What is Credentialing Liability

Credentialing liability refers to the responsibility that a hospital or medical facility carries for the staff practicing under its purview. Issues of credentialing liability arise when hospitals allow doctors and other medical professionals to practice who should not have been allowed to, whether for disciplinary reasons, a failure to meet educational requirements, or from malpractice.

BREAKING DOWN Credentialing Liability

Credentialing liability falls on hospitals, clinics and other medical facilities are required to ensure that doctors, physician assistants, nurses, and other medical staffers are properly vetted and credentialed before allowing them to treat patients. When patients are injured by a member of a hospital’s medical staff, they and their lawyers may seek to determine whether the staff member should have been allowed to practice in the first place.

Hospitals and other medical facilities may face negligence lawsuits if they grant credentials or privileges to staffers who are unqualified, unlicensed, or incompetent. In a negligent credentialing case, the plaintiff will seek to prove that the hospital or healthcare maintenance organization did not properly review the background of its staff. The resulting negligence could be due to a misdiagnosis of a patient’s injury or sickness, or from the suggestion or implementation of an improper treatment; the salient point, for a credentialing liability case, is that the staffer was not qualified to be dealing with the patient in the first place.

Credentialing Liability vs. Malpractice

Credentialing liability is not the same as medical malpractice liability. In a 2007 Illinois case, the state appellate court ruled that hospitals and other providers, that adopt but then fail to follow their own staff credentialing standards, can incur liability under a "negligent credentialing'" theory.  Providers that follow their credentialing standards when appointing a doctor to their staff do not incur such liability, even if the doctor then commits malpractice, the court held.

Options for Dealing With Credentialing Liability

A facility has several options when it comes to handling its credentialing liabilities:

  • It can decide that the risk of a lawsuit stemming from its current credentialing process is too low to warrant any adjustments.
  • It may assess its current credentialing process and make improvements, but not necessarily improve the documentation of its decision-making process.
  • It may improve its credentialing process while also creating documentation that supports its decisions.
  • Finally, it may seek to improve its credentialing process while making all of the documents relating to the process easy to assess during the discovery process of a trial.

The approach that is taken depends on the resources that the facility has at its disposal.