Negligent Credentialing/Privileging
Christopher Droubay
Snow Christensen & Martineau
Not a Doctor……

In 1958, Gerald Barnbaum graduated with a Bachelor’s Degree from the University of Illinois
College of Pharmacy. He worked as a pharmacist until 1976, when his license was revoked after he
and 10 other people were arrested for Medicaid fraud. That same year, he changed his name from
Gerald Barnbaum to Gerald Barnes, which was the same name as a practicing orthopedic surgeon,
and moved to California. In 1978, he got a job as a physician at the Pacific Southwest Medical
Group in Irvine. He worked for over a year until December 26, 1979, when 29-year-old John
Alfred McKenzie went to see Barnbaum. McKenzie complained of dry mouth, suddenly weight
loss, dizziness, and insatiable thirst. These symptoms point to uncontrolled diabetes, but instead of
sending him to the emergency room, Barnbaum told him to go home and not to eat candy.
McKenzie’s body was found two days later, after he died from complications related to diabetes.
Not a Doctor….
 Barnbaum was arrested and sentenced to three years for
involuntary manslaughter and spent 18 months in prison. One
would think that killing a patient and going to prison would be
enough for him to stop the charade, but once he was released on
parole, he started practicing medicine again. He was arrested
twice more for practicing medicine without a license and identity
theft and was sent back to prison.
 In 1995, he was out of prison and landed a job working at
Executive Health Group doing physicals and checkups, where
many of his patients were FBI agents. He was exposed within a
year and arrested. He pled guilty to mail fraud and was given 10
years. However, during a prisoner transfer, Barnbaum escaped
from the van, and again took up medicine while on the lam. He
was arrested weeks later and another two and a half years were
added to his sentence. He is currently set for release in 2018.
A Little History
 Pennsylvania Hospital (1754)
 Benjamin Franklin
 Not for Profit
 Primarily a place to recover from surgery
 Medical practice came later
 Charitable Immunity Doctrine
 Privatization and Self-Regulation
A Little History
 The healthcare system relies in large part on private
credentialing bodies to certify and approve practitioners and
healthcare organizations. This started in 1917 when the
American College of Surgeons 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 JCAHO. Today, JCAHO
accredits more than 15,000 healthcare organizations and
programs.
THE BASICS
 Credentialing —the process of obtaining, verifying, and
assessing the qualifications of a practitioner to provide care or
services in or for a health care organization.
• Educational and training background
• Work history
• Current licensure
• References, and
• Ability to perform the services / privileges requested.
THE BASICS
 Credentials are documented evidence of licensure, education
training experience, or other qualifications.
 Examples of credentials are:
 a certificate, letter, or experience that qualifies somebody to do
something. They can be a letter, badge, or other official
identification that confirms somebody's position or status.
The organization can obtain verification of the LIP’s education,
training, certificates and licensure from the primary source, and
maintain the file of information.
THE BASICS
 Privileging – the process whereby a specific scope and content of a
patient care services (that is clinical privileges) are authorized for a
healthcare practitioner by a health care organization, based on an
evaluation of the individuals credentials and performance.
• The specific patient care diagnostic or therapeutic procedures a physician or
non-physician practitioner is permitted to perform in a specific facility.
• Based on evaluation of the individual, the medical staff prepares
recommendations to grant, deny, continue, revise, discontinue, limit, or revoke
privileges, to the governing body.
• Only the Governing Body has the authority to grant:
1)
2)
Clinical privileges, after reviewing medical staff recommendations and
/ or
Medical Staff membership
THE BASICS
 A "privilege’ is defined as an advantage, right, or benefit that
is not available to everyone; the rights and advantages enjoyed
by a relatively small group of people, usually as a result of
education and experience.
THE BASICS
 Summary: Credentialing verifies the education and training.
This allows your organization to grant privileges to a licensed
independent provider to perform services for your
organization.
THE BASICS
Primary Source Verification (PSV):
• The verification of information directly from the original
source.
• Primary source verification is required to verify the accuracy of
education, training, licensure, exams, and board certification
information.
THE BASICS
Appointment and Re-appointment:
A.
Initial Appointment:
 The first appointment to the medical staff.
 Appointments may be no longer than 2 years, but may be less.
B.

Re-appointment:
The medical staff must periodically re-appraise all professionals appointed to the medical
staff / granted medical staff privileges to determine current competence.
 Purpose of appraisal: To determine suitability of continuing the medical staff membership
or privileges. Reappraisal is to be conducted. Without renewal, practitioner is practicing
without privileges (expired privileges).
 The medical staff appraisal procedures must evaluate each individual practitioner’s
qualifications and demonstrated competencies to perform task / privileges.
Legal Basics
 Different Theories of Liability are utilized
 Negligence
 Respondent Superior (Let the Master Answer)
 Apparent Agency
 Hospital-based physician, i.e., anesthesiologist, was thought to be a
hospital employee and therefore hospital is responsible for physician’s
negligence
 Direct Liability
 Including Negligent Credentialing
 Intentional Conduct
Direct Liability- Negligent Credentialing
 Hospital issued clinical privileges to an unqualified
practitioner who provided negligent care
 Hospital, along with its medical staff, is required to exercise
reasonable care to make sure that physicians applying to the
medical staff or seeking reappointment are competent and
qualified to exercise the requested clinical privileges. If the
hospital knew or should have known that a physician is not
qualified and the physician injures a patient through an act of
negligence, the hospital can be found separately liable for the
negligent credentialing of this physician
Legal Process in Utah
 DOPL Prelitigation
 Pleadings
 Discovery
 Interrogatories
 Requests for Production
 Depositions
 Trial
 Appeal
The First Case- Darling
 Darling v. Charleston Community Memorial Hospital (1965)
 First case in the country to apply the Doctrine of Corporate
Negligence
 Case involved a teenage athlete who had a broken leg with
complications and was treated by a family practitioner
 Leg was not set properly and patient suffered permanent
injury
 Hospital claimed no responsibility over the patient care
provided by its staff physician
Darling
 Court rejected this position as well as the charitable
immunity protections previously provided to hospitals
 Part of the basis for the decision was the fact that hospital
was accredited by the Joint Commission and had
incorporated the Commission’s credentialing standards into
its corporate and medical staff bylaws
Darling
 These standards reflected an obligation by the medical staff
and hospital to make sure physicians were qualified to
exercise the privileges granted to them
 Physician was found to be negligent
 The medical staff and hospital’s decision to give privileges
to treat patients with complicated injuries to an unqualified
practitioner directly caused the patient’s permanent injuries.
Therefore, the hospital was held liable for the damages
Johnson
 Johnson v. Misericordia Community Hospital
 It was alleged that a physician on a Wisconsin hospital’s medical
staff botched a hip surgery, causing paralysis. 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.
Johnson
 The Physician’s privileges were restricted, and in fact revoked, at
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some hospitals because of “fragrant 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 board-eligible in the field of orthopedic
surgery.
The physician had 10 malpractice suits filed against him, seven of
which occurred prior to his appointment at the hospital
Peers believed him to be unfit
Frigo
 Frigo v. Silver Cross Hospital (2007)
 Frigo involved a lawsuit against a podiatrist and Silver
Cross
 Patient alleged that podiatrist’s negligence in performing a
bunionectomy on an ulcerated foot resulted in osteomyelitis
and the subsequent amputation of the foot in 1998
Frigo
 The podiatrist was granted Level II surgical privileges to
perform these procedures even though he did not have the
required additional post-graduate surgical training required
in the Bylaws as evidenced by completion of an approved
surgical residency program or board eligibility or
certification by the American Board of Podiatric Surgery at
the time of his initial appointment in 1992.
Frigo
 Frigo argued that because the podiatrist did not meet the
required standard, he should have never been given the
privileges to perform the surgery.
 She further maintained that the granting of privileges to an
unqualified practitioner who was never grandfathered was a
violation of the hospital’s duty to make sure that only
qualified physicians are to be given surgical privileges.
 The hospital’s breach of this duty caused her amputation
because of podiatrist’s negligence.
Frigo
 Jury reached a verdict of $7,775,668.02 against Silver Cross
 Podiatrist had previously settled for $900,000.00
 Hospital had argued that its criteria did not establish nor was
there an industry-wide standard governing the issuance of
surgical privileges to podiatrists
 Hospital also maintained that there were no adverse
outcomes or complaints that otherwise would have justified
non-reappointment in 1998
Frigo
 Court disagreed and held that the jury acted properly because the
hospital’s bylaws and the 1992 and 1993 credentialing
requirements created an internal standard of care against which
the hospital’s decision to grant privileges could be measured
 Court noted that Dr. Kirchner had not been grandfathered
and that there was sufficient evidence to support a finding
that the hospital had breached its own standard, and hence,
its duty to the patient
 This finding, coupled with the jury’s determination that Dr.
Kirchner’s negligence in treatment and follow up care of
Frigo caused the amputation, supported jury’s finding that
her injury would not have been caused had the hospital not
issued privileges to Dr. Kirchner in violation of its standards
Frigo
 In Frigo, hospital’s attempt to establish that duty was met by
showing, through the peer review record, that podiatrist had
no patient complaints or bad outcomes was denied because
prohibition on admissibility into evidence was absolute.
 Court stated, however, that this information was somewhat
irrelevant because the Hospital clearly did not follow its own
standards.
Meyer
 In Meyer, et al. v. Health Plan of Nevada, Inc., et al., Case
No. A5832799 (Clark County, NV), three plaintiffs brought
claims for common law negligence and loss of consortium
against the Plans, as well as United Healthcare Services Inc.
and other affiliated companies, claiming that they contracted
Hepatitis C after receiving treatment from Dr. Dipak Desai at
the Endoscopy Center of Southern Nevada (Clinic). The
factual support for the plaintiffs’ claims emanated from the
Southern Nevada Health District tying the outbreak to
“unsafe injection practices,” including the alleged re-use of
syringes and medication vials, at the Clinic and other clinics
owned by Desai.
Meyer
 Plaintiffs alleged the Plans had a duty to “direct, evaluate, and
monitor the effectiveness of healthcare services provided by
the Clinic to [their] insureds,” including to establish and
implement a “quality assurance program designed and
utilized to provide quality health care services.” Plaintiffs also
contended that the Plans breached that duty because they
knew, or should have known, about the substandard
conditions and unsafe practices at Desai’s Clinics for multiple
reasons.
Meyer
 (1) Desai had a reputation for performing colonoscopy
procedures faster than any other physician in the area;
 (2) a competing doctor allegedly reported incidents of
malpractice to HPN years before the incident;
 (3) HPN allegedly paid Desai too little to perform the
procedures at any profit; and
 (4) in 1992, HPN dropped Desai from its network citing
quality concerns, yet reinstated him five years later. Plaintiffs
further contended that the Plans breached their duties to the
plaintiffs by failing to discover the improper conduct and
prevent plaintiffs from receiving treatment form Desai.
Meyer
 The Plans argued that no common law duty-imposed obligations
apply above and beyond Nevada’s regulatory requirements and
that they complied with all Nevada statutes because their quality
improvement programs were accredited by the National
Committee for Quality Assurance (NCQA) as “commendable,”
meaning a plan “meets or exceeds [NCQA’s] rigorous
requirements for consumer protection and quality improvement.”
Moreover, the Plans argued that the Clinic was accredited by the
Accreditation Association for Ambulatory Health Care (AAAHC),
pursuant to which the AAAHC conducted on-site inspections of
the Clinic and interviewed Clinic staff. Based upon meeting those
industry-standard accreditations, the Plans argued that they could
not have breached any duty as a matter of law.
Meyer
 Based upon meeting those industry-standard accreditations,
the Plans argued that they could not have breached any duty
as a matter of law. The court rejected that argument and the
jury found the Plans to be negligent for failing to properly
monitor Desai’s practice and awarded $24 million in
compensatory damages and assessed a total of $500 million in
punitive damages against both companies.
Meyer
 On appeal, the court noted that it had not formally
recognized the tort of negligent credentialing but that 40
years earlier it had observed that hospitals have a duty to take
steps to ensure patient safety in the process of accreditation
and granting of privileges. The court also noted that it
recognizes analogous torts, such as negligent selection or
hiring of an independent contractor. Finally, the court
acknowledged that at least 30 other states recognize the tort
of negligent credentialing.
Meyer
 The Court concluded:
 Based on these authorities, we are persuaded that the "gradual
evolution" of the common law supports the recognition of the
tort of negligent credentialing. Sacco, 271 Mont. at 234, 896
P.2d at 426. We therefore recognize negligent credentialing as a
valid cause of action in Montana. Similar to a medical
malpractice claim, a plaintiff in a negligent credentialing action
must establish the following elements: "(1) the applicable
standard of care, (2) the defendant departed from that standard
of care, and (3) the departure proximately caused plaintiff's
injury." Estate ofWillson [v. Addison, 2011 MT 179, ¶ 17, 361
Mont. 269, ¶ 17, 258 P.3d 410, ¶ 17].
Brookins v. Mote
 In Brookins v. Mote, 2012 MT 283, ___ P.3d ___ (not yet
released for publication), an expectant mother hired an
obstetrician who maintained a practice in his home. The
obstetrician ("Dr. Mote") had previously resigned his
position at Mineral Community Hospital ("the Hospital")
and pleaded guilty to misdemeanor sexual abuse of a
child. The Montana Board of Medical Examiners had placed
the doctor on probation and prohibited him from treating
minor patients unless a third party was present. Aware of
these facts, the Hospital declined to rehire him as an
employee but did extend credentials for him to use the
Hospital's facilities as an independent physician.
Brookins
 Medical problems persisted during the pregnancy and after
delivery, and a medical malpractice action was filed against
the Hospital and Dr. Mote. The complaint alleged that the
doctor had had unauthorized sexual contact with the baby
during delivery, examination, and subsequent
circumcision. A claim for negligent credentialing was
asserted against the Hospital. Following a settlement with
Dr. Mote, the trial court granted summary judgment for the
Hospital.
Basis of Negligent Credentialing Cases:
 Negligent information gathering and verification
 Failure to follow reasonable internal credentialing procedures
(Bylaws)
 Failure to follow standards of accreditation, licensing, CMS
Conditions of Participation, State regulations on Peer Review,
or other applicable requirements
Basis of Negligent Credentialing Cases:
 Failure to assess the credentialing information reasonably by the
medical staff
 Negligent granting or failure to limit privileges to an
unqualified physician
 Failure to take appropriate, remedial or corrective action based
on the credentialing/privileging information
Basis of Negligent Credentialing Cases:
 Documentation
 “If it wasn’t documented, it wasn’t done.”
 Pitfalls
 Scant documentation
 Missing documentation
 Evidence of Evaluative Process
 Forms not checked off, dated, or signed
 Incomplete applications
Basis of Negligent Credentialing Cases:
 Desperation (I need a warm body)
 Don’t be rushed into the appointment process
Utah Law
 Archuleta v. St. Mark’s Hospital
 The patient, Tina Archuleta, had laparotomy surgery in 2005,
which was performed by Dr. R. Chad Halversen at St. Mark’s
Hospital. Two days later, Archuleta was hospitalized with severe
pain and complications from the surgery, and in the next year, she
had over six corrective surgeries. In her lawsuit, Archuleta
asserted a claim against the hospital for negligent credentialing of
Halversen, based on the hospital’s alleged failure to properly
screen or review the surgeon’s competency, skills and abilities or
the hospital’s allegedly allowing a known incompetent surgeon to
access its surgical facilities. The district court rejected that claim
on statutory grounds, and Archuleta appealed.
Archuleta vs. St. Marks Hospital
 Bad facts often make bad law
 District Court dismisses negligent credentialing claim based
on three Utah statutes: 58-13-5(7), 58-13-4, 26-25-1
Archuleta vs. St. Marks Hospital
 Patient Archuleta appeals to Utah Supreme Court
 Utah Supreme Court reverses District Court and creates
new cause of action in Utah of negligent credentialing on a 32 vote
 Majority Supreme Court opinion states that “the plain
language of the statutes does not bar a negligent credentialing
claim”
 Strong minority opinion that the plain language of these
statutes does bar negligent credentialing claims
What Do You Think?
 Plain language of the statute 58-13-5(7)
 “(7) An individual who is a member of a hospital
administration, board, committee, department, medical staff,
or professional organization of health care providers . . . .
And any hospital, other health care entity or professional
organization conducting or sponsoring the review, is immune
from liability arising from participation in a review of a
health care providers professional ethics, medical
competence, moral turpitude or substance abuse.”
Archuleta vs. St. Marks Hospital
 The suit involved the interpretation of Utah Code §§ 58-13-5(7),
58-13-4, and 26-25-1, all part of the state’s statutory scheme
governing health care information. The Supreme Court addressed
each statute section in turn. The first provision, Utah Code § 5813-5, compels a health care facility to report certain events, such
as the termination of employment or restrictions of privilege for
cause, violations of professional standards or ethics, or
incompetency, that affect a licensed health care provider’s practice
or status.
 The court held that the plain language of § 58-13-5 shows that it
involves peer review. “The immunity contemplated under the
statute operates between a doctor whose credentials are under
review and the suppliers of information and decision-makers; it
does not contemplate immunity between a patient and a hospital,”
the court said.
Archuleta vs. St. Marks Hospital
 The second provision, § 58-13-4, grants immunity to health
care providers that sponsor or make decisions regarding the
proper use of facilities, the quality and cost of health care,
ethical standards, or performance of services. The court
found that the legislature expressly used language in § 58-134 that excluded patients’ claims regarding care. “The
credentialing determination is a decision regarding a doctor’s
fitness to provide patient care—and is clearly covered by the
language of the exception that protects patients’ claims
regarding provision of that care,” the court held. -
Archuleta vs. St. Marks Hospital
 The court then found that the third provision, § 26-25-1,
which grants immunity for the dissemination of information
or materials, bolstered the “plain language reading of limited
immunity” of the other two code sections. “Again, under the
plain language of this section, the legislature’s grant of
immunity relates to the dissemination of information, not to
patient care.”
Legislative Remedy
 Utah health care entities and health care providers had relied
on this language for decades to bar a claim for negligent
credentialing – in fact, Utah courts had as well until the
Archuleta ruling
 Only way to really change the Supreme Court common law
creation of this claim was to go back to the Legislature to
clarify
 Strong coalition of all major health care associations, led by
UHA, supported S. B. 150
S.B. 150 – Negligent Credentialing
 Concise and clear language is the best
 S.B. 150 is one of the shortest laws ever passed in Utah
 S.B. 150 says in total “It is the policy of this state that
the question of negligent credentialing, as applied
to health care providers in malpractice suits, is not
recognized as a cause of action.”
Legislative Debate
 “Worst” Senate debate, got off track “hospitals will now hire
pedophile physicians”
 Passed Senate on votes of 21-6 and 18-4
 “Best” House debate of over an hour, very good discussion
from both states as to the legal, practical and financial
implications of this bill.
 Passed House 54-20
Governors Reaction
 Normally when you pass bills by a veto proof (2/3 majority)
the odds are very high that a Governor will sign the bill
 Governor waited until near the end of his signing period to
sign this bill due to strong lobbying of him by opponents of
the bill
Media Reaction
 There was a fair amount of media interest in this bill –
mainly due to trial lawyers opposition to the bill There were
a number of newspaper articles and editorials critical of the
bill
 Coverage was generally fair when the media worked to get
both sides of the story
Plantiffs Lawyers Reaction
 Opposed the bill all the way to the end
 They will now look to the courts for a new remedy
 Current make up of Utah Supreme Court gives them hope
that under the right case they may be able to overturn S.B.
150 on constitutional grounds under the “open courts”
provision of the Utah Constitution
 As with all legislation that has passed the legislation, it is the
state law unless, or until, overturned or interpreted
differently by the Utah Supreme Court
Plantiff’s Lawyer Reaction
 Don’t worry about that – prior laws we have passed have
generally been upheld, and it has taken as long as 17 years for
the “right” case to get to the Supreme Court
 Supreme Court can’t just rule on a law, it has to come to
them through the normal court process, which can take years
if not decades, as the history of negligent credentialing shows
Nothing to Worry About?
 For your own financial, reputational, operational and legal
benefit, continue to have a very robust credentialing process
to weed out or stop problem providers
 Negligent Credentialing goes far beyond direct causes of
action
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Respondent Superior
Apparent Authority
Fair Hearing Issues
Other types of lawsuits
PATIENT CARE AND SAFETY
 Don’t be the case that overturns the Statute.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 Kadlec Medical Center, in Richland, Washington, brought suit
against LAA, the LAA shareholders, and Lakeview Regional
Medical Center (“defendants”) because they failed to disclose Dr.
Berry’s on-duty use of narcotics in response to Kadlec’s reference
request.
 Dr. Robert Berry, an anesthesiologist and former shareholder of
LAA, worked at Lakeview Medical until he was caught using
Demerol at work. He failed to answer a page while on-duty at
the hospital and he was discovered in the call-room, asleep,
groggy, and unfit to work. He was fired soon thereafter.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 After being terminated by Lakeview
Medical and LAA, Dr. Berry sought
work at Kadlec Medical Center through
Staff Care.
 Upon receiving his application, Kadlec
began its credentialing process and
examined a variety of materials,
including referral letters from LAA and
Lakeview Medical.
 LAA’s Dr. Preau and Dr. Dennis, two
months after firing Dr. Berry for his onthe-job drug use, submitted referral
letters for Dr. Berry to Staff Care, with
the intention that they be provided to
future employers.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 The letter from Dr. Dennis stated that he had worked with Dr.
Berry for four years, that he was an excellent clinician, and that
he would be an asset to any anesthesia service.
 Dr. Preau’s letter said that he worked with Berry at Lakeview
Medical and that he recommended him highly as an
anesthesiologist.
 Dr. Preau’s and Dr. Dennis’s letters were submitted on June 3,
2001, only 68 days after they fired him for using narcotics while
on-duty and stating in his termination letter that Dr. Berry’s
behavior put “patients at significant risk.”
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 Kadlec also sent Lakeview Medical a request for credentialing
information about Dr. Berry. The request included a detailed
confidential questionnaire, a delineation of privileges, and a signed
consent for release of information.
 Lakeview Medical responded to the requests for credentialing
information about 14 different physicians. In 13 cases it responded
fully and completely to the request; however, the response concerning
Dr. Berry was handled differently. Lakeview Medical drafted a short
letter that stated:
This letter is written in response to your inquiry regarding [Dr. Berry].
Due to the large volume of inquiries received in this office, the following
information is provided.
Our records indicate that Dr. Robert L. Berry was on the Active
Medical Staff of Lakeview Regional Medical Center in the field of
Anesthesiology from March 04, 1997 through September 04, 2001.
If I can be of further assistance, you may contact me at (504) 867-4076.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
The letter did not disclose LAA’s termination of Dr. Berry; his on-duty drug use; the
investigation into Dr. Berry’s undocumented and suspicious withdrawals of Demerol that
“violated the standard of care”; or any other negative information.
 Kadlec then credentialed Dr. Berry, and he began working there.
Shortly thereafter, Dr. Berry was in a car accident
and suffered a back injury. After the accident, nurses began to
notice he appeared sick and exhibited mood swings.
Several months later, Dr. Berry gave a patient too much
morphine during surgery, and she had to be revived using
Narcan. The neurosurgeon was irate about the incident.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 On November 12, 2002, Dr. Berry was assigned to the operating
room beginning at 6:30 a.m. He worked with three different
surgeons and multiple nurses well into the afternoon.
 According to one nurse, Dr. Berry was “screwing up all day” and
several of his patients suffered adverse affects from not being
properly anesthetized.
 Kimberley Jones was Dr. Berry’s fifth patient that morning. She
was in for what should have been a routine, fifteen minute tubal
ligation. When they moved her into the recovery room, one
nurse noticed that her fingernails were blue, and she was not
breathing. Dr. Berry failed to resuscitate her, and she is now in a
permanent vegetative state.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 Dr. Berry confessed he had been using Demerol since his
car accident and that he had become addicted to Demerol.
 Jones’ family sued Dr. Berry and Kadlec, and both Dr.
Berry’s and Kadlec’s insurers settled the claims.
 In this case, Kadlec and its insurer have filed suit against
LAA, Dr. Dennis, Dr. Preau, Dr. Parr, and Lakeview
Medical alleging intentional misrepresentation, negligent
misrepresentation, strict responsibility misrepresentation,
and general negligence.
Kadlec Medical Center v.
Lakeview Anesthesia Associates (“LAA”)
 In the lower court, a jury found Lakeview Medical and the three
shareholders/doctors of LAA liable. The court held that, in order to
protect future patients of an impaired physician, Lakeview Medical and
its physicians had a duty to disclose Dr. Berry’s impairment to a second
hospital where the physician relocated and applied for privileges.
 On appeal, the Fifth Circuit Court of Appeals held that:
 the defendants, after choosing to write referral letters, assumed a
duty not to make affirmative misrepresentations in the letters.
 the doctors’ reference letters were misleading, while the letter from
Lakeview Medical was not.
 the defendants had no affirmative duty to disclose negative
information about Dr. Berry in their referral letters.
 Lakeview Medical did not breach any duty owed to Kadlec, and
therefore the judgment against it was reversed.
 Although Lakeview Anesthesia Associates (LAA) put Dr.
Berry on notice and ultimately fired him for use of Demerol
and endangering patients, partners wrote glowing letters of
recommendation in respone to Kadlec’s peer reference
request.
 Provide correct information when responding to verification
requests
 Don’t omit key information when providing verifications
 Address letter to Credentialing and/or MEC
 Sign as Agent of MEC
Additional Pointers:
 Do not feel the need to stay within the form used
for the reference request;
 Do not respond to verbal requests for references
or provide information via email or
telephonically;
 Confirm every answer made with documentation
in file; and
 Do not rush to complete the reference request and
do have it reviewed before it is submitted.
Beyond “Traditional” Negligent Credentialing
Poliner v. Texas Health Systems
(5th Cir. 2008)
Multi-Million Damages Award to physician
reversed by appeals court. Hospital and Peer
Review Committee Member entitled to immunity
where Hospital complied with HCQIA,
notwithstanding failure to comply with Hospital
Bylaws.
Poliner v. Texas Health Systems
(5th Cir. 2008)
Facts:
 Dr. Poliner, cardiologist, was granted temporary
privileges at Hospital in 1996 and obtained full
privileges in October 1997. However, questions about
quality of care began to arise in September 1997
following a patient death after procedure in cath lab.
 Dr. Poliner’s cases were under review by Clinical Risk
Review Committee (“CRRC”) when, on May 12, 1998,
he misdiagnosed a patient and performed angioplasty
to wrong artery, leaving the blocked artery untouched.
Poliner v. Texas Health Systems
(5th Cir. 2008)
 The next day, on May 13, 1998, Dr. Knochel, head of
Department of Internal Medicine, requested Dr.
Poliner to agree to “abeyance” for fourteen days to
allow investigation. Hospital Bylaws required
consent.
 Dr. Knochel told Dr. Poliner that if he refused to agree
to abeyance, he would suspend privileges.
 Dr. Knochel testified at trial that at time of
compulsory abeyance, he did not have enough
evidence to determine if Dr. Poliner was a present
danger to patients.
 On June 12, Hospital suspended Dr. Poliner’s
privileges.
Poliner v. Texas Health Systems
(5th Cir. 2008)
Issue:
 Damages at trial based solely on forced abeyance of
May 13, 2009.
 Jury found no agreement as required by Hospital
Bylaws.
 Jury found abeyance did not meet HCQIA standards
for 14 day suspension in case of health emergency
because Dr. Knochel testified that he did not have
enough information to determine if Dr. Poliner was a
present danger.
Poliner v. Texas Health Systems
(5th Cir. 2008)
Holding:
(1) HCQIA immunity applied.
(2) 14 day HCQIA requirement satisfied - decision
made before May 14 even though Hospital did
not request Poliner’s consent to extension of
abeyance until day 15.
(3) Hospital met “imminent danger” standard
based upon CRRC’s determination that Poliner
had provided substandard care in half of cases
reviewed plus seriousness of mistake in clinical
judgment resulting in misdiagnosis and error in
treatment of patient the day before the abeyance.
Poliner v. Texas Health Systems
(5th Cir. 2008)
(4) HCQIA “reasonableness requirements” were
intended to create objective standard of
performance, rather than subjective good faith
standard.
(5) Focus of reasonableness standard is not whether
peer review committee’s decisions were correct
or even whether peer review committee had bad
motives. Instead, focus should be on whether
decision was reasonable based upon facts known
at that time.
Poliner v. Texas Health Systems
(5th Cir. 2008)
Lessons Learned:
1. Be diligent about time limitations for emergency
suspensions.
2. Emergency suspensions based upon “imminent
danger” must be based on reasonable belief and
based upon facts.
Beyond “Traditional” Negligent Credentialing
Rebecca, a surgical nurse, filed a suit against Dr. Michael and St. Vincent’s Hospital. Ms.
Farr alleged Dr. Michael gripped her in a bear hug, held on to her while she thrashed to
get away, rubbed his body against her chest, and actually reached down into her scrub top
and pulled it away from her body so that he could stare down at her chest.
Previously, at a different hospital, Dr. Michael had taken a staple gun and stapled a
nurse’s forehead and forearm when she angered him.
Ms. Farr is suing St. Vincent’s for its negligent hiring, training, and retention of Dr.
Michael.