On July 26, 2007, an Illinois Appellate Court allowed, for the first time, a negligent credentialing lawsuit against a hospital to go forward. Illinois now joins the majority of states that allow this tort claim. (Frigo v. Silver Cross Hospital and Medical Center, 2007 WL 2141822 (Ill.App.1 Dist.). The plaintiff brought the original malpractice action against a podiatrist and Silver Cross Hospital on October 6, 2000. In April of 2003, plaintiff amended the Complaint to include allegations of negligent credentialing.

During discovery, the plaintiff learned that the podiatrist was granted Category II surgical privileges, even though he did not meet the required criteria for those privileges. The specific credentialing criteria included completing an approved podiatric surgical residency or board certification by the American Board of Podiatric Surgery, and submission of documentary proof of having performed surgical procedures to the satisfaction of the Department of Surgery. Even though the podiatrist was later “grandfathered” from meeting new, stricter criteria, plaintiff claimed that, since the podiatrist was never properly credentialed, he could not be grandfathered.

After presentation of the evidence, one of the jury instructions was to determine whether the hospital failed to exercise ordinary care in granting Category II surgical privileges to the podiatrist, which resulted in the podiatrist’s negligent treatment of the plaintiff, and whether the hospital’s conduct was a proximate cause of the plaintiff’s injuries. The jury ruled for the plaintiff and awarded more than $7,775,000.

At issue before the Appellate Court was whether a negligent credentialing claim can relate back to allegations of medical malpractice in the original complaint; whether the Medical Studies Act bars negligent credentialing claims; whether the Hospital Licensing Act bars negligent credentialing claims; and whether the plaintiff failed to prove that the Hospital was negligent in granting the podiatrist surgical privileges.

With respect to the statute of limitations argument, the Appellate Court held that the original complaint contained allegations of negligent hospital management, which were specific enough to allow a later amended complaint of negligent credentialing. The Appellate Court held that the Medical Studies Act does not bar a claim for negligent credentialing. Plaintiff’s negligent credentialing allegations focused on failure to comply with the Hospital’s regulations, Medical Staff Bylaws and The Joint Commission standards, none of which are privileged credentialing committee materials and, therefore, not privileged under the Act.

Silver Cross tried to rely on Section 10.2 of the Hospital Licensing Act, which provides immunity to hospitals for decisions involving credentialing matters and other internal medical staff actions, such as physician discipline, absent wilful and wanton misconduct. The Appellate Court held that Section 10.2 limits the remedies available to physicians aggrieved by a hospital’s peer review process. It cited several cases, all of which dealt with the hospitals’ internal controls over physicians and stated that the Act does not bar a claim for negligent credentialing.

Having no Illinois cases upon which to rely, the Appellate Court cited, in part, a Florida Supreme Court case, which cited Darling v. Charleston Memorial Hospital, 33 Ill.2d 326 (1995). Darling is the landmark case in which the Illinois Supreme Court held that hospitals may be held liable for institutional negligence. Citing the Florida Supreme Court, the Appellate Court stated that as a matter of public policy, hospitals are in the best position to protect patients, and one such protection is through the selection and retention of competent independent physicians who practice at a hospital.

After determining that negligent credentialing is a viable tort in Illinois, the Appellate Court stated that the elements to prove such a claim are as follows:

1. Plaintiff must prove that the hospital failed to meet the standard of reasonable care in the selection of the physician to whom it granted medical staff membership and clinical privileges and whose treatment was the basis for the underlying medical malpractice claim;
2. While practicing pursuant to negligently granted clinical privileges, the physician breached the applicable standard of care; and
3. That the negligent granting of clinical privilege was a proximate cause for the plaintiff’s injuries.

Finally, the Appellate court affirmed the trial court decision and upheld the jury verdict.

This case has far-reaching implication to Illinois hospitals. Plaintiffs will be looking to add negligent credentialing counts to medical malpractice claims in the future. Hospitals must review their Medical Staff Bylaws, rules and regulations to ensure appropriate credentialing standards and criteria are being used. They must also ensure that such standards and criteria are applied to all staff applications and reapplications. If medical staff members have been grandfathered for new criteria, a review should be conducted to ensure that the original credentialing was appropriate.

For further information, please contact Douglass Marshall or your regular Hinshaw attorney.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.