Avoiding the pitfalls of negligent credentialing

Medical malpractice lawsuits resulting from negligent credentialing can be costly for hospitals. Legal defense fees, settlement payments, and jury verdicts can end up costing hospitals millions. However, these types of lawsuits can be avoided if those responsible for credentialing healthcare providers take the necessary steps.

“Hospitals are obligated to do their due diligence, making sure they’re asking the right questions, getting the right information, and following up when there are ‘red flags’ when a physician applies for privileges,” says Michael Callahan, Esq., partner at Katten Muchin Rosenman, LLP in Chicago.

Things to look out for when credentialing include gaps on a physician’s resume, resignations, withdrawals of applications, reductions over the years in insurance coverage, a high incidence of malpractice suits, multiple National Practitioner Data Bank (NPDB) reports, and returned inquiries from other hospitals with very limited information, Callahan says.

“These are industry red flags that if you don’t follow up on, if you’re not diligent, and you give someone privileges, that’s where you can get into trouble,” he says.

It’s essential that medical staff leaders review all information in the credentials file and that they have sufficient information on which to base a reasoned decision regarding the competency of the practitioner, says medical staff consultant Kathy Matzka, CPMSM, CPCS.

“Medical staff leaders need to know what they’re getting themselves into when they say ‘yes’ to taking on a job as a department chair, credentials committee member, or medical executive committee member. They need to be trained in their responsibilities in reviewing the qualifications of their peers,” Matzka says.

This training can be as simple as sitting down with a department chairman and going over how to read a credentials file, Matzka says, or it can be as costly as bringing someone into the hospital to train medical staff leaders or sending them to educational programs where they can receive intensive training about their roles and responsibilities.

From Credentialing and Peer Review Legal Insider, May 2015