The Kadlec Medical Center case: Lessons learned

Three years ago, the Federal District Court for the Eastern District of Louisiana found Lakeview Regional Medical Center and Lakeview Anesthesia Associates guilty of misrepresenting and omitting key information regarding anesthesiologist Dr. Robert Lee Berry and his use of Demerol while on duty. Lakeview Anesthesia Associates subsequently terminated Dr. Berry’s employment in March 2001 and Lakeview Regional Medical Center allowed his privileges to expire six months after that without taking formal corrective action.

But when Kadlec Medical Center in Richland, WA requested a credentialing reference, Lakeview Regional Medical Center only sent back a form letter stating that Dr. Berry was on active staff from March 4, 1997 through September 4, 2001 and did not make further comments. Lakeview Anesthesia Associates went further by stating that it had no concerns about Dr. Berry’s quality of care or health status and that Dr. Berry left the practice in “good standing.”

In November of 2002, a patient at Kadlec Medical Center, while undergoing a routine tubal ligation, suffered extensive brain damage due to Dr. Berry’s drug induced impairment. Kadlec Medical Center settled with the patient’s family for $7.5 million. As a result, Kadlec and its insurance carrier, Western Professional Insurance Company, sued Lakeview Regional Medical Center and Lakeview Anesthesia Associates, resulting in the above guilty verdict.

This month, the verdict was modified by the U.S. District Court for the Eastern Division of Louisiana. It upheld the finding against Lakeview Anesthesia Associates but overturned the decision against Lakeview Regional Medical Center, stating that an “affirmative duty to disclose does not exist absent of a fiduciary and confidential relationship.”

Based on this mixed message, what are the lessons learned?

1. Credentialing has no other master than the patient. An organization can protect itself if it prudently “does the right thing” when faced with a questionable applicant. It is reasonable to ask the applicant to sign an additional release of information form that will provide the hospital with protections against a potential suit. When confronted with a problematic candidate or a request for a difficult reference, ask yourself, “Would I send a loved one to this individual for care?” This brings the dilemma into sharp focus.
2. Hospitals need to place the burden on the applicant. This means that when you receive a reference that provides little meaningful information, it is the candidate’s responsibility to affirmatively attest to his/her professional competency and conduct. A good technique is to not complete an application until you receive all of the materials you requested and all unresolved issues have been adequately addressed. This process will need to be spelled out either in your medical staff bylaws or a credentialing procedures manual. Thus, if the applicant does not adequately complete the references and/or is not willing or able to retrieve the necessary information, the application lapses and no formal action is required.
3. Hospitals need to solve the competency equation. The competency equation asks whether an applicant has performed the requested privileges recently and if so, has the applicant performed them well? If the credentials committee or MEC has inadequate information to solve the competency equation, it is not prepared to make an informed recommendation to the board and must either postpone its decision or allow the application to lapse.

All the best,

Jon Burroughs, MD
Senior Consultant
The Greeley Company