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On Tuesday, Iowa's highest court will hear oral arguments in a negligent credentialing case brought against a hospital in Cedar Rapids. The suit has garnered the attention of the American Medical Association (AMA) due to its potential impact on other providers.

The negligence suit was originally filed in 2016 by Roxanne Rieder and her husband, Tony. The Rieders detail in court documents that Roxanne experienced permanent impairment and severe pain following spine surgery performed at Mercy Medical Center by a credentialed physician there in 2015. Though the Rieders resolved and dismissed their claims against the physician, David Segal, MD, and other defendants in the case in 2018, they continue to pursue a negligent credentialing claim against Mercy.

Should the Iowa Supreme Court recognize that there is a tort claim for negligent credentialing, it could spell increased accountability and liability for hospitals. Legal counsel for the Rieders say this recognition is critical to protecting patients. But the AMA's Litigation Center wrote in an amicus brief that such a ruling would in fact have the opposite effect.

"The court has never formally recognized this, but it has stated in prior opinions that it assumes that this is a recognized theory," said the Rieders' lawyer, Bruce Braley of Denver's Leventhal Puga Braley, regarding a tort claim for negligent credentialing.

The average patient who goes to a hospital for surgery assumes that the physician performing the procedure is competent, qualified, and not a risk to their safety, Braley told MedPage Today. The Rieders' case is important because hospitals "are in a much better position" to be able to protect patients than patients are themselves.

The Rieders have stayed the course, appealing a district court's order granting summary judgment in favor of Mercy.

In September, the Court of Appeals of Iowa the district court's summary judgment rulings. Now, Iowa's Supreme Court will hear arguments. Braley and his clients are seeking the opportunity for a jury to hear the case.

Just last week, the AMA noted that its Litigation Center had in the case, along with the Iowa Hospital Association and Iowa Medical Society.

"From a public perspective, these amici believe recognizing breach of such a duty as a viable independent, actionable tort for 'negligent credentialing' would impede the free flow of information critical to quality assurance activities and decrease the willingness of physicians to participate in peer review activities, including service on credentialing committees (as well as participation in other peer review and quality assurance activities)," the AMA and state associations wrote in the brief.

They further noted that the recognition of negligent credentialing would result in physicians becoming less willing to speak openly and honestly in quality assurance activities out of fear that their discussions may later become the focus of a lawsuit.

Additionally, the AMA and state associations noted that Iowa has primary healthcare shortages in nearly 60 of its 99 counties. However, they wrote, plaintiffs are asking the court to potentially remove some 10% of the practicing physicians in the state from practice each year "just because a complaint is filed or investigation initiated or a hospital otherwise receives notice of a complaint or investigation." In 2018, only about 5% of investigations resulted in a physician being disciplined.

A spokesman for the AMA noted that the Iowa case is not the first the Litigation Center has been involved with that examines recognition of a negligent credentialing claim. It previously filed amicus briefs with the Minnesota Court of Appeals and Minnesota Supreme Court in Larson v. Wasemiller, which dates back to 2007, he said in an email. The briefs opposed the recognition of a cause of action for negligent credentialing; however, the Minnesota Supreme Court affirmed a cause of action for negligent credentialing, the spokesman said.

He said that the AMA is unable to speculate on whether the Iowa case will have an impact outside of patients and physicians in that state.

John Lyddane, a partner at Dorf & Nelson in New York City, told MedPage Today that, generally, questions of negligent credentialing don't arise if a physician has enough medical malpractice insurance to cover an injury.

Very few injuries reach financially catastrophic proportions, such as a 40-year-old making $1 million a year becoming permanently disabled, Lyddane said. Most physicians have insurance to cover a couple million dollars, but not $40 million or $50 million, he said.

Lyddane added, however, that the complexity of medicine from a legal perspective is becoming greater by the day.

Recently, he as well as other forms of potential liability, in a December piece for Law.com and the New York Law Journal.

"Medical services are increasingly provided in complex arrangements involving corporate entities," Lyddane wrote. "Where there is a claim that injury has resulted from the act or omission of a single individual, there may be ramifications for other parties whose liability derives from the acts of that person," he added.

Legal counsel for Mercy declined to comment on the pending litigation in Iowa, as did the hospital.

Trial lawyer Guy Cook, who has represented Segal, said in an email that in 2016 Segal "voluntarily stopped performing surgeries, in an abundance of caution, due to some health issues." Segal continues to provide non-surgical medical services, he said.

"Dr. Segal denies any wrongdoing in the Rieder matter," Cook added. "An unrelated complaint or investigation by the medical board is proof of nothing. Dr. Segal resolved the matter with the medical board and successfully passed a competency review at the Center for Advancing Professional Excellence at the University of Colorado."

As for the Rieders, Braley said, "My clients, their ultimate goal is to make sure that this doesn't happen to anybody else."

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