The State of Negligent Credentialing in Kentucky

By Jamie W. Dittert

A key feature of a negligent credentialing claim is that it is based on the independent actions or omissions of the hospital. It does not depend on a finding that the hospital is vicariously liable for a doctor’s negligent acts.

Although recent Kentucky opinions on this topic have come to opposite conclusions, a common thread is a request for the Kentucky Supreme Court to decide whether to recognize the tort of negligent credentialing.  Medical providers should be aware of the potential addition of another cause of action relating to healthcare.

Those in favor of the tort argue that an ability to seek damages for negligent credentialing is consistent with patient expectations that hospital care is given by qualified staff. Negligent credentialing is similar to other causes of action that are recognized in Kentucky, including negligent hiring, negligent supervision, and corporate negligence.

Opponents of the tort have argued that a patient injured through a physician’s negligent care can fully recover from the physician and does not need to seek compensation through an extra avenue of recovery.

Recently, Kentucky courts have considered whether to recognize a new cause of action called “negligent credentialing.” Generally, a negligent credentialing claim involves allegations that a hospital negligently issued or renewed hospital privileges to a physician, resulting in injury to a patient. Under this theory, a patient can seek damages from a hospital based on the hospital’s negligence, which is separate and apart from any claims the plaintiff may make against the physician. A key feature of a negligent credentialing claim is that it is based on the independent actions or omissions of the hospital. It does not depend on a finding that the hospital is vicariously liable for a doctor’s negligent acts. Rather, the claim is that the hospital itself did not act as a reasonably competent hospital in connection with allowing a physician to exercise hospital privileges. While several other jurisdictions recognize negligent credentialing, some states have enacted statutes to limit or preclude negligent credentialing claims against hospitals.

There is no final Kentucky court opinion that adopts the tort of negligent credentialing. In 2014, the Kentucky Supreme Court (the highest court in Kentucky) was faced with the question of negligent credentialing and opted to leave the issue “for another day.” The debate continues, however, to make its way through the Kentucky courts, resulting in divergent opinions from the intermediate appellate court, the Kentucky Court of Appeals.

During the first quarter of 2016, two different panels of the Kentucky Court of Appeals issued contradictory decisions regarding the viability of negligent credentialing as a claim under Kentucky law. In the first decision, Brown v. Trover,[i]  two Judges out of the three Judge panel opined that Kentucky law does not currently recognize the tort of negligent credentialing, declined to recognize the tort, and stated that the Kentucky Supreme Court should decide whether to adopt the cause of action. A third Judge dissented, arguing for the adoption of the tort. A few months later, a different Kentucky Court of Appeals panel (with one Judge who also served on the Brown case) came to the opposite conclusion in another two-to-one decision, with two Judges holding that Kentucky should recognize negligent credentialing in Spalding v. Spring View Hospital, LLC.[ii] The Spalding decision is not final, but it may ultimately present the Kentucky Supreme Court with an opportunity to decide whether negligent credentialing is a viable claim under Kentucky law.

Several policy-based arguments have been asserted in favor of the tort of negligent credentialing. An ability to seek damages for negligent credentialing is consistent with patient expectations that hospital care is given by qualified staff. Moreover, the potential liability on the part of hospitals could result in an increased sense of accountability for an effective privileging process. In Spalding, one Judge connected the ability of patients to assert a claim based on hospital negligence to a shift in hospital ownership from non-profit to for-profit organizations and the notion that a business should be responsible for its own negligence. Further, in the context of Kentucky law, negligent credentialing is similar to and arguably an extension of other causes of action that have already been recognized in this state, including negligent hiring, negligent supervision, and corporate negligence.

Conversely, advocates against Kentucky’s adoption of the tort of negligent credentialing argue that it could have a negative impact on physician and credentialing committee recruitment, particularly in rural areas of the state. Other policy arguments against the tort include that recognition of the tort could add to the rising costs of healthcare, result in the improper admission of evidence regarding a doctor’s past performance issues in medical negligence cases, encroach on the jurisdiction of the Kentucky Board of Medical Licensure, create conflicts between physicians and hospitals in litigation, and impede the candor needed for an effective privileging process. Finally, opponents of the tort have argued that a patient injured through a physician’s negligent care can fully recover from the physician and does not need to seek compensation through an extra avenue of recovery.

One issue faced by courts is that the parameters of the tort of negligent credentialing differ from jurisdiction to jurisdiction. Generally, a claimant asserting a negligence claim must prove that the defendant owed a claimant a duty, that the defendant breached the applicable standard of care, and that the defendant’s breach was a substantial factor in causing damage to the claimant. In adapting these principles to negligent credentialing claims, jurisdictions differ on several points, including whether the duty owed by the hospital includes evaluating the financial stability of a physician, and whether a plaintiff must prove medical negligence on the part of the physician in order to establish a negligent credentialing claim against the hospital. Courts also need to decide if expert testimony will be required to establish that a hospital’s credentialing fell below the applicable standard of care.

Although recent Kentucky opinions on this topic have come to opposite conclusions, a common thread is a request for the Kentucky Supreme Court to decide whether to recognize the tort of negligent credentialing.  Medical providers should be aware of the potential addition of another cause of action relating to healthcare. Hospitals wishing to take pre-emptive steps may review existing policies and procedures regarding the extension and renewal of physician privileges to determine whether any updates are merited and to confirm that those policies and procedures are put into practice throughout the credentialing process.

Originally published in M.D. Update magazine, May 2016.

[i] Brown v. Trover, 2012-CA-001880 (Ky. App. Jan. 8, 2016).

[ii] Spalding v. Spring View Hospital, LLC, 2013-CA-000842 (Ky. App. March 11, 2016).