Hospitals entitled to peer review protections in negligent credentialing claims

Plaintiffs must prove committees acted in bad faith, Tennessee court rules.

By Amy Lynn Sorrel — Posted May 25, 2009

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A Tennessee appeals court ruling helps preserve certain statutory peer review protections for hospitals when patients sue over allegedly questionable credentialing decisions made by peer review committees.

The case also highlights the dangers of such negligent credentialing claims, some experts say. Tennessee is among roughly 30 states that recognize these actions.

The ruling hinged on an interpretation of the state's peer review statute, which, like most states, shields hospitals and peer review committees from liability as long as their decisions are made in good faith.

But the plaintiff argued that such protection applied only to suits in which physicians -- not patients -- challenge privileging decisions. Christy L. Smith, after experiencing complications from weight-loss surgery, sued Centennial Medical Center in Nashville, Tenn., alleging that the hospital should not have granted privileges to the surgeon who operated on her.

Smith argued that immunizing hospitals from patient claims over credentialing issues conflicted with the peer review statutes' intent of encouraging hospitals to police incompetent physicians and protect patient safety.

The Tennessee Court of Appeals in an April 22 opinion rejected that rationale, finding that hospitals were entitled to liability protection from negligent credentialing actions, provided peer review committees acted appropriately.

"The qualified immunity policy is intended to encourage frank and thorough review of a doctor's fitness to practice medicine. The fact that an incorrect credentialing decision may have been made does not undercut this policy," Judge Andy D. Bennett wrote. In addition, "the mere fact that [the physician] may have committed malpractice does not mean that the hospital or the peer review committee was negligent in granting him privileges."

The decision means patients still have to prove a high standard of malice in order to pursue negligent credentialing claims, said Brian D. Cummings, who represented Centennial Medical Center. "If you have a good [peer review] process and follow it, and you have good people making these decisions, it makes sense there should be a heightened standard to challenge a decision after the fact."

Cummings pointed to similar court rulings by Texas' and Colorado's state Supreme Courts that found hospitals were entitled to qualified immunity under the states' peer review statutes, irrespective of who brought suit, patients or doctors.

Had the Tennessee court gone the other way, "it certainly would discourage [peer review] participation ... if it was too easy to second-guess a credentialing decision," he said.

George Nolan, Smith's attorney, said the decision makes it more difficult for plaintiffs to prove their cases and diminishes an important incentive for peer review committees to act in patients' best interest -- the threat of liability.

"You don't want peer review committees to be rubber stamps. You want them to carefully review a doctor's performance and if there's a problem, step in and correct it," he said. "If someone was careless, but wasn't trying to be mean about it, shouldn't they be held responsible for the consequences?"

The case heads back to a trial court, which will determine whether the hospital acted appropriately.

Other threats remain

That trial process still threatens to chip away at peer review confidentiality, depending on what kind of information the court requires the hospital to reveal to defend itself, said Mark R. Whitmore, a health care lawyer and partner with Bassford Remele in Minneapolis.

"Any time that confidentiality is undermined, quality of care suffers because you aren't going to have physicians willing to serve" on peer review committees, he said.

The appeals court emphasized that it did not have enough information to decide whether Centennial Medical Center acted in good faith. "That issue will require more proof from the hospital," and is up to the trial court to decide "based upon facts reasonably known or reasonably believed to exist" at the time of the credentialing decision.

The danger of that is, "once you get into questions of reasonableness, you may not have immunity at all," Whitmore said.

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Case at a glance

Do state peer review laws protect hospitals from negligent credentialing claims brought by patients?

A Tennessee appeals court said hospitals are immune from liability as long as they can show they acted in good faith.

Impact: Some experts say the ruling helps safeguard the peer review process. Others say the discovery process still poses a threat to peer review confidentiality.

Source: Christy L. Smith v. Leona M. Pratt, Court of Appeals of Tennessee

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