Negligent credentialing is a way to bring the hospital into malpractice litigation against an EP. It also circumvents state damage caps in some cases.

“Negligent credentialing gets around med/mal damages caps because they are tort actions against the hospital, not medical malpractice actions against the physician,” explains Nathan A. Kottkamp, JD, a partner in the Richmond, VA, office of McGuireWoods.

Kottkamp has seen several allegations support a negligent credentialing cause of action in ED litigation, including failure to screen an EP’s qualifications and background at the time of initial credentialing, failure to check the National Practitioner Data Bank (NPDB) for a history of problems, failure to check references, failure to confirm qualifications, and failure to perform appropriate diligence or peer review if concerns are raised about an EP’s competence.

“The risk of negligent credentialing is very real,” says Kottkamp, noting any of these issues can legally expose hospitals. “A plaintiff could use a collection of malpractice cases as the basis of an allegation that the hospital and its medical staff were not doing their job to monitor the quality of an EP’s skills.”

Hospital bylaws requiring physicians to report malpractice actions upon the filing of an action (not just if the case is settled or decided by a jury) can guard against this. “Hospitals should then independently investigate the matter to determine if corrective action is warranted,” Kottkamp offers.

Hospitals are exposed to vicarious liability based on “negligent credentialing” if physicians or nurses known to be incompetent are allowed to treat patients, says Dan Groszkruger, principal of Solana Beach, CA-based rskmgmt.inc. “Proof of malpractice in a prior lawsuit may or may not constitute notice of incompetence that would justify punitive measures, such as discipline or dismissal,” he notes.

The most common situation in which “negligent credentialing” translates to hospital liability? The EP or ED nurse failed to report previous malpractice, but the hospital finds out about it anyway. “‘Bad’ doctors might show up at a hospital on temporary locum tenens assignments,” notes Groszkruger, adding that warnings circulated by hospital systems that operate facilities in several states can help prevent this. “If the hospital fails to take reasonable steps to discover the previous malpractice after being placed on notice, then the hospital may be found negligent.”

Publicly available court and licensing agency records of malpractice judgments and settlements can be used to support a negative credentialing cause of action. “The assumption is that EPs who have been found negligent by a jury, or those who agreed to pay significant amounts of money to settle malpractice claims, are probably suboptimal performers,” Groszkruger explains.

The rationale is that these EPs should be denied privileges. At the very least, they should be investigated more thoroughly than the standard applicant to ensure that they possess the necessary knowledge and skills. “Other indications of suboptimal performance are not available to the public,” Groszkruger says. These include an EP’s poor quality or outcome statistics and disciplinary actions arising from mistakes that harmed patients. Generally, these are confidential and privileged. If it was available to the plaintiff, says Groszkruger, “it would qualify as evidence supporting a negligent credentialing lawsuit.”

It is difficult (but not impossible) for a hospital to argue it was unaware of an EP’s troubling malpractice history. Conceivably, an EP who loses a license in one state could continue practicing in another.

“This is not easy, but individuals can change their names, falsify professional records, or even take steps to create a new identity,” Groszkruger observes. This could allow an EP to apply for and obtain a professional license in another state, then apply for hospital privileges with authentic-appearing documentation. “If for some reason the hospital’s routine checks are not able to detect fraud, privileges might be granted,” Groszkruger says.

However, systems are in place to prevent this. “‘Bad’ clinicians are identified in some nationwide publications, designed to make it difficult or impossible to create a new identity and regain a professional license,” Groszkruger explains.

The NPDB was created to protect the public from unscrupulous clinicians. The Joint Commission’s performance standards for credentialing also are designed to identify fraudulent applications. One issue is that staff assigned to check credentials normally work in the hospital’s medical staff office. “Staffing may be inadequate or subject to chronic turnover,” Groszkruger notes. Frequency of surveys is another concern. If a hospital is out of compliance with credential checks as required by The Joint Commission, says Groszkruger, “the failures may not be discovered until the next three-year survey.”