Kentucky Declines to Adopt Negligent Credentialing

LEXINGTON Kentucky’s appellate courts have debated for years on whether Kentucky allows hospitals to be sued for “negligent credentialing.” Generally, this claim involves allegations that a hospital breached its duty to ensure a competent medical staff by granting privileges to an incompetent or unqualified physician, and that the physician breached the applicable standard of care, resulting in harm to a patient. As recently as 2014, Kentucky’s highest court punted on the issue, stating it was “for another day.” This fall, the Kentucky Supreme Court finally made the call. In three consolidated cases, it ruled that negligent credentialing is not a viable cause of action in Kentucky, Lake Cumberland Regional Hospital, LLC v. Adams, 2016-SC-00181 (Ky. 2017). This decision is not yet final, but all six Kentucky Supreme Court justices reviewing the issue joined in the opinion. While this may seem like a positive step for health care providers, the Court’s rationale for declining to adopt the new cause of action was that the tort would not add to existing avenues of recovery against hospitals.

The crux of a negligent credentialing claim is the independent actions or omissions of the hospital that grants privileges to non-employee, independent contractor physicians. Certain claims against hospitals are based on the theory that the hospital is “vicariously liable” for harm caused by an employed physician. These claims are based on the nature of the relationship between the hospital and the physician and do not require an analysis of the hospital’s behavior. Conversely, negligent credentialing claims depend on whether the hospital itself fell below the standard of care.

In its new opinion, the Kentucky Supreme Court held that the duty of hospitals to employ competent staff has existed in Kentucky for decades, and that there is no need to adopt a tort of negligent credentialing to apply to hospitals. Like a negligent credentialing claim, a common law negligence action against a hospital is based upon the hospital’s own independent acts. The Court noted claims against hospitals are permitted for circumstances such as infections acquired during a hospital stay, premises liability, and negligent selection of staff. It recognized hospitals are moving into a for-profit system and shifting from employed physicians to independent contractor physicians with hospital privileges. But, a hospital may be liable under existing law in cases involving non-employee physicians.

The opinion also addresses how to handle jury trials in cases involving claims against the physician and the hospital. Generally, the claim against the hospital cannot succeed unless the patient proves the physician breached the standard of care, resulting in harm to the patient. It would be a waste of judicial time and resources to address the hospital claim before resolving the physician claim. Additionally, evidence that is relevant to the hospital claim may be too prejudicial to share with a jury who is hearing the claim against the physician. For these reasons, the Court indicated claims based on hospital negligence should be split from, and decided after, the physician claims. It is not clear if this bifurcation would apply for the purposes of trial only, or should also mean that discovery on the hospital claims should not be commenced until after the resolution of the physician claims.

An analysis of the three cases addressed in the Kentucky Supreme Court opinion also provides valuable guidance to hospitals and their counsel in this type of litigation. First, Kentucky has limits on how long a plaintiff may wait before filing a lawsuit. This time can depend on when the plaintiff learns key information. As physician malpractice and hospital negligence claims may be based on different facts, the plaintiff’s deadline for filing each type of claim may be different and should be reviewed.

Additionally, what happens if the patient settles her claim against the physician but not the hospital? Under these circumstances, the hospital may be obligated to litigate the underlying claim against the physician as well as the negligence claim against the hospital. This could lead to an increase in defense costs and present problems with proof and discovery that would not otherwise exist.

Finally, the Court addressed hospital bylaws. The standard of care a hospital should meet in addressing credentialing issues will typically be determined by expert opinion testimony. In some cases, the hospital may have adopted bylaws that go above and beyond the standard of care, but these bylaws do not change the standard applicable to the hospital. While an entity’s noncompliance with its own internal standards is not ideal, it will not necessarily equate to a finding the hospital breached the standard of care.

This opinion will certainly be monitored in the legal field, as the Kentucky Supreme Court still has jurisdiction to modify its opinion. Once it is final, hospitals and their attorneys handling hospital negligence claims should consider seeking bifurcation and should monitor how this decision is applied in lower courts.

Jamie Dittert is a healthcare and insurance defense attorney with Sturgill, Turner, Barker & Moloney, PLLC. She may be reached at jdittert@sturgillturner.com or 859.255.8581. This article is intended to be a summary of state law and does not constitute legal advice.

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