Ruling opens hospitals to lawsuits
Hospitals in South Dakota that grant doctors privileges to practice medicine can be sued if they acted in bad faith or were unreasonable in granting those privileges, a circuit court judge has ruled.
The ruling by Judge Bruce Anderson also opens the door to lawsuits against the individual members of committees that granted those privileges.
Anderson’s ruling sets the stage for South Dakota becoming a state that allows lawsuits against health providers under a concept known as “negligent credentialing.” At least 30 other states recognize the tort that hospitals have an obligation not to allow health providers to practice.
“Based upon this court’s review of the law and the briefs presented in these cases it appears South Dakota has all the necessary legal precedents as ingredients other courts have found prerequisite to adopting such a claim including a hospital’s duty of care for patient safety,” Anderson wrote.
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The ruling, which could be appealed to the South Dakota Supreme Court, is a significant victory for three dozen plaintiffs who are suing Dr. Allen Sossan, a spine surgeon who practiced in Yankton. The plaintiffs in the cases are also suing Lewis & Clark Specialty Hospital, where Sossan was one of the doctor owners, and Avera Sacred Heart, where Sossan was also credentialed to perform surgeries. The doctors on the credentialing committees are also being sued.
In addition to ruling that health providers can be sued for failing to properly credential doctors, Anderson also ruled that a statute allowing medical peer review committees to keep their findings and materials private is not an absolute privilege.
Under South Dakota law, medical peer review committees operate in secrecy, and plaintiffs in medical malpractice cases don’t have access to their materials. Peer review is supposed to foster greater patient safety by allowing medical professionals to speak freely and critique each other without fear that the conversations and materials generated by the committee can be used in lawsuits. But critics say the system enables doctors and hospitals to hide their mistakes, thus depriving justice to victims of medical malpractice.
But Anderson noted that other privileges – attorney/client privilege and spousal privilege – are also not absolute, and that they are subject to a crime/fraud exception. Anderson ruled that the medical peer review privilege should also be subject to a crime/fraud exception.
“These committees owe a substantial and important fiduciary obligation to the entire community, and in order for the public to be satisfied that they are properly carrying out that important fiduciary obligation, when the appropriate case arises, the plaintiffs should have access to the information to make sure the legislative intent as expressed in the statute is upheld,” Anderson wrote.
It’s a big victory for the plaintiffs because they are attempting to prove that Sossan was credentialed by the hospitals because of the profits he would bring them by performing lucrative spine surgeries. Sossan got credentials even though the medical community in Yankton knew that he had lost credentials at a hospital in Norfolk, Neb., and that he had past problems.
John Hughes, a Sioux Falls lawyer who tries medical malpractice cases, said that trial courts have typically ruled that the medical peer review statute is absolute and an “insurmountable barrier to any independent review.”
“Judge Bruce Anderson’s opinion is one of the most well-researched and well-reasoned judicial decisions that I have read,” Hughes said in an email. “He addressed all of the interests in a fair and balanced manner. I cannot recall exactly who said this, but the saying goes like this, ‘those who do not control themselves will soon find themselves governed by others’ or words to that effect. Plainly, that is what we have going here.”
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