CLIENT ADVISORY: Negligent Credentialing Ruled Outside Scope of Medical Malpractice Act, Threatens Hospital Purses

A Lynchburg Circuit Court Judge has ruled that an action against a hospital for negligent credentialing and privileging is a separate cause of action that does not fall within the scope of the Virginia Medical Malpractice Act. This holding may expose hospitals to significant monetary liability, as claims would not be subject to the statutorily prescribed medical malpractice cap set in Virginia Code § 8.01-581.15.

The case, Martin v. Salvaggio et al., involves a medical malpractice claim against Dr. Mark Salvaggio and a negligent credentialing claim against Centra Health Inc. The medical malpractice action alleges that in 2013 Dr. Salvaggio inadvertently cut the plaintiff’s ureter during a surgery to repair an aneurysm in a pelvic artery. The damage to the ureter went unnoticed for over a month, and the patient subsequently lost a kidney. In addition, the patient alleges that Centra Health negligently credentialed and privileged Dr. Salvaggio to perform surgeries in its hospital.[1]

In response, Centra filed a demurrer alleging that the plaintiff had failed to state a cause of action upon which relief could be granted. Centra also filed a motion to dismiss, alleging that the plaintiff could not have obtained an expert opinion that demonstrated that Centra had deviated from the standard of care, a prerequisite to filing a medical malpractice action under Virginia Code §8.01.20.1.

The Judge, Edwin Burnette, dismissed the demurer finding “ample authority from other jurisdictions and Virginia Circuit Courts” permitting a cause of action for negligent credentialing and peer review, though the Virginia Supreme Court has not directly addressed this issue. The Judge also overruled the motion to dismiss, holding that “a cause of action for negligent credentialing and privileging does not fit within the bounds of [the] statutory language [in the Virginia Medical Malpractice Act]” and that an expert opinion was not required in order to file a negligent credentialing action against Centra. Virginia Code §8.01.20.1 defines malpractice as a tort action for health care or professional services and defines health care as an act, professional service, or treatment performed or furnished to a patient during the patient’s medical diagnosis, care, treatment, or confinement. Based on these definitions, Judge Burnette reasoned that the tort action for negligent credentialing and privileging would have preceded any care furnished to the patient and is based in corporate negligence, not on any health care act that was performed.

This ruling, assuming it survives judicial review, significantly affects hospital liability, as many providers previously presumed that negligent credentialing actions fell under the Virginia Medical Malpractice Act and were subject to the statutory caps. Virginia Code § 8.01-581.15 provides that any verdict against a health care provider in an “action for malpractice” shall not exceed statutorily prescribed amounts listed in the statute. The cap is currently 2.2 million for any verdict returned prior to June 30, 2016 and will increase to 2.25 million on July 1, 2016 for the following year. The plaintiff in Martin v. Salvaggio alleges a total of 5 million dollars in damages for the malpractice action and the credentialing claim.

Hospitals should review their credentialing and privileging criteria to ensure thorough review of physicians occurs before the hospital grants privileges. In addition, hospitals should have ample documentation of all peer review processes in the event such documentation is necessary to mount a defense against a claim of negligent credentialing. However, hospitals should also bear in mind that state and federal peer review privilege statutes prohibit discovery of peer review materials, oral or written, in litigation outside of the hospital’s internal peer review process and any judicial review of that process. Virginia courts have not opined on the discoverability of peer review materials in a negligent credentialing claim, but other states courts have found that peer review materials remain privileged from discovery even in negligent credentialing actions.

Should you or your organization have any questions regarding how this case affects your operations, please contact Peter Mellette (Peter@mellettepc.com), Nathan Mortier (Nathan@mellettepc.com), Harrison Gibbs (Harrison@mellettepc.com), or Elizabeth Dahl (Elizabeth@mellettepc.com), or call Mellette PC at (757) 259-9200.

This Client Advisory is for general educational purposes only. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up to date and fact specific advice.

________________________________________________________________________________________________

[1] In fact, Centra health revoked Dr. Salvaggio’s privileges in January 2015 on grounds that the doctor had engaged in “conduct detrimental to patient care.” Dr. Salvaggio subsequently sued Centra for the revocation, alleging that the hospital bought out his practice and hired him to eliminate competition and then fired him without cause. That case is also pending; however, the court granted Centra’s motion to seal court records pertaining to this action before responding in the negligent credentialing case.

Categories: Client Advisory