can be shown that review actions were based on reasonable beliefs: "Thus HCQIA's immunity is intended to eliminate the 'chilling effect' that antitrust and other legal actions brought by physicians have had on legitimate professional review activities" (Rothschild and Rust, n.d., p. 2). The HCQIA also requires hospitals to report adverse actions against health professionals to the Data Bank. Entities (e.g., insurance companies) making payments for malpractice claims on behalf of health professionals must also report such actions to the Data Bank. Hospitals are further required to consult the Data Bank whenever health professionals apply for staff membership, and every two years afterward. The purpose of these mandatory reporting requirements is to prevent and deter the activities of unscrupulous health professionals: "The data banks [serve] as a 'flagging system' whose principal purpose is to facilitate a more comprehensive review of professional credentials" (Pozgar, 1993, p. 328). Penalties for failure to report depend on the reporting entity. Hospitals and health care entities that fail to report risk the loss of immunity protection. Insurance companies are subject to a $10,000 penalty for each unreported malpractice payment.
The National Practitioner Data Bank became operational during the latter part of 1990, and is administered under the Health and Human Services Department of the federal government. Given the enormous data processing tasks required, it is not surprising that problems were soon encountered with the system. During its first 16 months of operation, due to an unprecedented number of queries and understaffing, a backlog of almost 7,000 queries accrued (U.S. General Accounting, 1993, p. 14). By its first full year of operation the Data Bank had received almost 800,000 queries (Montague, 1994, p. 54). By 1992, time between mailing of a request for information and receipt of a response was almost a mont...