NC Medical Board Obstructs State Performance Audit - Part 2
Despite NCMB's Crafty Objections, Auditor's Troubling Findings Portend Licensee Challenges To Its Procedural Violations
This is Part 2 of a series on the state auditor’s blocked performance audit of the NC Medical Board (NCMB). The fact of a state professional licensing agency actually BLOCKING the elected state auditor from evaluating their investigations department and its internal protocols and assurances of compliance with state and federal laws, has profound implications for all professionals who require some form of state licensure. Because without assurance that a state agency (or an organization that’s been given a state function) is performing in a fully fair, accountable, and non-self-serving manner, there is no guarantee that that agency has not in some way veered towards self-interest and potential weaponization of its powers. This is especially true in any state agency or state-designated function entity such as NCMB that operates with utterly no governmental oversight and complete immunity from suit.
In this piece, we explore NCMB’s pushback against State Auditor Beth Wood via a cluster of hollow objections, the purpose of which seems none other than to delay scrutiny (with the potential for spoliation of evidence). It’s also likely to buy time so as to round up legislative and governor support for not supporting the Auditor’s investigation and preventing the audit from proceeding, behind a carefully crafted pseudo-valiant campaign to protect physician and patient privacy.
We see the preliminary observations and findings she was able to make from the very limited data (less than 5% of the records, at that most unusable) she could access. And we explore the overall rationale of the auditor’s duty, and why this particular performance audit is so critically important with profound implications not only for NCMB and the physicians it regulates, but for every medical board, so-called physician health program (PHP), and every licensed physician in the country. Even more broadly, it potentially has as much significance as the FTC v. NC Dental Board decision in which the US Supreme Court determined that the NC Dental Board was guilty of an anti-trust violation and, even though an alleged state agency supposedly protected from suit, was in fact NOT so protected. It likewise has major implications for the mandatory role of active state oversight (as articulated by FTC Guidance to all occupational licensing boards in 2016) and whether - and what - federal laws apply to a state medical board.1 Whether her audit proceeds or is blocked, it has profound importance. If blocked, it is likely that federal intervention would ensue.
Brief Recap of Part 1: NCMB Blocked State Auditor’s Performance Audit
NC Auditor Wood posted her scathing report on her blocked Performance Audit of purported state agency, the NC Medical Board (NCMB).
Her department attempted to conduct a performance audit specifically of its Investigations Division. NCMB’s Executive Director objected. It is not clear whether the President of the medical board, Dr. Michaux Kilpatrick, was consulted. As president, she officially represents the actually appointed members of NCMB that comprise “The Board” and is ultimately the person responsible for this agency’s compliance with law. If she concurs with Executive Director Henderson’s position (Henderson is simply an employee of the board), then she hold responsibility for all actions that ensue from this decision. If the Auditor or another investigatory agency were to find that NCMB violated state or federal law in its procedures, she and the entire appointed board could face the direct consequences. In the event of malfeasance, particularly if it is criminal malfeasance, no state immunity applies and no insurance covers the criminal liability of the organization. Thus, NCMB as an organization and any of its individual board members or staff could be subject to suit and not protected by any immunity.
Ms. Wood said she’d go to the General Assembly (legislature) to get their clarification of her authority and, presuming they’ll support her (iffy, as you’ll discover), she’ll come back with the equivalent of a court order for NCMB to comply and to let her examine whatever she needs to examine to complete her performance audit on behalf of the state and its people (which, of course, includes its licensees and the patients of all NC medical licensees).
Obstruction
Ms. Wood apparently began the audit in early 2022 and sought to review NCMB’s investigations protocol and its case records for the prior two years, beginning and ending in mid-year periods.
All investigations are contained in a curiously named 1984’ish sounding database “ThoughtSpan.” NCMB alleges they’re prohibited from providing her access. But they offered her a curious exception: if she just simply signed on the dotted line and defined herself as a “consultant” to them, then she could have access. Which of course makes no sense. And she explained why she can’t enter as a “consultant” as that ties her hands and she can’t be independent. (NCMB probably knew this was a ploy to tie her up in restrictions behind a facade of reasonableness.)
NCMB Proffers Excuses
They gave a cascade of excuses for opposing her audit, e.g. you’re not authorized to oversee us; you’re not authorized to see our privileged and confidentiality-protected material; you just don’t understand how investigations work; you’re picking on us.
She call b/s on all of them.
They say they’re willing to hire their own group to come in and examine and then let her know how stellar and blameless they are doing God’s work of “protecting the people.” We’ll come back to this crafty proposition in a subsequent piece.
Likewise, the discussion of the reasonableness of and legal bases for each of NCMB’s resistances to the audit deserves its own discussion. But even before that, the reader needs some preliminary understanding of who/what this medical board is and what the NC Auditor’s rights and duties are. So as not to overload the reader, we cover that also in a separate piece. Wonky policy stuff and statutory bullet crossfire are not everybody’s cup of tea. Though, as I hope you’ll discover, this could be a fine time to expand the scope of your curiosity.)
Standoff
Mr. Henderson (NCMB Exec Dir) says “we’re sticking by our guns - we’re not cooperating.” And, seemingly deferential to the impartiality and sagacity of the deciders of NC law, “let’s let the legislature decide the rightful interpretation of our respective laws.” (A note on my use of quotes.2)
This is the same sort of run-around they give licensees and counsel. They demand to be the inquisitor and refuses to be the inquisitioned. It’s definitely a reversal they’re not familiar with. And clearly it’s a bit uncomfortable.
But they plant in their reply the curious proposition “Since you don’t know anything about medical licensing boards and how they really need to run, laws be damned, how’s ‘bout we get our own auditor and let them give you the answers you need and convince you we’re clean?”
We’ll come back to this creative ploy in the section entitled “NCMB’s Sly Offer of Its Engaging An ‘Independent’ Auditor”
Coming Back With a Subpoena
In the report, she says “okay, I’ll go to the legislature and ask them.” Now, who in the hell knows what that process is. How do you ask “a legislature” for an interpretation? I’m not a savvy school of gov’t guy, but the thing seems like an intentional bureaucratic ensnarement. And even if the legislature had some mechanism to hear and rule on jurisdictional concerns, how long would that process take?
In various news pieces, she seems to say “I’ll get a subpoena / court order …” but again, is the court the correct route? Hope she can get a state governmental scholar, say from UNC-SOG, to give her input. That is, as long as NCMB hasn’t tied up everyone there with some sort of consulting agreement that then prevents them from serving as a consultant to the auditor. It appears NCMB, like many MLBs (medical licensing boards), has a penchant for hogging the whole available legal population so a doc has an extremely hard time finding competent and assertive representation. And it was already a tall order even before that.
But In The Auditor Lockout Interim, Auditor Offers Observations and Conclusions
Nevertheless, the auditor makes three main observations and draws two highly consequential conclusions from the limited material she’s seen.
Observations
1) The 1st Thing That’s Clear Is This: NCMB Conducts a LOT of Investigations.
(And yet it’s also well established that they have no - zippo - oversight. The auditor established that in two prior scathing reports in 2014 re NCMB’s failed oversight of due process-denying NCPHP and its own complete absence of government oversight. I mention this here because one gets the sense that that didn’t sit well and NCMB’s got an axe to grind.)
4,432 complaints over 2 years.
NCMB reports that they conducted 4,432 investigations over the two-year period being examined. On my first read, I presumed (mistakenly) that here an “investigation” surely broadly included amongst them the pro forma processing of nuisance complaints or of those that are entirely out of their jurisdiction, e.g., just writing a significant number of form letters in response to crackpot complaints from chronically disgruntled people, or from somebody who's got a vendetta and wants to tie up a licensee in a prolonged and costly battle. Surely it can’t mean mobilizing an investigator and opening a case file?! That would be 6 investigations a day! It certainly wouldn’t take long to max out your investigator personnel’s caseload capability. But, because of NCMB’s near complete shutout of the auditor, we just don’t know.
Can this really be accurate!?
How’s this stack up with other states? My quick math indicates that the ratio of yearly complaints (2,200) to actively practicing docs in the state (~30,000) is 1::15. Is the ratio that high in other states, or do we have a unique problem with NC’s doctors? What about complaints against NC dentists? NC nurses? NC lawyers? (Gageezes, the 1:15 ratio would probably be reversed!)
Is there any chance that this rogue agency is opening unwarranted investigations on minor matters, turning molehills into volcanoes, and then using that to strong-arm their way into full-scale SWAT team raids? Something’s out of whack. Might this be worthy of a state auditor’s scrutiny? One would certainly think so.
2) NCMB will not cooperate with the Auditor
Next, we see that basically from the get-go, NCMB refused to cooperate.
There were a handful of records (~ 5% of the total) that NCOSA was graciously “allowed” to review, but even there, she noted that they were so heavily redacted that the auditor found them useless for the purposes of the audit.
Hmmm. Just wondering here for a moment … Would the IRS permit that if you were audited? Would the DOJ permit that if they wanted to determine if you were running a racket? Don’t think so.
3) And We See That NCMB Offers Multiple Specious Rationales for Refusal
Essentially, there are three, and the 1st one is sort of paired.
1. a. You don’t have the legal authority over us because our statute says we have to protect these records.
But we can share them with other people with less confidentiality assuredness and even send out the entire file to any address that includes the word “board” in it.
1. b. And on top of that, they’re exquisitely confidential b/c they contain privileged and confidential PHI.
But we ourselves don’t have to protect confidentiality; and … we don’t trust yours. (But it could be that it’s not your confidentiality we don’t trust; it’s that we’re not confident that if you find something that could be damaging [and you will], we would have the ‘persuasive powers’ to get you to let that slide. You’re just not our kinda gal.
2. You’re picking on us and holding us to a higher standard than other NC licensing boards.
3. No medical board in the country has an investigations protocol.
What’s the validity of their rationales? We’ll pick these apart later as, to understand them, they call for a deeper understanding of the nature of both the Office of the State Auditor and this unusual independent, non-overseen, immune-from-suit, “not a state agency” medical regulatory entity known as NCMB.
Auditor’s Conclusions - Two Preliminary Takeaways
1) Apparently, NCMB has no standardized investigatory protocol.
2) And it’s violating established state law governing permission to extend its investigations in about a third of the cases it investigates (extrapolated from her very small sample which is all they’d give her to work with. At that, the scant records were so heavily redacted, they were useless for examining their practices on a policy and law compliance basis.)
Five Days After Scathing NCMB Performance Audit Published, A Sensational Headline Story Appears Discrediting the Auditor
In the interim since publishing her report and my doing a podcast on the freshly released audit, five days after publishing it, a sensational news story broadcasted that Ms. Wood had been the driver of a vehicle that hit a parked car as she was leaving a lawyer’s office holiday party on Dec. 8th (3 weeks prior to the audit report’s release) and that she was reported to allegedly have left the scene of the accident.3 Surveillance footage apparently captured her appearing to be impaired but being accompanied by a male who is seen putting her into the driver’s seat of her car. Also somewhat curiously, an Uber driver with a passenger stopped to take a picture, and the passenger asked the diver to circle the block and re-view the accident.
There are numerous disturbing aspects to this sudden splash of stories with sensational headlines like “NC Auditor Wood Involved in Hit and Run” and an immediate chorus of vengeful-sounding pols calling for her removal. Their vociferousness struck me as a tad too much, almost as if they were part of an orchestrated chorus.
The reader can track down the stories and videos if desired. Just search NC Auditor Wood.
I must note that this is an auditor, now in her fourth elected term, who has commanded the highest respect from people on both sides of the aisle. She’s challenged diverse leaders and state organizations on well-documented grounds, both financial and operational. When I met her at the NC General Assembly in 2014 when she presented her report on NCPHP, she carried herself with distinction. There have never been any reports or concerns about her personal or professional behavior. It’s noted that this holiday party occurred on Dec 8th and that she was there at the party for approximately two hours. To me, first, it is highly unlikely that she would drink irresponsibly at a professional gathering attended by her peers. It is also unlikely that she’d drink so much as to be grossly impaired within two hours. And it is most curious that a person from that gathering would actually place her in a car if she was so impaired as seems to be depicted. There are so many red flags here that I am led to believe that this was not a case of voluntary excess consumption leading to ‘coincidentally captured on camera’ impairment. And I can’t dispossess myself of my curiosity of the timing in the context of NCMB Henderson’s adamant refusal to cooperate and her saying she would exert her authority by getting an order to comply.
And I can’t help but believe that her earlier audit of NCPHP in 2014 and her finding that it had likely violated the due process of all 1,140 physicians it had evaluated over the prior decade, and her revealing that both NCPHP and NCMB had utterly no state oversight left these two agencies in quite a bind. Curiously, soon thereafter, NCPHP’s medical director Warren Pendergast, MD left the agency with no fanfare. And soon thereafter, after I had vigorously challenged the veracity of NCPHP actually conducting peer review and asserted that what they had actually performed throughout that decade of “state-sanctioned, privileged peer review” examination and likely throughout its inception were impermissible state-compelled invasive forensic psychiatric examinations. Such activity conducted in this manner is not only fraudulent deception but likely constitutes the equivalent of involuntary civil commitment done by an unlicensed entity exclusively contracted by the state via its medical board. And of course, by their very nature, in violation of laws protecting citizens’ civil rights. (It continues to astound that this roving interrogation entity didn’t even think to pass this by a compliance lawyer!)
Thus, all this taken together, I’m left with a deeply unsettled feeling that there’s something major amiss here. Can I rule out that she wasn’t simply impaired from excessive consumption or that she’s been harboring a substance abuse problem? No. But if I were to imagine a scenario where one or more parties wanted to implant that doubt so as to discredit or even to intimidate (or perhaps to retaliate), doing so in direct proximity to her announcing her intent to compel NCMB’s cooperation, I could imagine such. Why? Because there are some exposes’ of wrongdoing that wrongdoers don’t want exposed under any circumstance. And I can imagine any number of suspect elements in her recent forays with both these agencies for which that would be applicable.
If she was in fact impaired on that occasion and it was related to voluntary susbstance use, I hope she addresses it. If she has a medical condition that contributed, likewise I hope she has excellent clinicians who can get to the bottom of it. And if neither of these, but more of an unimaginable sabotage nature, I hope she has an utmost trusted inner circle of confidantes, and that she has access to suitable law enforcement personnel who can quickly and comprehensively study the occurrence and afford her protection from further harm.
The NC Auditor’s Overall Duty
The NC Auditor has an overall duty to ensure that all state entities and delegated functions comply with state and federal law. And one such state entity is the NC medical licensing board (NCMB) which like nearly all other boards and commissions in NC is considered a subordinate of the executive branch.
It seems a lot of North Carolina physicians have been under the belief that NCMB is a state agency.
Apparently, We’re All Delusional
I sure was. Just as I thought its physician health program NCPHP was a legitimate mental health entity. Turns out I was delusional on both counts.
Well, in actuality, I was deluded. Not delusional.
Here's the distinction: to be delusional is to possess a belief that a) the majority of others don't have; and b) to refuse to let go of that belief in the presence of clear factual evidence that your own belief doesn't hold up.
But if the evidence shows that my belief - a combination of perception and reasoning (I'm so sorry to get so William Jamesian on you) is actually a correct perception and manifests valid reasoning, then my belief is not delusional. Even if it doesn’t go along with majority opinion. But it would still be fair to say that I have been deluded in my thinking.
Huh? To be deluded in your thinking looks equivalent to being delusional. But it's not. Why? Because when you switch to the active voice, you see that someone is deluding me. This is what I believe is has happened here – NCPHP and NCMB have deluded me, and thousands of other physicians, into believing that they’re state agencies and enjoy the full array of immunity accorded such entities. And yet, how can a deceiving unlicensed, somehow exclusively contracted, fitness-for-duty evaluation entity lying about its function possibly be a state agency? And how can an independent “public organization” specifying that it is not a state agency and being documented as having no state oversight possibly be a state agency that has the full gamut of immunity and even police power? That doesn’t even seem possible! In other words, it seems they gaslighted me and the entire physician community, and likely the court system too.
One of the ways a deluder, a gaslighter, can continue to delude and avoid detection is to make sure they silence the voices of the harmed, those they have deluded. And to further silence them, they parade them out as not to be believed, as crazy. They enrobe themselves in their publicly perceived good reputation, relying on the lineage of delegated authority and responsible governance that preceded them.
This is fundamentally the psychodynamic behind retaliatory threat of harm to the victim of an assault if that victim dares to speak.
It’s also the same dynamic behind perpetrators who use date rape drugs to violate their victims while also chemically preventing the victim’s memory retention of the event. It is a dual rape - a rape of the body and a rape of the mind.
So in essence both NCMB and NCPHP have not just misled but deluded the entire community of licensees under their terrorizing regulatory capture, as well as the courts.
The Assumption of Active State Governance
When you hold the belief that a regulatory entity is a state agency, with that belief comes the associated presumption that it is governed – i.e. overseen by the state and held accountable for compliance with all laws and rights – including due process. After all, that's what gives state agencies – especially those that wield police power – their authority, and to which we rightfully give our respect. It's a social compact – the governed give the one who governs awesome power with the contractual understanding that the governor will govern within clear parameters established by law. And that office will maintain diligent oversight over its agencies and hold them accountable by prompt intervention and punishment for their deviance from law. The punishment is not just for the harm done. It’s also because they betrayed the trust of the governed and caused to be questioned the trustworthiness of the governor. It is thus the governor's duty to address and hold accountable a malfeasant agency.
This arrangement of oversight and accountability is rightfully considered a social contract.
So it is no surprise that even the auditor seems to believe that NCMB is a state agency.4 And therefore the state auditor should have a right to investigate to the fullest extent whether that state agency is fully compliant with all laws and policies and is acting in a responsible, public-servant manner in upholding to its people, and to all other states, trustworthiness in both the agency’s and the state’s integrity, the latter indicating its good citizenship as a state in that collective enterprise we call the United States.
After all, if the purported state agency NCMB is not in compliance, the state – its presumed overseer – could be at risk of litigation or be subject to federal investigation for noncompliance with any number of applicable federal laws and held liable for all harms. And if you violate those, worse, doing so in a manner that hurts the licensees you regulate by wrongfully infringing on their guaranteed rights, or harm the very public you’re supposed to protect by wrongfully removing their doctor and thus their access to health care, it could mean big trouble in terms of civil - or even criminal - fines, and perhaps even result in the state losing earmarked federal funds! Yeowzer!
But as soundly legally based as all this is, there’s a deeper concern that I believe the auditor is just beginning to explore. What happens when you privatize a state function and then not only permit it to become a secret profit center to the disadvantage of others, but allow it to be weaponized against anyone that it or its toxic circle of influence wants destroyed.
A Whistleblower’s Bind
In essence, she’s exploring the core question that every whistleblower has to grapple with. What is my responsibility to confront this deeply harmful wrongdoing? What if confronting wrongdoing could jeopardize my career? What if confronting it could result in my reputation being besmirched in devious ways? What if by my confronting it, they may harm me physically? What if, even if I take that risk, no one comes to my aid? What if they knock me off and leave my identity besmirched? Should I take that risk? Or should I just say “screw it, it’s hopeless.”
Most whistleblowers, especially those who’ve encountered physical and psychological harm (which seems to be nearly all) grapple with this. And a number of them, due to a variety of personal circumstances, may conclude that the sacrifice is just too great, and they back away, hoping that they made a difference or that somehow their effort sparked some change in the corrupt system. Sadly, often the corrupt system remains unchanged and even gloats at the whistleblower’s retreat, just as they celebrate with sadistic glee the harm they’ve inflicted on their challenger.
A few conclude that it’s their duty to keep marching forward, trusting that they’ll prevail, make a difference, change the system. And even if harmed, intimidated, or threatened, they incorporate that risk into their overall situational re-assessment and make a conscious decision how best to proceed.
In many ways, this auditor is an internal whistleblower. But not one who’s just accidentally come across something of concern. Rather, a person who has literally been assigned the duty of whistleblowing. The state of NC, clearly enacted an earlier time when virtue was valued, made the public commitment to the citizenry of that state, the central part of its social compact with its people, that we not only promise that we’ll do everything above board, we’ll empower a fully independent watchdog to ensure that we are, and hold us accountable, and cause to be effected prosecution and punishment for those who have violated the law. That, says the state, is our social contract with you.
And what this present standoff is really about is whether this state has the balls to live up to its commitment.
Sadly, as there’s so much at stake – this agency’s violation of federal laws; pulling the state into its “impaired physician rehabilitation” RICO; the state’s embarrassment and financial liability for its failure of oversight that enabled this wrongdoing and harm to proceed for as long as it has … – I’m inclined to believe they don’t have what it takes to truly take ownership.
And if that’s the case, whether they continue to throw up obstacles, besmirch and discredit the auditor in the hopes of getting her removed, or find some other way to conceal NCMB’s wrongdoing, hopefully an overseeing body like a federal agency that is charged with enforcing the applicable federal law, will have the temerity to compel accountability.
I’m sad to acknowledge my fear that even that’s iffy.
But whatever the outcome of that, one thing is clear. This is no time for docs to consider entering into such a regulatorily privatized state where their medical board runs a Gestapo operation, tracks and tallies in a cumulative rap-sheet database all their faux pas, quirks, and gossip, and completely obstructs from undertaking a requisite and rightful investigation the only person in the state who might have some authority over it. Physicians subject to such a rogue agency risk ensnarement and consequent loss of license nationwide, reputational destruction, and being thrust into destitution by a state-sanctioned, law-defiant despot.
See “FTC Staff Guidance on Active Supervision of State Regulatory Boards Controlled by Market Participants.” https://www.ftc.gov/system/files/attachments/competition-policy-guidance/active_supervision_of_state_boards.pdf
As I’m not a journalist, I take liberty with using “quotation marks.” Generally speaking, if I’ve got a direct quote from someone, it’ll be accompanied by [said Person A]. If it’s a block of text, say a statute, I’ll generally indent the whole thing and often put it in italics, maybe even offsetting it with one big theatrical opening quote mark.
And often, in pieces where I’m doing mind-reading and caricaturing somebody’s imaginary dialog, I’ll also use quotes. I am presuming the reader should be able to tell literal quote from caricatured attribution by the context. But I also recognize that in today’s living caricature of human interaction, that can be challenging.
In this piece, I often speak the caricatured dialog of various persons and put them in quotes. And sometimes, I dramatize the dialog by using dialect and slang, maybe even an obscenity (though generally sufficiently masked).
So, please know that I’ve taken liberty here. In the event that you’re not sure whether that person actually said that or I caricatured it to the point of ridiculous, use the following rule:
When in doubt, doubt.
And this event happens just days after NCOSA receives Mr. Henderson’s smarmy reply to the draft report. It’s as if the sensationalized event was a “p.s. Back off, lady. we mean business.”
Whether NCMB is actually a state agency is a critically important question. Believe it or not, NCMB asserts quite emphatically that it is NOT. We will examine this pivotal question in a subsequent piece.