Negligent Credentialing Lawsuits: Strategies to Protect your Organization Negligent
Credentialing Lawsuits:
Strategies to Protect your Organization
Amy E. Watkins, Esq.
This easy-to-read legal guide is for anyone involved in the hospital’s credentialing process. It explores organizational liability for negligent credentialing and tells you specific
actions to take to avoid negligent credentialing claims from being filed—and how to
strengthen your facility to successfully defend against such claims
Additional HCPro titles to add to your library:
– The 2005 Credentialing and Privileging Desk Reference
– Medical Staff Law: A Guide for Medical Staff Professionals and Physician Leaders
Or subscribe to these valuable monthly newsletters:
– The Credentialing Resource Center
– Medical Staff Briefing
– Credentialing and Peer Review Legal Insider
About HCPro
HCPro, Inc. is the premier publisher of information and training resources for the healthcare
community. Our line of products includes newsletters, books, audioconferences, training
handbooks, videos, online learning courses, and professional consulting seminars for
specialists in credentialing, medical staff, long-term care, rehab, health information
management, compliance, accreditation, quality and patient safety, nursing, pharmaceuticals,
physician practice, infection control, and safety.
Visit the Healthcare Marketplace at www.hcmarketplace.com for information on any of
our products, or to sign up for one or more of our free online e-zines.
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P.O. Box 1168
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Strategies to Protect your Organization
Watkins
©2005 HCPro, Inc. HCPro is not affiliated in any way with the Joint Commission on Accreditation of Healthcare Organizations, which owns the JCAHO trademark. Negligent
Credentialing
Lawsuits:
Amy E. Watkins, Esq.
Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii
What this book is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii
What this book is not . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viii
About the author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ix
Commonly used acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x
Part I: Introduction to Negligent Credentialing . . . . . . . . . . . . . . . . .1
Chapter 1: Negligent credentialing lawsuits: History and explanation . . . . . . . . . . .3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
History of hospitals and healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
The evolution of credentialing and privileging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
History of hospital liability for patient injuries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Chapter 2: Distinguishing negligent credentialing claims from other
theories of hospital liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
An introduction to tort law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Vicarious liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Chapter 3: Basic elements of a negligent credentialing claim . . . . . . . . . . . . . . . . 19
Four basic elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Additional liability concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
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CONTENTS
Part II: Prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Chapter 4: Effective strategies to limit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Medical staff bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Credentialing policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Corrective action policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Criminal background checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Credentialing verification organizations and regional credentialing . . . . . . . . . . . . . .42
Chapter 5: Avoiding ‘negligent selection claims: Checklist for
initial appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Written application for appointment to medical staff . . . . . . . . . . . . . . . . . . . . . . . . .45
Verification of information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Responding to information obtained during verification process . . . . . . . . . . . . . . . .51
Chapter 6: Avoiding negligent retention claims: Checklist
for reappointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Failure to monitor competence constitutes the majority of
negligent credentialing cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Application for reappointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Three key steps to verification during reappointment . . . . . . . . . . . . . . . . . . . . . . . . .55
Peer review and consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Chapter 7: Common credentialing pitfalls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Pitfalls during initial appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Pitfalls during reappointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Chapter 8: Credentialing challenges Impaired physicians . . . . . . . . . . . . . . . . . . .63
Types of impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Uncovering physician impairment issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Responding to physician impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Chapter 9: Credentialing challenges: New techniques and technologies . . . . . . . .69
Plan before your privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
American College of Surgeons recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
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Chapter 10: Credentialing challenges: Telemedicine . . . . . . . . . . . . . . . . . . . . . . .77
Diagnostic telemedicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
Telemedicine consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Part III: Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
Chapter 11: Responding to negligent credentialing lawsuits . . . . . . . . . . . . . . . . .83
The litigation process in general . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Seven steps to take if you’re sued for negligent credentialing . . . . . . . . . . . . . . . . . .85
Chapter 12: Use of experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Who can testify as an expert? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
Part IV: Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95
Chapter 13: Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Substantive defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Procedural defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Chapter 14: Avoiding personal liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
Personal liability of board members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
Personal liability of individual physicians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Three steps to avoid personal liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Chapter 15: The six most common trends for liability . . . . . . . . . . . . . . . . . . . . .113
1. Poor credentialing documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
2. Failure to follow up or document actions taken after a complaint by a
patient or staff member is received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
3. Failure to verify that applicant meets basic medical staff requirements
4. Inadequate review of red flags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
5. Poor oversight and supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
6. Inappropriate and unsupervised responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . .114
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CONTENTS
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
Appendix A: Table of cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
Appendix B: Sample credentialing policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
Appendix C: Credentialing inital self-assessment . . . . . . . . . . . . . . . . . . . . . . . . .135
Appendix D: Elements of a credentialing file . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Appendix E: Sample corrective action policy . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
Appendix F: Model application for appointment to medical staff . . . . . . . . . . . .151
Appendix G: Model application for reappointment to medical staff . . . . . . . . . . .159
Appendix H: Sample complaint form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
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Negligent credentialing
lawsuits: History
and explanation
Introduction
A majority of courts in the United States have recognized expressly that a hospital has a duty to investigate, select, and retain only qualified and competent physicians as members of its medical staff. These
courts have labeled a hospital’s failure to exercise this duty with a number of terms, including corporate or institutional negligence; negligent selection, retention, or supervision; and most commonly, negligent credentialing. Under this theory of liability, in which a patient is injured by an incompetent or
unqualified physician, the hospital is directly responsible to the patient—not for the negligent acts of
the physician, but for the hospital’s own failure to properly conduct the credentialing process.
Membership on a hospital’s medical staff is a privilege that most hospitals take seriously. After a physician applies for medical staff membership, a hospital committee—typically called the credentialing
committee—undertakes an elaborate, three-part credentialing process that involves (1) an extensive
review of the physician’s application, (2) independent verification of the application’s veracity, and ultimately (3) a recommendation to the hospital’s governing board as to whether to permit the physician
to become part of the hospital’s medical staff. Hospitals credential physicians to protect patients and
ensure that only qualified professionals are granted privileges to practice medicine within the hospital.
In addition to promoting the delivery of quality healthcare, the process acts to safeguard hospitals
against liability for the actions of incompetent or unqualified physicians.
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Over the past 40 years, however, patients and their families have increasingly sought relief from the
hospital when a member of its medical staff provided insufficient care. Although plaintiffs have asserted
many theories of liability, this book focuses on the argument of negligent credentialing—the failure of a
hospital to perform a diligent inquiry into a physician’s credentials to ensure that only qualified and
competent professionals are admitted to the hospital’s medical staff.
Due to recent tort reform laws and caps on medical malpractice damages, plaintiffs are turning to hospitals’ seemingly deep pockets to receive compensation for injuries caused by medical staff physicians.
As the case studies on the following pages demonstrate, plaintiffs are increasingly successful in their
The most commonly used term for the type
claims against hospitals for negligent credentialing,
of claim discussed in this book is “negligent
prompting hospital professionals to carefully scrutinize
credentialing.” However, courts have used
and reform their credentialing procedures to avoid lia-
the following terms:
bility. Unfortunately, even the slightest deviation from
• Corporate negligence
acceptable credentialing procedures is often enough to
• Institutional negligence
make a colorable claim that will allow a lawsuit to go
• Negligent selection
forward. Even if the claim is ultimately unsuccessful,
• Negligent retention
the amount of resources spent on defending against it
• Negligent supervision
can be considerable.
History of hospitals and healthcare1
Today’s hospital, with all its modern equipment and technology and its large staff of physicians, nurses,
LIPs, and other support staff, is seen as the pinnacle of medical care delivery. However, only relatively
recently have people come to hospitals for treatment by physicians—it used to be that hospitals were
the last place one would go for treatment.
The first hospitals in the United States were part of municipal almshouses. They were run by religious
groups and funded by a mix of private donations and local government moneys, with the purpose of
housing and feeding orphans, the poor, the old, and the mentally ill, some of whom required healthcare. No one voluntarily entered such a hospital for treatment. Working-class and wealthy people alike
received nursing and care from their family at home. And in those early days, healthcare could be provided at home, because most of it was palliative care administered while the disease ran its course. If
necessary, the physician would come to a patient’s home.
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Pennsylvania Hospital, which opened in 1754, was the first general hospital specifically founded to care
for the sick. Because Benjamin Franklin could not raise enough funds privately, he created a public-private matching grant scheme, in essence creating the first community, not-for-profit hospital. By the late
1800s, the development of antiseptic and aseptic techniques reduced what had been a substantial risk of
infection within hospitals.
Around this time, control over hospitals began to shift from the trustees to the doctors, and in some
instances, physicians began to own and operate hospitals for the benefit of patients who were recovering
from surgery. Until this point, little relationship had existed between hospitals and medical practice, and
little effective treatment was available for diseases—antibiotics weren’t introduced until the mid-1930s.
In fact, 1910 is identified as the “Great Divide,” the first time in history that a random patient, consulting a random physician about a random disease, had better than a 50-50 chance of benefiting from the
encounter.
Hospitals began to be seen as “the doctor’s workshop,”or facilities to support services provided by independent physicians. As the modern hospital evolved, physicians began to need hospital affiliations, and
by 1975, no physician would consider practicing medicine without one.
The charitable immunity doctrine
Charitable immunity is a doctrine that originated in English common law. The theory behind such
immunity was that allowing unlimited money-damage claims for negligence against “charitable” organizations (as most early hospitals were and many modern hospitals still are) would severely impair, if not
cripple, their ability to carry out their charitable missions. If an injured patient was allowed to recover a
judgment against a charitable hospital, such a judgment would drain resources that could be used to
treat many other patients. The doctrine also recognized donors’ right to see their contributions go to
fund the charitable enterprise rather than pay civil damages to injured plaintiffs.
In some states, this doctrine was recognized as common law or law derived through judicial decisions.
In other states, it actually was written into state statutory law. In either instance, the doctrine protected
hospitals from liability for some time.
However, over time, the charitable immunity doctrine has been worn away, if not outright abrogated, by
courts and state legislatures. First, many hospitals are now businesses run by private investors whose
purposes in investing are not purely charitable. Second, even nonprofit hospitals have evolved into big
businesses. A hospital with an affiliation to a charitable organization may have hundreds of beds and
NEGLIGENT CREDENTIALING LAWSUITS: STRATEGIES TO PROTECT YOUR ORGANIZATION
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millions of dollars in income each year. Professional administrators have replaced religious clerics and
other charity workers. As nonprofit hospitals have evolved into professionally managed, million-dollar
businesses, courts increasingly have been unwilling to continue the immunity granted to hospitals in
much simpler times.
The growth of self-regulation
The U.S. healthcare system relies in large part on private credentialing bodies to certify and approve
practitioners and healthcare organizations. This practice started back in 1917, when the American
College of Surgeons (ACS) established a one-page list of minimum standards for hospitals and introduced a voluntary compliance system. In the 1950s, the ACS and its standards were replaced by the
Joint Commission on the Accreditation of Hospitals, now known as the JCAHO. Today, the JCAHO
accredits more than 15,000 healthcare organizations and programs in the United States.
The AOA began to survey and grant accreditation to osteopathic hospitals in 1945 and is the main
accreditor of osteopathic healthcare organizations and programs, although occasionally allopathic medical hospitals opt for this accreditation rather than the JCAHO’s.
The National Committee for Quality Assurance (NCQA) is the most widely used managed care accrediting organization and grants accreditation for more than 50% of the nation’s health maintenance
organizations. NCQA also provides certification programs for organizations that verify credentials.
All three of these organizations have standards relating to the credentialing of healthcare providers.
The evolution of credentialing and privileging
Credentialing a physician involves obtaining, assessing, and verifying a physician’s qualifications and
competence to practice medicine. Privileging, in which the hospital determines which services the
physician is entitled to perform in the hospital, occurs in conjunction with the credentialing process,
usually after a physician’s credentials have been verified.
As hospitals became more involved in patient care, they initially began to exclude physicians whom
they believed to be unqualified from their medical staffs. This, in turn, prompted a slew of trade and
antitrust challenges by physicians who were denied medical staff privileges. The doctors argued that
the hospitals’ denials had an anticompetitive effect on the medical market. Successful litigants fetched
triple damages under federal antitrust statutes.
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To avoid these lawsuits and costly legal expenses and damage awards some hospitals changed their
strategy and granted medical staff membership to more and more physicians, even those whose
qualifications were questionable. This prompted a new batch of lawsuits, as unqualified and incompetent physicians treated hospital patients. Now, it was the patients who sued—this time for corporate
negligence and malpractice.
Credentialing managed care organizations
Like hospitals, managed care organizations (MCO) limit their physician panels, and as noted earlier,
the NCQA requires MCOs to credential physicians who may be a part of the organization’s panel.
Generally, however, the credentialing efforts of an MCO are much less intense than hospitals’ efforts.
In fact, many MCOs rely on the hospitals they contract with to provide them with information for their
credentialing decisions. Additionally, they’re more likely than hospitals to exclude physicians on the
basis of the physicians’ utilization of resources.
For example, Philadelphia-based Keystone Health Plan adopted a policy that required practitioners to
agree that they would not refer Keystone patients to non-Keystone practitioners. A similar restriction
on providers by hospitals would be illegal. A hospital that requires its physicians to refer patients only
to other members of the hospital’s medical staff is setting itself up for antitrust lawsuits from providers
who are not on the medical staff. Additionally, the practice of requiring in-house referrals runs afoul of
federal and state fraud and abuse laws.
History of hospital liability for patient injuries
Until the 1950s, most hospitals were viewed simply as a place where independent physicians came
together to practice medicine. As recognized by Judge Fuld of the New York Court of Appeals in Bing v.
Thunig, the general perception was that hospitals did not undertake to treat patients or act through
their doctors and nurses. (Complete citations for all cases too which this book refers can be found in
Appendix A.) Instead, hospitals existed simply to procure physicians to act upon their own
responsibility.
Because many were corporations (or unincorporated associations), the hospitals could not technically
practice medicine by themselves and were expected to exercise little, if any, control over the actions of
the physicians practicing within. But over the years, licensing regulations, accreditation standards, and
financial incentives from reimbursement agencies became more stringent and required hospitals to
exercise greater oversight over their medical staff. Thus, by the mid-20th century, hospitals began to
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exert more power over who could admit and treat patients within their facilities. With this power came
increased responsibility and liability.
There has never been much doubt as to whether hospitals should be held directly accountable for the
actions of their employed physicians and other healthcare providers (this is discussed further in the next
chapter). It has been a long-accepted principle of law that people and even corporations are responsible
for the acts of those over whom they can, or should, possess control. In the mid-1900s, hospitals and
other healthcare facilities also began to face liability for their negligence in failing to properly use and
maintain medical equipment and for improperly staffing the hospital to provide adequate treatment.
For example, in Hernandez v. Smith, an obstetrical clinic that lacked adequate surgical facilities for performing cesarean sections was held liable for failing to “provide proper and safe instrumentalities for the
treatment of ailments it undertakes to treat.”
Likewise, in Horton v. Niagra Falls Memorial Medical Center, a hospital was held liable for failing to remedy a temporary shortage of nursing staff after an unsupervised and disoriented patient fell from a hospital window.
These lawsuits were, perhaps, the predecessors for present-day negligent credentialing lawsuits, which
involve the failure to properly select, retain, or supervise a member of the hospital’s medical staff. Both
actions fall within the broader category of “corporate negligence,” or the general departure of a corporation (in this case, a hospital) to act with reasonable care.
Hospitals do more than just provide a place for treatment
As early as 1957, at least one court recognized that present-day hospitals do far more than furnish facilities for treatment. They hire regular employees, including nurses and staff physicians, to care for
patients. They also independently charge for medical care and treatment.
As the New York Court of Appeals stated in Bing v. Thunig,
“The conception that the hospital does not undertake to treat the patient, does not undertake to act
through its doctors and nurses, but undertakes instead simply to procure them to act upon their
own responsibility, no longer reflects the fact. Present-day hospitals, as their manner of operation
plainly demonstrates, do far more than furnish facilities for treatment. They regularly employ on a
salary basis a large staff of physicians, nurses and interns, as well as administrative and manual
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workers, and they charge patients for medical care and treatment, collecting for such services, if
necessary, by legal action. Certainly, the person who avails himself of “hospital facilities” expects
that the hospital will attempt to cure him, not that its nurses or other employees will act on their
own responsibility.
Negligent credentialing claim established
The landmark negligent credentialing case was decided in 1965 by the Illinois Supreme Court in Darling
v. Charleston Community Memorial Hospital. In that case, a general practitioner who was on emergency
call improperly set a cast on a patient’s broken leg. The cast, which was wrapped too tightly, restricted
the patient’s circulation, resulting in necrosis. After numerous surgeries, doctors at another hospital ultimately amputated the patient’s leg. Although the general practitioner insisted that he had set between
200 and 300 legs, it turned out that the only fractures he had set personally since admission to the hospital’s medical staff involved two ankle injuries, one of which resulted in a nonunion. To make matters
worse, the physician couldn’t recall studying any orthopedic procedure textbooks in medical school or
within the past 10 years. And no one at the hospital ever had questioned or examined him concerning
his knowledge of fracture treatment.
In truth, the doctor in Darling did not know about the current procedures used to set a broken bone, and
the hospital never questioned his lack of knowledge. Although two competent and qualified board-certified orthopedic surgeons were on the medical staff, the doctor did not, nor did the hospital require him
to, consult with either specialist prior to setting the cast or after complications developed. The hospital
did not review the physician’s operative procedures or require him to bring them up to date. The patient
sued the doctor for malpractice, but he also sued the hospital, arguing that the hospital should have
• prohibited the doctor from performing the orthopedic work required in this case
• required the doctor to bring his operative procedures up to date
• trained its nurses to supervise the care and treatment provided to the patient and monitor
his condition
• required the physician to consult with a specialist, particularly after complications developed
The jury sided with the plaintiff and held the hospital liable for $150,000 (approximately
$761,000 in inflation-adjusted 2005 terms2). The hospital actually ended up paying $110,000
(approximately $558,000 in 2005 terms), with the negligent physician covering the remainder.
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er this C
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sid
Hospital required to pay a patient for corporate negligence
se
Con
CHAPTER 1
In Johnson v. Misericordia Community Hospital, a physician on a Wisconsin
hospital’s medical staff botched a hip surgery, causing paralysisth the
patients. The patient sued not only the physician who performed the surgery
but also the hospital, alleging that it failed to properly investigate the physician’s
credentials prior to appointing him to the medical staff—a case of corporate negligence.
The physician settled out of court, but the corporate negligence lawsuit against the hospital continued in the lawsuit, it was discovered that no one at the hospital had ever verified any of the information provided by the physician on his application for appointment. Although the hospital didn’t
have a credentials committee at the time the physician applied for medical staff privileges, its executive committee was in charge of handling physician applications. Had someone conducted even a
cursory investigation, they would have discovered the following:
• The physician’s privileges were restricted, and in fact revoked, at some hospitals
because of “flagrant bad practices.”
• The physician was never on the staff at some of the hospitals listed in his application
for appointment.
• Contrary to statements in his application, the physician was not board-certified or boardeligible in the field of orthopedic surgery.
• The physician had 10 malpractice suits filed against him, seven of which occurred prior
to his appointment on the hospital’s medical staff
• The majority of the physician’s peers were of the opinion that he was not qualified to
practice orthopedic surgery
The jury awarded the patient $315,000 (approximately $683,500 in 2005) for past and future personal injuries and $90,000 (approximately $195,500 in 2005) for past and future impairment of
earning capacity. The Supreme Court of Wisconsin upheld the verdict, holding the hospital responsible for its failure to scrutinize the credentials of a medical staff applicant.
10
NEGLIGENT CREDENTIALING LAWSUITS: STRATEGIES TO PROTECT YOUR ORGANIZATION
NEGLIGENT
C R E D E N T I A L I N G L AW S U I T S :
H I S T O RY
A N D E X P L A N AT I O N
The Supreme Court of Illinois upheld the verdict, concluding that hospital accreditation standards, state licensing regulations, and the hospital’s bylaws were sufficient evidence of the hospital’s independent duty to ensure quality patient care.
Notes
1. Historical information is from two sources:
Muller R W. The Changing American Hospital in the Twenty-first Century. The 14th Annual Herbert
Lourie Memorial Lecture on Health Policy No.26/2003. The Center for Policy Research at the Maxwell
School of Syracuse University, Syracuse, NY 13244.
Furrow BR, Greaney TL, Johnson SH, et al. Health Law, 2nd ed. West Publishing, St. Paul, MN 2000.
2. All adjustments for inflation are made using the conversion factors set forth at
http://oregonstate.edu/dept/pol_sci/fac/sahr/sahr/infcf16652005.xls, using the CPI-U-RS factor. (accessed
Aug 15, 2005.
NEGLIGENT CREDENTIALING LAWSUITS: STRATEGIES TO PROTECT YOUR ORGANIZATION
11
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