Performance audit, Arizona Naturopathic Physicians Board of Medical Examiners

              State of Arizona
Office
of the
Auditor General
PERFORMANCE AUDIT
Report to the Arizona Legislature
By Debra K. Davenport
Auditor General
June 2000
Report No. 00-9
ARIZONA
NATUROPATHIC
PHYSICIANS BOARD
OF
MEDICAL EXAMINERS
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee
composed of five senators and five representatives. His mission is to provide independent and impar-tial
information and specific recommendations to improve the operations of state and local government
entities. To this end, he provides financial audits and accounting services to the state and political
subdivisions and performance audits of state agencies and the programs they administer.
The Joint Legislative Audit Committee
Representative Roberta L. Voss, Chairman
Senator Tom Smith, Vice-Chairman
Representative Robert Burns Senator Keith Bee
Representative Ken Cheuvront Senator Herb Guenther
Representative Andy Nichols Senator Darden Hamilton
Representative Barry Wong Senator Pete Rios
Representative Jeff Groscost Senator Brenda Burns
(ex-officio) (ex-officio)
Audit Staff
Melanie Chesney—Manager
and Contact Person (602) 553-0333
Natalie Coombs—Audit Senior
Jay De Pree—Staff
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410
Phoenix, AZ 85018
(602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
June 21, 2000
Members of the Legislature
The Honorable Jane Dee Hull, Governor
Dr. John L. Brewer, Executive Director
Naturopathic Physicians Board of Medical Examiners
Transmitted herewith is a report of the Auditor General, A Performance Audit of the
Naturopathic Physicians Board of Medical Examiners. This report is in response to a
June 16, 1999, resolution of the Joint Legislative Audit Committee. The performance
audit was conducted as part of the Sunset review set forth in A.R.S. §41-2951 et seq. I am
also transmitting a copy of the Report Highlights for this audit to provide a quick summary
for your convenience.
As outlined in its response, the Naturopathic Physicians Board of Medical Examiners
indicates that it will implement 15 of the 17 recommendations directed at the Board,
implement one recommendation in a different manner, and will not implement one
recommendation. The Board states that it does not find it necessary to implement the
recommendation to require the executive director to submit a corrective action plan,
including a timetable, for addressing records maintenance deficiencies.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on June 22, 2000.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
OFFICE OF THE AUDITOR GENERAL
Program Fact Sheet
Naturopathic Physicians Board
of Medical Examiners
Services: The Naturopathic Physicians Board of Medical Examiners is responsible for regu-lating
naturopathic doctors through licensure. The Board performs the following services: 1)
Conducts licensing examinations; 2) Audits doctors’ compliance with annual continuing
medical education requirements; 3) Issues and renews licenses and certificates; 4) Conducts
investigations and hearings concerning unprofessional conduct or other statutory violations;
5) Disciplines violators; and 6) Provides consumer information to the public.
Personnel: 3 full-time positions, one of
which has never been filled.
The Board consists of five members who
serve five-year terms:
Ü Three naturopathic doctors who have
resided in the State and practiced natu-ropathic
medicine full-time for at least
five years preceding appointment; and
Ü Two public members.
Revenue: $205,200
(Fiscal Year 2000 est.)
$172,400
$149,100
$205,200
1998 1999 2000 (est.)
Fiscal Year
The Board receives no General Fund mon-ies.
Revenues are primarily derived from
license, examination, and permit fees. Ten
percent of Board revenues are remitted to
the State General Fund.
Facilities: The Board owns no facilities. The
Board’s office is located at 1400 W. Washing-ton
in Phoenix. Board meetings are held in
the same building.
Equipment: The Board owns only standard
office equipment.
Agency Mission:
“The primary duty of the
Board is to protect the
public from unprofessional
and incompetent physi-cians
who practice naturo-pathic
medicine.”
OFFICE OF THE AUDITOR GENERAL
Program Goals (Fiscal Year 2000-2001)
1. To efficiently process license and cer-tificate
applications and administer ex-aminations.
2. To investigate in a timely manner and
adjudicate complaints to protect the
public from incompetent and unprofes-sional
practitioners and report the
unlawful practice of naturopathic
medicine to the county attorneys and
the Office of the Attorney General.
3. To implement a program that would
audit naturopathic physicians’ pre-scribing
and dispensing practices and
also their compliance with annual con-tinuing
medical education (CME) re-quirements.
Adequacy of Performance Measures:
Although the Board’s three goals appear to
be reasonably aligned with its mission, audi-tors
identified some problems with the
Board’s performance measures:
Ü The Board does not have 4 of the 15 per-formance
measures required by the
Governor’s Office of Strategic Planning
and Budgeting. For example, the Board
does not have a performance measure to
report the percentage of applicants or li-cense
holders reporting very good or ex-cellent
customer service. However, the
Board has recently developed a survey
to obtain such feedback.
Ü Some of the Board’s reported informa-tion
appears to be inaccurate or incor-rect.
This includes the information re-ported
for timely investigation and ad-judication
of complaints, percentage of
license applicants passing the examina-tion,
and percentage of physicians in
compliance with the dispensing statute.
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OFFICE OF THE AUDITOR GENERAL
SUMMARY
The Office of the Auditor General has conducted a performance
audit and Sunset review of the Arizona Naturopathic Physi-cians
Board of Medical Examiners pursuant to a June 16, 1999,
resolution of the Joint Legislative Audit Committee. The audit
was conducted as part of the Sunset review set forth in Arizona
Revised Statutes (A.R.S.) §§41-2951 through 41-2957.
The Naturopathic Physicians Board of Medical Examiners was
established in 1935 to regulate naturopathic physicians through
licensure. The 5-member Board is funded primarily through
licensing fees and regulates approximately 195 active naturo-pathic
physicians. These naturopaths were once restricted to
using natural, drugless, and nonsurgical methods; however, in
1992 the law was changed to allow these physicians to perform
many of the same activities performed by allopathic (M.D.) and
osteopathic (D.O.) physicians.
Legislative Clarification of
Naturopaths’ Scope of
Practice May Be Needed
(See pages 9 through 15)
The Legislature may wish to consider reviewing the Board’s
statutes to more clearly define what services naturopaths can
perform. Seemingly minor statutory changes have broadened
the naturopathic scope of practice to include practices once lim-ited
to allopathic (M.D.) and osteopathic (D.O) physicians. Ari-zona's
board, which has statutory authority to adopt rules for
recognizing naturopathic specialties, now proposes recognizing
16 specialties including family medicine and minor surgery,
internal medicine, neurology and psychiatry, and ophthalmol-ogy.
It is not clear if the Legislature intended such an extension
of naturopaths’ activities. No other state that regulates naturo-paths
recognizes such a broad range of specialties.
The Legislature may also wish to consider reviewing the
Board’s statutes to determine if increased review should be
Summary
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OFFICE OF THE AUDITOR GENERAL
provided over what prescriptions naturopaths can write. The
Board’s statutes require it to develop a list of “natural sub-stances”
that naturopaths can prescribe, but the statutes do not
define what “natural substances” are. The Board has developed
an extensive list, or formulary, that includes not only vitamins
and minerals, but also vaccines, antibiotics, oral contraceptives,
anabolic steroids, and controlled substances such as morphine
and cocaine. The federal Drug Enforcement Administration has
recently approved Arizona naturopaths to prescribe controlled
substances from the formulary because this appears to be in
accordance with state law. Although some other states allow
naturopaths to prescribe and dispense drugs, none has a list as
extensive as what the Board has developed. Most of these states
also have separate oversight bodies to develop or review the
list, while Arizona does not. These other states have also estab-lished
their formularies in rule before allowing naturopaths to
begin prescribing drugs; Arizona has not.
Numerous Problems
Exist with Licensing Exam
(See pages 17 through 24)
The Board needs to correct numerous problems with its three-part
licensing examination, or adopt a national examination, to
ensure that the naturopaths it licenses are competent. Since
1997, the Board has been administering a licensing examination
it developed specifically for Arizona. Problems with this ex-amination
call into question its validity as a tool for measuring
an applicant’s competence to practice naturopathy. For exam-ple,
the Board has not ensured that the examination tests what a
naturopath would need to know to practice safely and has not
shown that examination writers possess the necessary expertise
and training to develop test questions. Further, the Board has
made extensive adjustments to examination scores. For exam-ple,
one licensure applicant received credit for 90 questions that
she had answered incorrectly on one part of the February 1999
exam. As a result of such scoring adjustments, no one has failed
the Board’s exam since September 1998.
The Board also has not maintained adequate examination re-cords
to show that all licensed naturopaths have taken all re-quired
parts of the examination. For 19 of the 32 naturopaths
Summary
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OFFICE OF THE AUDITOR GENERAL
licensed between November 1998 and October 1999, the Official
Examination Record did not show that they had taken all ex-aminations
required for licensure. If the Board continues to de-velop
and administer its own examination, it needs to take
steps to address all of these deficiencies.
The Board Needs to Improve
Complaint Processing
(See pages 25 through 30)
The Board needs to improve complaint processing to ensure
that complaints are resolved in a timely and appropriate man-ner.
Although the Board receives only 6 to 13 complaints each
year, at the time of this review, it had developed a backlog of
cases. Of 13 unresolved complaints, 5 had been open for more
than 1,000 days.
After these backlogged cases were brought to the Board’s atten-tion,
the Board made an effort to resolve them by placing them
on meeting agendas for discussion and by working to hire a
complaint investigator. While this is a step in the right direc-tion,
some additional improvements are needed. The Board’s
complaint records are so limited that the Board probably cannot
provide consumers with a complete, or even a recent, history of
complaints and disciplinary actions against practitioners. Poor
recordkeeping has also resulted in some confusion about which
complaints have been resolved.
The Board also needs to separate its complaint investigation
and adjudication functions. Currently, the full board partici-pates
in investigative interviews with licensees, and then adju-dicates
the case. Although not illegal, this practice can give the
appearance of bias and is inconsistent with the Attorney Gen-eral’s
advice contained in the Arizona Agency Handbook. The
process should be changed so that Board members either do
not participate in investigations, or, if they do participate, are
recused from resolving the case.
Summary
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OFFICE OF THE AUDITOR GENERAL
Board Needs to Strengthen
Operations and Improve
Oversight of Executive Director
(See pages 31 through 37)
Board operations suffer from numerous problems that either
have not been recognized or adequately addressed. In addition
to those problems already discussed above, recordkeeping defi-ciencies
exist in a number of other areas, and the Board has had
difficulty staying within its personal services budget. In addi-tion,
the Board has not responded to a 1992 legislative directive
to develop rules for approving naturopathic medical schools
and training programs. It has not responded to legislative direc-tive
to establish time frames for issuing licenses as required by
A.R.S. §41-1073(A), to be in place by December 31, 1998. Many
of these problems are compounded by the Board’s failure to
adequately oversee its executive director. In addition, the Board
has allowed open meeting law violations to occur, and its
members have sometimes voted on issues that could carry the
appearance of a conflict of interest. For example, a former
member voted to approve a training program at an institution
where the member was on the faculty. Further, until August
1999, the Board allowed its executive director to also act as a
Board member even though this was statutorily prohibited in
August 1998.
Sunset Factors
(See pages 39 through 47)
As part of the Sunset review process, this audit also recom-mends
some additional changes to the Board’s practices, rules,
and statutes. For example, the Board should take disciplinary
actions against naturopaths who do not comply with the re-quirement
to attend continuing education courses. The Board
also needs to adopt numerous rules relating to issues such as
licensing time frames, as well as the criteria it will use for ap-proving
schools, training programs, and specialty designations.
Finally, the Legislature should consider amending the Board’s
statutes to allow the Board to subpoena medical records as part
of complaint investigations, and to allow the Board to keep its
examination and examinees’ scores confidential. Currently, at
Summary
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OFFICE OF THE AUDITOR GENERAL
least five other regulatory boards, including those that regulate
podiatrists and optometrists, have statutory provisions to keep
examinations and scores confidential.
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OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS
Page
Introduction and Background ......................... 1
Finding I: Legislative Clarification of
Naturopaths’ Scope of Practice
May Be Needed............................................ 9
Naturopathic Laws
Vary Among States......................................................... 9
Arizona Appears to Allow
Broadest Scope of Practice ............................................. 10
Extensive Formulary Includes
Prescription Drugs and
Controlled Substances.................................................... 13
Recommendations.......................................................... 15
Finding II: Numerous Problems Exist
with Licensing Exam ................................... 17
Scoring Methods
Are Questionable............................................................ 18
Test Development Does
Not Meet Recognized Standards................................... 19
Examination Records
Not Adequately Maintained.......................................... 21
Examination Deficiencies
Need to Be Addressed.................................................... 22
Recommendations.......................................................... 24
Table of Contents
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OFFICE OF THE AUDITOR GENERAL
TABLE OF CONTENTS (concl’d)
Page
Finding III: The Board Needs to
Improve Complaint Processing.................. 25
Backlog Result of Slow
Complaint Resolution.................................................... 25
Complaint Records Not
Well-Maintained............................................................. 27
The Board Needs to
Separate Its Investigation
and Adjudication Processes........................................... 28
Recommendations.......................................................... 30
Finding IV: Board Needs to Strengthen
Operations and Improve Oversight
of Executive Director................................... 31
Problems Have Been Neglected
in Many Areas................................................................. 31
Oversight of Executive Director
Has Been Insufficient...................................................... 33
Open Meeting Law Violations
Need to Be Addressed.................................................... 34
Recommendations.......................................................... 37
Sunset Factors.................................................. 39
Agency Response
Table
Table 1 Naturopathic Physicians Board of Medical
Examiners
Statements of Revenues, Expenditures, and
Changes in Fund Balance
Years Ended or Ending June 30, 1998, 1999, and
2000 (Unaudited)................................................ 4
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INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance
audit and Sunset review of the Naturopathic Physicians Board
of Medical Examiners (Board) pursuant to a June 16, 1999, reso-lution
of the Joint Legislative Audit Committee. This audit was
conducted under the authority vested in the Auditor General
by Arizona Revised Statutes §§41-2951 through 41-2957.
Board Responsibilities
Laws 1935, Chapter 105 established what is now called the Ari-zona
Naturopathic Physicians Board of Medical Examiners,
which is responsible for regulating naturopathic doctors
through licensure. A.R.S. §32-1501(20) defines the practice of
naturopathic medicine as “a medical system of diagnosing and
treating diseases, injuries, ailments, infirmities and other condi-tions
of the human mind and body including by natural means,
drugless methods, nonsurgical methods, devices, physical, elec-trical,
hygienic and sanitary measures and all forms of physical
agents and modalities.” As part of its duties, the Board:
ü Certifies doctors who dispense natural substances to pa-tients,
ü Certifies doctors who practice as specialists,
ü Certifies medical assistants who assist naturopathic doctors,
and
ü Approves students’ and graduate doctors’ training pro-grams.
The Board’s mission states:
The primary duty of the Board is to protect the public from
unprofessional and incompetent physicians who practice natu-ropathic
medicine.
Introduction and Background
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OFFICE OF THE AUDITOR GENERAL
The Board accomplishes this mission by performing a variety of
functions including:
ü Ensuring that persons practicing naturopathic medicine
possess required qualifications by issuing and renewing li-censes;
ü Conducting investigations and hearings concerning unpro-fessional
conduct or other statutory violations;
ü Disciplining violators; and
ü Providing consumer information to the public.
Currently, the Board licenses approximately 195 active naturo-pathic
doctors and receives approximately 6 to 13 complaints
each year.
Statutory Licensure
Requirements
The Board’s statutes and rules contain the following general
education, experience, and examination requirements for licen-sure
as a naturopathic doctor:
ü Graduation from an approved school of naturopathic medi-cine.
There are currently four schools of naturopathic medi-cine
in North America that are accredited or are candidates
for accreditation by the Council on Naturopathic Medical
Education. One of these schools is located in Arizona.
ü Completion of an approved internship, preceptorship, or
clinical training program in naturopathic medicine1; and
1 Internship and perceptorship training are completed after graduation
from a naturopathic medical school. Internship training consists of rota-tions
through various areas of medical practice and lasts 12 months or
more. Preceptorship training is focused on an area of medical practice
and lasts less than 12 months. Clinical training is completed during the
last 2 years of medical school.
Introduction and Background
3
OFFICE OF THE AUDITOR GENERAL
ü Passage of the three parts of the written licensure examina-tion
with a grade of 75 percent or more on each part of the
exam.
Organization and Staffing
The Board consists of five governor-appointed board members,
who serve five-year terms. Three of the members must be natu-ropathic
doctors who have resided in the State and practiced
naturopathic medicine full-time for at least five years preceding
appointment. The remaining two board members are public
members who do not have any connection to medical schools,
institutions, or practitioners.
Currently, the Board’s staff includes an executive director and
one secretary who are responsible for:
ü Collecting application, renewal, and other fees;
ü Accepting and preparing application files for Board review;
ü Initiating investigations of unprofessional conduct and
medical incompetence; and
ü Providing information to the public.
The Board is also authorized a third full-time position for in-specting
schools and training programs, and evaluating con-tinuing
medical education programs. However, this position is
not currently filled.
Budget
The Legislature appropriates monies to the Board from the Na-turopathic
Physicians Board of Medical Examiners Fund. This
fund contains revenues derived principally from the collection
of licensure application and renewal fees. The Board deposits
90 percent of its revenues into the Naturopathic Physicians
Board of Medical Examiners Fund and the remaining 10 per-cent
of revenues into the General Fund. Table 1 (see page 4)
Introduction and Background
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Table 1
Naturopathic Physicians Board of Medical Examiners
Statement of Revenues, Expenditures, and Changes in Fund Balance
Years Ended or Ending June 30, 1998, 1999, and 2000
(Unaudited)
1998 1999 2000
(Actual) (Actual) (Estimated)
Revenues:
Licenses, fees, and permits $142,342 $128,925 173,400
Sales and charges for goods and services1 25,955 16,463 30,800
Fines and forfeits 1,675 250 800
Other 2,384 3,472 200
Total revenues 172,356 149,110 205,200
Expenditures: 2
Personal services 54,744 66,716 105,900 3
Employee related 11,610 13,118 15,000
Professional and outside services 25,049 22,404 43,700 4
Travel, in-state 1,583 2,000
Other operating 5,749 10,314 15,800
Equipment 3,509 5,839      
Total expenditures 100,661 119,974 182,400
Excess of revenues over expenditures 71,695 29,136 22,800
Remittances to the State General Fund 5 17,228 15,015 20,500
Excess of revenues over expenditures and
remittances to the State General Fund 54,467 14,121 2,300
Fund balance, beginning of year 108,467 162,934 177,055
Fund balance, end of year $162,934 $177,055 $179,355
1 Over 96 percent of the amount is derived from examination fees, and less than 4 percent from sales of physician
directories.
2 Includes administrative adjustments from the prior year.
3 Includes an estimated $25,000 to fund a newly authorized position for inspecting schools of naturopathic medicine.
4 Includes estimated additional costs for acquiring investigative services, medical consultants, and court reporting
services necessary for handling an increased level of licensee complaints. In addition, includes an estimated one-time
cost for procuring additional exam questions.
5 As a 90/10 agency, the Board remits all of its administrative penalties and 10 percent of all other revenues to the State
General Fund.
Source: The Arizona Financial Information System Revenues and Expenditures by Fund, Program, Organization, and Object
and Trial Balance by Fund reports for the years ended June 30, 1998 and 1999; and the Department’s Revenue
and Expenditure Statement as of December 30, 1999, for the 2000 estimates.
Introduction and Background
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OFFICE OF THE AUDITOR GENERAL
illustrates the Board’s actual and estimated revenues and ex-penditures
for fiscal years 1998 through 2000.
Audit Scope, Methodology,
and Limitations
Audit work focused on the Board’s licensure examination,
complaint investigation, and adjudication processes, Board
management, and naturopathic doctors’ scope of practice. This
performance audit and Sunset review includes findings and
recommendations as follows:
ü The need for legislative review of the Board’s scope of prac-tice
and changes to the Board’s process for developing a
formulary, which is a list of natural substances that naturo-paths
can prescribe (see Finding I, pages 9 through 15);
ü The need for the Board to improve its written licensure ex-amination
or use the national examination (see Finding II,
pages 17 through 24);
ü The need for the Board to resolve complaints in a timely
manner, improve recordkeeping, and change its investiga-tion
and adjudication processes (see Finding III, pages 25
through 30);
ü The need for increased Board oversight of Board staff (see
Finding IV, pages 31 through 37); and
ü The need for the Board to adopt rules; to take action against
naturopaths who do not comply with continuing education
requirements; and to ensure compliance with state pro-curement
regulations (see Sunset Factors, pages 39 through
47).
Throughout the audit, Auditor General staff encountered a
number of limitations in obtaining information about the
Board’s performance. Specifically, the Board’s staff was not
readily able to provide complete complaint logs or any other
assurance that the auditors were provided all complaint files. In
addition, complaint files were missing needed documentation,
Introduction and Background
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OFFICE OF THE AUDITOR GENERAL
including Board resolutions. Other information that was not
readily available, and in some cases could not be provided, in-cluded
Board meeting minutes for some meetings since 1996,
and exam results and supporting documentation for some ex-ams
administered since September 1998.
This audit used a variety of methods to study the issues ad-dressed
in this report. These methods included interviewing
Board members, the Board’s executive director, and the Board’s
current and former Attorney General representatives; attending
Board meetings; and reviewing statutes, rules, and Board meet-ing
minutes. In addition, the following specific methods were
used:
ü To compare the scope of practice of naturopathic doctors in
Arizona to other states, as well as the formulary develop-ment
process, auditors reviewed statutes and other docu-ments
from 10 of the 11 states that license naturopaths.1
Auditors also interviewed representatives from 6 of these
states.
ü To evaluate the Board’s licensure examination, auditors
identified nationally accepted standards for licensure exams
and compared these with the Board’s exam, policies, and
procedures. Further, auditors reviewed the scoring of 18
written examinations administered in February 1999. Fi-nally,
one auditor took part 2 of the Board’s examination
that was administered in February 1999 and applied the
Board’s scoring practices to determine if this auditor would
pass or fail the examination.
ü To assess the timeliness of the Board’s complaint investiga-tion
and adjudication processes, auditors reviewed 42 com-plaints
that appeared to be within the Board’s jurisdiction
and were received between January 1996 and October 1999.
1 The states that license naturopathic doctors are Alaska, Arizona, Con-necticut,
Hawaii, Maine, Montana, New Hampshire, Oregon, Utah,
Vermont, and Washington. Hawaii’s statutes and other documentation
were not readily available and were not included in this review.
Introduction and Background
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OFFICE OF THE AUDITOR GENERAL
ü To assess the timeliness of issuing licenses, auditors re-viewed
a random sample of the licensing files of 33 naturo-paths
who renewed their licenses for 1999. Auditors also re-viewed
the licensing files of 15 naturopaths who received
initial licenses in 1998 and 1999. These 10 files included a
random sample of 10 initial 1998 licenses, and all 5 initial
1999 licenses issued as of October 1999.
ü To determine whether the Board provides consumers with
accurate and complete information, including complaint
histories, about licensed naturopaths, auditors posing as
members of the public made four calls to the Board request-ing
information. In addition, one auditor visited the Board’s
office to review a file in person.
ü To determine whether the Board complies with state pro-curement
regulations, auditors reviewed documentation for
12 service contracts.
This audit was conducted in accordance with government au-diting
standards.
The Auditor General and staff express appreciation to the
members of the Naturopathic Physicians Board of Medical Ex-aminers
and staff for their assistance throughout the audit.
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OFFICE OF THE AUDITOR GENERAL
FINDING I LEGISLATIVE CLARIFICATION
OF NATUROPATHS’ SCOPE OF
PRACTICE MAY BE NEEDED
Recent statutory changes have broadened the scope of naturo-pathic
medicine in Arizona beyond its traditional boundaries.
Only a few states regulate naturopathy, and with the exception
of Arizona, most of these place numerous restrictions on the
practice. In contrast, the scope of practice in Arizona is broad
enough to allow naturopaths to perform many activities once
limited to allopathic (M.D.) and osteopathic (D.O.) physicians.
In addition, the Board has also interpreted the statute allowing
naturopaths to prescribe “natural substances” to include many
legend, or prescription, drugs and controlled substances.
Naturopathic Laws
Vary Among States
There appears to be little agreement among states and profes-sional
organizations about the appropriate level of regulation
and scope of practice for naturopathic physicians. Currently,
only 11 states regulate naturopathy. A 12th state, Florida, has
naturopathic statutes on the books, but the law applies only to
naturopaths who became licensed before July 1, 1959. Further, it
has been reported that several other states, like Florida, once
had naturopathic licensing laws, but have abolished them.1 At
least two of these states, Tennessee and South Carolina, have
gone so far as to make naturopathy illegal.2 Among the states
Few states regulate naturo-pathy.
1 These states include California, Georgia, Pennsylvania, South Carolina,
Tennessee, and Texas.
2 South Carolina’s law states that it is illegal for anyone to practice naturo-pathy.
Naturopathy is also illegal in Tennessee except when practiced by
individuals who are licensed in the various healing arts, such as M.D.s,
D.O.s, chiropractors, and dentists.
Finding I
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that do regulate naturopathy, laws vary from prohibiting natu-ropathic
doctors from claiming to practice medicine to allowing
them to act as primary care physicians. Despite the variation in
the practices allowed, most states that regulate naturopathy
require similar levels of education and training for licensure.
There is also dissension among professional naturopathic
groups about the necessity of licensure and the appropriate
scope of practice. Two groups, the Coalition for Natural Health
and the American Naturopathic Medical Association, actively
oppose licensure. These organizations maintain that no true
naturopath would desire to prescribe drugs, perform surgery,
or undertake other activities that have traditionally been within
the realm of allopathic physicians, or M.D.s. On the other hand,
the American Association of Naturopathic Physicians (AANP)
actively supports licensure and views prescribing drugs and
performing minor surgery as being within the appropriate
scope of practice.
Arizona Appears to Allow
Broadest Scope of Practice
Recent statutory changes appear to have made Arizona’s natu-ropathic
laws the most permissive in the nation. In 1992, minor
statutory wording changes expanded the scope of naturopathic
medicine’s practice beyond its traditional boundaries. The legis-lative
intent behind these changes is unclear. However, Ari-zona’s
Board, which has statutory authority to adopt rules for
recognizing naturopathic specialties, now proposes recognizing
16 specialties, many of which were once limited to M.D.s and
D.O.s. Other states do not permit such a broad scope of prac-tice,
and those that recognize specialties limit them to naturo-pathic
childbirth and acupuncture.
Statutory change impacts scope of practice—Prior to 1992, Ari-zona
statutes limited naturopathic physicians to treating pa-tients
through drugless and non-surgical means. Two court
cases and a 1990 Attorney General opinion affirmed that natu-ropaths
could not prescribe drugs or perform surgery based on
the statutory definition of naturopathy at the time:
Professional groups disagree
about the appropriate scope of
practice.
Arizona’s laws place few
restrictions on naturopathic
practice.
Finding I
11
OFFICE OF THE AUDITOR GENERAL
“Naturopathy” means a system of treating the abnor-malities
of the human mind and body by the use of
natural, drugless or non-surgical methods, including the
use of physical, electrical, hygienic and sanitary meas-ures
and all forms of physiotherapy.
However, in 1992, the word “including” was inserted in the
definition, and together with subsequent changes, A.R.S. §32-
1501(20) now provides:
“Practice of naturopathic medicine” means a medical
system of diagnosing and treating diseases, injuries, ail-ments,
infirmities and other conditions of the human
mind and body including by natural means, drugless
methods, nonsurgical methods, devices, physical, elec-trical,
hygienic and sanitary measures and all forms of
physical agents and modalities. (emphasis added.)
With the addition of “including,” the statute no longer limits
naturopaths to natural, drugless, or non-surgical methods. In-stead,
the only limitation on the procedures Arizona naturo-pathic
physicians may perform is whether the practice is taught
in naturopathic medical schools or training programs.
Legislative intent is unclear—It is unclear whether the Legisla-ture
intended for these changes to significantly expand naturo-pathic
physicians’ scope of practice. Auditors were unable to
locate minutes for committee hearings in which the change
would have been discussed. In addition, the changes did not go
through the formal sunrise process, where any increase in the
scope of practice would have been legislatively reviewed. As
part of the sunrise review, the Board would have had to explain
why a change was needed, and provide evidence that it had
previously functioned adequately in protecting the public.
Other areas that the Legislature would have reviewed include
whether effective quality assurance standards exist, such as a
code of ethics, and whether training is available to prepare
practitioners to function at the proposed level.
Finding I
12
OFFICE OF THE AUDITOR GENERAL
Board proposes numerous specialties—The Board now plans to
allow naturopaths to advertise expertise in 16 specialty practice
areas, many of which
were once limited to
M.D.s and D.O.s. The
Board has the statutory
authority to adopt rules
for approving naturo-pathic
specialties. Al-though
it has not yet
adopted any such rules,
the Board has already ap-proved
training programs
in at least 4 specialty ar-eas,
and has issued certifi-cates
to at least 16 naturo-paths
in the specialty of
family medicine. Cur-rently,
there are no statutory restrictions on the type of special-ties
that the Board can recognize, nor are there specific statutory
education or examination requirements for doctors seeking
specialty certification.
Other states restrict practices—In contrast, other states that
regulate naturopaths continue to impose numerous restrictions
on naturopathic practices and specialties. Most of these states’
statutes specifically limit naturopathic practices to such things
as hydrotherapy, dietetics, electrotherapy, sanitation, manipula-tion,
counseling, prescribing diagnostic tests, and performing
physical exams. Further, although there are four states other
than Arizona that recognize specialties, these are limited to
natural childbirth and/or acupuncture.1 The other states that
recognize specialties also generally have statutes that specify
education and/or training requirements and limit the proce-dures
that a naturopath can perform. For example, these states’
statutory requirements for becoming a specialist in naturo-pathic
childbirth include such things as completing an intern-ship
with an M.D., passing examinations, and participating in a
minimum number of live births.
1 These states are Maine, Montana, New Hampshire, and Oregon.
Proposed specialties:
Acupuncture Dermatology
Emergency Medicine Family Medicine and
Geriatrics Minor Surgery
Internal Medicine Medical Imaging and
Medical Pharmacology Radiology
and Toxicology Neurology
Obstetrics and Gynecology and Psychiatry
Ophthalmology Orthopedics, Physical
Pathology and Medicine, and
Laboratory Medicine Rehabilitation
Pediatrics Preventive and
Proctology Environmental
Medicine
Other states limit specialties
to naturopathic childbirth
and acupuncture.
Finding I
13
OFFICE OF THE AUDITOR GENERAL
Because the scope of practice in Arizona appears to be much
broader than in these other states, and it is not clear whether
this is what the Legislature intended, the Legislature should
consider reviewing A.R.S. §§32-1501(17) and (20), and if neces-sary,
modify the statues to more clearly outline acceptable prac-tices.
Extensive Formulary Includes
Prescription Drugs and
Controlled Substances
The Board has assembled a list (called a formulary) of more
than 460 items that it believes naturopaths should be able to
dispense under current statutory authority of “natural sub-stances”—
a term the statutes do not define. The Board’s list
includes both prescription drugs and some controlled sub-stances.
The list has not been established by administrative rule,
which would allow for public input. Other states with such lists
have established them by administrative rule and also have
oversight bodies to review the items included.
Arizona’s formulary includes a broad range of drugs—In estab-lishing
its extensive formulary, the Board relies on a 1995 At-torney
General intraoffice memo indicating that statutes allow
naturopaths to dispense and administer natural substances,
including drugs. The Board defines “natural substances” to
mean drugs derived from animals, minerals, or vegetables. The
resulting formulary lists more than 460 items that include not
only vitamins and minerals, but also vaccines, antibiotics, oral
contraceptives, anabolic steroids, and narcotics. For example,
according to the Board’s formulary, naturopaths can prescribe
and dispense oxytocin, which stimulates uterine contractions;
Lovastatin, which is used to control cholesterol levels; and con-trolled
substances, such as morphine and cocaine, that are used
as pain medications.
Efforts have been made to gain wider recognition for Arizona’s
formulary—The Board’s formulary has recently been recog-nized
by the DEA, and efforts have been made to gain it wider
acceptance by drug suppliers and pharmacists. The DEA has
recently approved Arizona naturopaths to prescribe controlled
The DEA will now allow
Arizona naturopaths to pre-scribe
controlled substances.
Finding I
14
OFFICE OF THE AUDITOR GENERAL
substances since this authority appears consistent with current
state law. In addition, the Board acted in at least one case to
inform a drug supplier that Arizona naturopaths are allowed to
prescribe and dispense substances on the formulary. However,
Arizona pharmacists may still be hesitant to fill prescriptions by
naturopaths. One concern is that the formulary is not estab-lished
in rule, which would have afforded pharmacists and
other outside parties an opportunity to provide input. Because
the formulary is not in rule, pharmacists must determine
whether a prescribed substance is “natural.” For example, a
pharmacist may decide to fill a prescription for the antibiotic
penicillin, but may not fill one for amoxycillin because it is a
semisynthetic penicillin.
Other states impose greater limits on prescribing authority—
Some other states do allow naturopaths to prescribe drugs;
however none has as extensive a formulary as Arizona, and
most require a separate body to oversee formulary develop-ment.
Currently, laws in 7 other states give naturopaths pre-scription
authority; however, only 5 of these states have estab-lished
the formularies necessary to allow naturopaths to begin
prescribing drugs.1 The largest of these formularies is in Oregon
and lists approximately 270 different substances, or about 200
fewer than Arizona’s.
Most of the other states with statutory prescribing authority
also have an oversight body designated to develop or review
the formulary. These formulary committees typically consist of
naturopaths, pharmacists, and M.D.s. These other states have
also adopted their formularies in rule before allowing naturo-paths
to begin prescribing substances from their lists.
1 New Hampshire and Utah have not yet established formularies. States
with formularies include Maine, Montana, Oregon, Vermont, and Wash-ington.
Formularies in Montana, Oregon, and Vermont include some
controlled substances, but only naturopaths in Montana and Oregon cur-rently
have DEA authority to prescribe these drugs.
In other states, M.D.s and
pharmacists help oversee
naturopathic formularies.
Finding I
15
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The Legislature should consider reviewing A.R.S. §§32-
1501(17) and (20) to determine whether the current scope of
practice is appropriate and clarify the statutes as needed to
more clearly outline acceptable practices.
2. The Legislature should consider amending A.R.S. §32-1501
to define “natural substances” and thereby clarify what na-turopaths
may prescribe.
3. The Legislature should consider establishing an oversight
committee consisting of naturopaths, pharmacists, medical
doctors, and others as the Legislature determines necessary,
to develop and/or review any formulary considered for use
by Arizona naturopaths.
4. The Board should adopt its formulary in rule to allow for
public comment and input.
5. The Board should adopt rules outlining the standards for
approving specialty training programs and certification be-fore
accepting and approving applications for specialty
schools, training programs, and certification.
16
OFFICE OF THE AUDITOR GENERAL
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17
OFFICE OF THE AUDITOR GENERAL
FINDING II NUMEROUS PROBLEMS
EXIST WITH LICENSING EXAM
Problems with the Board’s three-part licensing examination
indicate that the Board has either allowed incompetent naturo-paths
to practice, or that the exam itself is not a valid tool for
measuring competence. Although all applicants taking the ex-amination
since September 1998 have passed, it appears that
they did so because the Board adjusted their scores. The Board
has not ensured that the examination, which it developed spe-cifically
for use in this state, meets recognized standards. The
Board also has not maintained adequate examination records to
show that all licensed natu-ropaths
have taken all re-quired
parts of the examina-tion.
If the Board continues
to develop and administer its
own examination, it needs to
take steps to address these
deficiencies.
The Board has been adminis-tering
its own licensing ex-amination
since 1997. Prior to
that time, the Board con-tracted
with a company that
had developed a naturo-pathic
licensing examination
used by several other states.
However, conflicts with the
vendor, and statutory
changes requiring Arizona to
test many more subjects than
were included on the ven-dor-
supplied test, led the
Board to develop its own
test. The Board administers its examination twice each year,
typically in February and September.
A.R.S. §32-1525 requires licensure applicants
to take a three-part licensure examination.
Applicants pass the exam if they achieve 75
percent on each part of the exam.
ü Part 1 Exam Subjects: anatomy, basic
pharmacology and toxicology, biochemis-try,
microbiology and immunology, physi-ology,
pathology, and naturopathic juris-prudence.
ü Part 2 Exam Subjects: dermatology, oph-thalmology
and otolaryngology, geriatrics,
infectious diseases, neurology and psychia-try,
pediatrics, obstetrics and gynecology,
orthopedics, physical medicine, and reha-bilitation.
ü Part 3 Exam Subjects: emergency medicine
and minor surgery, clinical pharmacology,
internal medicine, laboratory diagnosis and
diagnostic imaging, clinical nutrition, bo-tanicals,
and diet therapy.
Finding II
18
OFFICE OF THE AUDITOR GENERAL
Scoring Methods
Are Questionable
Since September 1998, each part of the Board’s three-part exami-nation
has had a 100 percent pass rate; however, it appears that
the Board achieves this rate only by making substantial adjust-ments
to licensure applicants’ test scores. Through scoring ad-justments,
the Board determined that all individuals who took the
February 1999 examination were competent in all areas tested,
even though none actually achieved the necessary 75 percent
score on any part of the exam on their own.1 Scores these appli-cants
attained prior to scoring adjustments ranged from 51 percent
to 72 percent. In rescoring the examination, the Board:
ü Allowed credit for “difficult” questions—The Board deter-mined
that approximately one-sixth of all February 1999 ex-amination
questions were too difficult and gave applicants full
credit for each of these questions. These adjustments added
between 15 and 18 percent to all examination scores. The
Board identified the “difficult” questions by looking at the
number of applicants who answered the questions correctly,
without further analysis of whether the question was valid
and appropriate. Furthermore, the Board did not modify or
remove these questions from the September 1999 administra-tion
of the examination.
ü Made additional adjustments—Even after adjusting for the
“difficult” questions, only 9 of the 18 examinations had pass-ing
scores. Additional adjustments, for which there was no
apparent justification, were made to these 9 examinations,
which enabled the applicants to pass. For example, on the
1 The Board provided testing information and statistics for only the Febru-ary
1999 examination administration. Testing statistics and other re-quested
information for the September 1998 and September 1999 test
administrations was not available for analysis.
Everyone passed the Febru-ary
1999 exam, but without
scoring adjustments, no one
would have passed.
One person received credit for
90 incorrect responses on the
380 question part 2 exam.
Finding II
19
OFFICE OF THE AUDITOR GENERAL
part 2 examination, one individual received credit for a total of
90 questions that she answered incorrectly.1
The Board’s decision to substantially adjust scores could have en-abled
incompetent naturopaths to pass each part of the examina-tion
and to become licensed. This appears possible since an audi-tor
with no medical background or training took part 2 of that
examination under simulated testing conditions and, if given the
same scoring adjustments, would have passed.
Test Development Does
Not Meet Recognized Standards
In developing its examination, the Board has not ensured that the
examination tests what a naturopath would need to know to prac-tice
safely. The Board has also not shown that examination writers
possess the necessary expertise and training to develop test ques-tions.
In addition, the examination itself is poorly constructed.
Finally, the Board has not demonstrated that the 75 percent “pass
point” for these exams differentiates between qualified and un-qualified
individuals.
No evidence that the examination’s content is valid—Although
specific examination subject areas are required by statute, the
Board has not shown that its three-part examination measures
critical naturopathic skills in these areas. Whether the examination
actually measures competence in naturopathic medicine is ques-tionable
since the auditor who took part 2 of the examination
scored as well as or better than trained naturopathic students on
four of the six examination sections. Moreover, the Board’s ex-amination
includes questions that do not appear valid for measur-ing
naturopathic competence since they relate to activities outside
the scope of naturopathic medicine. For example, one ophthal-mology
question is related to fit and wearability of soft contact
lenses, which are not among the natural substances that a naturo-
1 The 90-point adjustment was the largest adjustment made and includes
credit for 69 “difficult” questions for which all applicants received credit,
and 21 questions for which there is no explanation. In addition, this ap-plicant
and at least 5 others received double credit for those “difficult”
questions that they initially answered correctly.
Some questions appear unre-lated
to naturopathic practice.
Finding II
20
OFFICE OF THE AUDITOR GENERAL
path could prescribe or dispense. Another question relates to pre-paring
a patient for major surgery, which is outside naturopaths’
training.
Test development literature recommends that licensing boards
base their examinations on a job analysis of the profession. Such
an analysis would enable the Board to determine which abilities
are critical for safe practice, and then ensure that its examination
requires applicants to demonstrate mastery of these abilities be-fore
becoming licensed.
No evidence test writers are qualified—The Board has not shown
that it set specific experience criteria or required test writers to
demonstrate test writing and subject matter expertise through an
application or bidding process. The Board indicates it determined
that it would pay $6 per examination question, then sought to
obtain a mix of recent graduates and long-term practitioners to
write questions. It also indicated that it sought individuals who
were faculty members or otherwise had experience in particular
subjects. However, the Board did not work with the State Pro-curement
Office to contract with test writers and was unable to
provide any evidence that the test writers selected met minimum
qualifications to develop questions.
In contrast, testing literature suggests that examination writers be
members of the profession who are viewed as “masters” by their
peers. In addition, test writers should be trained to ensure that
they understand the required content of the test and that they are
familiar with the characteristics of good test questions.
Further, the competency of at least two individuals involved in
test development is questionable. Specifically:
ü One individual with whom the Board contracted to write 400
basic science (for example, anatomy, physiology, biochemis-try)
questions had previously failed two administrations of the
vendor-supplied basic sciences licensing examination in all but
one of these same subjects. She challenged the results of the
second examination administration and the Board changed
her scores to passing. She did not retake the basic science ex-amination,
nor is there any evidence that she took a clinical
Some persons who have had
difficulty passing examinations
are now writing them.
Finding II
21
OFFICE OF THE AUDITOR GENERAL
sciences examination that was required at the time she was li-censed.
ü The Board has designated another individual to review ex-amination
questions and rewrite those considered to be highly
difficult. In February 1997, this individual failed all but two ba-sic
science subjects on part 1 of the Board’s examination. The
failed subjects were retaken and passed in September 1997;
however, a review of the Board’s Official Examination Record
and other examination information provided by the Board
shows no evidence that this individual took the remaining
part 2 and part 3 portions of the examination required for li-censure.
Test is poorly constructed—A number of examination questions
are problematic and could confuse licensure applicants who take
the tests. For example, the Board has not ensured that examination
questions are not repeated or that they do not have more than one
correct answer. In addition, the examination contains several
questions with typographical errors, including some that affect
correct answers and could confuse applicants. Test takers in-formed
the Board of errors in February 1999, but the Board did not
modify its examination prior to administering it again in Septem-ber
1999. Examination literature indicates that before an examina-tion
is administered, questions should be reviewed to ensure ac-curacy,
appropriate grammar, adherence to sound question-writing
practices, and technical accuracy.
No evidence that 75 percent “pass point” is appropriate—The
Board also has not shown that the 75 percent pass point is the ap-propriate
dividing line between competent and incompetent prac-tice.
According to national testing standards, it is essential that the
Board demonstrate how candidates scoring below the pass point
are not competent and candidates scoring at or above the pass
point are competent.
Examination Records
Not Adequately Maintained
In addition to the problems noted above, the Board does not
maintain sufficient examination records to support that appli-
Errors in questions not cor-rected.
Finding II
22
OFFICE OF THE AUDITOR GENERAL
cants have taken and successfully passed the required examina-tions.
Auditors compared the list of naturopaths licensed be-tween
November 1998 and October 1999 to the Official Exami-nation
Record—the Board’s list of applicants and their adjusted
test scores—to determine whether applicants had taken all re-quired
examinations. For 19 of the 32 licensees, the Official Ex-amination
Record did not show that they had taken all exami-nations
required for licensure.
There is also evidence that even for those applicants included in
the Official Examination Record, the results may be inaccurate.
For example, in March 1999, the Board licensed one applicant
based on test scores he reportedly attained on the February
1999 examination. These test scores are shown in the Official
Examination Record. However, a review of the detailed exami-nation
documents showed that this individual actually took
only the part 3 examination.1 There is no record of his taking
the part 1 and 2 examinations, nor is there any other evidence
supporting the examination scores the Board shows that he
received on these examinations.
Examination Deficiencies
Need to Be Addressed
The Board needs to take steps to address problems with its li-censing
examination. One option is for the Board to revise each
part of its examination to meet national testing standards. An-other
option is to adopt a recently developed national examina-tion
and revise only those portions of the Board’s examination
that are not covered by this national examination. Alternatively,
the Board could adopt the national examination and seek a
statutory change to eliminate the requirement to examine sub-jects
that are not covered by the national examination.
The Board needs to take steps to ensure any exam it develops
and administers is appropriate—If the Board continues to de-
1 Applicants who are licensed in another jurisdiction may be allowed to
become licensed by “endorsement,” which requires that they take only
the part 3 examination. This individual, however, was not approved for
licensure by endorsement.
Official Exam Record does
not show that 19 of 32 recent
licensees took all parts of the
exam.
Finding II
23
OFFICE OF THE AUDITOR GENERAL
velop and administer any portion of its own examination, sev-eral
steps should be taken to ensure the exam meets accepted
testing standards.
ü First, the Board needs to appropriately determine the activi-ties
that are critical to safe naturopathic practice.
ü Second, the Board needs to ensure that questions are ap-propriate
and are written by qualified individuals. As part
of this process, questions and test construction should be
reviewed to ensure that questions measure competence in
the critical areas, are grammatically correct, are not re-peated,
and do not have more than one correct answer.
ü Third, the Board needs to demonstrate that the 75 percent
“pass point” is an accurate division between competent and
incompetent practitioners.
The Board also needs to fully document and justify any rescor-ing
decisions. Specifically, the Board should have a testing ex-pert
review examination results and advise the Board whether
questions should be removed because they are too difficult or
are otherwise problematic. If problem questions are identified,
any subsequent administration of the examination should be
modified.
The Board could adopt a national examination—If the Board
determines it lacks the resources to revise its entire examination
appropriately, it could replace portions of it with a recently de-veloped
national examination. The national examination covers
most of the subject areas Arizona statutes require to be exam-ined.
Prior to adopting the national examination, however, the
Board should determine that the national examination has been
proven valid and reliable.
The Board could seek a statutory change—In lieu of revising
any portion of its examination, the Board could seek a statutory
change limiting the examination subject areas required for li-censure,
except for jurisprudence, to only those included on the
national examination. The national examination includes all but
Finding II
24
OFFICE OF THE AUDITOR GENERAL
3 of the 31 subjects that Arizona’s statutes require. The 3 sub-jects
not included on the national examination are pharmacol-ogy,
jurisprudence, and internal medicine.
Recommendations
1. The Board needs to develop and implement policies and
procedures for ensuring that all examination documenta-tion,
including such things as test development activities,
individual test results, statistical analyses, and rescoring jus-tification,
is appropriately maintained.
2. The Board needs to determine whether it will continue to
use all or a portion of its own examination and, if so, work
with the State Procurement Office to contract with a testing
expert to ensure that:
ü The examination’s content is valid;
ü Questions are appropriate and are written by qualified
individuals;
ü Questions and test construction are reviewed to ensure that
questions measure competence in the critical areas, are
grammatically correct, are not repeated, and do not provide
answers to other examination questions;
ü The 75 percent pass point is an accurate division between
competent and incompetent practitioners;
ü Any rescoring decisions are made appropriately and are
documented; and
ü Subsequent examinations are revised as appropriate.
3. If the Board determines it lacks the resources to correct defi-ciencies
in its examination, it should seek a statutory change
to eliminate the requirement to examine applicants in sub-ject
areas other than jurisprudence that are not included on
the national licensing examination, once that examination
has been determined to be valid and reliable.
25
OFFICE OF THE AUDITOR GENERAL
FINDING III THE BOARD NEEDS TO
IMPROVE COMPLAINT
PROCESSING
The Board needs to improve complaint processing to ensure
complaints are resolved in a timely and appropriate manner.
Resolution of some complaints has been slow, resulting in a
backlog of cases. Although the Board has recently made efforts
to resolve timeliness problems, some additional improvements
are needed. These include improving recordkeeping related to
complaints and separating the investigation and adjudication
processes.
Backlog Result of Slow
Complaint Resolution
Although the Board receives only a few complaints each year, at
the time of this review it had developed a backlog of cases. Resolv-ing
complaints in a timely manner is important. It limits the pub-lic’s
exposure to possible substandard medical practice, ensures
that violators quickly correct any problems, and decreases the
possibility that delays will lessen the Board’s ability to discipline.
After auditors brought the backlogged cases to the Board’s atten-tion,
the Board has begun taking action on most of them.
Board has been slow to resolve some complaints—The Board
receives approximately 6 to 13 complaints each year. However,
when this review began, 13 complaints were open. Five of the 13
complaints had been open for longer than 1,000 days. For exam-ple:
ü The most serious of these complaints has been open for more
than three years and alleges that the physician inappropriately
infused hydrogen peroxide and other hazardous substances
into a patient’s veins and did not maintain adequate and accu-rate
medical records. The Board received this complaint in
Five complaints had been
open more than 1,000 days.
Finding III
26
OFFICE OF THE AUDITOR GENERAL
October 1996, but chose not to act upon it until the civil lawsuit
was resolved, despite evidence that the doctor continued to
perform this procedure. The Board was notified of the civil set-tlement
in March 1999, but failed to place this complaint on the
agenda for nine months, until the December 1999 meeting. It
was then continued until the February 2000 meeting when the
Board decided to hire an investigator to review the case.
Two factors have contributed to a slow complaint resolution.
ü First, the Board does not ensure that complaints appear on its
monthly meeting agendas in a timely manner. During 1999,
complaints appeared only on the January and December
agendas.
ü Second, the Board has not used an investigator to ensure that
information is obtained and reviewed in a timely manner.
Although the Board had an investigator under contract through
June 1999, it did not use this person to investigate complaints dur-ing
1999. The Board indicates that the investigator was not used
because she did not provide the information needed. However, no
effort was made to correct this by instruction or training, nor did
the Board contract with a different investigator.
The Board has recently made efforts to improve timeliness—After
auditors brought the unresolved cases to the Board’s attention, the
Board has made a greater effort to resolve them by placing these
open complaints on its recent agendas. Since December 1999, the
Board has resolved 11 of the 13 open complaints auditors identi-fied.
In addition, the Board is currently making an effort to con-tract
with an investigator to review two complaints. Working with
the State Procurement Office to hire an investigator on a contract
basis could help to ensure that complaints are processed in a
timely manner and improve the Board’s investigative and adjudi-cative
processes.
Finding III
27
OFFICE OF THE AUDITOR GENERAL
Complaint Records Not
Well-Maintained
The Board’s complaint records are lacking. This limits consumers’
ability to gain information about practitioners, and it also affects
the Board’s ability to act on complaints.
ü Consumer information is limited—The Board’s complaint
records are so limited that the Board probably cannot provide
consumers with a complete, or even a recent, history of com-plaints
and disciplinary actions against practitioners. Without
this information, consumers’ ability to make informed choices
about practitioners is limited. For example, this review found
that there is no complete source that lists all complaints re-ceived
and their resolutions. Specifically, the Board could not
readily locate all complaint files, nor provide a log listing com-plaints
received, or board meeting minutes showing which
complaints had been resolved.1 Auditors also reviewed licens-ing
files to determine if the Board made a permanent record of
complaint resolutions in the files, but located information
about the specific cases being reviewed in only 1 of 11 files.
ü Board’s ability to act is affected—Poor recordkeeping has
also resulted in some confusion about which complaints have
been resolved, and in at least one case has allowed unprofes-sional
conduct to go unchecked. For example, in a February
2000 meeting, the Board heard complaints against two natu-ropaths.
A long-time Board member said he thought both
complaints had already been resolved before. In one instance,
the naturopath who was the subject of the complaint re-sponded
that the Board had indeed previously heard this case
and had dismissed it. However, in the second instance, the na-turopath
who was the subject of the complaint indicated that
he had not previously appeared before the Board for this com-plaint.
In another case, a naturopath appeared before the Board in Janu-
1 The Board eventually provided complaint logs and minutes as they were
found or recreated by the executive director from old computer files;
however, the logs and minutes provided were still not complete.
There is no one complete
source of complaints informa-tion.
The Board itself is uncertain
which complaints have been
resolved.
Finding III
28
OFFICE OF THE AUDITOR GENERAL
ary 1999 to respond to a complaint. However, at that meeting, the
naturopath indicated that he had not been notified of the com-plaint
allegations, so he was uncertain how to respond. The natu-ropath
and his attorney, who had traveled from Tucson, agreed to
waive the typical 30-day notice period if the Board could provide
them with a copy of the complaint at the meeting. The Board was
unable to find the complaint. This complaint was tabled and was
not resolved until February 2000, when the Board reprimanded
the naturopath for prescribing controlled substances using an
M.D.’s prescription pad.
The Board Needs to
Separate Its Investigation
and Adjudication Processes
The Board also needs to separate its complaint investigation and
adjudication functions. Currently, the full Board participates in
both investigating and adjudicating complaints. This lack of sepa-ration
can result in an appearance of unfair practice and should be
changed.
Board serves as both investigator and adjudicator—Currently,
the Board is active in complaint investigations and adjudications.
The entire five-member board conducts an investigative interview
with the licensee, reviews and discusses information, and then
makes a decision regarding the case. This lack of separation can
give the appearance of bias. For example:
ü During the course of an investigative interview in February
2000 a doctor made comments that appeared to disparage the
complainant’s character. If the interview had been conducted
earlier by a single board member or by an investigator, the in-terviewer
could have provided the Board with an objective
discussion of the case and minimized the likelihood that the
negative information about the complainant could have biased
the Board’s decision.
Investigation and adjudication should be separated—The Board’s
existing practice is inconsistent with the Attorney General’s advice
contained in its Arizona Agency Handbook because it can give the
Finding III
29
OFFICE OF THE AUDITOR GENERAL
appearance that the Board is not resolving complaints fairly. The
Handbook recommends:
Other Arizona regulatory boards, such as the Board of Medical
Examiners and the Board of Behavioral Health Examiners, have
separated the investigation and adjudication processes. Such a
separation shields board members from information that may
impact their objectivity.
There are various means by which the two processes can be sepa-rated.
For instance:
ü The Board could use a contract investigator, a board member,
or a staff person to perform the investigations, identify poten-tial
statutory violations, and make recommendations to the
Board.
ü Likewise, the Board could assign one Board member or staff
person to work with an investigator to explore allegations and
develop recommendations to be presented to the full Board.
The lead Board member should then recuse himself/herself
from all other discussions and decisions regarding the com-plaint.
Separation can minimize the
appearance of bias in board
decisions.
“Decision-makers should not
actively participate in the
investigative process unless
they will be recusing them-selves
from the decision-making
process. Additionally,
they must refrain from dis-cussing
the results of their
investigation with other mem-bers
of the decision-making
body, except in open hearing.”
Finding III
30
OFFICE OF THE AUDITOR GENERAL
These approaches are compatible with the advice provided in the
Arizona Agency Handbook.
Recommendations
1. The Board should improve its agenda management by devel-oping
a procedure to ensure complaints are promptly placed
on it, and that those complaints tabled at any meeting reap-pear
on successive agendas until closed.
2. The Board should work with the State Procurement Office to
contract for an investigator, and hire and train that investigator
to perform investigations.
3. The Board should maintain complete and accurate logs of all
complaints received and their resolutions.
4. The Board should ensure that all complaint files contain
documentation of the complaint, the resolution, and other per-tinent
information.
5. The Board should ensure that licensure files contain records of
any complaints and their resolutions.
6. The Board should separate its investigative and adjudication
functions by:
a. Using a contract investigator, board member, or staff per-son
to perform investigations, identify potential statutory
violations, and make recommendations to the Board; or
b. Assigning a board member or staff person to work with an
investigator to perform investigations, identify potential
statutory violations, and make recommendations to the
Board.
7. If the Board chooses to use a board member to conduct inves-tigations
or to work with the investigator, that board member
should recuse himself/herself from participating in the adju-dication
of the case.
31
OFFICE OF THE AUDITOR GENERAL
FINDING IV BOARD NEEDS TO
STRENGTHEN OPERATIONS
AND IMPROVE OVERSIGHT
OF EXECUTIVE DIRECTOR
Board operations suffer from numerous problems that either
have not been recognized or have not been adequately ad-dressed.
In addition to those problems already discussed in
previous findings, other records are inadequately maintained,
rules required by the Legislature have not been developed, and
the Board has had problems staying within its personal services
budget. Many of these problems are compounded by the
Board’s failure to adequately oversee its executive director. In
addition, the Board has allowed open meeting law violations to
occur, and its members have not ensured that they avoid the
appearance of impropriety when participating in board deci-sions.
Improvements are needed in all these areas.
Problems Have
Been Neglected
in Many Areas
The Board faces substantial problems in a number of areas.
Several of these problems, such as developing a thoroughly
credible licensing examination and resolving complaints in a
timely and complete manner, have already been discussed in
earlier parts of this report (see Finding II, pages 17 through 24,
and Finding III, pages 25 through 30). In addition, recordkeep-ing
deficiencies exist in a number of other areas, rules required
by the Legislature in 1992 and 1998 have yet to be developed,
and the Board has had difficulty staying within its personal
services budget.
Records are lacking—Recordkeeping, a problem already
pointed out in both examination results and complaint han-dling,
is inadequate in other areas as well. For example:
Finding IV
32
OFFICE OF THE AUDITOR GENERAL
ü Meeting minutes lost—The Board is statutorily required to
maintain meeting minutes. However, the Board was ini-tially
unable to locate minutes for 1996 and 1997. During the
course of the audit, auditors located most of those minutes
mixed in with other documents; however, some were still
missing and the executive director needed to recreate them
from old computer files.
ü Contract files inadequate—The Board has failed to docu-ment
efforts to comply with procurement laws. For exam-ple,
contract files do not contain any information showing
that the Board sought bids or obtained verbal quotes from
service providers such as investigators and examination
question writers.
Failure to develop rules—Aside from a minor change in 1987,
the Board’s existing rules have not been changed or updated
since 1984, and do not address many of the Board’s responsi-bilities.
1 For example, 1992 legislation directed the Board to de-velop
rules for approving naturopathic medical schools and
training programs, but the Board has not yet done so. The
Board has also not established time frames in rule for issuing
licenses by December 31, 1998, as required by A.R.S. §41-
1073(A). The Office of the Ombudsman—Citizens Aide re-ported
on these issues in April 1999, and following that report,
the Legislature required the Board to begin submitting reports
every six months on the progress of rules development. How-ever,
the Board has made little progress toward implementing
the required rules. As of March 2000, it had not yet approved a
draft rules package that includes the required rules relating to
schools.
History of problems staying within personal services budget—
Since 1996, the Board has had continued difficulties adhering to
its personal services budget. Because of these problems, in 1998
Joint Legislative Budget Committee staff recommended that the
Board’s appropriation be changed from a lump sum to modi-fied
lump sum. Under a lump-sum appropriation, the Board is
not required to limit spending for particular items so long as
1 The Board updated its fee schedule in 1999; however these rules were
exempted from the formal rules-making process.
The Board was required to
adopt rules for approving
schools in 1992, but has not
done so.
Finding IV
33
OFFICE OF THE AUDITOR GENERAL
there are sufficient monies available in the total budget. The
modified lump-sum appropriation required the Board to ad-here
to the amount budgeted for certain line items, such as per-sonal
services. The Board, however, overspent its personal ser-vices
line item in both 1998 and 1999. In 1998, monies from
other line items were transferred to cover the shortage. In 1999,
the shortage was deducted from the executive director’s pay
since he is responsible for managing the budget and had not
taken appropriate actions to address the shortfall.
The Board’s appropriation was changed back to lump sum for
fiscal year 2000, but this change may warrant review. The Board
is no longer required to limit spending for certain line items.
However, if the Board’s spending were still restricted, it ap-pears
expenditures for personal services would again exceed
the amount budgeted. At the end of fiscal year 2000, the Board
should revert $5,900 in personal services monies that were ear-marked,
but not used, to upgrade the Board’s secretarial posi-tion.
However, based on the Board’s current spending level,
reverting these monies would cause a deficit of approximately
$4,500 in the personal services line item. To provide for greater
oversight, the Legislature should consider reestablishing the
modified lump-sum appropriation.
Oversight of Executive Director
Has Been Insufficient
Lack of oversight of the executive director has contributed to
the many problems identified during the audit. The Board is
responsible for ensuring that the agency fulfills its statutory
responsibility to regulate naturopathic physicians. Daily ad-ministration
of the Board’s office and functions is performed by
the executive director, who is appointed by the Board. The ex-ecutive
director’s statutory duties include such things as main-taining
records of board actions and proceedings, managing the
Board’s office, preparing the budget, compiling and publishing
a directory, and other duties as required by the Board. This ar-rangement
of a governing board utilizing an executive director
is typical for medical regulatory boards in Arizona.
Greater oversight over the
Board’s spending may be
warranted.
Finding IV
34
OFFICE OF THE AUDITOR GENERAL
Until recently, the executive director’s unique relationship to
the Board may have made it difficult for the Board to effectively
exercise oversight. Prior to August 1999, the executive director
also served as a Board member and officer. Under this struc-ture,
the Board may have found it awkward to assess one
member’s performance and to take corrective action. However,
for the past eight months the executive director has been solely
a board employee. The Board, though, still appears hesitant to
review his performance. For example, the Board had an oppor-tunity
to complete a performance review in January 2000 but
did not do so. Instead, one Board member simply read a motion
to give the executive director “the maximum pay increase
available.” The motion was one that had been pre-printed in
agenda materials that the executive director provided to the
Board. There was no discussion or review by the Board.
To ensure that problems are corrected, the Board should re-quire
the executive director to submit a corrective action plan to
address the deficiencies identified in this report. The Board also
needs to regularly review the executive director’s progress and
performance. In performing this review, the Board should con-sider
using information obtained from its recently established
customer satisfaction survey and/or soliciting input from licen-sees
and other organizations or agencies that have regular con-tact
with the executive director. These individuals and agencies
could provide useful information for the review since auditors’
work has identified concerns that the executive director is
commonly unavailable and non-responsive.
Open Meeting Law
Violations Need to Be
Addressed
The Board also needs to take action to address open meeting law
violations and ensure that board members with ethical conflicts
of interest do not participate in decisions. Specifically:
ü The Board needs to review meeting minutes to ensure that a
quorum of board members was present for decisions made
between August 1998 and August 1999.
The Board has failed to review
the executive director’s per-formance.
Finding IV
35
OFFICE OF THE AUDITOR GENERAL
ü In addition, board members need to make a more conscien-tious
effort to avoid participating in decisions where they
may have a potential conflict of interest.
Open meeting law violations—The Board needs to review de-cisions
made between August 1998 and August 1999 to ensure
that a quorum was present to conduct business as required by
the State’s open meeting law, A.R.S. §38-431(3). Effective Au-gust
1998, A.R.S. §32-1509(A) prohibited the Board’s executive
director from also serving as a board member. However, when
the statute became effective, the Board voted to have one of its
members continue acting as the executive director until it could
hire an outside individual to fill the position. Because of the
statutory conflict, when this board member agreed to accept the
executive director duties, he automatically vacated his board
position. This individual, however, continued to act as a board
member, accepting board leadership positions and participat-ing
in decisions until August 1999, when his term as a board
member expired and he was replaced. At that time, the Board
officially hired him as the executive director.
The Board needs to review decisions made during that one-year
time period to ensure that a quorum (at least three board
members, not including the executive director), was present to
conduct business. If not, the Board will need to review these
decisions and determine whether to ratify them. For example,
in September 1998, two board members and the executive di-rector
conducted a meeting where decisions were made to issue
certificates for postdoctoral and clinical training programs. For
these certificates to be valid, the Board needs to ratify these de-cisions.
Potential conflicts of interest should be avoided—Board mem-bers
also need to ensure that they avoid participating in deci-sions
where conflicts of interest may exist. In the past, board
members have not always recused themselves appropriately.
For example, one former board member’s name and address is
on file with the Corporation Commission as the business ad-dress
of an organization of specialty colleges. While a board
member, this individual also served as a faculty member of one
of these specialty colleges. Despite this involvement, this board
member made and seconded motions, and voted to approve
Finding IV
36
OFFICE OF THE AUDITOR GENERAL
training programs and graduates of this organization’s colleges.
This individual may have also been involved in including this
organization in the Board’s proposed rules as a body desig-nated
to approve specialty training programs. While it is not
apparent whether these actions constitute a statutory conflict of
interest, they do give the appearance of impropriety, and the
Board needs to make efforts to avoid the appearance of such
conflicts in the future.
Finding IV
37
OFFICE OF THE AUDITOR GENERAL
Recommendations
1. The Legislature should consider reestablishing a modified
lump-sum appropriation for the Board.
2. To ensure management problems are corrected, the Board
should require the executive director to submit a corrective
action plan, including a timetable, for addressing records
maintenance deficiencies in areas such as:
ü Complaints
ü Examinations
ü Contracts
ü Meeting Minutes
3. The Board should establish a procedure and regular sched-ule
for reviewing the executive director’s progress toward
correcting deficiencies.
4. The Board should establish a procedure and regular sched-ule
for reviewing the Executive Director’s performance in
managing the agency. As part of such a review, the Board
could consider soliciting feedback from individuals, organi-zations,
or agencies that have regular contact with the
agency.
5. The Board should review decisions made between August
1998 and August 1999 to ensure that at least three board
members, not including the executive director, were present
to conduct business. If not, the Board will need to review the
decisions made during those meetings and determine
whether to ratify them.
6. During its semiannual regular meetings the Board should
caution members to avoid participating in decisions where
there may be the appearance of a conflict of interest.
38
OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
SUNSET FACTORS
In accordance with A.R.S. §41-2954, the Legislature should con-sider
the following 12 factors in determining whether the Ari-zona
Naturopathic Physicians Board of Medical Examiners
should be continued or terminated.
1. The objective and purpose in establishing the
Board.
The Board was established in 1935 to protect the public’s
health, safety, and welfare by licensing naturopaths and
investigating and adjudicating complaints. Since then,
the Board has also become responsible for such things as
approving naturopathic schools and other training pro-grams,
and certifying students to participate in these
programs. Current statutes also authorize the Board to
certify naturopaths to dispense natural substances, and
to certify specialists and medical assistants.
To enable the Board to fulfill its responsibilities, statute
authorizes the Board to perform such activities as:
ü Adopt rules for approving schools of naturopathic
medicine and other training programs;
ü Periodically inspect and evaluate schools and train-ing
programs, as well as naturopathic continuing
education programs;
ü Determine eligibility of applicants for licensure and
certification; and,
ü Investigate charges of misconduct and adjudicate
complaints.
Sunset Factors
40
OFFICE OF THE AUDITOR GENERAL
2. The effectiveness with which the Board has met its
objective and purpose and the efficiency with which
it has operated.
While the Board generally processes licenses timely, this
audit identified a number of other areas of ineffective-ness
and inefficiency in board operations, including
problems with management, the Board’s licensing ex-amination,
and complaint-handling processes.
ü Licensing—The Board appears generally timely in
issuing initial licenses once complete applications are
received. In situations where complete application
information was received and applicants passed all
required examinations, the Board took between 23
and 72 days to process licensing applications.1 The
overall time frame to issue a license is longer because
the licensing examination is given twice per year,
and applicants who are approved to take the exam
must wait for the next administration. Most appli-cants
in our sample waited approximately 70 to 80
days from the time they were approved to take the
examination until the actual exam date.
The Board also appears to issue renewal licenses in a
timely manner. Auditors reviewed a random sample
of 33 renewal applications processed for 1999 and
found that the Board typically issues renewal li-censes
within one week of receiving the application.2
ü Management—The Board has not exercised suffi-cient
oversight to ensure that day-to-day operations
have been performed efficiently and effectively.
Numerous problems exist, including failure to ade-quately
maintain complaint and examination re-
1 Based on a random sample of ten initial 1998 licenses and all five initial
1999 licenses issued as of October 1999, excluding time the applicant
spent waiting to take the licensing examination after being approved to
do so.
2 The random sample selected included 33 files, but only 25 of these files
had all necessary dates available to complete this analysis.
Sunset Factors
41
OFFICE OF THE AUDITOR GENERAL
cords, contract files, and public documents, such as
meeting minutes and an annual directory. The Board
has also failed to promulgate rules in a timely man-ner,
and has not adequately monitored its budget to
ensure that personal services monies have not been
misspent or overspent. (See Finding IV, pages 31
through 37.)
ü Licensure examination—The Board has not en-sured
that its licensure examination is a valid tool for
making licensure decisions. Specifically, the Board
has not ensured that the examination was developed
and scored appropriately, and that it has maintained
sufficient documentation to demonstrate that indi-viduals
have taken and passed all required examina-tions.
(See Finding II, pages 17 through 24.)
ü Complaint processing—The Board needs to ensure
complaints are adjudicated timely and appropriately.
Although the Board receives only a few complaints
each year, about 6 to 13, at the time of this review it
had developed a backlog of 13 cases. At least 5 of
these complaints had been open for more than 1,000
days. Since auditors brought these cases to the
Board’s attention, it has made an effort to resolve
them. However, in the future the Board needs to bet-ter
ensure that complaints are placed on agendas
promptly and use an investigator to obtain informa-tion
in a timely manner. The Board also needs to bet-ter
separate its investigation and adjudication proc-esses.
Currently the full Board participates in inves-tigative
interviews and then adjudicates the cases.
Although not illegal, this practice can give the ap-pearance
of bias in the Board’s decisions. (See Find-ing
III, pages 25 through 30.)
3. The extent to which the Board has operated within
the public interest.
The Board generally has not operated in the public in-terest
to protect the public health, safety, and welfare. As
discussed in Finding II, pages 17 through 24, the Board’s
Sunset Factors
42
OFFICE OF THE AUDITOR GENERAL
licensing examination does little to ensure that licensed
naturopaths are competent to practice. In addition, the
Board has not resolved some consumer complaints in a
timely manner and has not ensured that it maintains
adequate records to provide the public with complete
information about doctors’ complaint histories (see Find-ing
III, pages 25 through 30). The Board also has not en-sured
that public records are readily available, that state
monies are appropriately spent, and that open meeting
law requirements are met (see Finding IV, pages 31
through 37).
Finally, the Board has not taken disciplinary action
against naturopaths who fail to complete the required 15
hours of continuing medical education (CME) per year.
Instead, the Board has renewed licenses of naturopaths
who have agreed to complete 30 CME hours during the
next license year. Since failure to comply with board
rules is defined as unprofessional conduct under A.R.S.
§32-1501(22), the Board should take disciplinary action
in these types of cases in the future.
4. The extent to which rules adopted by the Board are
consistent with the legislative mandate.
According to the Governor’s Regulatory Review Council
(GRRC), the Board has not adopted a substantial num-ber
of rules necessary to fulfill its statutory mandates.
The list of needed rules that GRRC identified is ap-proximately
six pages long (the full text has been pro-vided
to the Board). The needed rules include provisions
for such things as approving naturopathic medicine
schools, and clinical, internship, preceptorship, and
postdoctoral training programs; inspecting these educa-tional
programs; licensing time frames; approving alter-native
licensing examinations; and addressing chal-lenges
to the Board’s examination. As part of its review,
GRRC also found that the rules that the Board does have
in place, with the exception of those relating to fees and
one minor amendment in 1987, have not been updated
since 1984.
Sunset Factors
43
OFFICE OF THE AUDITOR GENERAL
The Legislature has also noted the Board’s failure to
adopt rules, some of which have been required since
1992, and in May 1999, required the Board to begin re-porting
every six months on its progress toward imple-menting
rules. The Board has begun drafting rules,
however, it has not yet approved a draft rules package
to be submitted to GRRC that includes the required
school approval rules.
5. The extent to which the Board has encouraged input
from the public before adopting its rules, and the ex-tent
to which it has informed the public as to its ac-tions
and their expected impact on the public.
According to Board staff, the Board has encouraged
public input in drafting its proposed rules. The Board
held meetings throughout the State in July and August
1999 to obtain input from interested parties and stake-holders.
The Board has also heard comments about its
proposed rules during its regular meetings, which are
also open to the public. The Board also plans to make the
proposed rules available on the Web site it is currently
developing.
6. The extent to which the Board has been able to in-vestigate
and resolve complaints that are within its
jurisdiction.
The Board has sufficient statutory authority and disci-plinary
options to investigate and adjudicate the few
complaints it receives each year; however, at the time of
this review, it had developed a complaint backlog (for
further information, see Finding III, pages 25 through
30).
Sunset Factors
44
OFFICE OF THE AUDITOR GENERAL
7. The extent to which the attorney general or any
other applicable agency of state government has the
authority to prosecute actions under the enabling
legislation.
A.R.S. §32-1556 authorizes the Attorney General’s Office
to prosecute actions and represent the Board. The Board
currently is represented by one assistant attorney gen-eral.
8. The extent to which the Board has addressed defi-ciencies
in its enabling statutes which prevent it
from fulfilling its statutory mandate.
Numerous changes have been made to agency statutes
over the years. Some of these changes have modified the
naturopathic scope of practice, while others have en-hanced
the Board’s ability to fulfill its statutory mandate.
For example:
ü During the 1992 legislative session, the practice of na-turopathic
medicine was redefined, and this change
appears to have expanded the scope of practice be-yond
its traditional boundaries (see Finding I, pages
9 through 13).
ü In 1995, the Board received authority to issue non-disciplinary
letters of concern in adjudicating com-plaints
where there was insufficient evidence to sup-port
disciplinary action.
ü In 1996, the Board was required to expand its annual
directory to include a copy of the naturopathic stat-utes
and a list of natural substances that could be
dispensed by certified naturopaths. In addition, stat-utes
defining unprofessional conduct were ex-panded,
and renewal schedules were set for certifi-cate
holders. The Board was also authorized to rec-ognize
specialists in naturopathic medicine.
ü In 1998, the definitions of naturopathic medicine and
the practice of naturopathic medicine were amended,
Sunset Factors
45
OFFICE OF THE AUDITOR GENERAL
and definitions of unprofessional conduct were fur-ther
expanded. In addition, the Board’s executive di-rector
was prohibited from also being a board mem-ber.
This statutory change also transferred statutory
duties from the Board to the executive director. Re-quirements
for the Board’s licensing examination
were also substantially changed. The Legislature es-tablished
a three-part examination covering 31 sub-jects
and required applicants to attain a 75 percent
passing score on each part, rather than each subject.
ü In 1999, the Board was required to adopt rules for
approving naturopathic medical schools and ap-proving
and inspecting other training programs. The
Board was appropriated monies for conducting these
inspections; however, it has not yet hired an inspec-tor.
The Board was required to report to the Legisla-ture
every six months on its progress toward imple-menting
rules.
9. The extent to which changes are necessary in the
laws of the Board to adequately comply with the fac-tors
listed in the Sunset review statute.
As discussed in Finding I, pages 9 through 13, the Legis-lature
should consider reviewing the naturopathic scope
of practice, including prescribing authority and specialty
designations, and clarifying the statutes as appropriate.
In addition, the Legislature should consider establishing
an independent body to develop and/or review the
formulary of natural substances that naturopaths are al-lowed
to prescribe.
The Legislature should also consider modifying the fol-lowing
statutes:
ü A.R.S. §32-1551 to grant the Board authority to sub-poena
medical records as part of its complaint inves-tigations;
and,
Sunset Factors
46
OFFICE OF THE AUDITOR GENERAL
ü A.R.S. §32-1525 to enable the Board to keep its licen-sure
examination and examinees’ scores confidential.
Currently, at least five other regulatory boards, in-cluding
those that oversee podiatrists and optome-trists,
have similar provisions.
10. The extent to which termination of the Board would
significantly harm the public health, safety, or wel-fare.
Terminating the Board would not significantly harm the
public’s health and safety since the practice of medicine
would continue to be regulated by the Allopathic Board
of Medical Examiners and the Board of Osteopathic Ex-aminers
in Medicine and Surgery. Naturopaths could
continue to perform many traditional activities, but
would no longer be allowed to act as primary medical
care providers.
However, terminating the Board could harm the public’s
welfare by potentially limiting access to alternative medi-cal
care. Naturopathy’s focus is on healing through natu-ral
methods and techniques, which is somewhat different
from traditional allopathy. If the Board were terminated,
consumers’ access to this alternative approach would be
limited. In addition, some of the services naturopaths
now perform, such as prescribing drugs, could be per-formed
only by other licensed practitioners, such as allo-pathic
(M.D.) or osteopathic (D.O.) physicians. This could
decrease consumer access to medical services in general
by reducing the number of practitioners.
11. The extent to which the level of regulation exercised
by the Board is appropriate and whether less or more
stringent levels of regulation would be appropriate.
This audit found that given the apparent scope of prac-tice,
the current level of regulation exercised by the Board
is generally appropriate. However, as discussed in Find-ing
I, pages 9 through 13, only ten other states regulate
naturopathy, and the scope of practice in these other
Sunset Factors
47
OFFICE OF THE AUDITOR GENERAL
states is limited. Further, some activities traditionally per-formed
by naturopaths, such as massage, dietary assess-ment
and counseling, and acupuncture, can be legally
performed by unlicensed individuals, or individuals li-censed
in other professions, so long as they do not call
themselves naturopaths.
12. The extent to which the Board has used private con-tractors
in the performance of its duties and how ef-fective
use of private contractors could be accom-plished.
The Board has contracted for services such as computer
consulting and database development, examination de-velopment,
rules writing, and complaint investigation.
However, the Board did not use the services of its con-tract
investigator in 1999, which may have contributed to
a complaint backlog (see Finding III, pages 25 through
30). The investigation services contract expired in June
1999 and has not been replaced. The Board should again
contract with an investigator because using contract per-sonnel
in this and other positions can be cost-effective
since the services are obtained on an as-needed basis.
When issuing any new contracts, the Board needs to
comply with state procurement laws. Auditors reviewed
12 contracts for services and found there is no evidence
that the Board complied with state procurement laws in
obtaining these contracts. Specifically, the files do not con-tain
evidence that verbal or written price quotes were ob-tained,
or that requests for proposals were issued. Al-though
there is no evidence of competition, there is also
no justification in the files for sole sourcing. In addition,
there is nothing in the examination development contract
files to indicate that the amount that the Board paid ques-tion
writers was appropriate. It appears that the Board
determined the price it would pay, and then sought ques-tion
writers who would agree to provide questions for
this amount. According to the State Procurement Office,
Boards should not dictate prices, but should seek pricing
quotes from vendors and use these as criteria in awarding
contracts.
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OFFICE OF THE AUDITOR GENERAL
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OFFICE OF THE AUDITOR GENERAL
Agency Response
OFFICE OF THE AUDITOR GENERAL
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State of Arizona
Naturopathic Physicians
Board of Medical Examiners
"Protecting the Public's Health"
1400 West Washington · Suite 230 · Phoenix, Arizona 85007 · Telephone · (602) 542-8242 Fax · (602) 542-3093
June 12, 2000
Debra K. Davenport, Auditor General
State of Arizona
2910 North 44th Street, Suite 410
Phoenix, Arizona 85018
Re: Performance Audit Report and Sunset Review Findings
Dear Ms. Davenport:
Board members reviewed the Performance Audit Report of the Board and Sunset Review Findings. We
appreciate the opportunity to respond to the Audit Report and Sunset Findings. We also recognize the
diligent effort put forth by your staff in their efforts to understand the naturopathic medical profession and
the Board's regulation of the profession.
Board members do not agree with all of the remarks stated in the Report and recognize that perceptions
regarding the regulated profession are oftentimes misleading. Hopefully, our Agency Response will
allow persons reading the Report an opportunity to come to a reasonable conclusion regarding the Board
and difficulties faced by the agency and its staff.
Thank you again for the efforts of your staff to improve the performance of the Board.
Sincerely,
Naturopathic Physicians Board of Medical Examiners
Glenn T. Ozalan, NMD
Acting Chairman of the Board
GTO/jlb
Enclosure: Agency Response to Performance Audit Report and Sunset Review Findings
Agency Response Page 1
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Naturopathic Physicians Board of Medical Examiners
The Auditor General's Report recommended several changes to Board practices, rules, and statutes. The
Report points out that Board should take disciplinary actions against naturopathic physicians who do not
comply with the requirement to attend continuing education courses and the Board intends to do so. The
Report also states Board needs to adopt numerous rules relating to issues such as licensing time frames, as
well as the criteria it will use for approving schools, training programs, and specialty designations and the
Board is in the process of completing the rules. Board agrees the Legislature should consider amending
Board statutes to allow Board to subpoena medical records as part of complaint investigations and to allow
Board to keep its examination and examinees' scores confidential.
The Board regulates 222 naturopathic physicians, 205 naturopathic medical students and graduates in
clinical and preceptorship training programs and 102 training locations.
The Legislature Has Reviewed Board Statutes
On Several Occasions Over The Past 8 Years
The Auditor General is requesting the Legislature to review Board statutes and determine if what the
legislature enacted was really their intent. However, the Legislature has reviewed Board statutes on
several occasions since the last Sunset Review and made amendments to naturopathic medical laws as
they deemed necessary. For example, in 1999 the Legislature amended the definition "practice of
naturopathic medicine" in A.R.S. § 32-1501 by striking the word "physiotherapy" and inserting "physical
agents and modalities". This change was not at the request of the Board or the Arizona naturopathic
medical profession.
The Auditor General is requesting the current Legislature to clarify
statutory amendments dating back to 1992. Many "seemingly minor
statutory changes" that are of concern to the Auditor General were made
by Legislators as they deemed necessary. For example, in 1992 the
definition "practice of naturopathic medicine" was amended in a Senate
Committee without request from the Board or the profession and the
word "including" was added. The Auditor General's findings suggest
the Board should instruct Legislators on whether they may or may
not amend the naturopathic medical practice act.
To ask current Legislators to clarify statutory amendments dating back to
1992, as recommended by the Auditor General, is nothing more than
asking current Legislators to determine if prior Legislators knew what
they were voting on when they enacted the legislation.
Specialties - Medical professions do not remain static and advances in
the diagnosis and treatment of disease occur each year. The same is true
in naturopathic medicine. Each year more and more graduates of
naturopathic medical schools are accepted for training in residence
programs including family medicine, cardiology, pediatrics and other
specialties. Proposed Board rules do include numerous specialty areas of
practice for purposes of regulating naturopathic physicians for purposes
of regulation. Statutory language is clear regarding specialties.
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To ask current Legislators to
clarify statutory amendments
dating back to 1992 is asking
current Legislators to deter-mine
if prior Legislators knew
what they were voting on when
they enacted the legislation.
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The Report fails to state a
significant finding that only 2
cases of medical malpractice
have been reported in the past
13 years.
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Statutory language is clear
regarding specialties.
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Agency Response Page 2
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Naturopathic Physicians Board of Medical Examiners
To protect the public, the Legislature did in fact intend for the Board to
regulate specialty activities by naturopathic physicians. The Legislature
recognized it to be appropriate for the Board to regulate naturopathic
medical specialties by enacting the provisions of A.R.S. § 32-1529. By
specifically defining "specialist" in A.R.S. § 32-1501 and making it
unprofessional conduct for naturopathic physicians to call themselves a
specialist "if such was not a fact".
Chiropractors practice family practice, neurology and orthopedics. Physical therapists practice family
practice and other specialties. These practitioners practice those specialties as chiropractors and as
physical therapists. Their use of those specialty titles does not authorized them to practice those specialties
in a manner that a MD or a DO practice the same specialties. The same is true of naturopathic physicians
practicing in specialty areas.
Naturopathic physicians are not being authorized by Board rule to practice naturopathic specialties in the
manner that a MD or a DO practice their specialties. A doctor of naturopathic medicine practices
naturopathic family medicine not allopathic family medicine or osteopathic family medicine.
Without statutory provisions and proposed Board rules for naturopathic specialties, a minimum number of
naturopathic physicians or just 1 in the case of a limited liability corporation could form a specialty and
board certify themselves regardless of whether they are properly trained, qualified and certified by a
specialty board. The proposed Board rules, and more specifically the statutory provisions, act to prevent
and prohibit such from occurring. The statutory provisions and proposed Board rules relating to specia lties
are proper in order to regulate the profession.
Natural Substances - Federal and state law provides that articles
intended for use in the diagnosis and treatment of patients are
"drugs". The Board is mandated by law to publish a list of natural
substances in its annual directory that may be dispensed by a naturopathic
physician. The Legislature has reviewed Board statutes several times
relating to the authority of naturopathic physicians writing prescriptions.
As recently as 1998, the Legislature amended the provisions of A.R.S. §
32-1581 to clarify that doctors of naturopathic medicine may dispense,
administer and prescribe natural substances in the diagnosis and
treatment of patients. In 1998, the Legislature also clarified that such
patient prescriptions may be filled by a pharmacy of a patient's choice or
by the physician. The term "natural substance" is defined within the
statutory language of A.R.S. § 32-1581 and authorizes doctors of
naturopathic medicine to use natural substances in the dia gnosis and
treatment of patients.
Natural substances used in the diagnosis and treatment of patients are "drugs". The Board requested the
Legislature to consider defining the term "natural substance". Certain groups advised the Legislature it was
unwise to have a separate statutory classification of drugs and therefore the term "natural substance" was
defined within the statutory language of A.R.S. § 32-1581 to provide that doctors of naturopathic medicine
may use natural substances in the diagnosis and treatment of patients.
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The Legislature has reviewed
Board statutes several times
relating to the authority of
naturopathic physicians writing
prescriptions.
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The term "natural substance" is
defined within the statutory
language of A.R.S. § 32-1581.
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To protect the public, the
Legislature did in fact intend
for the Board to regulate
specialty activities by
naturopathic physicians.
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Agency Response Page 3
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Naturopathic Physicians Board of Medical Examiners
All of the natural substance articles approved by the Board are from a natural origin. The List of Natural
Substance Articles approved and printed in the Annual Directory of Naturopathic Medicine includes
vitamins, minerals, vaccines, antibiotics, oral contraceptives, anabolic steroids, and controlled substances
such as morphine and cocaine, that are from a natural origin.
The United States Department of Justice Drug Enforcement Administration determined it was proper for
naturopathic physicians not only in Arizona but in other states as well to prescribe controlled substances
that are of natural origin.
Board legal counsel recommended the List of Natural Substance Articles
should be established in administrative rules and the Board's current
proposed rule packet includes adopting the List of Natural Substance
Articles in rules. Other naturopathic licensing agencies compliment the
Board on its list of natural substances. Those agencies indicate their
intent to update their natural substance formularies since they fail to list
natural substance articles that may be administered, dispensed and
prescribed by their naturopathic physicians.
Board Recognizes Problems
With Licensing Examination
The Board is required by law to administer two licensing examinations each year. In 1997, the Board
faced extreme difficulties with limited resources to develop and administer its own licensing examinations
when the Board was unable to approve a new contract with an examination vendor.
There was no national board of examiners for the Board to turn to
for assistance. The money appropriated to develop the licensing
examination was $2400. The Board did the best job it could do within its
limited resources.
The vendor previously used by the Board submitted a proposed contract
that the Contracts Division of the Office of the Attorney General could
not approve since the vendor requested an unlawful delegation of
authority relating to applicants for examination and for examination
challenges required by Arizona law. Other problems with the vendor
were requiring the Board to mail, receive and process vendor applications
for examination and for the Board to collect money for the examinations
in the vendor's name and to transmit the money to the vendor. The Office
of the Attorney General informed the Board it was improper for a state
agency to mail, receive and process vendor applications and collect
examination money for a vendor and transmit them to a vendor. The
Board could not approve the examination vendor contract without
approval from the Contracts Division in the Office of the Attorney
General.
From 1995 to 1999, the Board spearheaded a request for naturopathic licensing agencies to
establish a national board of examiners. In 1999, a national board was organized by naturopathic
licensing agencies and the Board has a member representative on the North American Board of Naturo-pathic
Examiners.
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The Board did the best job it
could do within its limited
resources. There was no
national board of examiners for
the Board to turn to for
assistance.
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The Board could not approve the
examination vendor contract
without approval from the
Contracts Division in the Office
of the Attorney General.
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All of the natural substance
articles approved by the Board
are from a natural origin.
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Agency Response Page 4
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Naturopathic Physicians Board of Medical Examiners
NPLEX, Inc., a company that has been in the business of examination development and scoring for
licensing agencies since 1988, is on contract for examination development and scoring for the national
board. The national board is being accepted by or is in the process of being accepted by naturopathic
licensing boards in Canada and the United States.
The Board has recognized the North American Board of Naturopathic Examiners as a national board of
examiners and this will correct problems associated with the Board's licensing examination. The Board
accepts examinations administered by the national board for Part One and Part Two.
The national board informed the Arizona Board that it examines in the
subjects of dermatology, ophthalmology and otolaryngology, geriatrics,
infectious diseases, pediatrics, obstetrics and gynecology, neurology and
orthopedics under physical and clinical diagnosis. Psychiatry is examined
under the subject of psychology and lifestyles counseling and the subject
of physical medicine includes rehabilitation. The Board will utilize national
board examinations for Part III clinical medical science examinations in
the subjects of emergency medicine and minor surgery, laboratory
diagnosis and diagnostic imaging, clinical nutrition, botanicals and diet
therapy. The Board is negotiating with the national board to provide
examinations in the subjects of internal medicine and clinical
pharmacology. With these changes, the Board would no longer be
conducting examinations.
In the event negotiations with the national board for the examination subjects of internal medicine and
clinical pharmacology are not completed prior to August 2000 examinations, the Board will administer the
2 examination subjects. As a cautionary step, the Board's Examination Committee is currently reviewing
how it will develop, administer and score the internal medicine and clinical pharmacology examinations.
Complaints Have Been Entered
Into The New Database Program
When the performance audit was taking place a new database program was being programmed and
updated.
The hard drive from the old computer was installed in the new computer
but was of no use in transferring old database information relating to
complaints and examinations into the new program. Consumer complaint
information, complaint logs and examination information did not transfer
to the new database program. The executive director spent numerous
hours in obtaining the necessary information from the outdated database
and word-processing program to provide information to the auditors.
Information was not re-created as suggested in the Report.
Cases referred to in the Audit Report as being open for more than 1,000 days are:
1. A consumer complaint involved an allegation of malpractice. Acting on advice of legal
counsel, the Board agreed it would not hear the allegations until the civil matter was heard by
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Consumer complaints, com-plaint
logs and examination
information did not transfer to
the new database program.
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The Board has recognized the
North American Board of
Naturopathic Examiners as a
national board of examiners
and this will correct problems
associated with the Board's
licensing examination.
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Agency Response Page 5
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Naturopathic Physicians Board of Medical Examiners
the court or settled. The Board received conflicting information from the physician's attorney
and the complainant's attorney as to when the case settled and was accepted by the court.
When appropriate information was received, the complaint was placed on the Board's agenda.
This complaint is currently under review by Board members.
2. In the consumer complaint listed above, information in that complaint indicated the physician
used an associate MD's prescription pad to write a prescription for a controlled substance. At
the request of the Board the executive director opened an investigative file and an investigator
was retained. The investigator obtained investigative reports from the Drug Enforcement
Agency regarding the prescription issue and submitted an investigative report to the Board.
When the matter came before the Board the physician's attorney stated his client had never
received proper Notice of Complaint. The physician's attorney said the allegation was part of
the consumer's complaint of alleged malpractice and the allegations were not to be heard by
the Board until after the civil case was heard by the court. The Board's agenda item
incorrectly listed CLN indicating a Complaint instead of INV that indicates an investigation.
The executive director, at the Board meeting, informed Board members and legal counsel of
the agenda item mistake except the physician and his attorney were sent proper notice of the
investigative interview and the informal interview. When legal counsel requested all complaint
information regarding the physician at the Board meeting, the secretary had left the meeting
and the director went to the secretary's office to retrieve the files and found a note that the
secretary had resigned immediately. The executive director was unable to locate all the
complaint information relating to the physician that measured approximately 12 inches in
height and informed the Board and legal counsel. Legal counsel advised the Board that the
investigation apparently related to the civil case and should wait until the court hears the civil
case. When the Board received information regarding settlement of the civil case, the Board
concluded the investigation and the physician agreed to enter into a consent agreement
regarding the prescription issue.
3. A consumer complaint, case number 96-002, was received on April 27, 1996 and concluded
on August 18, 1997. The investigation and hearing was combined with case number 95-006.
The Board heard the matter and issued letters of concern to the physician. Case number 96-
004 involved the same physician who had failed to return a patient's telephone call in a timely
manner. When contacted about the case, the patient complainant said she only filed the
complaint against the doctor at the request of a medical student to cause the doctor to have a
lot of complaints before the Board. The Board's Unprofessional Conduct Review Committee
heard the complaint and received testimony from the physician. The Chairman of the
Committee presented an oral report to the Board at a board meeting. The Board accepted the
Committee Chairman's oral report except meeting minutes do not reflect the complaint being
dismissed and the complaint was brought back before the Board and dismissed. Total days
between receipt of complaint and final conclusion were 526 days.
4. Case number 98-009 involved a consumer complaint who requested the Board to require a
naturopathic physician to reimbursement her for health care expenses to a chiropractor for
injuries allegedly sustained during a physical examination and by the physician and a
naturopathic medical student. The Board has no authority to require reimbursement of
expenses charged by other health care providers. After an initial investigative hearing before
the Board with the complainant and physician, members were concerned of possible
malpractice and requested patient medical records relating to the medical student and the
Agency Response Page 6
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Naturopathic Physicians Board of Medical Examiners
supervising physician records of that student. The custodian of records attempted to invoke
federal law stating student educational records may only be released by student consent.
During the time of obtaining the medical records, the supervising physician moved out of state
and the medical student graduated. After the out-of-state supervising physician responded to
the Board, the Board completed its investigation. An informal interview was conducted and
the Board again took testimony from the consumer but found no act of malpractice and issued
a letter of concern to the physician. Total days between receipt of complaint and final
conclusion were 498 days.
5. Case number 97-001 involved an investigation based on a December 2, 1996 letter received
from a consumer that failed to specify any particular allegation against a naturopathic
physician but contained copies of letters and notices of demand the consumer had sent to the
doctor. An investigation file was open and a complaint form was sent to the consumer to
obtain complaint allegations. The purpose of the complaint form was to assist Board members
in determining the consumer allegations. The form was returned in January 2000 and the
consumer stated the complaint did not involve unprofessional conduct relating to diagnosis and
treatment by the doctor. In February 2000, the Board heard the complaint and dismissed it by
concluding there was insufficient evidence to support findings of unprofessional conduct as
defined by law.
Board staff is able to provide consumers with a complete and recent history of complaints and
disciplinary actions against naturopathic physicians. The Board's computer system is now updated.
Board complaint records were limited at the time of the Performance Audit since the computer system
was being updated and complaint information could not be transferred.
Complaint information and logs had to be manually typed into the new
database program. Poor record keeping regarding complaints resulted
from a prior secretary, without authorization, re-lettering and renumbering
complaints and investigation files to calendar years instead of maintaining
the records on a fiscal year basis. The prior secretary also caused
confusion by re-lettering and renumbering investigation files as complaint
files and moving some closed complaints to storage.
Another part of the confusion regarding complaints was that official Board action letters and orders
regarding physician and naturopathic medical student complaints were placed in the physician or student
file but not in the complaint or investigation file. The executive director cleared up the confusion by
making photocopies of the letters and orders and placing them in the appropriate complaint or
investigation file.
Changes in investigation and adjudication functions :
The Board intends to request the Legislature amend its informal interviews by requesting similar statutory
language enacted for the Osteopathic Board of Examiners in Laws 2000, Chapter 176, HB 2158. Also, the
provisions of Laws 2000, Chapter 113, SB 1435, requires complaints relating to revocation and suspension
of licenses and certificates issued to persons regulated by the Board to be forwarded to the Office of
Administrative Hearings.
Legal counsel recently advised Board members on conducting investigative interviews. The Board now
assigns a member as a lead board member to assist in investigative interviews and to work with the
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Consumer information
and logs had to be
manually typed into the
new database program.
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Agency Response Page 7
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Naturopathic Physicians Board of Medical Examiners
investigator. When the case comes before the Board the member does not participate in hearing the case
and submits a recusal form to the Board. This is consistent with the Attorney General's advice contained
in the Arizona Agency Handbook.
Board Reviewed its Operations and
Oversight of the Executive Director
Board did not find fiscal management problems:
Fiscal management problems do not exist. The problems mentioned in the Report relate to personal
services for FY 96/97 paid in 1998 and personal services for FY 98/99 paid in 1999. It was necessary for
the Board to request a supplemental appropriation for personal services and the Board received the
supplemental appropriation after the Legislative determined the request was necessary. The Board is on a
biannual budget and submits its budget request 22 months prior to its second fiscal year of operations.
The Board contracts with another state agency for payroll services. In
FY 98/99 the director learned that personal services exceeded the
amount appropriated and notified the Office of Strategic Planning and
Budgeting and the Joint Legislative Budget Committee. The Director
requested any excess personal services be deducted from his pay. The
findings relating to personal service do not demonstrate fiscal
management problems. The Report fails to mention the appropriated
funds reverted at the end of its fiscal years that was not spent by the
Board. The funds reverted demonstrates proper fiscal management, not
mismanagement.
Naturopathic Medical School Rules:
The Naturopathic Physicians Board of Medical Examiners has no authority to license naturopathic
medical schools, only the Arizona State Board for Private Postsecondary Education has authority
to approve and license naturopathic medical schools. The Report states the Board needs to add