FAILURE OF INITIAL CREDENTIALING PROCESS
BACKGROUND: Physician negligently removed pin from hip. Physician failed
to disclose 10 pending malpractice cases; misrepresented denial and restriction of
privileges elsewhere. Lied about board certification. No investigation was made
of any information listed in incomplete application. Hospital failed to check
references which would have led to discovery of adverse information should
have or could have known. Med Staff Coordinator testified that information on
initial application had not been PSV.
DECISION: Hospital is responsible for information that would have been
revealed during proper credentialing, verification and peer review process.
Hospital has duty to exercise care in selection of medical staff. At minimum,
should require that application be complete and verify application statements,
especially core criteria, education, training and experience. Should solicit
information from peers, determine current licensure and inquire about any
challenges and malpractice history.
FAILURE TO HAVE PROPER SUPERVISION/LIABLE UNDER
CORPORATE NEGLIGENCE DOCTRINE
BACKGROUND: Independent podiatrist improperly treated patient;
medical records knew of pending malpractice claims; hospital did not
investigate.
DECISION: Hospital must use all information available to it when
evaluating credentials; even if information is obtained by department other
than MSO. Hospital has duty to protect patients from harm; to ensure
competency and evaluate quality of medical treatment rendered on
premise. Courts noted public’s perception that hospital is a health care
facility responsible for the quality of medical care and treatment rendered
within. Though podiatrist was an independent contractor, not employee,
hospital had a duty to screen, carefully select and periodically review
performance of all practitioners.
VIOLATION OF FEDERAL ANTITRUST LAWS/ANTI-COPETITIVE PEER
REVIEW
BACKGROUND: Dr. Patrick, solo practitioner, was member of only hospital in
town. MEC and peer review committee composed of former partners. He filed
antitrust lawsuit against physicians at Astoria Clinic, alleging they caused him to
lose hospital MS privileges as result of his decision not to join their clinic but
instead compete against them. Lower court decision, overturned by Supreme
Court, held that physicians were immune from antitrust liability even for bad fait
efforts under state action exemption.
DECISION: Physicians who participate in peer review could be held liable
under anti-trust theory. Supreme Court found that though state mandates
engagement in peer review, since the state was not involved in nor supervised
action peer review decisions, the exemption did not apply. Adverse credentialing
decisions and negative peer review are NOT immune from federal anti-trust laws.
Proceedings led to passage of HCQIA in 1986
DENIAL OF APPLICATION BASED ON EXCLUSIVE CONTRACT IS NOT A
RESTRAINT OF TRADE
BACKGROUND: Dr. Robinson alleged that hospital was an “essential facility” and
therefore denial of access created server handicap for entry to marketplace and sued
hospital and other thoracic surgeon after rejection of application. Hospital followed
objective criteria and bylaws; denial based on limited OR space, failure to meet academic
standards, participation in residency program. Dr. Robinson had privileges for open heart
surgery at 7 other hospitals. Denial did not prevent patients from slection him or
physician from referring to him.
DECISION: Neither hospital or surgical group had a monopoly; insufficient evidence of
specific anticompetitive intent, conspiracy or agreement to take joint action. Court noted
that 1) hospital’s policy of encouraging MS to concentrate practice at hospital; 2)
concerns regarding Dr. Robinson’s contributions to residency program and 3) concerns as
to alleged inability to work harmoniously with others, advanced hospital’s institutional
objectives for patient care and did not unreasonably restrain trade. Court upheld okay to
limit competition if consistently follow objective criteria (strategic plan, bylaws, medical
staff development plan, P&P, etc.) and/or competitive strategy to limit staff.
DISRUPTIVE BEHAVIOR MUST BE RELATED TO PATIENT CARE
BACKGROUND: Physician denied membership based on inability to
work with others, filed suit alleging standards were so vague and uncertain
as to allow for arbitrary or discriminatory application.
DECISION: Hospital may not permit exclusion on arbitrary or irrational
basis; but requirement for ability to work with others is permissible if that
inability presents a real and substantial danger to patient care. There must
be a link between conduct and potential effect on patient care.
DISRUPTIVE BEHAVIOR MAY BE CONSIDERED IF ADVERSELY
EFFECTS OPERATIONS
BACKGROUND: Privileges denied based on report from other facilities
re termination, restriction of privileges, competency and emotional
problems.
DECISION: Hospital has discretionary right to exclude physician whether
based on lack of proficiency or a personality if detrimental to the working
of the hospital (staff’s ability to perform jobs). Additionally, court should
not substitute its evaluation of such matters for that of BOD.
MANAGED CARE ORGANIZATION LIABLE FOR PRACTITIONERS ACTIONS
BACKGROUND: Surgeon accidentally perforated chest wall during breast biopsy,
causing hemothorax. Husband sued HMO and participating physician under theory of
ostensible agency following death of patient after alleged misdiagnosis. HMO
represented that participating providers were competent and evaluated up to six months
prior to be accepted on panel. Gave impression that MSO controls and is therefore liable
for care provided.
DECISION: Policy reasons for holding hospitals liable for actions of medical staff
members under theory of ostensible agency may be extended and equally applied to
HMO’s, based on limited provider list from which patient may select, selection of
practitioner by HMO, role of gatekeeper in accessing specialist; fact that patient does not
contract directly with physician but with HMO and mechanics of payment for services.
Court considered two factors: 1) whether patient looks to institution rather than
physician for care; 2) whether HMO holds out the physician as its employee. Court noted
“changing role of hospital in society creates likelihood that patients will look to
institution for care” and applied same to HMO.
MCO FAILURE TO CREDENTIAL
BACKGROUND: Malpractice by Dr. Witt, urologist during surgery. Court
reviewed relationship between physician and Total Health Care and limited
choice of providers.
DECISION: Finding an unreasonable risk of harm to subscribers if the physician
is incompetent, the Missouri court held that MCO have common law duty to
members to conduct reasonable investigation to ensure practitioners are
competent and capable. Extent of investigation can be determined on case by
case basis, but no investigation means duty has not been met. However, by
Missouri state statute, a health service corporate was immune from liability for
any negligence of a person or entity rendering health care serves to the
corporations members and beneficiaries, therefore, the Missouri Supreme Court
determined that an HMO is akin to a health service corporation and eligible for
same immunity. Summary judgment for Total Health Care was affirmed; upheld
defendant’s denial of responsibility under state immunity statue (Missouri).
MCO DUTY TO SELECT AND MONITOR
PROVIDERS/OSTENSIBLE AGENCY
BACKGROUND: Woman selected primary care provider from list of
participating physicians provided by IPA HMO. Malignant mole sample
not submitted for analysis of tissue histology. Delay in diagnosing
malignant melanoma resulted in metastatic cancer and subsequent death.
HMO promotions spoke to the quality of providers, represented as such.
DECISION: MCO liable through theory of ostensible agency. MCO has
non-delegable duty to select and retain only competent physicians. Court
found sufficient evidence to hold that provider was ostensible agent of
HMO using theories of corporate negligence and ostensible agency. Not
pre-empted by ERISA.
HCQIA PRESUMPTIOM OF GOOD FAITH PEER REVIEW/BURDEN
ON PHYSICIAN TO PROVE BAD FAITH
BACKGROUND: Committee including competitors found substandard
care; outside consultant agreed. Surgeon challenged summary judgment,
arguing bad faith.
DECISION: HCQIA presumption of good faith upheld. Hospital immune
from monetary damages under HCQIA.
NEGLIGENT CREDENTIALING AT REAPPOINTMENT
BACKGROUND: No deficiencies at Sharp Cabrillo but physician had
been summarily suspended at another hospital. Sharp Cabrillo did not
query other facilities.
DECISION: Hospital liable for physician’s action due to failure to request
date from others. Should have obtained more information at
reappointment.
INCOMPLETE APPLICATION
BACKGROUND: Applicant did not respond to requests for information
felt necessary to process. Application was not acted upon and no fair
hearing rights were afforded.
DECISION: Burden on applicant. Incomplete applications do not need to
be acted upon and/or may be denied.
FAILURE OF PEER REVIEW
BACKGROUND: Physician had history of unnecessary and negligent
surgery. Negligently performed inappropriate laminectomy on patient.
Proper peer review would have identified issues and required medical staff
action.
DECISION: Hospital has duty to assure quality care; to create mechanism
for review (to discover) inadequacies of staff members.
GOVERNING BOARD IS ULTIMATE AUTHORITY
BACKGROUND: Physician taken off backup panel for failing to accept
patient; BOD overturned hearing committee recommendation to reinstate
due to lack of substantial evidence.
DECISION: Governing board is ultimate authority.
DISRUPTIVE BEHAVIOR/ADVERSE EFFECT ON PATIENT CARE
BACKGROUND: Angry surgeon threw tantrum in OR during lumbar
laminectomy; slapped patient on butt to make a point.
DECISION: Hospital can revoke otherwise competent physician’s
privileges when disruptive behavior may adversely affect patient care.
GOVERNING BOARD IS ULTIMATE AUTHORITY
BACKGROUND: Patient sent home from ER after chest pain and died at
home. Family alleged negligence for failing to require proof of
professional qualifications, investigating same, character, background,
failure to exercise ordinary care in determining competence.
DECISION: Medical Staff (agents of the hospital) recommendation did
not relieve hospital (board) of liability if appointment was negligent.
FAILURE TO DISCLOSE
BACKGROUND: Ophthalmologist did not disclose all prior hospital
affiliations on application. Summarily dismissed based upon statement on
signature page which stated that “any significant omission is cause for
summary dismissal”.
DECISION: Hospital has responsibility to conduct careful credentialing
which requires full and complete disclosure by the application. Hospital
summary suspension upheld; burden is on the applicant to prove
qualifications.
IMPROPER REVIEW OF CLINCAL COMPETENCE
BACKGROUND: Misdiagnosed and performed inappropriate surgery.
Department of surgery failed to take action on two similar cases. Filing of
four lawsuits against Dr. Purcell and hospital prior to treatment of
Zimbleman for diverticulitis should have led to investigation.
DECISION: Hospital assumed duty to supervise competency of staff
physicians; responsible for actions of surgery department who acted on his
behalf. Hospital knew or should have known lacked skills to treat
condition in question; hospital failed to take action to curtail privileges.
INCOMPLETE APPLICATION
Failure to respond to request for information deemed necessary to process
the application.
INCOMPLETE APPLICATION
BACKGROUND: New applicant refused to authorize release of
information from other affiliations; hospital rejected incomplete
application; hearing held, denial upheld due to physician’s lack of
cooperation.
DECISION: Hospital may establish reasonable application requirements
as part of duty to credential; burden is on the applicant to comply and
provide information as requested or allow sufficient information to be
provided/gathered so as to allow for thorough evaluation of credentials
and qualifications, experience and history.
Darling v. Charleston Community Memorial Hospital (1965)
BACKGROUND: Failure to enforce rules/end of charitable immunity: 16yo
football player, FP improperly set orthopedic injury, failed to consult, nursing staff
did not monitor, resulted in transfer and amputation
DECISION: Hospital assume certain responsibility for car and duty to protect
patients. 1) Need for responsible credentialing, 2) Development of legal theory of
corporate negligence applied to hospitals. 3) Toppled doctrine of charitable
immunity.