What a Negligent Credentialing Claim Alleges

The allegation is corporate rather than clinical. It says the organization owed a duty to the patient to exercise reasonable care in selecting, verifying, and monitoring the providers to whom it granted privileges or whom it employed, and that it failed to do so. The specific failures alleged tend to be documentary. Verification that was not performed or not performed primary source. A gap in employment history that was never explained. Prior malpractice history, licensure actions, or restrictions elsewhere that were not discovered or were discovered and not acted on.

• The claim targets the entity own selection, verification, and monitoring duties
• Prior malpractice, licensure actions, and data bank information not discovered or not acted on
• Reappointment without current competency evidence, and absent ongoing monitoring
• The duty alleged is direct rather than vicarious, which affects which policy responds

Which Policy Responds

This is where organizations are most often surprised, and the answer depends on the forms in place. Healthcare professional liability policies may cover the entity for claims arising from the rendering of professional services, and some forms expressly extend to credentialing or to administrative acts by committees. Others do not, and some exclude claims arising from the granting or denial of staff privileges. Directors and officers or management liability policies cover wrongful acts in the management of the organization, which credentialing arguably is. But many healthcare management liability forms exclude bodily injury, and a negligent credentialing claim brought by an injured patient alleges bodily injury.

• Some professional liability forms extend to credentialing; others exclude staff privileges claims
• Management liability forms frequently exclude bodily injury, which a patient claim alleges
• The exposure can fall into the seam between the two policies
• Ask both carriers in writing, and prefer forms that address credentialing expressly

The Process That Is Also the Defense

Credentialing defense is documentary, which means the file is the case. Primary source verification of license, education, training, board certification, and work history, with the verification evidence retained rather than a summary. Explanation and documentation of every gap in employment history. National Practitioner Data Bank queries at appointment and reappointment, with evidence of review. Written criteria for privileges tied to documented training and current competency, applied the same way to every applicant.

• Primary source verification with the evidence retained, not just a summary
• Every employment history gap explained and documented
• Data bank queries at appointment and reappointment, with evidence of review
• Written privileging criteria tied to training and current competency, applied uniformly
• Committee minutes reflecting the real basis for each decision
• Ongoing monitoring between cycles, with documented follow up on any concern

Talk It Through With a Specialist

Credentialing exposure is the clearest example of a healthcare risk that can fall between two policies, and the answer is usually available in writing before a claim rather than argued after one. We can review how your professional liability and management liability forms treat credentialing and peer review, and identify where the seam sits. Grandbay Financial Services places healthcare risks across the specialty and surplus lines markets, with leadership bringing 20+ years in commercial insurance. Book a time at calendly.com/grandbayfinancial. This article is for general information and is not a substitute for policy language or professional advice.