Suits against hospitals that allege negligent credentialing of doctors and other administrative misconducts are to be decided by ordinary negligence principles – says the North Carolina Court of Appeals

May 9, 2013

Estate of Ray ex rel. Ray v. Forgy, 2013 WL 1876755 (N.C.App. 2013)

This case involved negligent-credentialing allegations against hospital.  The plaintiffs claimed that the hospital was negligent in that it granted staff privileges to a surgeon without investigating his malpractice history.  The plaintiffs’ suit was not certified by a qualified medical expert, contrary to North Carolina’s pleading requirement for medical malpractice actions (N.C.G.S. § 1A–1, Rule 9(j)). The trial judge consequently granted the hospital’s motion for summary judgment, but this victory was short lived. The North Carolina Court of Appeals reversed the trial judge’s decision and reinstated the suit.

The Court held that suits against hospitals that allege negligent credentialing of doctors (and other staff) do not require certification by medical experts. Based on its previous ruling in Estate of Waters, 547 S.E.2d 142, 145 (N.C.App. 2001), the Court reasoned that when a corporate negligence claim does not arise out of clinical care, but rather “out of policy, management or administrative decisions, such as granting or continuing hospital privileges, failing to monitor or oversee performance of the physicians, credentialing, and failing to follow hospital policies, the court should apply the ordinary negligence principles and the “reasonably prudent person” standard” rather than defer to doctors. The certification requirement consequently does not apply.

This decision aligns with my distinction between “treatment rules” and “setup rules”: see Toward a Theory of Medical Malpractice, 97 Iowa Law Review 1201, 1229-32 (2012).