The Kadlec case is the latest in the trend to find hospitals and physicians liable for "negligent credentialing." The theory is that hospitals are responsible if they allow incompetent physicians to operate on patients at their facilities. This first phase of negligent credentialing has been on the books for almost twenty years.

Kadlec was phase two. In this malpractice action, the jury found both the hospital at which the operations were performed liable, as well as the hospital and private practice who failed to provide appropriate peer review information regarding the physician’s performance at their facilities. In this case, the physician was an anesthesiologist and was addicted to and diverting Demerol and his performance suffered accordingly. Earlier this month, the United States Court of Appeals for the Fifth Circuit reversed the District Court’s holding of liability against the hospital that provided the peer review information, i.e. Lakeview Medical Center. The Circuit Court found that the referring hospital did not misrepresent the physician’s peer review history. The facts indicate that the referring hospital merely confirmed that Dr. Robert Berry, the anesthesiologist, had been a medical staff member at Lakeview Regional Medical Center for a particular period of time. It made no affirmative statement about his abilities and did not disclose any details regarding the problems that Dr. Berry encountered at Lakeview. 

On the other hand, the Circuit Court affirmed the liability of Lakeview Anesthesia Associates and two of its physicians who had provided glowing letters of reference for Dr. Berry. The Court concluded that the medical practice and the physicians had affirmatively misrepresented Dr. Berry’s condition and abilities.

Since the referring hospital had imposed no adverse peer review decisions, there was no report to the National Practitioner’s Data Bank. Despite the fact that the referring hospital was absolved of liability in this case, it was not absolved because of a rejection of negligent credentialing liability phase 2; it was absolved because it had provided a neutral letter of reference, which those in the employment law area have learned to suspect as camouflage. 

The anesthesia practice and its physicians remain liable for misrepresentations simply because of the misguided nature of their responses.

A copy of the opinion is attached.