Louisiana Hospitals Remain Exposed to Malpractice Cap Bypass

August 08, 2019

Louisiana hospitals have been contending with the exclusion of negligent credentialing claims from the state’s $500,000 medical malpractice cap. Unless the Supreme Court steps in to clarify the bounds of its original ruling, hospitals could be exposed to credentialing claims far beyond the limits of the medical malpractice cap.

Getting Around the Medical Malpractice Cap

In 2016 the Supreme Court made a groundbreaking decision in Billeaudeau v. Opelousas Gen. Hosp. Auth., et al., when it ruled that the Louisiana Medical Malpractice Act (LMMA) does not cover negligent credentialing claims. Since then, plaintiff’s attorneys have used that decision to file general tort claims as a way to bypass the state’s malpractice cap. Uncertainty about Billeaudeau’s potential reach remains. Now the Third Circuit’s ruling that negligent re-credentialing is also not malpractice in Thomas et. al. v. Reg’l Health System of Acadiana, LLC, et. al. raises even more questions about hospital risk under Louisiana law.

Court Decisions and Existing Law Remain Inconsistent

The theory of negligent re-credentialing in Thomas is inconsistent with existing law. Writs have been filed and granted by the Louisiana Supreme Court for review of the decision, yet the scope of negligent credentialing claims remains unsettled. Simply striking down negligent re-credentialing will not do enough to clear up the uncertainty. Plaintiffs will continue to bring claims in the Third Circuit to test the boundaries of Billeaudeau and circumvent the LMMA cap. Plaintiffs may even take their claims further to prove hospital liability for conduct beyond credentialing.

Credentialing Processes Need Careful Scrutiny

Hospitals are already challenged to find ways to limit their liability for credentialing claims. Staying one step ahead of Louisiana’s developing law is a must combined with ongoing scrutiny of a hospital’s approach to credentialing.