Follow-up review of the Auditor General's 1994 audit of the Board of Medical Examiners

              AUDITOR GENERAL
LETTER REPORT DOUGLAS R. NORTON, CPA
AUDITOR GENERAL
January 1996 Letter Report No. 96- L1
ARIZONA D
Members of the Arizona Legislature ARCHIVES &
The Honorable Fife Symington, Governor / PI? 2 2 1996
Dr. Richard Zonis, Chair
Board of Medical Examiners
Subject: Follow- up Review of the Auditor General's
1994 Audit of the Board of Medical Examiners
Pursuant to a May 17,1995, resolution of the Joint Legislative Audit Committee, our Office
was directed to conduct a follow- up review of the findings and recommendations identified
in our 1994 performance audit of the Board of Medical Examiners ( BoMEX).' This letter
report presents the results of our follow- up review.
BOMEX is taking steps to address the problems identified in our recent audit. BOMEX's
problems at that time included a large complaint backlog, untimely case resolution, limited
complaint investigation, little disciplinary action, improper registrations and permits, and
inadequate management and board oversight. In the limited amount of time since the 1994
report was issued, BOMEX has implemented several changes that appear to address some
of our previous concerns. More time will be needed, however, to judge the effects of many
of its efforts.
Background
The Board of Medical Examiners' primary responsibility is to protect the public from
unlawful, incompetent, unqualified, impaired, or unprofessional medical practitioners.
Statutes authorize the Board to exercise ths responsibility through examining and licensing
physicians, renewing licenses annually, investigating and resolving complaints, disciplining
1 Our Office last reviewed BOMEX in 1994, issuing Report No. 94- 10 on November 23, 1994.
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29 10 NORTH 44TH STREET SUITE 410 PHOENIX, ARIZONA 8501 8 ( 602) 553- 0333
and rehabilitating physicians, and developing and recommending standards governing the
medical profession. During fiscal year 1995, the Board was appropriated more than
$ 2,800,000 to regulate approximately 12,700 doctors with active Arizona medical licenses.
Efforts to Address
Backlog and Timeliness
BOMEX has recently taken steps to reduce its significant backlog of complaints and to
improve the timeliness of its complaint resolution process. Although still high, the complaint
backlog has decreased since our previous audit. In addition, case resolution time has
improved for some types of cases.
Case backlog reduced - For the first time in years BOMEX has reduced its case backlog.
BOMEX resolved more cases in fiscal year 1995 than it received, achieving a 21 percent
reduction in the case backlog. As illustrated in Table 1, the Board decreased the backlog
from 1,643 cases at the end of fiscal year 1994 to 1,292 cases at the end of fiscal year 1995.
Table I
BOMEX Complaint- Handling Statistics
Fiscal Years 1991- 92 throuqh 1994- 95
Number of Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Complaints 1991 - 1 992 1992- 1 993 1993- 1 994 1994- 1 995
Beginning of Year 1,146 1,374 1,528 1,643
Received 1,033 1,209 1,004 979
Resolved 805 1,055 889 1,330
End of Year 1,374 1,528 1,643 1,292
Source: Auditor General staff analysis of BOMEX complaint traclung database.
BOMEX has initiated several measures to reduce the complaint backlog. Because some of
these changes were made recently, it is difficult to determine their full impact.
Due to the large backlog of malpractice cases, the Board made a special effort in fiscal
year 1995 to address these types of complaints, resolving 446 cases. As a result, the
Board resolved almost as many malpractice cases in fiscal year 1995 as in the three
previous years combined.
In March 1995, the Board implemented a conference call consent- agenda designed to
address complaints where both a medical consultant and a Board member recommend
dismissal.' A 15- minute call in March eliminated 102 cases from consideration at the
April 1995 board meeting.
In July 1995, BOMEX hred an ombudsman to assist consumers with resolving minor
grievances against doctors. For example, a patient with a fee dispute or objection about
a doctor's bedside manner might be advised to talk to the doctor about the problem.
Ths practice may help reduce the number of complaints filed.
The Board divided into subcommittees for the first time at the October 1995 meeting.
The Board is divided into two committees to hear complaints. This new procedure,
authorized by Session Laws 1995, Ch. 212, 513 addresses the complaint backlog by
allowing the Board to consider many more cases at each meeting. The Board addressed
247 cases in October 1995, an increase of 111 percent from the same meeting last year.
BOMEX addressis~ gc ase resolr~ tioszt islze - The Board has also taken steps to improve
complaint resolution timeliness for all cases. The greatest improvements have occurred with
malpractice cases. For example, the Board decreased the average resolution time for
malpractice cases by over 250 days, from 1,173 days in fiscal year 1994 to 921 days in fiscal
year 1995. Unfortunately, whle concentrating on resolving the large malpractice case
backlog, the average number of days to resolve all other cases increased from 364 days in
fiscal year 1994 to 376 days in fiscal year 1995. However, the Board is working to improve
case resolution timeliness. For example:
BOMEX has developed a prioritization procedure for classifying complaints according
to their potential to threaten public safety in an effort to resolve the most serious cases
first. Whle ths measure may not increase overall timeliness, the most serious cases
should be addressed more quickly. According to the Executive Director, ths policy will
be implemented in January 1996.
When possible, physicians' consent agreements ( stipulations) are developed prior to the
informal interview with the entire Board. If the Board agrees with the stipulation, they
need only approve it. Ths frees up valuable Board meeting time previously spent
developing stipulations.
Case ~~ collitorr'sazngd delays still a coszcm - Although BOMEX has taken steps to improve
timeliness, some cases continue to be delayed. During the follow- up audit, eight cases were
Only cases where both the BOMEX medical consullant and the reviewing board member recommend
dismissal are placed on the teleconference agenda. If a board member believes a case on the
teleconference agenda warrants further discussion, it is placed on the agenda of an upcoming board
meeting.
brought to our attention that were delayed for various reasons. Some of these delays seem
excessive and unnecessary. For example:
In September 1993, a patient made sexual misconduct allegations against her doctor.
Four- and a- half months passed before the complaint was given to a BOMEX medical
consultant for review. Another 16 months elapsed before the case was assigned to an
outside medical consultant for review. As of October 1995, over two years later, the
Board has still not considered ths case. According to the Executive Director, the initial
four- month delay occurred because BOMEX did not yet have a psychatric medical
consultant on staff. The medical consultant then discovered he had a conflict of interest
and could not review the case. However, the additional 16- month delay in sending the
case to an outside consultant occurred because BOMEX did a poor job of monitoring it.
In June 1994, a patient alleged that h s doctor charged him twice for the same surgery.
A board member directed agency staff to interview the doctor. However, more than 5
months elapsed before agency staff sent a letter to the doctor requesting hm to come
in for an interview. The Executive Director stated that before sending the letter, BOMEX
staff spoke with the doctor by phone; however, there is no evidence of ths in the
investigation file.
Too Early to Fully Evaluate Efforts
to Address Disciplinary Action and
Complaint Investigation Deficiencies
Although BOMEX has initiated efforts to address investigation and disciplinary problems
identified in last year's report, more time must pass before assessing the full impact of these
changes. It is too early to tell if recent changes in investigative procedures may positively
impact the Board's disciplinary actions. Last year's report noted one reason the Board may
not take strong disciplinary action is because complaints were not adequately investigated.
BOMEX did not assign investigators to investigate complaints, but used them to monitor
doctors for substance abuse. Whle BOMEX no longer uses investigators to collect drug
screening samples from doctors, investigations have not substantially changed. For example,
investigators are now assigned to cases, and have more time to work on them. However,
they still do not consistently perform interviews with complainants or witnesses as
recommended in our last report. BOMEX generally conducts interviews only to obtain
missing information, or to clarify existing information.
As recommended in our previous report, the Legislature recently amended A. R. S. 532-
1402. A, increasing the number of public members who serve on the Board from two to
three.' A 1990 study of the impact of public member representation on occupational
licensing boards found that, " Increased proportions of public members are associated with
1 BOMEX has been operating with only one public board member since October 1995, when one public
board member resigned.
more serious disciplinary actions." The addition of one public member increases BOMEX's
public membership to 25 percent of the Board. However, as of January 1996, ths additional
public member had not yet been appointed. Also, our recent study of Arizona's regulated
health professions recommends going even further and increasing public membershp to 50
percent1
Finally, as required by Session Laws 1995, Chapter 212, 517, BOMEX recently developed
disciplinary guidelines that the Board adopted at their October 1995 meeting. These
guidelines delineate the grounds for discipline, list aggravating and mitigating factors to
determine penalties, and specify the typical ranges of penalties for each type of offense.
Since these guidelines will not be implemented until January 1996, their impact on
disciplinary action remains to be seen. However, these guidelines could assist the Board in
imposing more uniform disciplinary action.
Newly Established Controls
Should Address Registration
and Permit Concerns
BOMEX has instituted various control measures that should prevent the improper issuance
of registrations and permits. The last audit found that BOMEX staff inappropriately granted
some locum tenens registrations.* Our follow- up audit work revealed no evidence of
inappropriate issuance of locum tenens registrations. In fact, earlier this year, BOMEX's
attorney general staff provided licensing staff with an overview of the requirements that
must be met before a locum tenens registration can be issued. In addition, according to the
Executive Director, all license applications are now reviewed and approved by one
individual, and issued by a second individual.
BOMEX has also improved oversight of training permits issuance. In order to track the
number of applicants granted permits to train in a program, each applicant is entered onto
a computerized list. This should allow staff to recognize when there are more applicants
than openings in a program, preventing approval of too many applicants for a particular
program.
Management and Board
Oversight is Improving
The Board of Medical Examiners has improved management and agency oversight in the
12 months since our previous audit report was issued. Many problems in procurement,
1 See Report No. 95- 13, " The Health Regulatory System."
A locum tenens registration authorizes an out- of- state doctor to temporarily assist or substitute for
an Arizona physician.
management, board oversight, and other areas have been addressed, or are in the process
of being addressed.
Procurement Problems - Our previous audit identified several areas in which BOMEX
violated procurement code requirements, including contracting for lab services, improper
payments to contractors, and exceeding expense allowances for an out- of- town board
meeting. After last year's audit, BOMEX requested that the Department of
Administration General Accounting Office ( GAO) review the Agency's internal control
structure. The GAO audit examined practices in effect from July 1, 1993, through
December 31,1994, and identified contracts totaling over $ 229,000 that did not comply
with state procurement laws. In response to GAO's findings, BOMEX requested that the
State Procurement Office ( SPO) evaluate the Agency's procurement function, and
provide procurement training. The evaluation and procurement training were conducted
in April 1995, and procurement procedures have since been implemented to address
many of the identified problems. In fact, a SPO staff member recently characterized
BOMEX's procurement activities as much improved. Furthermore, BOMEX has recovered
the $ 25,010 overpayment from the substance abuse monitoring program provider that
was identified in our previous audit.
Internal Controls - Prior Auditor General reports as well as the GAO audit identified
significant problems with cash receipts and fixed assets. To address these deficiencies,
BOMEX hired a new business office manager, created and filled a limited position to
segregate cash handling, and inventoried its fixed assets.
Management Issues - BOMEX has addressed several management practices, identified
in our last report as impairing the Agency's ability to perform its duties. First,
management is making an effort to delegate some responsibilities. Last year's report
noted that while the Agency had grown to more than 40 employees, many decisions and
duties were funneled through top management. Second, in preparing to assume more
responsibility, many employees have received a wide variety of training, such as
development in management and computer skills. Third, BOMEX has filled the licensing
supervisor and ombudsman positions, whch have been vacant for extended periods.
Finally, the Agency hired a new Deputy Director in October 1994, and BOMEX staff
comment favorably on changes she has made.
BOMEX has also addressed other aspects of agency operations. In accordance with open
meeting law requirements, the Board notified the Secretary of State of the location where
meeting notices will be posted, and appears to have lawfully posted the notices. Also,
the Agency's required administrative rules have been revised, and were approved by the
Governor's Regulatory Review Council in September 1995.
Board Oversight - The Board has undertaken greater agency oversight, and members
seem much more aware of agency operations. Three of the nine current Board members
recently attended the State of Arizona Board and Commission Member Training Seminar
coordinated by the Governor's Office for Excellence in Government. The training covered
regulations pertaining to regulated professions, rulemaking and the legislative process,
and common legal issues. Additionally, in response to requests from Board members,
BOMEX staff now provide reports at the quarterly meetings about agency operations,
including business office affairs and budgetary items, and complaint and disciplinary
caseload statistics. The Board also evaluated the Executive Director's performance at the
July meeting, and intends to conduct evaluations at each quarterly meeting.
EDP Issues - The Agency's electronic data processing ( EDP) system still needs
improvements. Our previous report noted two concerns with BOMEX's EDP practices,
and the Agency has yet to fully address either issue. The monitoring system designed
to track complaint files is not yet fully adequate. For example, some cases still get lost
in the system. Additionally, whle employees are now required to log on and enter
passwords, system access is still too broad, presenting security concerns. Also, quality
control needs to be strengthened. For instance, we identified some cases that had been
entered into the database with incorrect dates. BOMEX has also identified some
duplicate cases in the system, and is taking steps to correct the situation.
The Auditor General and staff express appreciation to the Chairman and staff of the Board
of Medical Examiners for their cooperation and assistance during the review. A copy of the
Board's response to ths letter report is attached.
My staff and I will be pleased to discuss or clarify items in this report.
Sincerely,
~ o\ igiasR . Norton
Auditor General
Attachment
Agency Response 1
FIFE SYMINGTON
GOVERNOR
ARIZONBAO ARDO F MEDICALEX AMINERS
MARK R. SPEICHER
EXECUTIVE DIRECTOR January 22, 1996
ELAINHEU CUNIN
DEPUW DIRECTOR
The Honorable Fife Symington, Governor
Members of the Arizona Legislature
RE: Letter Report No. 96- L1
In November, 1994, the Auditor General's Office issued Report # 94- 10, outlining
the results of their performance audit of the Board of Medical Examiners and
giving findings and recommendations. The legislature reviewed this report and
the Board's response, reviewed the progress made by the Board at that time and
the many, complex recommendations made by the Auditor General's Office, and
determined to continue the Board for two years to allow them to evaluate the
results of the changes already underway, and to implement some of the
recommendations in the Auditor General's Report # 94- 10.
Rather than having two years to evaluate these results, the legislature directed
the representatives of the Auditor General's Office to return in June, 1995, seven
months after the initial report was issued. The Findings in the letter report
represent this agency's operations between seven and ten months after Report
# 94- 10 was issued by the Auditor General's Office.
The Board agrees that it has taken effective steps which have reduced its back-log
of complaints, and the back- log of complaints has continued to be reduced
more than the Fiscal Year 1995 statistics presented by the Auditor General's
Office would indicate. Information continuing through the first six months of
Fiscal Year 1996 is presented below:
In addition, more than 250 additional cases were scheduled to be closed during
the board's January, 1996 meeting.
Open Cases July 1, 1995
Cases Received July 1 - December 31, 1995
Cases Closed July 1 - December 31, 1995
Open Cases as of December 31, 1995
The Board agrees that it is addressing case resolution time. The Board concurs
that it has reduced the average resolution time for malpractice cases by 20%
1,292
767
974
1,085
1651 East Morten, Suite 210 a Phoenix, Arizona 85020 Telephone ( 602) 255- 3751 FAX ( 602) 255- 1848 0
from fiscal year 1994 to fiscal year 1995. The Board continues to work to
improve resolution timeliness. By implementing a number of the procedures
provided to the legislature in October', and by continuing to explore creative
solutions for the Board to review cases thoroughly but in less time, the average
number of days required to investigate a case will continue to be reduced.
The Board believes that by using only cases closed in fiscal year 1995, rather
than cases received in fiscal year 1995, the Auditor General's information
includes a higher percentage of very old cases. The Board, as noted in Letter
Report 96- L1, made a concerted effort to resolve old investigations, both
complaints and malpractice cases, in fiscal year 1995. Once a case has become
old, it can't help but increase the average days in resolution time. By basing the
average number of days to resolve a case on just closed cases, the Auditor
General " penalizes" the Board for closing these very old cases. Had those very
old cases been left open, they would not have been added to the average
resolution time for fiscal year 1995, and so the average number of days to
resolve all of the cases would have decreased over fiscal year 1994.
The case examples cited as having the most excessive and unnecessary delays
the auditors found in their review were received before the Auditor General
issued his 1994 report. One case was received in September 1993, a full
fourteen months before Report # 94- 10 was issued, and the second in June,
1994, six months before that report was issued. Clearly the changes made
following the issuance of Report # 94- 10 cannot be measured by reviewing cases
which were already old at the time the report was issued.
The Board disagrees that interviewing complainants in each case is either
necessary, or contributes to the completeness of investigations. Procedures
provided to the legislature in October, 1995 show that written information is
received from complainants, and the Board's staff gathers additional information
if that written information is incomplete. The Auditor General's Report indicates
that, " BOMEX generally conducts interviews only to obtain missing information,
or to clarify existing information." The Board now routinely interviews
complainants in certain types of cases, such as cases alleging sexual
misconduct. The Board believes these are exactly the times that interviews
should be conducted. Written information is obtained from the physicians
named in the complaint. The physicians are generally not interviewed for
complaint investigations either. There is no empirical evidence to show that
increasing interviews with complainants increases the number of Board actions.
The quality of an investigation is determined by the information documented in
the investigative file. That information is complete when it contains the
allegations of the patient, the response from the physician to the allegations, a
review of the medical care provided by the physician to the patient, a review of
Session Law, Sec. 17 House Bill 2045 Filed as Chapter 212,1995 Laws.
the professional conduct of the physician, and documentation of the standards
used to determine whether the care and conduct is appropriate or not.
The Arizona Board of Medical Examiners prides itself on conducting extensive,
often time consuming investigations. In fact, one of the reasons the
investigation time is lengthy, is because of the number of investigations,
evaluations, etc. used by the Board to determine whether or not physicians are
competent, mentally and physically able to safely engage in the practice of
medicine, and abiding by the statutory requirements for professional conduct.
The only purpose the Board can see for conducting an interview with each and
every complainant is to allow that complainant to vent his or her frustrations at
the provider, or to encourage the complainant to make additional allegations
against the physician. The Board finds that it would be inappropriate to engage
in the second activity, and while the Board would like to have time to hear and
counsel each complainant, it cannot do so while at the same time reducing its
back- log of complaints and shortening its investigation time. However, BOMEX's
ombudsman has assumed the role of providing patient information, and " lending
an ear" when patients are angry or frustrated at the physician, the physician's
office or the " health care system" that they feel has not treated them properly.
The Board agrees that the public members still have not been appointed by the
Governor to the Board although the legislature did change its membership to
25% public membership. It is unfortunate that in its special study on the health
regulatory system*, the Auditor General's Office failed to suggest changes to the
current appointment process, suggest qualifications for Board members, suggest
criteria for Board member training and expertise, or suggest a timeframe for
appointments. Those suggestions would have helped regulatory boards in the
same situation as the Board of Medical Examiners to receive qualified
appointments in a timely fashion.
Once again, the Auditor General's Office did not acknowledge the fact that the
Federation of State Medical Boards published a list of all Boards and indexed
disciplinary actions per thousand physicians in April, 1995. The Board of
Medical Examiners of the State of Arizona had the highest index of disciplinary
actions per thousand physicians of all the state medical regulatory Boards
whose index was published. 3
The Board agrees that its newly established controls address the registration
and permit concerns based by the pervious Auditor General's Report, and that
the Board's problems cited in the areas of procurement, management, Board
oversight and other areas are being addressed or have been addressed.
Auditor General Report # 95- 13
Federation of State Medical Boards of the United States, Inc., " Medical Boards discipline
physicians in record numbers," April 5, 1995.
While the Board disagrees with the Auditor's conclusion that the electronic data
processing system allows cases to " get lost in the system," the Board continues
to work to improve the monitoring capabilities of its information system. The
Board disagrees, however, that system access is too broad and presents a
security concern. Employees are required to log- on for access to the system
and enter unique passwords, and reducing access to information system
functions will only serve to slow down the internal processes of the Board, and
increase investigation time. There have been no actual security problems cited
by the Auditor General or the Department of Administration Information Services
Division.
The Board of Medical expresses its appreciation to the Auditor General and to
his staff for recognizing the changes that have been made in this agency and for
conducting their review in a professional fashion. The Board is committed to
continuing to improve its operations and to continue its tradition of the highest
level of public protection in this state.
Sincerely,
Mark R. Speicher
Executive Director