MINNEAPOLIS, Updated 9:57 a.m. CDT July 28, 2006 -- Can hospitals and other review organizations be sued for negligence if they choose to credential or grant privileges to certain physicians? The case Larson v. Wasemiller raised this issue. The Court's decision on this case could greatly impact physicians (and the hospitals they work in).

Therefore, the MMA submitted an amicus brief in an attempt to prevent negligent credentialing/privileging from becoming a new cause of action in Minnesota. On July 25, 2006, the Minnesota Court of Appeals ruled in favor of physicians and hospitals stating that, "Minnesota does not recognize a common-law cause of action for negligent credentialing or privileging of a physician against a hospital or other review organization." This is an outstanding result for physicians and hospitals in this state. The MMA will keep you apprised on whether the case goes to the Minnesota Supreme Court for further review.

Details on Larson v. Wasemiller Case

In May of 2006, the MMA filed an Amicus brief in the Larson v. Wasemiller case. The Plaintiff in the case, Mary Larson, alleged in her Complaint that St. Francis Medical Center knew or should have known that Dr. James Wasemiller posed an unreasonable danger of harm to the bariatric surgery patients of St. Francis Hospital because the hospital granted him surgery privileges.

The case was heard by Minnesota District Judge, Gerald Seibel, who ordered two certified questions to the Minnesota Court of Appeals: 1) Whether Minnesota recognizes a cause of action for negligent credentialing/privileging of a physician against a hospital or other review organization; and 2) Whether Minnesota Statutes §§ 145.63-.64 grant immunity or otherwise limit liability of a hospital or other review organization for a claim of negligent credentialing/privileging of a physician.

The MMA recognized that the decision of the Court of Appeals on the certified questions could greatly impact physicians and hospitals. First, a cause of action for negligent credentialing/privileging would erode Minnesota's well-established peer review laws which currently require review organizations to keep matters discussed during meetings confidential. Second, hospitals routinely rely on the Board of Medical Practice's ability to evaluate physicians' ability to safely practice medicine (and license them) before hospitals make credentialing decisions. This new cause of action would unfairly impose liability on a hospital for tasks the Legislature declared to be a function of the Board of Medical Practice. Third, creating a cause of action for negligent credentialing/privileging would change the focus of medical malpractice law in Minnesota from whether the physician or nurse complied with the standard of care in the present case to questions of the physician's character, which would allow evidence of prior malpractice suits to be considered. Finally, under present Minnesota law, an employer is only held vicariously liable for the torts that its employees commit within the course and scope of their employment. If a negligent credentialing/privileging claim were allowed, hospitals would also be responsible for acts of physicians who are independent contractors.

The MMA, along with the MHA and the AMA hired Attorney Mark Whitmore of Bassford, Remele to file an Amicus brief on behalf of our members. On July 25, 2006 the Minnesota Court of Appeals issued a decision on this case holding that, "Minnesota does not recognize a common-law cause of action for negligent credentialing or privileging of a physician against a hospital or other review organization." With regard to the second issue raised, the Court held that, "Minn. Stat. §§ 145.63-.64 do not explicitly grant immunity to a hospital or other review organization from liability for a claim of negligent credentialing or privileging of a physician. But the statutes (do) limit liability to 'actions or recommendations not made in the reasonable belief that the action or recommendation is warranted by facts known to the review organization after reasonable efforts to ascertain the facts on which the review organization’s action or recommendation is made,' and (they further) limit evidence to support or defend against such claims to information available from original sources." In other words, statutory law clearly limits the liability of hospitals and review organizations for acts relating to credentialing or privileging. The Court however, declined to define the parameters of the limitation. The Court stated that because the legislature "did not contemplate negligent credentialing or privileging actions . . . recognition of such an action would best be deferred to the (Minnesota) Supreme Court or the legislature for a comprehensive analysis and weighing of how the confidentiality of the peer-review process would be affected by recognition of such a cause of action."

This is an outstanding result for physicians and hospitals in Minnesota. The MMA plans to continue to support its members on these issues should the Plaintiffs seek further review by the Minnesota Supreme Court.

Karolyn K. Stirewalt, J.D., MMA Policy Counsel