Performance audit, the Board of Medical Examiners

              PERFORMANCE AUDIT

THE BOARD OF MEDICAL EXAMINERS

Report to the Arizona Legislature

By the Auditor General

November 1994

Report 94- 1 0

DOUGLAS R. NORTON, CPA

AUDITOR GENERAL

STATE OF ARIZONA

OFFICE OF THE

AUDITOR GENERAL

DEBRA K. DAVENPORT, CPA

DEPUTY AUDITON GENERAL

November 22, 1994

Members of the Arizona Legislature

The Honorable Fife Symington, Governor

Dr. Richard E. Zonis, Chairman

Board of Medical Examiners

Transmitted herewith is a report of the Auditor General, A Performance Audit of the

Board of Medical Examiners. This report is in response to a May 5, 1993, resolution

of the Joint Legislative Audit Committee. This performance audit was conducted as

part of the Sunset review set forth in A. R. S. § § 41- 2951 through 41- 2957.

Medical boards in Arizona and other state have traditionally viewed BOMEX as a

" model" board. BOMEX's program to monitor and rehabilitate doctors with substance

abuse programs has been recognized nationally. In addition, compared to other

boards, BOMEX has sufficient statutory authority and a substantial budget to carry out

its regulatory responsibilities.

Our review, however, found that BOMEX's performance has declined in recent years.

On the regulatory side, we found that the Board suffers from a significant backlog of

complaints, takes too long to resolve complaints, does little to investigate complaints,

and appears to be too lenient with offending doctors. On the management side, we

found that the agency has not been able to manage some operations basic to state

agencies. We found violations of both the State's open meeting law and State

procurement requirements, mismanagement of the rules of development process, and

personnel problems.

My staff and I will be pleased to discuss or clarify items in the report.

This report will be released to the public on November 23.

Sincerely,

owa as R. Norton

Auditor General

2910 NORTH 44TH STREET SUITE 410 = PHOENIX, ARIZONA 85018 l( 602) 553- 0333 - FAX ( 602) 553- 0051

SUMMARY

The Office of the Auditor General has conducted a performance audit and Sunset

review of the Board of Medical Examiners ( BOMEX), pursuant to a May 5, 1993,

resolution of the Joint Legislative Audit Committee. The audit was conducted under

the authority vested in the Auditor General by Arizona Revised Statutes ( A. R. S.)

9941- 2951 through 41- 2957.

The Board's primary responsibility is to protect the public. A. R. S. 532- 1403. A. states:

The primary duty of the board is to protect the public jkom unlawfil, incompetent,

unqualified, impaired or unprofessional practitioners of allopathic medicine through

licensure, regulation and rehabilitation of the profession in this state.

Our audit found that the Board is not adequately protecting the public. We present

three findings critical of the Board's complaint resolution and licensing functions. In a

fourth finding, we criticize management for not addressing these regulatory problems

and also for failing to comply with state procurement and open meeting law

requirements. Board members need to be more actively involved in overseeing the

agency to ensure that problems we identified in our findings are rectified.

A Large Complaint Backlog and

Slow Complaint Resolution Impede

BOMEX's Ability to Protect the Public

( See pages 1 through 10)

BOMEX had a backlog of 1,481 unresolved complaints as of June 30,1994. In addition,

non- malpractice complaints resolved between July 1991 and June 1994 took an average

of 355 days to process. Other states comparable to Arizona in number of physicians

licensed had an average backlog of 275 complaints. Failure to resolve complaints in a

timely manner allows doctors with problems to continue to practice medicine

unchecked.

BOMEX can reduce its complaint backlog and improve complaint resolution timeliness.

First, BOMEX needs to adopt a complaint prioritization method to ensure that the most

serious complaints are addressed first and invalid complaints are quickly eliminated.

Second, BOMEX can significantly improve complaint resolution timeliness by

eliminating unnecessary administrative delays between important steps in the process.

Third, the Board needs to more efficiently utilize time spent adjudicating complaints.

Currently, the full Board rules on all complaints. Ths practice has not reduced the

backlog. The Board should divide into two adjudicatory bodies to double complaint

resolution. Other states have adopted these types of changes to address similar

problems with complaint resolution.

Discipline and Complaint

Investigation Need to Be Improved

( See pages 11 through 16)

The Board does not take sufficient action against doctors found in violation of

professional conduct standards, nor does it fully investigate complaints. Even when the

Board finds doctors to be in violation of standards, some actions have been too lenient.

For example, we noted one case in which during a Thanksgiving weekend, a 22 month-old

baby girl died of acute bronchial pneumonia, a curable bacterial infection. Although

the father called several times about his daughter's worsening condition, the doctors

said they did not need to see the child and instead recommended fluids, a vaporizer

and cough syrup. The Board issued Letters of Concern against the doctors. Some Board

members told us that disciplinary action should have been taken against the doctors.

One Board member said that the chld's life could have been saved.

In 21 of 30 cases we reviewed, the Board issued Letters of Concern when stronger

action appeared to be warranted. In addition, we found that the Board was slow to

take strong action against doctors with multiple serious violations. Reasons for the

Board's weak discipline are: 1) its lack of disciplinary guidelines; 2) its reluctance to

discipline fellow doctors; 3) statutes requiring that most Board members be doctors; and

4) inadequate complaint investigations.

The Board also needs to improve its complaint investigations. Investigations are

typically limited to reviewing medical records provided by the doctor in question.

Critical parties, including the complainant/ patient, the doctor, the nurses, and other

potential witnesses are rarely interviewed. One reason for poor investigations may be

because the Board has not, until recently, routinely assigned its seven investigators to

investigate complaints. Rather, most of their time was spent gathering urine samples

from approximately 70 doctors the Board is monitoring for substance abuse problems.

BOMEX Has Issued Some

Registrations and Permits to

Practice Medicine to Persons

Who Did Not Meet Statutory Requirements

( See pages 17 through 20)

Although we did not review BOMEX's licensing function due to time constraints, two

issues came to our attention during the audit. BOMEX has improperly issued locum

tenens registrations and training permits in violation of state statutes. A locum tenens

registration is used to authorize an out- of- state doctor to substitute for or assist an

Arizona doctor for a limited time. In four cases it appears that the Board used locum

tenens registrations as a substitute for its regular licensing process. BOMEX also issued

training permits in excess of residency, intern, and fellowship- allotted positions at

hospitals. For example, in fiscal year 1993 BOMEX issued 14 training permits to

applicants participating in a program that was only authorized 10 positions. BOMEX

also improperly dated training permit applications retroactively.

Inadequate Management and

Limited Board Oversight

Hinder BOMEX

( See pages 21 through 26)

Poor management and failure by the Board to assert its statutorily defined role of

overseeing the agency has contributed to many of the problems we found during the

course of the audit. In addition to problems handling and resolving complaints against

doctors, we found that the agency has violated state procurement rules and the open

meeting law. Board members need to place more emphasis on monitoring and guiding

the agency.

iii

Table of Contents

Paqe

Introduction and Background . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Finding I: A Large Complaint Backlog and Slow

tRoe sPorolutteicotn t hIme pPeudbel iBc O. M. . E. X.' s. A. b. il. ity. . . . . . . . . . . . . . . . . . . . . . 5

Timely Complaint Resolution Important . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Board Has an Enormous

Complaint Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Complaint Resolution Process

MuchTooLong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Solutions for Reducing Backlog and

Improving Complaint

Resolution Timeliness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Finding II: Discipline and Complaint

Investigation Need To Be Improved . . . . . . . . . . . . . . . . . . . . . 11

Board Should Impose

Stronger Disciplinary Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

Complaint Investigation

Very Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 5

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

Table of Contents

Finding Ill: BOMEX Has Issued Some

Registrations and Permits to Practice

Medicine to Persons Who Did Not Meet

Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Improper Issuance of

Locum Tenens Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Training Permits

Granted Improperly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Finding IV: Inadequate Management

and Limited Board Oversight

HinderBOMEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Numerous Problems

atBOMEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Management Practices

Contributed to BOMEX Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Little Oversight Provided By

the Governing Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Sunset Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Agency Response

List of Tables

Page

Table 1 Board of Medical Examiners

Statement of FTE, Revenues, Expenditures and

Changes in Fund Balances for Years Ended

June 30, 1993 and 1994 and Statement of Appropriated

Expenditures for Year Ended June 30, 1995 . . . . . . . . . . . . . . . . . 2

Table 2 BOMEX Complaint Statistics

Fiscal Years 1991- 92 through 1993- 94 . . . . . . . . . . . . . . . . . . . . . 6

Table 3 Average and Suggested Time Frames

for Steps In the Complaint Resolution Process

For Fiscal Year 1993- 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

INTRODUCTION AND BACKGROUND

The Office of the Auditor General has conducted a performance audit and Sunset

review of the Board of Medical Examiners ( BOMEX), pursuant to a May 5, 1993,

resolution of the Joint Legislative Audit Committee. The audit was conducted under

the authority vested in the Auditor General by Arizona Revised Statutes ( A. R. S.)

$ 541- 2951 through 41- 2957.

Board Responsibilities

The Board's primary responsibility is to protect the public. A. R. S. $ 32- 1403. A. states:

The primary duty of the board is to protect the public from unlawful, incompetent,

unqualified, impaired m unprofessional practitioners of allopathic medicine through

licensure, regulation and rehabilitation of the profession in this state.

Statutes authorize the Board to exercise this responsibility through examining and

licensing physicians, renewing licenses annually, investigating and resolving complaints,

disciplining and rehabilitating physicians, and developing and recommending standards

governing the medical profession. During fiscal year 1994, the Board regulated

approximately 12,000 doctors with active Arizona licenses.

BOMEX's Performance

Has Declined

Medical boards in Arizona and other states have traditionally viewed BOMEX as a

" model" board. BOMEX's program to monitor and rehabilitate doctors with substance

abuse problems has been recognized nationally. In addition, compared to other boards,

BOMEX has sufficient statutory authority and a substantial budget to carry out its

regulatory responsibilities.

Our review, however, found that BOMEX's performance has declined compared to

some other states and compared to other regulatory and management criteria. On the

regulatory side, we found that the Board suffers from a significant backlog of

complaints, takes too long to resolve complaints, does little to investigate complaints,

and appears to be too lenient with offending doctors. On the management side, we

found that the agency has not been able to manage some operations basic to any state

agency. We found violations of both the State's open meeting law and State

procurement requirements, mismanagement of the rules development process, and

financial and personnel problems.

Staffing and Budget

The Board is comprised of 12 members, including nine licensed physicians, two public

members, and a member of the Board of Nursing. The Board employs an executive

director who oversees agency operations. For fiscal year 1994- 95, the Board was

appropriated 42.5 full- time equivalent ( FTE) employees. The Board employs investiga-tors,

medical consultants, and licensing and other administrative staff to carry out its

duties.

The Board was appropriated approximately $ 2.4 million for agency operations in fiscal

year 1994- 95. The Board is funded by the Legislature out of a special fund comprised

of examination and licensing fees collected by the Board. Table 1 summarizes the

Board's actual revenues and expenditures for fiscal years 1992- 93 and 1993- 94, and the

Board's appropriated expenditure budget for fiscal year 1994- 95.

Table 1

Board of Medical Examiners

Statement of FTE, Revenues, Expenditures

and Changes in Fund Balances for Years

Ended June 30, 1993 and 1994 and

Statement of Appropriated Expenditures

for Year Ended June 30, 1995

( unaudited)

1992- 93 1993- 94 1995

Actual Actual Appropriated

FTE 40.5 41.5 42.5

Revenues $ 2,966,071 $ 3,134,342

Expenditures: $ 1,030,190 $ 1,074,693 $ 1,260,000

Personal Services

Employee Related 229,451 233,912 288,900

Prof. & Outside Services 639,180 628,117 338,700

Travel - In- state 38,771 34,530 47,300

Travel - Out- of- state 8,343 13,628 8,800

Equipment 14,691 182,530 0

Other Operating 427,257 422,910 41 6,200

Total Expenditures: $ 2.387.883 $ 2,590.320 $ 2.359.900

Excess of Revenues over 579,189 544,022

Expenditures

Beginning Fund Balances $ 1,170,782 $ 1,748,971

Ending Fund Balances $ 1.748.971 $ 2,292,993

Source: Arizona Financial Information Systems and the State of Arizona Appropriations Report for the

Fiscal Year Ending June 30, 1995.

Audit Scope

Our audit contains findings in the following four areas:

The extensive backlog of pending complaints and the untimely resolution of

complaints;

w Lenient disciplinary action and incomplete complaint investigation;

Issuance of some registrations and permits to practice medicine to persons who did

not meet statutory requirements;

w Poor agency management, and the Board's lack of oversight over agency

operations.

The audit was conducted in accordance with government auditing standards.

The Auditor General and staff express appreciation to the Board of Medical Examiners,

the executive director, and staff for their cooperation and assistance throughout the

audit.

FINDING I

A LARGE COMPLAINT BACKLOG AND SLOW

COMPLAINT RESOLUTION IMPEDE BOMEX'S

ABILITY TO PROTECT THE PUBLIC

BOMEX needs to reduce its significant backlog of complaints and improve the

timeliness of its complaint resolution process. Our review found that the Board

currently has a large backlog of complaints, totaling 1,481 as of June 30, 1994.

Complaints resolved in the past three fiscal years took on average 355 days to process.

The Board can address these problems by prioritizing complaints, better managing its

complaint process, and adopting alternative complaint adjudication methods.

Timely Complaint

Resolution Important

It is vital that the Board resolve complaints in a timely manner. Swift resolution of

complaints benefits all parties involved. If a doctor is found in violation, he or she can

address the problems identified. The public benefits from timely complaint resolution

by being less exposed to possible substandard medical practice. The Board benefits

because lengthy delays can affect its ability to discipline. For example:

A baby was born with severe brain damage and died 17 months later. The

complaint alleged that the brain damage occurred because the doctor failed to

perform a timely caesarean section during the delivery. The malpractice case was

filed with the Board in December 1988. The case appeared before the Board in 1993

and was returned to staff for further investigation. The Board finally adjudicated the

case in April 1994, over five years after receiving it. Board members commented that

since ths case was so old, it was difficult to determine the standard of care at the

time it occurred. As a result, the doctor received only a Letter of Concern for " delay

in delivering a baby in the face of a prolonged, ominous fetal heart rate tracing."

Board Has an Enormous

Complaint Backlog

The Board has not been able to reduce its large backlog of complaints. The backlog,

estimated at over one- and one- half years, has remained constant for the past three

fiscal years. Under the Board's current complaint resolution process, it appears unlikely

that it will eliminate the backlog.

Currently, the Board is faced with a large backlog of complaints. As of July 1994, the

Board had 1,481 unresolved complaints. As shown in Table 2, the backlog has remained

steady over the last three fiscal years.

Table 2

BOMEX Complaint Statistics

Fiscal Years 1991 - 92 throunh 1993- 94

Fiscal Year Fiscal Year Fiscal Year

Number of Complaints 1991 - 92 1992- 93 1993- 94

Beginning of Year 1,175 1,397 1,543

Received 1,020 1,186 821 ( a)

Resolved 798 1,040 883

End of Year 1.397 1.543 1.481

( a) A change in reporting requirements resulted in a decrease in the number of malpractice claims

reported to the Board. Prior to 1993, all malpractice cases filed were to be reported to the Board.

However, as of July 1993, only cases that have been settled must be reported to BOMEX.

Source: Auditor General staff analysis of BOMEX complaint tracking data base.

The Board has resolved an average of approximately 900 complaints annually over the

last 3 years. At this rate, even if the Board were to receive no more complaints, it

would take 20 months to eliminate its pending backlog.

The Board's backlog is significantly higher than other states with a similar number of

doctors. A 1992 survey of other state medical regulatory boards performed by the

Federation of State Medical Boards found that 11 other boards comparable to Arizona

in numbers of p, %.- siciansli censed averaged approximately 275 open complaints.

Arizona's nearly tJO open complaints at the end of fiscal year 1993- 94 was over five

times greater thc. , imilar states' backlogs.

Complaint Resolution

Process Much Too Long

The Board has failed to resolve complaints in a timely manner. Our review of Board

records for the last 3 fiscal years found that it took the Board an average of 355 days

to resolve complaints. The Board should be able to reduce this time to 180 days or less

by addressing some administrative delays.

Complaint resolution averaged 355 days - Our review of Board records for fiscal years

1991- 92 through 1993- 94 found that, excluding malpractice complaints, it took the Board

an average of 355 days to resolve complaints adjudicated in those years. Malpractice

complaints adjudicated in those years ( 17 percent of total cases) averaged 1,159 days.(')

Resolution time could be sharply reduced - The time it takes for the Board to resolve

complaints can be improved. Some other boards we studied were able to resolve

complaints within 180 days. In addition, Board members and the new executive director

concur that the time should be reduced to six months or less.

The Board could improve complaint resolution timeliness simply by shortening the time

that cases are pending the next step. We sampled 90 complaints closed in fiscal year

1993- 94 to determine how much time the Board takes to complete various steps in the

process. We found several steps where the complaint time frame could be reduced. By

reducing the administrative waiting time in some of the steps, complaints could be

resolved in approximately 180 days or less, as shown in Table 3 on page 8.

Solutions for Reducing Backlog

and Improving Complaint

Resolution Timeliness

The Board could implement several improvements to rectify its complaint backlog and

resolution problems. First, the Board needs to set up a complaint prioritization process.

Second, the Board needs to streamline its adjudication process.

BOMEX is statutorily required to initiate an investigation into malpractice reports upon receipt of the report.

However, the Board's practice of working these cases as time permits has resulted in a large backlog and

created delays in investigating and adjudicating these cases. Consequently, these cases have taken longer to

resolve.

Table 3

Average and Suggested Time Frames

For Steps In The Complaint Resolution Process

For Fiscal Year 1993- 94

* Indicates steps simply waiting for assignment to the next step in the process.

Step

I *

2

3*

4

5*

6

7

( a) Finding II ( see page 11) discusses the need to assign complaints to the Board's medical

investigators. The medical investigator would be assigned the complaint at step one and would

complete investigation efforts and a written report in concert with the medical consultant's activities

in step four.

( b) Current Board requirement is 20 days.

Complaint prioritization needed - The Board needs to prioritize complaints so

immediate action can be taken on serious cases. The Board currently does not have

formal guidelines to rank cases in order of seriousness. The Board maintains it takes

action on the most serious complaints first; however, we found no evidence that ths

does indeed occur.

Suggested

Time

7 days ( a)

20 days ( b)

7 days

60 days

7 days

11 days

60 days

172 days

Description

Number of days from receipt of complaint until medi-cal

records are requested

Number of days from request for medical records

until medical records are received

Number of days from receipt of all medical records

until the complaint is assigned to medical consultant

Number of days from assignment of complaint to

medical consultant until the medical consultant's

report and summary is complete

Number of days from completion of medical

consultant's report and summary until the complaint

is assigned to reviewing Board member

Number of days from assignment of complaint to re-viewing

Board member until Board staff receive re-viewing

Board member's recommendation

Number of days from receipt of reviewing Board

member's recommendation by Board staff until the

full board takes action on complaint

Total:

Average

Time

41 days

48 days

39 days

105 days

52 days

11 days

88 days

384 days

The Citizen Advocacy Center ( CAC), a public citizens' watch group, recommends that,

" Boards that process large numbers of complaints should have a system that gives

priority to those allegations that are particularly serious, and potentially detrimental to

the public welfare." CAC also states that, "... quality of care cases need to be given top

priority in terms of time and resources."(') Other states have adopted prioritization

schemes which have helped reduce complaint backlogs and also address more serious

cases sooner.

Mme e m tco mplaint adjudication needed - Although the Board has conducted

lengthy meetings in an attempt to address its large complaint caseload, it has not been

able to reduce the backlog. As a result, the Board needs to adopt alternative complaint

resolution methods to address this problem. Currently, the Board meets quarterly, with

meetings typically running for ten hours per day over six days. In these meetings, the

full Board reviews and acts on all complaints. The only time- saving measure now

utilized is a mass dismissal of complaints determined to be invalid by both the medical

consultant and the assigned Board member.

Since the Board already meets more than most of the boards we interviewed, it is not

feasible or necessary to add more meetings if reasonable alternatives are available. One

such alternative is to expedite its complaint resolution by dividing the Board into two

panels or subcommittees to review complaints. Six of the eight boards we interviewed

use either subcommittees or panels to review complaints to speed up the complaint

resolution process.

The Board could also resolve more complaints per meeting by streamlining its current

process. The Board should consider eliminating the oral reading of the medical

consultant's report and summary for each complaint. In addition, some Board members

suggested that reducing the number of informal interviews of doctors that the Board

conducts would also save time.

(') " Licensing Board Policies For Prioritizing Complaints: Results of a Survey by the Citizen Advocacy

Center," Fall 1993.

RECOMMENDATIONS

1. BOMEX needs to develop and implement a formal process for prioritizing

complaints.

2. BOMEX should improve its complaint resolution time by:

a. Eliminating administrative delays in its complaint resolution process; and

b. Further analyzing the process to determine if additional resources are needed to

address delays.

3. BOMEX needs to reduce its complaint backlog by:

a. Using alternative methods to adjudicate complaints; and

b. Eliminating unnecessary case reviews and interviews at board meetings.

FINDING II

DISCIPLINE AND COMPLAINT INVESTIGATION

NEED TO BE IMPROVED

The Board does not take sufficient action against doctors found to be in violation of

professional conduct standards, nor does it fully investigate complaints. Doctors found

in violation more often receive warnings rather than discipline. In addition, our review

found that complaint investigations typically entail only a review of medical records.

Board Should Impose Stronger

Disciplinary Actions

In Arizona, as is true nationally, very few doctors are actually disciplined after

complaints are filed. Reviewing BOMEX's disciplinary actions, we found the Board

appears to be inappropriately using Letters of Concern when formal discipline is

warranted. In addition, the Board is slow to take action against doctors with multiple

serious violations.

Very few complaints result in disciplinary action by the Board. In fiscal year 1993- 94,

the Board took 1,034 actions involving 873 doctors. Ninety percent of those actions ( 788

dismissals and 145 nondisciplinary Letters of Concern) resulted in no disciplinary action

being taken against the doctor. The Board disciplined only 65 of the 873 doctors. Most

( 47) of the disciplinary actions taken against these doctors were of lesser severity, such

as stipulations ( 38), probation ( 5), and censure ( 4). Some of these actions included Board

orders for substance abuse rehabilitation, a nonquality- of- care issue.(') Strong dis-ciplinary

action was taken against 18 doctors, including 16 license revocations and 2

license suspensions.

Letters of Concern issued when disciplinary action warranted - Our analysis found

that Letters of concerd2) are often issued when disciplinary action is warranted.

Although Letters of Concern are intended to be used when there is insufficient evidence

(') Because BOMEX does not track the nature of the complaints received ( i. e., quality of care versus

substance abuse or fee complaints) we could not easily determine whether the Board is

appropriately pursuing cases alleging medical negligence or incompetence. However, several recent

reports indicate that quality- of- care cases are among the most difficult for boards to address because

they tend to be complex, time- consuming, expensive, and controversial.

( 2) By statute, a Letter of Concern may be issued when there is not sufficient evidence to support

direct action against the doctor's license; however, continuation of the activities that led to the claim

being submitted may result in action against a doctor's license.

to support disciplinary action, we found instances in which the Board issued them

when the doctor engaged in acts of unprofessional conduct. We reviewed a sample of

30 complaints that resulted in Letters of Concern and found 21 complaints in which

statutory violations occurred and stronger action could have been taken, as is illustrated

in the next two examples that resulted in the death of one infant and the mistreatment

of another.

Case Example # 1

The father of a 22- month- old baby girl repeatedly spoke with doctors on call over

a 3- day Thanksgiving holiday, indicating that his daughter had a high fever, ear

pain, was vomiting, coughing, not eating or drinking, and had congestion and some

difficulty breathing. On Wednesday, the doctor on call advised the father to obtain

cough syrup and use a vaporizer that night and call the office in the morning if the

cluld was not feeling better. The father called the office the next day, Thanksgiving

Day, and informed the doctor now on call that the cluld was getting worse. This

second doctor said he did not need to see the cluld and to give her fluids. The

father suggested to the doctor that the child should go to the emergency room. The

doctor advised him that was not necessary as the child probably had the flu. The

child was once again restless that night and her condition did not improve. The

parents called the doctor's office early Friday morning and made an appointment

to bring the child in. She died that morning prior to the appointment. The autopsy

revealed that the cluld died from acute bronchial pneumonia, a bacterial infection

that is curable. Rather than applying a stricter sanction, the Board issued Letters of

Concern to the two doctors involved. When Board members were questioned about

the actions on tlus complaint, a few said they should have taken disciplinary actions

against the doctors. In addition, one Board member volunteered his opinion to us

that the child's life could have been saved.

Case Example # 2

A seven- month- old child was brought to the emergency room by her mother

because she fell and appeared to be in pain. The nurse noted that the cluld's leg

was sensitive to touch. The doctor diagnosed an ear infection and prescribed an

antibiotic. The mother took the child to another pediatrician two days later because

the cluld was not moving her leg and was irritable. The pediatrician diagnosed a

fracture of the leg. The emergency room doctor, in lus response to the allegation,

admitted that lus examination was probably inadequate and that is why he failed

to diagnose the fracture. Rather than disciplining the doctor, the Board issued a

Letter of Concern.

Inadequate action against doctors with multiple complaints - In addition to issuing

Letters of Concern when statutory violations have occurred, the Board in some

instances has failed to take progressively stronger actions against medical doctors who

have received numerous complaints over time. Despite the fact that some medical

doctors have engaged in repeated acts of unprofessional conduct, and less severe

sanctions have failed to change their behaviors, the Board has been reluctant to impose

stronger sanctions. The following two case examples came from our review of the 46

most chronic offenders:

w Case Example # 3

Between 1983 and 1987 the Board received 15 complaints against one doctor. Many

of the complaints were surgery related, alleging unnecessary surgery, inappropriate

surgery, below- standard care resulting in shortening of a patient's leg and disability,

and releasing a patient from the hospital without properly caring for a surgical

wound. In September 1989, the Board grouped seven of the complaints together,

placed the doctor on probation, and restricted him from practicing surgery related

to the neck and back. The Board had previously issued three Letters of Concern to

the doctor relating to malpractice claims.

Complaints against this doctor, however, continued. In response, the Board issued

five more Letters of Concern to lum between October 1989 and October 1991. In

addition, between 1987 and 1994 the Board received 19 other complaints, many of

them surgery related, alleging unnecessary surgery, negligent surgery, and setting

a broken leg incorrectly, resulting in a patient being confined to a wheelchair and

unable to walk. In May 1994, the Board grouped 11 of the 19 complaints together

and canceled the doctor's license.

When asked, Board members stated several reasons for delaying strong disciplinary

action, including the need for developing a strong case by registering numerous

complaints, lawyer involvement, and the concern of taking away a fellow doctor's

license to practice.

Case Example # 4

Over an 18- year period BOMEX received 38 complaints and malpractice cases

against a doctor. In response to these, the Board dismissed 26, issued 8 Letters of

Concern, and has 4 cases that are currently open and under investigation. No

disciplinary action has ever been taken against the doctor. The Letters of Concern

were issued for the following reasons:

- 3 Letters of Concern ( 1980, 1989 and 1991) for charging excessive fees;

- 2 Letters of Concern ( 1984 and 1990) for errors in surgery;

- 1 Letter of Concern ( 1991) for failing to recognize post- operative conditions;

- 1 Letter of Concern ( 1991) for mistreatment of a condition; and

- 1 Letter of Concern ( 1990) for failure to bring a patient in earlier for examination

and evaluation of her condition.

Of the four open complaints, we could not determine the nature of one complaint

because it was a malpractice case that has yet to be investigated. The other three

open complaints involve 1) prescribing the wrong form of treatment that would

have caused harm to the patient and a fee complaint; 2) directing a patient on

hospital discharge orders to obtain their prescriptions from a certain pharmacy; and

3) a technical error in surgery.

A review of the Letters of Concern found that Board medical consultants concluded

that inappropriate actions occurred; however, no disciplinary action was ever taken.

Board members we interviewed concerning this doctor provided a number of

reasons for not taking disciplinary action, ranging from " the doctor is a sharp

cookie ... g ood talker," " he has a good attorney;" and the perception that doctors get

one " freebie."

In another case we reviewed, we found that even though the doctor had numerous

violations of the professional conduct standard relating to substance abuse, the Board

appeared hesitant to take strong action even with a preponderance of evidence.

Although the doctor continued to use drugs and consistently violated Board orders,

including two probations, over eight years elapsed from the time the Board was first

notified of the drug use until it revoked his license.

Reasons for inadkquate discipline - Although the Board's reluctance to discipline

doctors is contrary to its statutory responsibility of protecting the public from poor

medical practice, several reasons have been identified to help explain why the Board

fails to take adequate action against medical doctors. For example:

Lack of formal guidelines - The Board still lacks formal disciplinary guidelines to

help ensure appropriate and consistent discipline. Thirteen years ago, our 1981

Sunset review of BOMEX recommended adoption of disciplinary guidelines. The

Federation of State Medical Boards recommends that every state medical board have

a basic guidebook on medical discipline to promote consistency in the disciplinary

process. Other states have adopted these types of guidelines.

Reluctance to discipline - Our interviews with eight Board members revealed that

the Board appears reluctant to strongly discipline doctors because of the impact the

discipline may have on the doctor's ability to practice medicine and make a living.

For example, Board members said that doctors claim even Letters of Concern can

result in a doctor being dropped from a managed care contract, and any disciplinary

action almost guarantees that the doctor's contract will be terminated.

We contacted several managed care organizations and found that they investigate

the circumstances surrounding each Board action taken against one of their doctors

and, based on their findings and the severity of the violation, determine appropriate

action against the doctor. The only Board actions that result in immediate

termination of a doctor's contract are revocations and suspensions.

Too many medical practitioners on the Board - The reluctance to discipline fellow

doctors has been a problem recognized nationally. A 1990 study of the impact of

public member representation on occupational licensing boards found that,

" Increased proportions of public members are associated with more serious

disciplinary actions." One Board member stated that because the Board consists

mostly of doctors, it sometimes makes it hard to take an action against a doctor. He

stated that in the back of their minds the doctors may be thinking that they too

could make the same mistake.

A proposal developed by The Federation of State Medical Boards recommends that

25 percent of Board members be unrelated to the medical profession. The Public

Citizen, a public interest group involving medicine, recommends that at least 30

percent of the members of each state medical board should be public members.

Currently, 2 of the 12 Board members, or 17 percent, are unrelated to the medical

profession. Replacing one or two doctors with persons who have nonmedical

backgrounds would increase the percentage to 25 percent or 33 percent, respectively.

Changes in the Board's composition would require statutory changes to A. R. S.

532- 1402. A.

Inadequate investigation - As discussed below, we identified problems in the

investigation process that may also contribute to the Board's failure to take adequate

discipline against doctors. If cases are not fully developed, the Board may not have

sufficient information to make an appropriate decision.

Complaint Investigation

Very Limited

The Board's complaint investigations are not comprehensive and need to be improved.

The Board's failure to fully utilize investigators is the primary reason for poor

complaint investigation. Our review found that investigations seldom incorporate

standard investigative techniques such as interviewing complainants, doctors, or

witnesses. Without interviewing, public protection may be compromised.

Interuiews are needed - Board staff need to interview those involved in the complaint.

Currently, a typical complaint investigation involves obtaining and reviewing pertinent

records from the doctor the complaint was filed against. Our review of a random

sample of 90 complaint files found that complainants, doctors, or potential witnesses

are seldom interviewed by Board staff. In fact, we found that only 1 of the 90

complainants was interviewed, and only 10 of the 90 doctors were interviewed ( 6 of

whose cases involved substance abuse allegations where the doctor typically has a

personal interview with agency management to assess the problem and begin rehabilita-tion

if necessary). Further, agency records indicate that during fiscal year 1992- 93, the

Board received 1,186 complaints, took 1,313 actions, and conducted only 71 investigative

interviews.

The Board's current investigative process may compromise public protection. Board

management and staff believe that interviews are unnecessary in many cases and that

the medical records are sufficient to assess the complaint. However, it is unlikely that

a complainant could cover all aspects of the complaint in one initial written document.

In addition, relying solely on medical records is also problematic for three reasons.

First, the source of the records used to evaluate the merits of the case is often the

person whom the complaint is filed against. Second, since the complainant is not

interviewed, there may be additional facets of the case that may not be apparent during

the medical record review. Tlurd, the records may not contain all the necessary

information.

lisvestigatm misused - It is particularly difficult to understand why interviews are

not being conducted when the Board has 7 investigators. The job description of a

medical investigator includes the duties of conducting investigations, writing supporting

reports, and providing recommendations. However, we found the 7 investigators spend

much of their time collecting urine specimens from 70 doctors under consent orders

regarding substance abuse. Not only is this task a lower priority than protecting the

public by investigating complaints, but the amount of work involved should only

require a small portion of the investigator's time. Ample time should be available to

investigate complaints, even if investigators continue to collect samples. The new

executive director stated to us that under the former administration, investigators were

mainly used to collect urine samples and deliver subpoenas. He stated that he has

begun utilizing investigators to investigate complaints.

RECOMMENDATIONS

1. The Board should develop disciplinary guidelines for determining the appropriate

level of action against a doctor and to ensure that similar violations are being

treated consistently. These guidelines should provide well- defined criteria to be used

in determining the type of disciplinary action based on the severity of the violation,

the doctor's previous violations, and any other factors the Board feels are relevant.

2. The Legislature should consider amending A. R. S. 532- 1402. A. to increase the number

of public members serving on the Board who are not involved in the medical

profession.

3. The Board should revamp the investigation process in such a way to ensure that

investigations are adequate by:

a. Ensuring the issues raised in the complaint are addressed.

b. Interviewing the doctors, patients/ complainants, and any witnesses.

c. Ensuring investigators are used to investigate complaints.

d. Developing policies for prioritizing complaints.

FINDING Ill

BOMEX HAS ISSUED SOME REGISTRATIONS

AND PERMITS TO PRACTICE MEDICINE

TO PERSONS WHO DID NOT

MEET STATUTORY REQUIREMENTS

During the audit it came to our attention that BOMEX staff have issued some

registrations and permits to persons who failed to meet statutory requirements. We

identified several cases where locum tenens registrations were issued to applicants who

did not meet statutory criteria. In addition, some training permits may have been

granted to persons who failed to meet statutory requirements.

Improper Issuance of

Locum Tenens Registrations

The Board has granted locum tenens registrations inappropriately. A. R. S. § 32- 1429. A

clearly outlines the criteria for an applicant to obtain a locum tenens registration. A

locum tenens registration authorizes an out- of- state doctor to temporarily assist or

substitute for an Arizona physician. Applicants with unresolved complaints do not

qualify to receive a locum tenens registration. However, during the course of our work

on other issues, we found two examples in which BOMEX staff misused locum tenens

registrations, issuing them to persons who clearly did not meet the statutory

requirements.(')

Example 1

An applicant licensed to practice in another state received a locum tenens

registration to practice medicine in Arizona, even though the applicant had two

complaints pending in another state he was not substituting for or assisting

another physician. This applicant clearly did not meet the statutory requirements for

receiving a locum tenens registration.

There are numerous unusual circumstances surrounding this case whch raise many

Because a comprehensive review was not conducted in this area, it is unknown whether these are

isolated incidents or common practice. However, for the three- year period ending June 30,1994, the

Board issued 389 locum tenens registrations.

questions regarding the process of issuing locum tenens registrations. This applicant

had a valid license to practice medicine in another state and applied for a license

to practice medicine in Arizona in June of 1993. However, BOMEX apparently

delayed approval of the Arizona license pending the outcome of complaints filed

against the applicant in another state.

In September 1993, BOMEX issued the applicant a locum tenens registration amid

curious circumstances. First, we found no evidence that the applicant ever applied

for a locum tenens registration. Although there is a locum tenens application in the

applicant's file, the application is blank except for a signature by agency manage-ment

approving the application. Second, there is no written request from any

sponsoring doctor as required by statute.(') A handwritten note in the applicant's file

indicated BOMEX staff contacted a doctor in the rural northeastern area to see if he

was willing to sponsor the applicant for a locum tenens. The doctor agreed to

sponsor the applicant " as long as he wasn't going to get into any trouble for it."

However, the applicant was not substituting for or assisting this " sponsoring"

doctor, as required by statute. In fact, the applicant had opened his own clinic in

a rural community of Arizona and was practicing medicine without an Arizona

license. Less than one month after receiving the locum tenens registration, Board

staff realized the registration should not have been issued and the doctor

relinquished it at the Board's request.

Example 2

BOMEX staff issued locum tenens registrations to three applicants practicing in

southwestern Arizona who did not meet the statutory requirements. These doctors

were recruited and practiced medicine at a clinic under locum tenens registrations

for periods ranging from two to ten months. Two of these applicants eventually

obtained permanent Arizona licenses. However, these applicants did not meet the

statutory requirements for obtaining a locum tenens registration. Specifically:

1. The applicants were not licensed by another state, as required by A. R. S.

532- 1429. A.'~).

2. None of the applicants had a certificate issued by the Educational Council for

Foreign medical Graduates as required by A. R. S. § 32- 1423.2. This certificate is

required when the applicants graduate from unapproved schools of medicine

and are not licensed by another state.

Statutes require that the doctor for whom the applicant is substituting or assisting must provide

a written request to the Board for locum tenens registration of the applicant.

(') The applicants were licensed in Puerto Rico. A. R. S. $ 32- 1429. A has since been amended to include

applicants licensed by districts, territories, or possessions of the United States.

3. The locum tenens registrations were issued at the request of a clinic administra-tor

rather than a doctor, as required by A. R. S. 532- 1429. A. 3.

Prior to issuing these locum tenens registrations, the Board received information

that three of these applicants were already practicing medicine without a license,

a felony violation punishable under A. R. S. 932- 1455. A. Although a subsequent

BOMEX investigation confirmed the allegations, the Board later approved locum

tenens registrations for the applicants.

Training Permits

Granted Improperly

BOMEX staff may have inappropriately issued training permits to persons who did not

meet the statutory requirements. Newly adopted policies and procedures should

address this problem.

A: R. S. 532- 1432.02 authorizes the Board to grant training permits to any person

participating in an approved teaching hospital's internship, residency, or clinical

fellowship training program. A training permit authorizes a person to practice medicine

only in a supervised setting of a hospital's accredited graduate education program.

According to A. R. S. 532- 1401.3, only programs that have been accredited by the

Accreditation Council for Graduate Medical Education qualify for training permits.

Frequently, the Accreditation Council limits the number of accredited positions within

each program. Each year BOMEX receives hundreds of training permit applications.

An April 1994 internal review of the Board's training permit policy found:

In fiscal year 1993 BOMEX issued 14 permits to a program with 10 accredited

positions. In addition, permits have been issued to applicants who are not

participating in an approved program.

BOMEX staff retroactively dated hundreds of training permit applications for July

1 of each year- even though applications were not usually received until months

later. Tlus practice has been in effect for years. Consequently, hundreds of

applicants practiced medicine for months prior to receiving formal authorization to

do so.

These problems occurred because Board members and management failed to implement

proper oversight or controls. For example, BOMEX staff conducted no verification of

an applicant's background, failed to determine whether the applicant would be

participating in an approved program, and performed no reconciliation to ensure that

the quota of accredited positions for a particular program had not been exceeded.

BOMEX staff relied on the sworn statements submitted by applicants and training

program officials to ensure applicants were participating in accredited programs. As a

result, if a signed application was received a training permit was issued.

After being informed of the various problems associated with training permits, the

Board adopted new policies and procedures to help ensure that only qualified

applicants receive these training permits. On June 30 and July 1, 1994, Board staff

notified training hospitals that 1) permits will no longer be retroactively dated; 2) the

number of permits issued will not exceed the total number of accredited positions in

the program; and 3) no permits will be issued to any person in a nonaccredited

program. Board members formally adopted this policy at their July 1994 meeting.

RECOMMENDATIONS

1. Board members and staff should review the procedures for issuing locum tenens

applications and ensure controls are in place to prevent applicants who do not meet

statutory criteria from obtaining a registration.

2. Board management should ensure that staff follow the new procedures for issuing

training permits.

FINDING IV

INADEQUATE MANAGEMENT AND LIMITED

BOARD OVERSIGHT

HINDER BOMEX OPERATIONS

The Board of Medical Examiners suffers from inadequate management and limited

oversight. We identified numerous problems that management has failed to recognize I or adequately address. Many of these problems stem from poor management practices.

The 12- member Board needs to provide more direction and oversight to the agency.

I Numerous Problems

at BOMEX

Management has failed to identify and take timely action to correct problems that are

I basic to the Board's existence. These include problems we identified in the previous

three findings that relate to the Board's primary regulatory responsibilities of address-ing

patient complaints and licensing doctors. We also found that BOMEX has not

I managed functions basic to any state agency, such as complying with procurement and

open meeting law requirements. BOMEX also failed to adopt rules as required by 1989

legislation. Furthermore, BOMEX has yet to fully address internal control weaknesses I identified by our Office in 1991 and 1993. Finally, BOMEX has yet to fully utilize some

key functions of its automated complaint tracking system.

P r o c u m t violatim - BOMEX has failed to follow Arizona procurement code

requirements in several areas. For example:

BOMEX failed to contract for lab services. BOMEX paid over $ 20,000 to one vendor

for lab services in fiscal year 1993- 94. However, the vendor was not under contract I with BOMEX as required by law. Board staff have been advised of this deficiency

and plan to obtain a contract for this service.

I A review of the Board's contract for monitoring impaired physicians revealed the

Board paid the contractor approximately $ 25,000 more than the contract allowed

I during fiscal years 1993 and 1994. Specifically, the Board inappropriately paid

performance bonuses and contractor billings that overestimated the amounts owed.

Further, we found BOMEX paid the contractor without sufficient documentation of

I expenses and work performed. A lack of oversight by the State Purchasing Office

may have contributed to some of these problems.

Board staff did not comply with state procurement laws when arranging accommo-dations

for the July Board meeting. First, staff failed to obtain advance authorization

from the State Procurement Office ( SPO) for the amount in excess of their delegated

authority; July meeting expenses totaled over $ 14,000 and BOMEX is delegated

authority to make procurements without SPO authorization only if the amount is

for $ 10,000 or less. Second, staff failed to take the proper steps to ensure they

obtained the best price. The Board did not use the State's authorized travel agency

to secure the best available price nor did they obtain competitive bids.

Open meeting law violations - The Board has not fully complied with open meeting

law requirements for its quarterly meetings. Statutes governing open meetings require

the agency to file a statement with the Secretary of State identifying where meeting

notices will be posted. However, the Board no longer posts notices at one of the two

locations identified in the statement and, as a consequence, did not comply with the

statutory notice requirements. The lack of proper notice renders any action taken by the

Board at these meetings invalid. In August 1994, the Board realized they had violated

open meeting laws. To remedy the situation they held a special meeting on August 26,

1994, " to ratify actions of the Board of Medical Examiners that may have been taken

in violation of the Open Meeting Law." ( See Sunset Factor # 5, page 28, for further

information.)

Failure to develop rules - BOMEX did not properly oversee a major rules package

required by 1989 legislation. Although a rules package was prepared and progressed

through most of the required stages, the package stalled late in the process because

management failed to monitor its status and progress. The package recently submitted

to the Attorney General's Office for certification was incomplete and untimely. The

Attorney General's Office has informed BOMEX that it will probably need to restart the

rules development process from the beginning. ( See Sunset Factor # 4, page 28, for

further information.)

Weaknesses in internal controls - Our review of BOMEX operations revealed that

management has neglected to fully address control weaknesses in its accounting system

identified by our Office in 1991 and 1993. Among other things, the reviews identified

weaknesses in the way BOMEX handles cash receipts. Since BOMEX receives thousands

of checks for licensing and application fees each year, ensuring that adequate controls

are in place is critical.

Utilization of EDP resources - To date, BOMEX has not fully utilized a computer

system installed three years ago. Complaint and licensing information is now tracked

on the computer and, according to staff, the system has improved agency functions

such as license renewals and complaint processing. However, we found the Board has

been slow to implement several functions. For example, a monitoring system designed

to identify cases that need follow up is not fully used and cannot be relied on because

needed data is not appropriately entered on the system. Also, BOMEX has not fully

implemented the security features of the automated system. We found unauthorized

staff can access and modify complaint and licensing information.

Management Practices

Contributed to BOMEX Problems

BOMEX's management practices have impacted the agency's ability to perform its

duties. Funneling almost all responsibility and decision making through the executive

director is insufficient for addressing the growing workload and other challenges facing

the agency. In addition, as cited previously, management has not fully utilized some

staff resources.

Failure to delegate - Management needs to delegate more responsibility and decision

making. Although the agency has grown to more than 40 employees, many duties and

decisions are still funneled through the assistant director and executive director. For

example, the executive director interviews all doctors regarding substance abuse

allegations. This is time consuming and is also a duty of the consultant retained to

administer the substance abuse program. Furthermore, all licensing exceptions and most

enhancements of the new computer system have been handled directly by the assistant

director.

The former executive director stated that this management style was appropriate up

until the late 19801s, when growth in the agency's workload made it difficult for one

person to " oversee and be involved in everything." He stated that he and the assistant

director were " so involved in day- to- day operations that we haven't had the luxury of

stepping back - the next step is to reevaluate and reassign responsibilities."

Staflresources not used eflectively - Our review found that BOMEX management has

not effectively utilized some of the staffing resources appropriated by the Legislature.

Investigator positions have been misused and other critical positions have been left

vacant for significant periods of time.

As mentioned in Finding I1 ( page ll), seven investigators have been used primarily for

collecting urine samples from physicians being monitored for substance abuse problems.

Another example of poor utilization of the seven investigators involves their assignment

to various duties at the week- long Board meetings. Although assigned to operate the

tape recorder, provide security, and perform other tasks, our observations were that

most, if not all, of their presence was unnecessary. Because the meetings are long,

investigators accrued 435 " comp time" hours at the last three Board meetings.

BOMEX management has left critical positions vacant for extended periods, two of

whch are middle management positions. The medical consultant supervisory position

has been vacant for several years, and the licensing supervisor position has been vacant

for over a year. Finally, a nurse ombudsman position, authorized and funded by the

Legislature in 1992, has yet to be filled. Tlus position was created to assist people filing

complaints against doctors.

Little Oversight Provided

By the Governing Board

The Board needs to improve its governance of the agency. Its lack of involvement in

agency matters has contributed to the many management problems we found during

the audit. The Board needs to revise its operating method to allow time to provide

guidance and oversight.

The Board is responsible for ensuring that the agency fulfills its statutory responsibility

to regulate doctors. Daily administration of the Board's office and functions is

performed by the executive director, who is appointed by the Board. The executive

director's statutory duties include carrying on the Board's work, managing the Board's

offices, executing Board directives, and performing all other duties required. This

arrangement of a governing board utilizing an executive director is typical for medical

regulatory boards in Arizona.

Inadequate monitoring and direction of agency management - It appears that the

Board has not adequately directed and monitored agency management. The Board was

not aware of, or had not acted on, the problems described earlier in this finding. Three

other examples of the Board not being sufficiently involved in agency affairs are as

follows:

Without prior knowledge of the Board, the former executive director inappropriately

" dismissed 300 to 400 pending malpractice complaints. Misinterpreting a statutory

change, the former director sent letters in August 1993, notifying plaintiffs' attorneys

that their cases would not be investigated. The Board was informed of the director's

action at their October 1993 meeting and instructed the director to reopen and

investigate the cases.

In early 1994, the former executive director requested the Attorney General replace

of the two attorneys assigned to BOMEX. The Board had no knowledge of this until

four days before the April 1994 Board meeting, when the former executive director

wrote a letter to the Board informing them of h s request. In ths letter, the former

executive director cited, among other things, the attorneys' " fault- finding memos"

to the Board. The Board reacted strongly to this issue at their April meeting and

directed agency management to keep the currently assigned attorneys.

The Board has not formally assessed the performance of either the executive director

or the assistant executive director in several years. Annual performance evaluations

provide a formal structure to assess past performance and set goals for the

upcoming year.

The Board should have been involved in each of these examples for two reasons:

because they are the body that formally resolves complaints, and they are the body that

provides policy direction to the executive director.

Our review of Board minutes and interviews with Board members identified several

reasons for the Board's inadequate oversight:

Misperception of role - Some Board members felt that their role was to review

and adjudicate complaints against doctors, leaving agency administration up to the

executive director. Others, however, have expressed concern about the Board's

limited role and the need for more oversight.

No structure or policies for Board involvement - The Board has never outlined

what its role is and how that role should be implemented. The Board does not have

any formal policies and procedures as to how and when direction is given to the

executive director or how the Board will monitor agency management and activities.

Overloaded with complaints - As mentioned in Finding 11, ( see page ll), the

Board is overloaded with complaints. The Board meets more than most other boards

but spends most of its time adjudicating complaints. Little time is left for oversight.

Board action needed to address problems - The Board needs to establish a structure

and policies to ensure that it provides guidance and monitors agency management and

activities. For example, policies and guidelines should be adopted in key areas such as

complaint handling, licensing, and discipline. The Board should also be kept abreast of

all major agency activities. Other boards we have observed utilize verbal reports from

the executive director and/ or other top agency officials, which the current BOMEX

director initiated at the July 1994 board meeting. Other boards also receive written

reports from agency management that provide statistics and narrative on programs,

budget, and other activities. Recently, the new executive director initiated a monthly

written report to board members.

The Board needs to develop an action plan to address the many serious problems

identified in this report. Several of the problems identified relate to the Board's basic

mission of protecting the public. Other problems involve complying with important

laws and rules required of any agency in the State. To act on the problems we found

during the audit, the Board will have to revise its board meeting process to free up

time to perform its guidance and monitoring duties.

RECOMMENDATIONS

1. The Board needs to improve its oversight of BOMEX operations. Specifically:

a. The Board should revise its board meeting operating practices to allow time for

monitoring and oversight of agency activities; and

b. The Board should formalize its oversight role through development of policies

and procedures that specify Board and management duties and provide for

communication and reporting between the Board and agency management and

staff.

2. BOMEX upper management needs to address management problems by:

a. Delegating routine duties to middle management;

b. Utilizing staff resources provided to the agency by the Legislature.

3. BOMEX needs to comply with state procurement and open meeting law require-ments.

4. To comply with A. R. S. § 32- 1491. E., BOMEX should:

a. Review Chapter 11 of the Arizona Agency Handbook detailing steps required

to adopt a rule; and

b. Irutiate steps to adopt required rules.

5. BOMEX needs to address internal control weaknesses and shortcomings with their

EDP system.

SUNSET FACTORS

In accordance with A. R. S. § 41- 2954, the Legislature should consider the following 12

factors in determining whether the Arizona Board of Medical Examiners should be

continued or terminated.

1. Objective and purpose in establishing the Board.

A. R. S. 532- 1403. A states:

" The primary duty of the board is to protect the public from unlawful,

incompetent, unqualified, impaired or unprofessional practitioners of allopathic

medicine through licensure, regulation and rehabilitation of the profession in this

state."

To carry out this responsibility, a 12- member board is statutorily empowered to

examine candidates for licensure as allopathic physicians; initiate and conduct

investigations to determine whether a doctor has engaged in unprofessional

conduct or provided incompetent medical care; and discipline and rehabilitate

physicians.

2. The effectiveness with which the Board has met its objectives and purpose and

the efficiency with which the Board has operated.

The Board can improve its effectiveness and efficiency in fulfilling its statutory

responsibility to protect the public from incompetent allopathic physicians. Our

review shows that the Board has not ensured the timely resolution of some serious

complaints, has not taken adequate disciplinary actions in many of the complaints

it has addressed, and has not acted against licensees who have had numerous

complaints and violations ( see Findings I and 11, pages 5 and 11). In addition, the

Board has improperly allowed some persons to practice medicine in Arizona ( see

Finding 111, page 17). Inadequate management and limited Board oversight and

direction have contributed to some of these problems ( see Finding IV, page 21).

3. The extent to which the Arizona Board of Medical Examiners has operated within

the public interest.

The Board can do more to operate in the public interest. The Board's failure to take

adequate and timely enforcement actions in some cases has limited its ability to

properly protect the public from incompetent and potentially dangerous doctors.

In addition, inappropriately allowing some doctors to practice may place the public

at risk. Furthermore, the Board could do more to make disciplinary information on

doctors available to the public. Currently, the public cannot obtain any complaint

information on a doctor over the phone. We found other boards will provide

disciplinary action information by phone. The executive director drafted a new

public information policy in January of this year indicating more information will

be provided by phone; however, as of August 1994 the policy had not yet been

implemented.

4. The extent to which rules adopted by the Board are consistent with the legislative

mandate.

1989 legislation directed the Board to promulgate rules and regulations in order to

enforce statutes addressing the dispensing of drugs by allopathc physicians.

However, the Board has not yet promulgated the necessary rules. The Board

drafted the rules and held public hearings in October 1992 and January 1993.

However, the package recently submitted to the Attorney General's office for

certification was incomplete and untimely.(') An Attorney General representative

stated that the Board will probably need to repeat the entire process.

5. The extent to which the Board has encouraged input from the public before

adopting its rules and the extent to which it has informed the public as to its

actions and their expected impact on the public.

We found that the Board has not fully complied with open meeting law require-ments.

The Board of Medical Examiners holds quarterly meetings to discuss

disciplinary and licensing matters. Our review found that some of these meetings

have not been appropriately posted as required by law. For example, notices were

not posted at all required locations. In addition the Board failed to provide at least

24 hours' notice for two of their quarterly meetings as required by law. The lack

of proper notice renders any action taken by the Board at these meetings invalid.

Late in the audit the Board realized they had violated open meeting laws and held

a special meeting on August 26, 1994, " to ratify actions of the Board of Medical

Examiners that may have been taken in violation of the Open Meeting Law."

( I) A. R. S. 641- 1024. B requires that rules be submitted to the Attorney General's Office for certification

within 120 days after noticing the proposed rule adoption or after the close of the record on the

proposed rule, whichever occurs last.

The Board has not promulgated rules in many years. However, it is unclear to

what extent the Board encouraged input from the public in their most recent efforts

to adopt rules for prescribing and dispensing practices. The Board could not

provide us with a public rule- making docket wluch would have identified the

number and types of notices published. The Board did publish the rules in the

Board's Medical Directory; however, tlus occurred after the Board had already

adopted the rules.

The Board also does little to keep the public informed of its actions against

physicians. Although the Board has historically published a newsletter on an

infrequent basis, it fails to identify the names of doctors who it has disciplined. In

addition, the Board does not typically notify the media of actions taken against

physicians. Finally, the Board does not notify individual complainants before

holding hearings or taking disciplinary action in relation to their complaint.

6. The extent to which the Board has been able to investigate and resolve

complaints that are within its jurisdiction.

The Board needs to strive to improve the overall timeliness of its complaint

resolution process ( see Finding I, page 5). In addition, the Board can take steps to

improve the investigation process and strengthen disciplinary actions ( see Finding

11, page 11).

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. § 41- 192 authorizes the Attorney General's Office to prosecute actions and

represent the Board. BOMEX retains two Assistant Attorneys General in- house who

represent and provide counsel to the Board at their meetings, and prosecute

violators of Board statutes.

8. The extent to which the Board has addressed deficiencies in its enabling statutes

which prevent it from fulfilling its statutory mandate.

According to BOMEX staff, numerous techrucal and administrative changes have

been made to agency statutes over the years. For example, the Board has expanded

the type of actions that constitute unprofessional conduct, clarified the power and

duties of the Board and executive director, developed new types of licensure, and

increased mandatory reporting requirements. According to Board personnel, current

statutes are directly in line with the recommendations of the Federation of State

Medical Boards, " Elements of a Model Medical Practice Act."

9. The extent to which changes are necessary in the laws of the Board to

adequately comply with the factors listed in the Sunset laws.

The Board needs to adopt rules addressing the dispensing of drugs and devices in

order to comply with statute. A. R. S. 532- 1491. E directs the Board to establish rules

regarding labeling, record keeping, storage, and packaging of drugs. Although this

statute has been in effect since 1989, the Board has not yet promulgated rules in

this area. In addition, the Board is considering proposing changes to clarify A. R. S.

§ § 32- 1432.02 and 32- 1432.03.

10. The extent to which the termination of the Board would significantly harm the

public health, safety, or welfare.

Termination of the Board would significantly endanger the public. The lnregulated

practice of allopathic medicine could pose a threat to public health, safety, and

economic well- being. For example, several of the complaints we reviewed involved

critical health and safety considerations, such as inadequate or inappropriate

surgical procedures and sexual abuse. Other complaints dealt with excessive fees

and misdiagnosis and mistreatment.

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.

Our review found that the Board is not exercising appropriate regulation over

licensees. As discussed in Findings I ( page 5) and I1 ( page ll), the Board is too

lenient in disciplining doctors and slow to resolve complaints against doctors. In

addition, the Board should exercise more caution when authorizing persons to

practice medicine in Arizona. We found that the Board has issued some locum

tenens registrations inappropriately.(') For example, the Board issued a locum

tenens registration to an applicant who had complaints pending against lum in

another state even though A. R. S. 532- 1429. A. 2 specifically prohibits issuing a locum

tenens registration to applicants who have unresolved complaints ( see Finding 111,

page 17).

12. The extent to which the Board has used private contractors in the performance

of its duties and how effective use of private contractors could be accomplished.

The Board has used private contractors for services it cannot provide in- house.

Specifically, the Board has contracted for the aftercare monitoring and treatment

of substance- abusing physicians, hearing officers to conduct formal hearings,

medical consultants to review complaints, and development of an automated

complaint tracking system. However, our audit revealed that the Board has

A locum tenens registration allows the holder to practice medicine in Arizona without supervision.

overpaid the provider of the aftercare monitoring program ( see Finding IV, page

21). In addition, the Board does not have a contract for laboratory analysis of

bodily fluid samples. BOMEX paid almost $ 23,000 to one lab in fiscal year 1994.

State procurement regulations require that any recurring expenditure in excess of

$ 100 be competitively bid and contracted for. BOMEX management is aware of this

deficiency and plans to contract for this service.

ARIZONA BOARD OF MEDICAL EXAMINERS

RESPONSE TO THE REPORT OF THE AUDITOR GENERAL

November 18, 1994

Summarv

While the Board disagrees with the conclusion that the public is not adequately protected

through its actions, the Board agrees with many of the findings made in the report of the

Auditor General. The Board believes, however, that the report does not address many of

the changes made since July 1994.

A large complaint backlog and slow complaint resolution im~ edeB OMEXs abilitv to

protect the public.

BOMEX agrees that it has a signdlcant backlog of complaints, and agrees that the

complaint process should be improved and expedited.

The new Executive Director of the Board proposed a 180 day complaint time fiame; the

Auditor General found that the complaint timefiame ( see table 3) should be 172 days. The

Board plans to implement the time fhme guidelines given by the Auditor General's office.

The Board mher believes that better management of the complaint process is necessary,

and that many steps to expedite the complaint process have already been implemented.

These steps additionally address the finding of the Auditor General that complaint

investigations are not sufficiently thorough and that investigators are misused. However,

the Board agrees with the conclusion regarding the length of the complaint investigation

process, the Federation of State Medical Boards found that nationally only 69.5 percent of

all cases were resolved within a single fiscal year.

The Board agrees that a complaint prioritization process should be developed, and such a

system will be reviewed by the Board at its January, 1995 meeting. However, no system

is foolproofl and may have the following weaknesses:

1. Complaints are generally prioritized based on the allegations. When the allegations are

false, time is misspent on complaints that should not have become a high priority.

When the allegations do not include information in a high priority category, even

though such conduct occurred in the patient's treatment, those complaints are not

prioritized.

2. The prioritization of complaints adds another step to the complaint investigation.

All complaints are currently being assigned to investigators, a process which was

established under the Board's new Executive Director.

More Efficient Comdaint Adiudication Needed

The Board agrees that more efficient processes need to be implemented to adjudicate

complaints. However, the length of the Board meeting is not related to the number of

complaints the Board feels it must address; in fact, no system had ever been used prior to

October, 1994 to determine how many complaints should, or would, appear on the

Board's agenda, nor was a system in place for prioritizing complaints to be placed on the

Board's agenda.

Such a system for prioritizing interviews and complaints for on the Board's agenda has

been developed and is currently in use.

The Board agrees that to divide the Board into panels or to use subcommittees to review

complaints is a good suggestion and one which will be reviewed by the Board, after a plan

for implementation is developed by the Executive Director and the Chairman. The Board

expects to review an implementation plan at its January, 1995 meeting.

However, other ideas have already been implemented. These include:

1. Prioritizing those complaints to be placed on the Board's agenda;

2. Separating the physician rehabilitation program interviews fiom the rest of the Board

meeting, so that the has appropriate time to adjudicate complaints;

3. Giving time guidelines to interviews;

4. Adding a report for Board members containing specific information focusing on the

reasons a physician was invited for an informal interview;

5. Considering consent agendas to dismiss complaints in the months between Board

meetings so that the Board effectively meets more frequently than quarterly.

Another suggestion made in the draft report by the Auditor General, that letters of

concern also be placed on a consent agenda, was to be implemented during the Board's

October, 1994 Board meeting. However, the Board received legal advice at its October,

1994 Board meeting that its system of issuing letters of concern should not be changed at

this time, and it is unknown when this can be implemented.

Disci~ linea nd Com~ lainItn vestieations Need to be Im~ roved

This Wing of the Auditor General's office that the Board's actions lack sufficient

seriousness fails to consider several points:

1. The Board of Medical Examiners ranked third in the nation in 1993 ( the most

recent year for which figures are available) in the number of actions per 1000

physicians according to the Federation of State Medical Boards.

2. In deciding when to discipline a physician, the Board must make the distinction

between incompetent physicians versus serious errors by otherwise capable

physicians.

3. Disciplinary actions, such as censures or probations, effectively end a physician's

career with managed care plans. This may mean, truly, the complete end to a

physician's career. The Board believes, then, that it may not always be appropriate

to discipline a capable physician who makes an isolated error, even if the error

results in a tragic outcome. While the Auditors indicate that health plans do not

" automatically" terminate physicians for disciplinary actions, this is contradicted

by, for instance, the case of a physician who appealed a censure by the Board and

presented evidence that several health plans had terminated him due to the censure.

4. Like many Boards in this country, the Board feels that the rehabiilitation of

physicians who may benefit fiom education, training, monitoring or other forms of

non- disciplinary action, should generally be attempted before true disciplinary

action is used, and that rehabiilitation can protect the public as effectively

discidhe.

However, improving the quality of the investigation process, speeding up the process,

improving the way the results of the process are communicated to the Board, and

considering guidelines for disciplining physicians ( especially those with prior Board

actions), will improve the Board's ability to adjudicate complaints.

Regarding the finding of the Auditor General that there are too many medical practitioners

on the Board, there have been no cases in the last year where the public members of the

Board of Medical Examiners voted in concert against the physician members regarding

disciplinary action.

The average medical Board in the United States has 16.5 members, of whom 3.0 are

public members. This is clearly less than the 25 percent recommended by the Auditor

General.

One of the Board's medical practitioners is not a physician, but is rather a nurse. It seems

unlikely that the nurse member would consistently feel that it was a difficult or

inappropriate action against a physician, simply because the nurse member was an allied

health provider.

The Board's investigation process does need to be improved. The finding regarding the

misuse of the investigators has already been addressed by assigning each and every

complaint to an investigator. In fact, this was implemented prior to the Auditors leaving

this office. A staff education program, to teach investigators how to evaluate which

investigative tools are best for dierent types of complaints, is underway.

Irn~ ro~ Itsrsu ance of Renistrations and Permits

The Board agrees that an applicant received a locum tenens registration even though the

applicant had two complaints pending in another State. The Board's staff discovered this

problem soon after the locum tenens was issued. However, under the previous locum

tenens statute, open complaints were not considered in issuing locum tenens registrations.

During the illness of the Executive Director, this locum tenens registration was issued by

the Assistant Director, who was not generally familiar with the issuance of locum tenens

registration.

This was not a " questionable" locum tenens registration. This physician's licensure was

delayed, awaiting the outcome of the investigations in Florida before issuing a full license.

The Assistant Director mistakenly believed that a locum tenens registration, for six

months, could be issued awaiting the outcome of those complaints. No locum tenens

application was filed because the locum tenens application almost identical to the

endorsement application which was already filed by the applicant.

In addition, a physician in the rural northeastern area of Arizona ( the same area to be

served by this physician) agreed to sponsor the locum tenens physician. In this way, the

physician was assisting the sponsoring physician, by seeing many patients in northeastern

Arizona whom the other physician could not see, due to geographic distance or volume.

Once it was found that the locum tenens registration was issued inappropriately, the

Assistant Director brought it to the Board's attention at the next quarterly public meeting.

The issue was reviewed at a public meeting long before the Auditor General began its

audit.

Regarding those individuals practicing in southwestern Arizona who did not meet

statutory requirements, they did not meet statutory requirements because they were

licensed by Puerto Rico, which was not a state as required by ARS. $ 32- 1429( A). As

indicated by the auditors, A. RS. $ 32- 1429( A) has since been amended to include

applicants licensed by districts, territories or possessions of the United States. Some of

the applicants outlined, additionally, graduated from approved schools rather than

unapproved schools, and so did not require ECFMG certification. Once again, this issue

was discovered by the Board's st& and appropriately brought to the Board.

These are two examples out of more than hundreds of locum tenens registrations issued

each year.

Training permits were not granted inappropriately. The Board did not make a finding that

permits were granted inappropriately. The statutes regarding training permits refer to

" participatingn in an approved program. " Participatingn is not defined by law to mean that

an individual must be in a position specifically accredited by the ACGME. The new

Executive Director simply chose to propose this policy to the Board for issuing pedts in

the firture.

Proper controls for the issuance of these permits were in place: The forms required the

affidavit of the director of medical education of each program, under penalty of perjury.

The Board's staff relied on this affidavit when issuing permits. In the same way, the Board

relies on affidavits fiom many individuals when processing all types of licenses.

Frequently, no independent check is run, or even possible. For example, when a license by

endorsement is issued, we rely on the director of medical education to aflirm, under

penalty of perjury, that an individual was indeed a resident in the program. We do not go

back to the ACGME to determine how many positions were approved for that year, or

how many residents the program had in place. This amount of checking would render the

Board paralyzed as far as issuing licenses and permits.

In addition, licensing controls have been changed under the new Executive Director. For

each license issued, the license application is reviewed and approved by one individual,

and wiU be issued ( after a second review of the application to ensure requirements are

met) by a second individual.

Inadeauate Mana~ ementa nd Limited Board Oversight Hinder BOMEX O~ erationg

While the Auditor General claims that the Board has failed to firlly address accounting

internal control weaknesses identified by the office in 1991 and 1993, the Board has

adequately addressed some of these concerns, and many raised in the letter report of 1991 I

which found the office in " disarray." In fact, the information generated by B. 0. M. E. X. k

computer system was used in auditing the Board during this performance audit. In areas I

such as accounting controls, the Board has requested staff in previous budget submissions

( and again this year) to correct those weaknesses. I

The Board's complaint tracking system is hlly implemented and l l l y in use, and was so

during a portion of the auditors' five- month stay in our office. After the appointment of

the new Executive Director, an internal audit of all cases was carried out and the current

status of all cases was included on the Board's computer system. This makes the system

completely up- to- date and completely implemented.

The new Executive Director was to have taken a class offered by the procurement office

to ensure that pertinent regulations were complied with, on November 1, 1994.

Unfortunately, the class was canceled. Nonetheless, the Board has taken the following

steps regarding purchasing:

1. The Board has initiated the proceedings to contract for laboratory services as

pointed out in the audit.

2. The contract for monitoring impaired physicians clearly included an amount to be

paid as a " performance bonus," and amounts for other " optional" services. These

items were clearly stated in the contract, which was awarded by the Procurement

Division of the Department of Administration. The Board was never advised, and

the new Executive Director was unaware, that such a performance bonus could

not be paid siince it was clearly included in the terms of the contract. No bonus

will be paid this fiscal year.

3. Regarding the July, 1994 Board meeting, competitive bids were obtained for the

previous year and verbal bids were obtained to ensure that prices had not change

from the previous year ( 1993). However, the Board acknowledges that it did not

anticipate expenses would exceed $ 10,000, and did not obtain written bids.

The open meeting law violations were inadvertent, yet certainly serious. The statement

with the Secretary of State was not updated after the Board's move to DOA facilities in

June, 1993. In August, 1994 the Board realized that the statement was not updated to the

Board's new address and the situation was remedied.

The Board agrees that the rule package, which was prepared and progressed through most

of the required stages, was not submitted for final approval because the Executive

Director, who was responsible for this submission of the rule package became seriously ill.

Once the changes to the rule making processes are effective ( January 1, 1995) the Board's

staff will submit the rules according to the new rule making process. The staff has

received training in the rule making process so that this can be camed out expeditiously.

The Board acknowledges that previously investigators were not always properly used for

investigating complaints, and that some positions were left vacant for extended periods of

time. This situation has been remedied by changing the role of the investigator and the

entire complaint investigation process, and in illling all but two of the Board's vacant

positions. Those two positions are being recruited at this time.

The Board has taken steps to adequately monitor the agency. The Executive Director

gives a quarterly report to the Board at a public m d g , and sends periodic written

information to Board members to ensure they are kept apprised of developments. The

Board reviewed with the new Executive Director its expected performance criteria, and

performance indicators for all areas of the Board's functions either have been or arc being

developed at the present time.

In addition, the true role of the Board members is to ensure the public is protected. The

Board feels that this is best and most efficiently done when the Board can spend most of

its time adjudicating complaints, and oversees the agency in a manner that is effective yet

not time consuming.

The Board reviewed, but did not approve, a number of written policies and procedures at

the October, 1994 Board meeting. They diected the Executive Director to continue work

on the written policies.

In conclusion, the Board agrees with many of the findings of the Auditor General's office.

The Board disagrees on how those findings specifically impact the Board's ability to

protect the public, but, nonetheless has quickly embarked on a course to implement many

of the suggestions and recommendations of the Auditor General's office. In addition, the

Board has developed a number of its own program changes which it plans to implement

over the next calendar year in order to remain, as recognized by the Auditor General's

office, one of the premier medical Boards in the country.