Negligent/Malicious Credentialing Claims:  Do They Exist in Texas?

Tina M. Stansel, J.D., LL.M. Candidate

Pam is a patient at ABC hospital and is about to have her baby.  She chooses Dr. Green, who has privileges at ABC Hospital to deliver her baby.  Something goes wrong during the delivery and Pam’s baby suffers brain damage.  Pam sues Dr. Green for medical malpractice and ABC Hospital for negligently credentialing Dr. Green.

In the aftermath of the Texas Supreme Court’s rulings in the two cases discussed below, the question becomes whether Pam can recover damages against the hospital.

Negligent credentialing is a common law cause of action recognized in many states.  The Texas Medical Practice Act (“TMPA”), however, does not contain a cause of action for negligent credentialing.*  So the issue confronting the Texas Supreme Court in St. Luke’s Episcopal Hospital v. Agbor, 952 S.W.2d 503 (Tex. 1997), was whether the malice requirement in the TMPA applied to negligent credentialing causes of action.  The court held that plaintiffs must show malice in negligent credentialing cases.
In Agbor, Dr. Rothchild delivered the Agbors’ infant son at St. Luke’s Hospital.  The infant suffered an injury during birth that permanently disabled his left arm.  The Agbors sued Dr. Rothchild and the hospital.  They alleged medical malpractice against Dr. Rothchild and negligent credentialing against the hospital.  The district court granted the hospital’s motion for summary judgment.  It concluded that absent a showing of malice, the TMPA provided immunity for decisions made in the credentialing process.  The court of appeals reversed.

The Texas Supreme Court interpreted the TMPA to require a showing of malice to defeat summary judgment on a negligent credentialing claim against a hospital.  This case essentially placed two hurdles on the plaintiff.  First, the plaintiff must prove malice to survive a summary judgment on a negligent credentialing claim.  Second, even if the plaintiff can prove malice, the plaintiff cannot obtain the hospital’s credentialing file through discovery to prove the hospital’s negligence in credentialing.  This severely limits the ability of plaintiffs to successfully assert a negligent credentialing cause of action.

The Houston Court of Appeals further limited credentialing causes of action in KPH Consolidation, Inc. v. Romero, 2003 WL 60482 (Tex.App.—Houston [14th Dist.] Jan. 9, 2003). The Romero court held that a hospital can effectively prevent a plaintiff from successfully claiming negligent credentialing by invoking its confidentiality privilege regarding the credentialing of a physician.  The court determined that a hospital is entitled to invoke the confidentiality privilege regarding its committee communications if it properly complies with the requirements in the TMPA.  Strict compliance with the TMPA in the formation and operation of the committee is the key to obtaining the privilege.  Even if a plaintiff can prove a hospital was objectively and subjectively aware of a physician’s problems, this case makes it virtually impossible for a plaintiff to prove the hospital acted with conscious indifference.  With the privilege in place, a plaintiff is left without evidence of actions or inactions taken by the hospital in response to a physician’s known problems.  There is no evidence of conscious indifference without piercing the hospital’s confidentiality privilege.

In light of this holding, it is likely that plaintiffs will be diligently searching for ways to pierce the privilege and prove waiver of the privilege.  Hospitals should confirm compliance with the TMPA to ensure its committee confidentiality privilege can be properly asserted.  Hospitals should also ensure its committee members are aware of the importance of the privilege and informed on how to prevent waiver of the privilege.

Generally, based on the holding in Romero, the hospital committee and peer review privileges should not be waived.  In the rare situation where a privilege is waived, the timing of the waiver becomes an important issue.  For example, a timing issue might arise when a hospital first asserts the privilege and then later decides to waive the hospital committee privilege and allow testimony regarding the proceedings of the committee meeting. When this occurs, the hospital must follow the Texas Rules of Civil Procedure in supplementing its responses to discovery.

Another issue of importance is whether negligent/malicious credentialing is a health care liability claim under article 4590i.  The Dallas Court of Appeals recently pronounced in Rose v. Garland Community Hospital that article 4590i does not apply to negligent credentialing causes of action.  The Rose court determined negligent credentialing claims against a hospital are not health care liability claims as defined in section 1.03(a)(4) of the Medical Liability and Insurance Improvement Act (“the Act”).

The Rose court determined that negligent credentialing claims do not constitute a cause of action for treatment or lack of treatment by a hospital.  Additionally, a hospital’s alleged acts or omissions that form the factual basis of a negligent credentialing claim cannot be considered medical care, health care, or safety, as defined in the Act.  The Rose court concluded, as a matter of law, that negligent credentialing claims are not governed by the Act.  If the Act doesn’t apply, neither do the caps found in article 4590i.  The court held that the caps apply only if the negligence occurred “during the patient’s care, treatment, or confinement.”

The Rose court did recognize that a cause of action for negligent credentialing is still subject to the immunity provisions of the TMPA.  The court cited Agbor and noted the threshold standard of malicious conduct was required to state a cause of action against a hospital for its credentialing actions.  Thus, a patient is faced with the difficult task of pleading and proving malice to defeat a hospital’s immunity on a negligent credentialing claim.  Further, in light of Romero, a hospital can stand on their confidentiality privilege to defeat a negligent credentialing claim, regardless of the application of article 4590i.

*  The TMPA limits the liability of the participants in the peer review process by requiring plaintiffs to prove the members acted with malice.  The TMPA does not define malice.  But section 1.03(b) states that “[a]ny term, word, word of art, or phrase that is used in this Act and not otherwise defined in this Act has the meaning as is consistent with the common law.”  The legislature has defined malice in the Civil Practice and Remedies Code as:

(A)  A specific intent by the defendant to cause substantial injury to the claimant; or
(B)  an act or omission:
(i)  which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and
(ii)  of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.