Recently, a news report stated that the Department of Veterans Affairs doctors had been reminded that if they don't report medical malpractice, they could face losing their licenses. Supposedly, many doctors have been under the impression that they don't have to report medical malpractice, since the VA covers them in most situations.
That's not really true anymore. In fact, the VA may cover things like the doctor's liability, but malpractice or a reduced standard of care could still lead to a doctor losing his license. For instance, if a doctor doesn't report a malpractice case that another VA doctor took park in, both doctors, once the situation is realized, could face losing their licenses.
When working for the government, doctors can usually avoid personal liability through one of three methods. The first is medical malpractice insurance. The second is self-insurance. The third is government representation, which is provided during only a Federal Tort Claims Act lawsuit. Doctors aren't, though, protected if they don't report what they or another doctor have done.
Doctors can be licensed in any state when they come to work for the government. Doctors in the Florida VA may be licensed in Ohio, for instance. The doctor must abide by the standards of his medical board; in that imaginary doctor's case, he'd be under the guidelines of the Ohio Medical Board.
When a doctor knows that another has caused a patient harm and doesn't report it, he or she becomes liable to the respective licensing board for failing to report the incident. Some VA doctors may not have been clear on this in the past, especially because of the differences in state medical boards. The government has now reached out to clarify and to help keep the VA transparent.
Source: Disabled Veterans, "VA Doctors On Hook For Not Reporting Medical Violations" Benjamin Krause, Aug. 20, 2014