On March 22, 2013, a new Ohio law will go into effect that seeks to clarify who must notify a patient that his or her physician’s employment has been terminated.  Under Ohio Revised Code Section 4731.228, the “health care entity” that employs a physician is now responsible for notifying the physician’s patients that the physician’s employment has been terminated.  This new law will trump the Ohio State Medical Board’s current rules that places the responsibility for notices solely on the departing physician.

Section 4731.228 appears to be the Ohio General Assembly’s solution to the following recurring problem.  A hospital, physician practice or other health care provider fires a physician.  Under current Ohio law, the physician is solely responsible for notifying his or her patients that the physician is, for example, terminating his or her relationship with the patients or leaving the practice.  The physician must provide certain information in mailings, published notices in newspapers and conspicuous signs posted at the current practice location.  The problem is that the physician’s former employer not only just fired that physician but also controls the lists of patients’ names and contact information.  That employer may not want to hand over this valuable information for both competitive reasons and perhaps for personal reasons (e.g., hard feelings).  Further, the employer most likely has no interest in allowing the physician to hang signs around the office encouraging patients to follow the physician to his or her new practice.  After all, the employer just fired the physician.  So, the physician is then left in the unsolvable dilemma that, under the threat of disciplinary action, the Medical Board requires the physician to notify his or her patients but the physician has no access to the information to fulfill this obligation.

This problem brings us to the Ohio General Assembly’s solution: To shift the notice responsibility to the employer.  The employer can now only avoid this responsibility, and the associated costs, by providing the departing physician with a list of patients treated by the physician and contact information for each of those patients.  Problem solved, right?

Not exactly.  Section 4731.228 is going to keep the Medical Board busy for the next six months, by which date (i.e., September 22, 2013) the new law requires the Medical Board to conform its current rules to the new law.  Here are a few of the many issues that the Medical Board will most likely be mulling over:

Are independent contractors completely excluded from the new rule? 

Section 4731.228 applies only to physicians who are employed.  While the law does not define employment, it appears to refer only to W-2 employees.  For example, a health care entity is not required to provide notices to patients after a physician’s employment is terminated if “the physician continues to provide medical services for patients of the health care entity on an independent contractor basis.”  Given the apparent limited scope of the new law, physicians providing services as independent contractors will most likely remain under current law and potentially the same problem that Section 4731.228 seeks to address.

Do the Medical Board’s current rules remain necessary and to what extent? 

As the Medical Board begins to conform its existing rules to the new law, it may conclude that Section 4731.228’s limited scope requires that the rules should generally remain in place in their current form.  Section 4731.228 addresses only the situation where a physician’s employment is terminated, that is, “the end of a physician’s employment with a health care entity for any reason.”  However, the current Medical Board rule extends not only to the end of a physician’s employment but also to any situation where the physician is (1) terminating his or her relationship with a patient or (2) leaving a practice, selling a practice, or retiring from practice.  Except where employment is terminated, Section 4731.228 is silent on who must notify patients in any of these situations.  Since Section 4731.228 has such a narrow scope, it may be possible for the Medical Board to meet its obligation to revise its current rules by making very limited revisions.

For example, while the current rules state that a failure to comply with the rules may subject the physician to disciplinary action, the Medical Board could add an exception to this rule for compliance with Section 4731.228.  Alternatively, the Medical Board may add language to its current rules that limits the rules only to situations not covered by Section 4731.228.  Regardless of the extent of the revisions the Medical Board may make, where Section 4731.228 does not apply, a physician may still be cut off from the information he or she needs to meet the notice obligations imposed by the Medical Board’s rules.

Will the Medical Board attempt to reconcile the requirements for Section 4731.228 with its current rules to avoid imposing two different standards for notice letters to patients?

Section 4731.228 differs from the Medical Board’s current rules in a number of respects.  For example, in determining which patients to notify, Section 4731.228 requires the health care entity or physician to look back only two (2) years rather than the current rules’ three (3) year requirement.  While Section 4731.228 requires additional content in the notice letters to patients, it does not impose the current rules’ requirement to publish in newspapers or to post signs.  Further, Section 4731.228 does not include the exception, which is part of the current rules, for situations where a physician has formally transferred care to another physician.  The Medical Board may decide to conform its current rules to all of these different requirements under Section 4731.228.  If it does not do so, physicians must be careful to comply with the correct notice requirements dependent on whether Section 4731.228 or the Medical Board’s rule applies.

The new law appears to expand the Medical Board’s authority but does the law fail to give the Medical Board teeth to enforce the law?

Whereas the Medical Board’s current notice rules reflect its limited authority over physicians and the practice of medicine by placing the notice obligations solely on the physicians whom it regulates, Section 4731.228 appears to give the Medical Board, for the first time, authority over any entity that falls within the definition of a “health care entity.”  A health care entity is any of the following that employs a physician to provide physician services:

  • A hospital registered with the Department of Health;
  • A for-profit corporation;
  • A nonprofit corporation;
  • A limited liability company;
  • A health insuring corporation;
  • A partnership; and
  • A professional association.

These entities are not generally subject to the Medical Board’s authority, except to the extent that they might engage in the licensed or unlicensed practice of medicine, although the Medical Board has fairly recently taken the position that Ohio no longer has a corporate practice of medicine prohibition.  For example, while Ohio does not license hospitals, hospitals are regulated by the Department of Health.  Likewise, health insuring corporations (as HMOs are called in Ohio) are licensed by the Department of Insurance.  In such case, the Ohio General Assembly could have placed the new law in one or more sections of the Ohio Revised Code that give the oversight responsibility to these state agencies.

Instead, the Ohio General Assembly chose to place the new law in Chapter 4731, which is enforced by the Medical Board.  However, the Medical Board’s authority to take disciplinary action is generally limited to disciplining a physician under O.R.C. §§ 4731.20 and 22.  While Chapter 4731 establishes certain other penalties that may be enforced by the Medical Board (e.g., O.R.C. § 4731.99), none of the disciplinary actions that may be taken by the Medical Board appear to give the Medical Board legal authority to penalize a health care entity for failing to meet its obligations under Section 4731.228.  It is possible that the Medical Board has seen the scope of its authority expand but without any enforcement mechanism.  In such case, the Medical Board may potentially be left with a scenario that patients of employed physicians are less protected than patients of independently contracted physicians.