The Iowa Supreme Court recently reversed a lower court decision that dismissed a lawsuit against a hospital for negligently credentialing a surgeon. The Supreme Court agreed that an expert’s opinion that the hospital was negligent was admissible and that the opinion entitled the patient to a jury trial in his negligence claim against the hospital.

Facts of the Case

Dr. David Segal performed surgery on Roxanne Rieder’s neck and lower back at Mercy Medical Center in 2015. In the days following the surgery, Rieder experienced severe pain in her lower back, radiating into her left leg. She told Dr. Segal that she felt tingling and numbness in her leg and that she could not lift it off the bed.

Dr. Segal performed a second surgery of Rieder’s lower back to decompress nerve roots. Three days later, Rieder was discharged. She continued to experience pain in her neck, both arms, and both legs, as well as numbness and related symptoms.

On the day of her discharge, the Iowa Board of Medicine filed charges accusing Dr. Segal of “professional incompetency” concerning his treatment of several other patients. At some point prior to the surgery he performed on Rieder, Dr. Segal informed Mercy Medical Center than he was being investigated by the Board of Medicine. Mercy did not suspend his credentials while the investigation was pending.

Expert Opinion on Standard of Care

Rieder sued Dr. Segal and several other entities, including Mercy. Rieder settled with all of the defendants except Mercy. Mercy contended that it had no duty to take action against Dr. Segal until the Board of Medicine revoked his license.

Rieder contended that Mercy was negligent in continuing to credential Dr. Segal after learning that he was under investigation. In support of that position, Rieder offered the expert opinion of Dr. Charles Pietrafesa. Dr. Pietrafesa opined that the applicable standard of care required Mercy “to take swift and immediate action to limit, restrict, or suspend Dr. Segal’s privileges with respect to care of any patients at Mercy at that time.”

Mercy took Dr. Pietrafesa’s deposition. Dr. Pietrafesa explained that Mercy breached the standard of care by failing to conduct its own investigation into Dr. Segal’s competency after learning that he was being investigated by the Board of Medicine. Dr. Peitrafesa also testified that, had it conducted an investigation, Mercy would have discovered facts that would compel a reasonable hospital administrator to suspend Dr. Segal’s privileges immediately.

Dr. Pietrafesa identified additional facts that, in his opinion, triggered a duty to suspend Dr. Segal’s surgical privileges. Dr. Segal had been sued for malpractice seven times and had been sent to the Center for Personalized Education for Physicians due to concerns about his competency. Mercy also received a subpoena for records of surgical complication rates that should have alerted it to issues requiring further investigation.

The trial court concluded that Mercy Hospital did not have sufficient information to create a duty to suspend Dr. Segal’s surgical privileges. Because it did not know the basis of the Board’s investigation, it would not have known that he posed a serious risk to his patients.

The court also ruled that evidence of earlier malpractice claims was inadmissible under Iowa law. The court decided that Dr. Pietrafesa’s opinion was inadmissible because it relied on the prior lawsuits.

Negligent Credentialing

Most states recognize that a hospital can be liable for negligent credentialing. Iowa’s courts have ducked the issue in the past. The Iowa Supreme Court ducked it again in Rieder’s case. Since Mercy did not claim that negligent credentialing is not a viable tort claim in Iowa, the Supreme Court assumed for the purpose of this case only that liability exists for negligent credentialing.

The Supreme Court rejected Mercy’s argument that it had no duty to investigate Dr. Segal. A hospital always has a duty to exercise reasonable care for its patients. The question is not whether it had a duty but whether it breached that duty by failing to conduct an investigation.

The dispositive question was whether Dr. Pietrafesa’s expert testimony was sufficient to establish that Mercy was negligent. The Supreme Court agreed with the trial court that evidence of prior malpractice lawsuits is not relevant proof that a doctor was negligent in some other case. But Dr. Pietrafesa did not rely on the lawsuits as proof that Dr. Segal was negligent. He testified that a reasonable hospital administrator, confronted with those lawsuits, would be negligent not to investigate the competency of a doctor who had been sued so many times. The Supreme Court agreed that the lawsuits were relevant to Mercy’s credentialing decision.

Whether the lawsuits themselves were admissible evidence did not determine whether Dr. Pietrafesa was entitled to rely on them in forming an expert opinion. Experts are entitled to rely on the kind of facts that are reasonably relied upon by other experts in a field, whether or not those facts are admissible evidence. Precedent from other states satisfied the Court that experts would reasonably rely upon the existence of malpractice lawsuits when they decide whether a hospital was negligent in credentialing a surgeon.

Finally, the Supreme Court decided that Dr. Pietrafesa’s expert opinion was sufficient to create a dispute of fact that entitled Rieder to a trial. Dr. Pietrafesa testified that the combination of facts known to the hospital, including the fact of the Board of Medicine’s investigation, the Board’s subpoena for medical records concerning complication rates from Dr. Segal’s surgeries, and multiple malpractice lawsuits filed over a span of years, would have alerted a reasonable hospital to the need to investigate Dr. Segal’s competency. Since the hospital did not do so, Dr. Pietrafesa’s expert testimony would allow a jury to find that the hospital was negligent in credentialing Dr. Segal.