Hospital can be sued for credentialing doctor with questionable qualifications, Minnesota high court rules

Physicians fear that a recent Minnesota Supreme Court decision could compromise statutory peer review protections and taint physicians in medical liability cases that are tied to negligent credentialing claims.

For the first time, the high court recognized that patients can sue hospitals for allegedly granting privileges to doctors with questionable credentials. The unanimous decision adds Minnesota to a list of at least 25 other states that recognize negligent credentialing claims.

In their opinion, justices looked to some of those states when they concluded that hospital peer review committees have a duty to protect patients when they make privileging decisions. Existing peer review confidentiality measures can continue to protect those discussions, but nothing in the law prevents patients from using other outside information to make their cases, the court said. Attorneys say that could mean anything from prior lawsuits and state disciplinary records to divorce papers.

"Although the confidentiality provisions of [the peer review statute] present some obstacles in both proving and defending a claim of negligent credentialing, they do not preclude such a claim," the Aug. 16 opinion in Larson v. Wasemiller states.

Meanwhile, doctors worry that such claims will chip away at peer review confidentiality because hospitals will find it difficult to fight back without disclosing the details that go into credentialing decisions.

In that case, "physicians will be reluctant to get involved in peer review, and it really relies on that voluntary participation" for quality-of-care improvement, said Mark R. Whitmore, legal counsel for the Minnesota Medical Assn. The state medical society filed a friend-of-the-court brief in the case along with the American Medical Association/State Medical Societies Litigation Center and the Minnesota Hospital Assn.

Doctors also may find it tougher to obtain hospital privileges if facilities raise their standards or require physicians to carry more medical liability insurance, to reduce the risk of the facilities being sued, said attorney Robert M. Mahoney, who represented St. Francis Medical Center, the hospital involved in the lawsuit.

But plaintiff lawyers say the ruling reinforces hospitals' obligations to adhere to acceptable credentialing standards and ensure patient safety.

Hospitals generally are vigilant in making sure physicians are qualified before granting them privileges, said Terry L. Wade, a plaintiff attorney in the case. "But there are always exceptions where the law needs to set standards. And the standard the court set in Minnesota is whether it is reasonable for a doctor to have privileges at a hospital," he said.

Wade said the ruling does not force peer review panels to disclose protected materials, nor does it suggest that plaintiffs will have access to them.

"But if the information is publicly available, it would strike me that hospitals should be able to gather that in the credentialing process," he said.

How will ruling affect physicians?

In the Larson case, Wade said he discovered through court records that general surgeon James P. Wasemiller, MD, failed his surgical board exams three times and had several lawsuits filed against him before he performed gastric bypass surgery on Mary Larson in 2002.

Larson initially sued Dr. Wasemiller and his brother, general surgeon Paul S. Wasemiller, MD, who assisted in the surgery, for failing to properly diagnose and respond to complications that arose after the surgery. Both doctors deny the allegations.

Larson later added St. Francis Medical Center to the complaint, alleging that the hospital knew or should have known, before granting him privileges, that Dr. James P. Wasemiller posed a danger to patients. St. Francis Medical Center denied any wrongdoing.

The high court said Larson could pursue her case against the hospital, finding no conflict with the peer review statutes.

But in a concurring opinion, Justice G. Barry Anderson was hesitant about the absence of any conflict, given that doctors often are tentative about participating in peer review "aggressively and meaningfully." Though he agreed that Minnesota law permits patients to sue hospitals for not ensuring doctors' qualifications, Anderson was "skeptical of the efficacy of negligent credentialing litigation as a method of improving health care."

Doctors also worry that negligent credentialing claims will raise issues that generally are not admissible in medical liability cases.

"It allows plaintiffs to go out and find all the public 'dirt,' if you will, on a physician and say this doctor should never have been allowed to do surgery at the hospital," Whitmore said. "It unfairly taints the doctor because that information has nothing to do with whether the doctor complied with the standard of care."

Whitmore called the ruling particularly troubling because the court declined to address if the two actions -- the negligent credentialing claim and underlying medical liability claim -- would be tried together or separately.

But Wade said information about a physician's competence is "relevant to any patient deciding to have a doctor to perform surgery on him and to any hospital deciding whether a doctor should be allowed to perform surgery on patients."

The Larson case goes back to a trial court where the judge will decide whether to separate the negligent credentialing and medical liability claims. No hearing date has been set.