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January 2014 Bulletin: Malpractice

Negligent Credentialing in Massachusetts – Implications of Rabelo v. Nasif, et al.

Natalie Heineman, Esq.

— Natalie A. Heineman, Esq.

On December 12, 2012, a Worcester Superior Court judge ruled that hospitals may be held liable for negligently granting physicians privileges to treat patients at their facilities.1 Rabelo brings Massachusetts in line with approximately 30 other states recognizing this cause of action, and, as discussed below, while other applicable law may make it difficult for plaintiffs to obtain the credentialing information needed to prove their claims, physicians and hospital staff should be aware of this change in the law and its potential implications.

In identifying the basis for the “negligent credentialing” cause of action, the Rabelo Court reasoned that a hospital has a duty to its patients to safeguard them from “incompetent or careless” physicians, and that such a duty is foreseeable given that they deal with the public.2 The defendant physician in Rabelo had been credentialed and re-credentialed by a Massachusetts hospital despite a number of past and pending medical malpractice cases against him and having failed multiple board certification exams, in addition to eyesight that was apparently failing at the time of treatment.3 The underlying negligence action arose from a surgical procedure performed by the physician on the plaintiff. Notably, Rabelo’s broad holding contemplates liability both when a hospital knows that the physician was "incompetent" and fails to take action, and when it fails to discover this incompetence prior to credentialing.

One obvious result of Rabelo is the potential for an increase in direct claims against hospitals, which are commonly only named under a theory of vicarious liability.4 Indeed, in Rabelo the Court anticipated and rejected a hospital’s potential defense that, in many instances, its physicians are not employees but rather independent contractors with privileges at the facility, which may offer a legal defense in a typical medical malpractice action. In a negligent credentialing action, however, the Court reasoned that a “special relationship” exists between the hospital and the patient, whereby the patient expects the hospital to provide safeguards against harm from physicians while being treated there, regardless of whether they are independent contractors or not.5

Although Rabelo expressly holds that a hospital may not be liable for negligent credentialing if the physician is not ultimately deemed negligent, the negligent credentialing claim need not be bifurcated or stayed pending the outcome of a medical malpractice action brought against the physician whose treatment is at issue.6 This will permit a plaintiff to proceed with discovery on issues pertinent to the negligent credentialing claim despite a potentially weak case on the merits of the underlying malpractice case. Such discovery may include depositions of staff persons involved in the credentialing and hiring process, disclosure of internal policies governing applicant reviews adnd interviews, as well as background and employment verifications.

The scope of discovery in a negligent credentialing case is likely to be limited by other applicable law, however. Without further clarification yet available from Massachusetts courts, Rabelo appears to raise a conflict between a claimant’s right to conduct discovery on his negligent credentialing claim, and state and federal peer review privileges which prohibit the discovery of peer review materials.7 The purpose of protecting peer review materials is to encourage confidential patient care and physician reviews. Given the benefits of such committees to ongoing quality assurance, and both state and JCAHO requirements that hospitals maintain peer review programs, peer review committees are ubiquitous. In addition to protecting work-product concerning patient care reviews, the peer review privilege also protects credentialing materials.8 Although Massachusetts courts have not addressed the issue given that Rabelo was recently decided, courts in several other jurisdictions have ruled that the peer review privilege protects credentialing materials against discovery, even in the context of negligent credentialing cases.9 Indeed, expanding discovery to include peer reviewed credentialing materials would undermine the significant role and far reaching purpose of peer review committees in their efforts to ensure high quality care. If Massachusetts courts agree, plaintiffs will face substantial challenges when seeking to discover the information needed to prove their claims.

One concern for physicians in the wake of Rabelo is that they may be hesitant to participate on peer review committees in fear of potential exposure in a negligent credentialing action. However, physicians are provided limited immunity for service on peer review committees under the Health Care Quality Improvement Act.310 Likewise, the Massachusetts Supreme Judicial Court has ruled consistently with this immunity at least in principle, although not in the context of a negligent credentialing lawsuit.11

While the implications of Rabelo are not known in the absence of further interpretation by Massachusetts courts, the case is likely to result in more direct claims against hospitals. These direct claims will not be readily susceptible to motions for summary judgment for lack of the traditional employer/employee relationship. Additionally, heightened attempts for discovery of credentialing information together with the commensurate motion practice should be expected. Although peer review committees credentialing physicians may be more closely scrutinized, decisions in other jurisdictions suggest that the trend is to preserve the peer review privilege during discovery, even when a negligent credentialing claim is asserted. In addition, physicians serving on those committees are largely insulated against liability by state and federal law. Finally, physicians may expect to face more stringent credentialing criteria and reviews in the wake of Rabelo, which may make it more difficult for them to obtain and maintain hospital privileges.

References

  1. 30 Mass. L. Rptr. 547 (December 12, 2012).
  2. 30 Mass. L. Rptr. 547, 2.
  3. Id.
  4. This is particularly true considering both the increased number of for profit hospital organizations in Massachusetts as well as the potential for increased recovery against not-for-profit hospital organizations following a recent increase in the cap on damages pursuant to M.G.L. c. 231, § 85K, if negligent credentialing is considered a medical malpractice claim.
  5. 30 Mass. L. Rptr. 547, 1-2.
  6. Id. at 4.
  7. M.G.L. c. 111, §§ 1, 203-205; M.G.L. c. 112, §5; 243 CMR 3.0 et seq.; Carr v. Howard, 426 Mass. 514 (1998).
  8. M.G.L. c. 111, § 205(b); Board of Registration in Medicine v. Hallmark Health Corp., 454 Mass. 498 (2009). 
  9. Columbia/JFK Medical Center v. Sanguonchitte, 920 So.2d 711 (Dist. Ct. App. Fl. 2006); Smith v. Pratt, 2009 WL 1086953 (Tenn.Ct.App.).
  10. 42 U.S.C. § 11111-11152 (providing that “a professional review body … [and] any person acting as a member or staff to the body … shall not be liable in damages under any law of the United States or of any State … with respect to the action”).
  11. Vranos v. Franklin Medical Center, 448 Mass. 425, 433-44 (2007) (“Following passage of the Health Care Quality Improvement Act, the Legislature enacted laws and the Board of Registration in Medicine (board) promulgated regulations that progressively offered increased immunity for medical peer review committee members and witnesses and privilege against subpoena, discovery, and the use in evidence of documents related to medical peer review.”).

Natalie A. Heineman is an associate attorney at Foster & Eldridge, LLP, where she focuses her practice on defending medical professionals in civil actions in state and federal courts, and before the Board of Registration in Medicine and other regulatory agencies. She thanks Caroline Kelly, law clerk at Foster & Eldridge, LLP, for her research assistance with this article. Natalie can be reached at nheineman@fosteld.com.

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