Negligent Credentialing of Physicians: Increased Liability for Hospitals

The Louisiana Third Circuit recently held in Billeaudeau v. Opelousas General Hosp. Authority, 189 So. 3d 561 (La. App. 3d Cir. 2016) that a claim for “negligent credentialing” of a physician by a hospital does not constitute medical malpractice subject to the terms of the Louisiana Medical Malpractice Act (“MMA”), La. R. S. §40:1231.1, et seq., thereby exposing hospitals to liability beyond the $500,000 damages cap imposed by the MMA. The holding in Billeaudeau represents a departure from previous jurisprudence on the matter. The Louisiana Supreme Court is to review the decision, and if upheld, then hospitals will face increased liability in the form of negligent credentialing claims. Billeaudeau v. Opelousas Gen. Hosp. Auth., 2016-0846 (La. 6/28/16). Accordingly, out of an abundance of caution we recommend reviewing hospital credentialing policies and procedures to minimize the risk of incurring potentially costly negligent credentialing lawsuits.

CASE NOTE

In Billeaudeau, an injured stroke patient’s family members initiated an action under the MMA against the emergency room (“ER”) physician who had misdiagnosed the patient. In addition to filing a request for a medical review panel, plaintiffs concurrently brought suit in general negligence against the hospital, Opelousas General Hospital Authority (“Opelousas General”), for negligent credentialing of the ER physician, whom plaintiffs alleged was not qualified to practice emergency medicine. On a motion for summary judgment, plaintiffs argued that Opelousas General’s decision to grant credentials to the ER physician was an administrative decision, not a medical one, and thus, the terms and limitations of the MMA were inapplicable to the claim against the defendant-hospital. The trial court granted the motion, holding that the demands against Opelousas General for negligent credentialing fell outside the scope of the MMA.

The defendant-hospital appealed, asserting the following three arguments in favor of overturning the lower court’s decision:

1. The lower court’s holding was contrary to a prior holding by the Third Circuit in Plaisance v. Our Lady of Lourdes Regional Medical Center, Inc., 47 So. 3d 17 (La. App. 3d Cir. 2010), writ den., 52 So.2d 904 (La. 2011), where the court found that the plaintiff’s claim for negligent credentialing in that instance constituted a malpractice claim within the definition of the MMA;

2. Contrary to the lower court’s findings, analysis of the plaintiffs’ negligent credentialing claim under Coleman v. Deno, 813 So.2d 303 (La. 2002), supported a finding that the claim against Opelousas General is governed by the MMA; and

3. The MMA’s definition of “malpractice” includes “all legal responsibility of a health care provider arising from acts or omissions…in the training or supervision of health care providers…”, which is meant to encompass negligent credentialing.

The Third Circuit rejected these arguments, finding that the plaintiffs’ claim that the hospital negligently credentialed the ER physician was not claim of “malpractice” under the MMA and as such was not subject to the MMA, including the cap on damages found in La. R.S. §40:1231.2 (B)(1). In so doing, the court held 1) that Plaisance is distinguishable from the case before it, 2) that under the Coleman framework, the negligent credentialing claim presented by plaintiffs is not a claim of malpractice and 3) that the legislative history of the MMA supported the view that the legislature intentionally excluded negligent credentialing from the definition of “malpractice.”

The court distinguished Plaisance within its discussion of the Coleman factors, which formed the crux of its analysis. The Supreme Court in Coleman identified the following factors that must be considered when analyzing whether certain conduct by a qualified health care provider constitutes “malpractice” as defined under the MMA:

1. whether the particular wrong is “treatment related” or caused by a dereliction of professional skill;

2. whether the wrong requires expert medical evidence to determine whether the appropriate standard of care was breached;

3. whether the pertinent act or omission involved assessment of the patient’s condition;

4. whether an incident occurred in the context of a physician-patient relationship, or was within the scope of activities which a hospital is licensed to perform;

5. whether the injury would have occurred if the patient had not sought treatment; and

6. whether the tort alleged was intentional.

Notably, “[b]efore analyzing the case in light of the Coleman factors,” and signaling its reluctance to accept the arguments made by Opelousas General, the court purposefully noted “the difficulty of applying these factors to a claim for negligent credentialing, which is not a purely medical decision.” Billeaudeau, 189 So. 3d at 565. Despite the acknowledged difficulty in applying these factors to a negligent credentialing case, the court systematically addressed each factor in making its determination.

The court devoted considerable discussion to the first Coleman factor, as a means of distinguishing Plaisance. In Plaisance, the plaintiff claimed that the hospital was negligent in originally credentialing a physician, and subsequently allowing the physician to retain his credentials in light of multiple allegedly substandard medical procedures that had been performed on the patient-plaintiff. In that case, the same court had found that the wrong was treatment related because “it required the court to review the treatment that the physician provided to that plaintiff, and the hospital’s decisions in light of the plaintiff’s allegations of substandard care.” Billeaudeau, 189 So. 3d at 565.

In contrast, the court found that in the instant case, the wrong was not “treatment-related,” and so the first Coleman factor weighed against treating the claim as one for malpractice. The court noted that, unlike Plaisance, the case before it did not require review of the patient’s treatment to determine whether Opelousas General acted negligently in hiring the ER physician, suggesting that in Plaisance, the retention of credentials in light of substandard care was critical in tipping the scales in favor of considering the act “malpractice.”

As for the second factor, the court noted that although expert testimony would be required to determine whether the ER physician was qualified to practice emergency medicine, the expert testimony was of a different nature than the type of testimony that was required in Plaisance. The court explained that the expert testimony regarding the applicable standard of care in the present case would address the hospital’s decision-making process in evaluating the qualifications necessary to work as an ER doctor, not the proper treatment and diagnosis of a potential stroke patient in an ER setting.

In that same vein, the court found that the third factor weighed against finding malpractice, because the analysis of the hospital’s credentialing methods did not require an assessment of the stroke-patient’s condition.

The fourth factor was the only factor the court found plainlyweighed in favor of characterizing the action as malpractice, since credentialing is within the scope of activities that a hospital is licensed to perform.

The court found the fifth factor difficult to apply. However, it concluded it weighed against treating the claim as malpractice because “while [ the patient’s] alleged injuries relate to the treatment provided by [the ER physician], the credentialing decisions of Opelousas General are not necessarily tied to the treatment of [the patient].” Billeaudeau, 189 So. 3d at 566.

Lastly, the court did not consider the sixth factor, because intentional tort was not alleged.

In sum, the court found that, although credentialing is within scope of activities that a hospital is licensed to perform, and although expert testimony is required regarding evaluation of physician’s qualifications, it does not need to review the medical treatment of the plaintiff-patient to determine whether hospital acted negligently in hiring physician, and the analysis of the hospital’s credentialing methods do not require any assessment of the patient’s condition. Consequently, considering the factors as a whole, the court held that negligent credentialing in this case was not “malpractice” subject to the terms and limitations of the MMA.

In further support of its decision, the court noted that the legislature had amended the definition of “malpractice” in 2001 to include the “acts and omissions…in the training or supervision of health care providers,” and had specifically rejected, on three separate occasions, bills that included “credentialing” in the definition of medical malpractice.

RECOMMENDATION

The decision of the court paves the way for increased exposure to liability for hospitals. The Louisiana Supreme Court has granted a writ of certiorari filed by Opelousas General, and so the ultimate fate of this new case law is uncertain. Billeaudeau v. Opelousas Gen. Hosp. Auth., 2016-0846 (La. 6/28/16). In light of this uncertainty, hospitals must take steps to re-evalute their credentialing processes and procedures in order to protect themselves from negligent credentialing lawsuits. Prevention is the best practice, and hospitals should review their medical staff bylaws, credentialing policies and corrective action policies. Review is critical not only for initial appointment to medical staff, but also for reappointment. Our experts are available both to assist you with strategies to strengthen your credentialing process, and of course to defend any negligent credentialing claim.