Kadlec: How Will It Affect Your Hospital?
Andy Lock, President, Practitioner Hospital Data Bank

The Decision

The defendants in the case, Lakeview Anesthesia Associates and Lakeview Regional Medical Center (LRMC) were found by the federal district court to have intentionally omitted material adverse information about a physician when responding to Kadlec Medical Center’s credentialing inquiry. The court ruled that a hospital owed a duty not to misrepresent directly, or by omission of “material” information, to an inquiring hospital. A jury trial awarded multi-million dollars in damages to Kadlec. You can read more about the case at these links:


How Will This Case Affect MSSPs?

As a result of this case, MSSPs have responded with varied opinions about the appropriate action to take in their own hospital medical staff department on how to respond to credentialing inquiries. This case will incur additional workload for MSSPs and greater legal exposure for hospitals. Clearly, the industry will need to make some changes to improve the quality of communication but several challenges remain for medical staff departments:

  • Fear of legal risks result in inadequate information on responses
  • Lack of written standards and procedures on how to respond to requests
  • Forms sent by other hospitals are all different with different questions
  • Medical staff usually not qualified to answer many of those questions
  • Medical or Dept. Director does not have the time to respond to all the questions
  • Understaffed and under budgeted

Some have misinterpreted the Kadlec case by identifying the “template” letter as the culprit. In reality, evidence showed that it was the intent to mislead by withholding information as the reason the ruling went against the defendants. The “smoking gun” which supported such evidence was the finding of letters sent to other hospitals did not contain the same content as the letter sent to Kadlec. This emphasizes the need for medical staff departments to implement processes that ensures consistent responses. One of the most important things to remember is that liability is remote under the federal Health Care Quality Improvement Act (HCQIA). Under this law, a hospital is immune from damages for providing information unless it knowingly provides false information.

The Practitioner Hospital Data Bank (PHDB) can address some of the challenges faced by medical staff departments as a result of this case. www.phdb.net

Understaffed and under budgeted

Automate the response process for your practitioners in good standing (95%). Take advantage of low-cost web technologies like the PHDB.

Lack of standards

Using an automated process like the PHDB ensures a consistent response on every good standing practitioner.

Inconsistent questions asked by other hospitals’ forms

Be sure to address the type questions typically asked by other hospitals in your automated letter response.