Hospitals and other providers that adopt¡Xbut then fail to follow¡Xtheir own staff credentialing standards can incur liability under a ¡§negligent credentialing¡¨ theory recently adopted by an Illinois appellate court. Providers that follow their credentialing standards when appointing a doctor to their staff do not incur such liability, even if the doctor then commits malpractice, the court held.

The lesson from this Illinois ¡§negligent credentialing¡¨ case, Frigo v. Silver Cross Hosp., No. 1-05-1240, 2007 WL 2736595 (Ill. App. Ct. Sept. 20, 2007), and similar cases in other states is simple: providers must exercise care and strictly follow their credentialing procedures when considering whether to appoint a doctor to their staff to avoid incurring unnecessary liability.

In the Illinois case, a hospital granted category II surgical credentials to a doctor. A patient sued both the hospital and the doctor for damages resulting from foot surgery performed by the doctor at the hospital, alleging that the doctor committed malpractice by performing elective bunion surgery before an ulcer on the foot had fully healed. The doctor¡¦s malpractice allegedly resulted in the amputation of the patient¡¦s foot. The patient sued the hospital for negligent credentialing, alleging that the hospital granted the doctor category II surgical privileges even though he did not meet the hospital¡¦s requirements for such privileges.

The plaintiff alleged that the hospital ignored its credentialing procedures because the doctor had not completed a 12-month podiatric surgical residency and was not board-certified as the hospital¡¦s bylaws and JCAHCO standards required.

The jury awarded the patient $7,775,668.02 in damages against the hospital. The hospital appealed, contending that Illinois law does not recognize negligent credentialing claims.

The hospital first argued that its credentialing process constituted privileged peer review information under a state statute that prohibits a plaintiff from seeking discovery of such peer review documents as proof of negligence. The court, however, ruled that the statute protects against disclosure of peerreview process mechanisms, such as investigations and deliberations leading to peer-review committee decisions about a doctor¡¦s performance. The statute does not, according to the court, prohibit discovery of information before the peer-review process begins, such as whether the hospital followed its own guidelines in granting staff privileges to a doctor. The court therefore held that the plaintiff was entitled to discover and use facts about the hospital¡¦s negligence in following its credentialing standards.

The hospital also argued that the Illinois Hospital Licensing Act immunized it from negligent credentialing liability. That statute says that hospitals have no liability for the acts, omissions, or decisions of any committee or person directly or indirectly responsible for staff privilege decisions or disciplinary actions against doctors.

The court, however, ruled that the statute immunizes hospitals from liability against doctors who disagree with a hospital¡¦s staff privilege and disciplinary decisions, but not liability resulting from the hospital¡¦s negligent failure to follow its credentialing standards.  Avoiding Liability for Negligent Credentialing The court cited a growing trend in other states recognizing negligent credentialing claims and other theories detailing a hospital¡¦s institutional duty to its patients. In recognizing the tort of negligent credentialing, the court said that a plaintiff must prove that:

  • The hospital failed to use reasonable care in granting staff privileges to a doctor whose treatment injured the plaintiff;
  • The doctor, while practicing pursuant to negligently granted staff privileges, breached the applicable standard of care; and
  • The hospitals negligent granting of staff privileges proximately caused the plaintiff¡¦s injuries.

In reviewing the evidence at trial, the court found that the plaintiff met all of these criteria. The hospital¡¦s credentialing criteria required a category II surgeon to have completed a surgical residency and become board certified. The doctor in question did not meet these or other criteria. The court also found enough evidence that the hospital¡¦s failure to follow its criteria proximately caused the plaintiff¡¦s injuries.

Providers should take at least some comfort in the court¡¦s distinction between negligent credentialing and medical malpractice. Just because a staff doctor commits malpractice does not make the hospital liable for negligently granting privileges to that doctor. Rather, a hospital only becomes liable for negligent credentialing if its failure to follow its own credentialing standards proximately caused a patient¡¦s injury.