an NPDB report for a privileges action, it may also trigger or coincide with an 805 report to the MBC, and vice versa. The MBC receives many reports that are also sent to the NPDB, and disciplinary actions by the MBC itself are reported to the NPDB.
One concern is that a doctor resigns in order to limit the amount of negative information that is put (by the MEC or hospital) into an 805 report. However as the Medical Board website says, the 805 report shall contain a "Description of the facts and circumstances of the medical disciplinary cause or reason and any other relevant information deemed appropriate by the reporter." The "any other reason deemed appropriate language opens the door to anything and everything.
At times a negotiated resignation can limit the "any other relevant information" but at times that will not work. Your attorneys can explore this issue but in the realm of "peer review" and resignations little is guaranteed.
In short:
The NPDB rule (no awareness required; report if investigation was ongoing) applies fully in California for the federal data bank.
Hospitals in California must comply with both federal NPDB rules and state 805 reporting obligations, which can create parallel (but not always identical) requirements.
Navigating the peer review process and resignation rules requires expert advice and difficult judgments. The physician lawyers at the Law Office of Daniel Horowitz are here to guide you. Call us at 925-283-1863
