Synergy - September/October 2013 - 11

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procedure.5	The	court	agreed,	holding	that	
the	hospital	had	a	duty	to	exercise	due	care	
when	selecting	its	medical	staff,	and	had	
failed	to	properly	do	so.6	
The	physician	had	made	several	
misstatements	and	omissions	on	his	
application	for	medical	staff	membership	
and	clinical	privileges,	and	the	hospital	
did	not	follow	up	on	these	issues	or	verify	
the	information	that	he	did	provide.7	
Specifically,	the	physician	stated	that	his	
privileges	at	other	facilities	had	never	
“been	suspended,	diminished,	revoked,	
or	not	renewed.”	This	statement	was	false	
and,	had	the	hospital	attempted	to	verify	
the	information,	it	would	have	discovered	
that	his	privileges	had	been	revoked	at	
another	facility	for	quality-of-care	issues.	
The	court	held	that	the	hospital’s	failure	to	
investigate	the	physician’s	qualifications	for	
the	staff	privileges	requested	gave	rise	to	a	
foreseeable	risk	of	unreasonable	harm.8	The	
opinion	in	Johnson	never	expressly	stated	
that	the	hospital	was	required	to	request	and	
review	documents	and	materials	authorized	
by	the	physician	to	be	released	by	other	
facilities	pursuant	to	the	application	for	
appointment	and	consent	form.	However,	it	
is	a	logical	inference	that	such	a	request	and	
review	would	have	satisfied	the	“ordinary	
care”	required	of	the	hospital.	
If	the	other	facility	refuses	to	provide	
information,	it	would	be	reasonable	for	the	
credentialing	facility	to	request	information	
and	materials	directly	from	the	physician.	
One	benefit	of	this	approach	is	that	it	may	
be	practically	easier	to	obtain	these	materials	
from	the	physician	than	from	the	facility.	
Facilities	have	always	carefully	guarded	
their	peer	review	information,	and	even	
in	response	to	authorizations	to	release,	
facilities	have	historically	been	reluctant	to	
release	negative	peer	review	information.	
This	reluctance	is	grounded	both	in	a	
desire	to	ensure	that	any	protected	and	
privileged	status	of	peer	review	information	
is	maintained	and	preserved,	and	in	a	desire	
to	avoid	the	possibility	of	litigation,	e.g.,	a	
claim	of	defamation	or	tortious	interference	
by	a	physician	who	disagrees	with	the	
facility’s	peer	review	findings.	
In	fact,	in	some	states	the	peer	review	
information	created	by	the	facility	is	
statutorily	protected	from	disclosure.	This	

protection	is	a	privilege	granted	to	the	
facilities	and	their	committees	(not	the	
practitioners	under	review)	to	encourage	
open,	honest,	and	unhesitating	peer	
review	among	practitioners.	In	these	states,	
facilities	may	decline	to	provide	peer	review	
information	in	response	to	requests,	even	
when	those	requests	are	accompanied	
by	releases	and	authorizations,	because	
the	practitioner	who	signed	the	release	
or	authorization	may	lack	the	authority	to	
waive	the	privileged	and	protected	status	
of	this	information.	In	jurisdictions	where	
facilities’	peer	review	information	is	not	
statutorily	protected,	the	historic	reluctance	
to	turn	over	peer	review	information	has	
been	somewhat	tempered	by	the	U.S.	
District	Court	for	the	Eastern	District	of	
Louisiana’s	2005	decision	in	Kadlec Med.
Ctr. v. Lakeview Anesthesia Assocs.9	
In	Kadlec,	the	district	court	found	that	
hospitals	have	an	affirmative	duty	to	disclose	
information	about	their	medical	staff	
members.	In	that	case,	a	patient	suffered	a	
major	complication	during	surgery	at	Kadlec	
Medical	Center	(Kadlec)	due,	in	part,	to	the	
anesthesiologist’s	impairment.	During	its	
credentialing	of	the	anesthesiologist,	Kadlec	
had	requested	information	from	a	facility	
where	the	anesthesiologist	had	privileges,	
Lakeview	Medical	Center	(Lakeview),	and	
his	past	practice	associates.	Lakeview	simply	
responded	that	the	physician	had	been	
a	member	of	the	medical	staff,	but	that	
“due	to	the	large	volume	of	inquires,”	no	
further	information	would	be	provided.10	
The	past	practice	associates	gave	more	
information,	highly	recommending	him	for	
future	placements,	despite	the	fact	that	he	
had	been	terminated	for	cause	due	to	drug	
diversion	and	impairment.11	The	district	
court	found	that	even	absent	a	contractual	
or	fiduciary	relationship,	Lakeview	had	a	
special	relationship	with	Kadlec	such	that	
Lakeview	had	an	affirmative	duty	to	disclose	
negative	information	it	had	in	its	possession	
about	the	anesthesiologist,	and	found	that	
Lakeview	had	breached	this	duty	by	not	
disclosing	that	the	physician	had	been	
monitored	for	drug	diversion	and	had	been	
involved	in	a	monitoring	plan.12	The	court	
also	found	that	the	past	practice	associates	
had	actively	misrepresented	the	physician’s	
credentials.13	The	case	ultimately	resulted	
in	a	jury	award	of	more	than	$8	million,	

allocating	25%	of	the	fault	to	the	practice	
associates	and	25%	to	Lakeview.14
On	appeal,	the	Fifth	Circuit	upheld	the	
verdict	against	the	practice	associates,	
but	reversed	the	judgment	against	
Lakeview.	In	making	this	decision,	the	
court	“drew	a	bright-line	distinction	
between	the	doctors’	actions,	which	
involved	affirmative,	misleading	statements	
about	[the	anesthesiologist’s]	suitability,	
and	Lakeview	Hospital’s	decision	not	to	
disclose	any	additional	information.”	The	
appellate	court’s	determination	was	based	
on	the	fact	that	Lakeview	did	not	have	
an	affirmative	legal	duty	under	Louisiana	
state	law	to	disclose	information	about	
the	anesthesiologist.	However,	the	trial	
court’s	imposition	of	such	a	burden,	and	
the	appellate	court’s	recognition	that	
there	are	“compelling	policy	arguments”	
in	favor	of	imposing	a	duty	to	disclose,	
point	to	the	likelihood	that	this	issue	may	
be	revisited	in	the	future.	Many	states	also	
currently	impose	reporting	obligations,	if	not	
disclosure	obligations,	and	many	authors	
have	expressed	the	opinion	that	the	trend	
toward	expanding	disclosure	obligations	will	
continue.15	While	currently	there	are	not	
any	federal	regulatory	requirements	(aside	
from	the	possible	consequences	of	failing	to	
submit	a	required	report	to	the	NPDB)	that	
provide	consequences	for	failing	to	disclose	
complete	information	to	other	facilities,	in	
light	of	Kadlec,	facilities	do	face	significant	
risk	(including	financial	liability	and	possible	
sanctions	or	fines)	for	failing	to	give	
comprehensive,	truthful	accounts	of	their	
current	and	former	medical	staff	members	to	
credentialing	entities.
Other	courts	have	also	reviewed	facilities’	
inquiries	into	other	facilities’	peer	review	
or	disciplinary	proceedings	involving	an	
applicant	physician.	For	example,	the	
court	in	Webman v. Little Co. of Mary
Hosp.16	held	that	a	credentialing	hospital	
acted	reasonably	in	denying	a	physician’s	
application	for	reappointment	where	his	
privileges	had	been	summarily	suspended	
at	another	facility	because	of	issues	related	
to	patient	care	and	the	physician	actively	
interfered	in	the	credentialing	hospital’s	
attempt	to	investigate	the	other	hospital’s	
adverse	action.17	In	Webman,	the	court	
held	that	the	credentialing	hospital’s	bylaws	
clearly	provided	that	the	“reappointment	
September/Oct Ober 2013 SYNERGY

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Synergy - September/October 2013

Table of Contents for the Digital Edition of Synergy - September/October 2013
