Iowa Supreme Court throws out case after doctor's credentialing file is used in trial

A surgeon's credentialing file should not have been used as evidence during his employer's medical liability trial, the Iowa Supreme Court has ruled. Without the credentialing file, the plaintiff does not have sufficient evidence to pursue his claims, the high court said, thus throwing out the lawsuit (link).

The Iowa Supreme Court opinion -- in conjunction with an appeals court decision finding that credentialing files are protected by peer review laws -- is a victory for state health professionals, said Eric G. Hoch, an attorney who represented Mercy Hospital Medical Center, a defendant in the Supreme Court case.

"It's a very positive development for physicians and hospitals and their staff. One of the main benefits is [health professionals] can't be deposed or questioned about the credentialing process," he said. "That should afford some peace of mind to those individuals as well as protect the credentialing process."

The high court decision ends a nine-year court battle that moved up and down the judicial ladder and was heard twice by state Supreme Court justices.

The dispute started in 2002 when Dennis Cawthorn sued surgeon Daniel Miulli, DO, and Des Moines-based Mercy Hospital Medical Center. Cawthorn claimed that he experienced complications from two surgeries performed by Dr. Miulli. Mercy failed to investigate Dr. Miulli's qualifications properly and negligently extended him surgical privileges, according to Cawthorn's suit. During discovery, Cawthorn requested a copy of Dr. Miulli's credentialing file. Before trial, Dr. Miulli settled with the patient, but he denied any liability, according to Hoch.

Cawthorn's case against Mercy proceeded. During trial, hospital attorneys objected to evidence admitted from an Iowa Board of Medical Examiners investigation and a disciplinary hearing concerning Dr. Miulli. The objections were overruled. The plaintiff and defense both used information from Dr. Miulli's credentialing file as evidence. A jury awarded Cawthorn $10.5 million in damages.

The judge ruled that the award was too high and granted the hospital a new trial. Both parties appealed. In 2007, the Iowa Supreme Court concluded that Dr. Miulli's medical board investigation was confidential and should not have been used as evidence. The case was sent back to the trial court for a new trial.

In 2009, the Iowa Court of Appeals issued an opinion in a similar case that clarified the state's peer review law. In that case, judges ruled that credentialing files were protected from disclosure under Iowa statute. Citing the new opinion, attorneys for Mercy requested that Cawthorn's lawsuit be dismissed. Cawthorn appealed. He argued that because the hospital used information from Dr. Miulli's credentialing file during trial, Mercy could not now argue against the file's use. A district court ruled for the hospital. Cawthorn appealed to the Supreme Court.

The hospital is not barred from changing the course of its arguments, Iowa Supreme Court justices said in their Dec. 2 opinion. Furthermore, the court said Iowa's peer review privilege cannot be waived, meaning neither party can elect to use peer review-protected documents during trial.

At this article's deadline, an attorney for Cawthorn had not returned messages seeking comment.

The decision reinforces the state's peer review shield, Hoch said.

"We are pleased with the result. We believe it honors the statutory framework that is in place to protect peer review files -- in this case the credentialing file of the physician," he said.

The decision is in line with previous rulings by Iowa courts supporting the state's peer review law, said Jeanine Freeman, deputy executive vice president of legal affairs and policy development for the Iowa Medical Society. However, she noted that the decision is somewhat of a double-edged sword.

The decision makes it more difficult for plaintiffs to claim negligent credentialing of doctors, she said. They no longer can rely on a physician's credentialing file to prove his or her case and must find other evidence.

But the ruling also could hinder a doctor's access to his or her own credentialing file, she said. Because plaintiffs and defense attorneys are barred from using the files in court, it could weaken either party's case.

Overall, the Iowa Supreme Court ruling is helpful for hospitals and physicians and shows that the courts strictly back peer review protections, said Bill Miller, an Iowa attorney who practices health care law.

"It provides further assurance of the strength of the peer review statute and guidance of how peer review information should be handled" in future cases.