Health Care Law Blog

License Sanctions Against Health Professionals Can Be Used As Evidence in Unrelated Malpractice Cases

Any disciplinary sanction against a health professional’s license can have serious collateral consequences, such as termination from provider networks, loss of malpractice insurance or substantially increased rates, medical staff investigations and proceedings, adverse employment actions, and reports to the National Practitioner Data Bank. A recent Michigan Court of Appeals decision highlights an added risk that many health professionals and their attorneys may not have known. A relatively minor licensing sanction was used, with devastating effect, as evidence in an unrelated malpractice action.

A dentist was sued for malpractice following a root canal procedure in Holder v Schwarcz. The jury awarded $67,500 in damages and the trial court granted $151,555 in case evaluation sanctions. The dentist had been involved in an unrelated licensing investigation relating to root canals for another patient. The licensing action was resolved through a consent order. In a consent order, a health professional does not admit any allegations in the licensing complaint, but agrees that the board’s disciplinary subcommittee may treat them as true and enter a sanction for violating the Public Health Code. The sanction imposed against the dentist in the licensing action included probation for one year, a requirement for ten hours of continuing education, and a $5,000 fine. The sanction was fairly typical for a licensing case alleging negligent care.

In the malpractice action, the trial court admitted the consent order into evidence over the dentist's objection. The Court of Appeals held that the consent order was properly admitted to (1) rebut the defendant’s testimony that he did not remember the visit but would have reviewed the x-ray showing the broken tooth with the patient, and (2) show the dentist was motivated to not tell the patient about the broken tooth to avoid the risk of further disciplinary action. It is fair to presume that the jury was influenced by evidence that the Board of Dentistry found the dentist negligently performed several root canals.

Any health professional faced with a licensing investigation has to know about and give serious consideration to the possible consequences beyond the actual sanction imposed by the licensing board. While probation, continuing education, and a fine may not have seemed too significant at the time, the sanction ended up causing an unexpected and very expensive side effect. So what does this mean for other licensed health professionals? Take every licensing complaint or investigation seriously, and consult with a knowledgeable and experienced attorney to help you through the process.

If you have any questions about health professional licensing issues in Michigan, please contact Richard Kraus at 517-371-8104 or rkraus@fosterswift.com.

Categories: Licensing, Physicians, Providers