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Commenting on a prior employee or physician’s past behavior poses legal liability for healthcare providers. Providing only minimal information is usually the best course of action.
Inquiries about a previous employee or physician’s performance at your hospital can put administrators in a difficult position. If the truth is not favorable and the hospital says so, the hospital could be liable for besmirching the person’s reputation and interfering with his or her career. But if the hospital discloses nothing about the poor background, it could be liable for allowing that person to go on and harm patients at another facility.
Even a positive reference can come back to bite the hospital, so hospitals are forced to minimize their risk, says Sanjeeve DeSoyza, JD, partner with the law firm of Bond, Schoeneck & King in Albany, NY.
“Unfortunately, in our litigious society, employers must continue to be cautious in responding to reference requests. A glowing reference for an incompetent clinician — issued in the hopes of moving that person on with minimal conflict — can create a host of new problems down the road if relied upon by a successor employer and harm later results,” he says. “Similarly, a negative reference can come back to haunt an employer if unsupported or contradicted by the personnel file and other relevant evidence.”
State laws on reference checks vary, DeSoyza says. For instance, New York law does not require that employers provide references for former employees and unlike several other other states, New York does not have a reference check immunity law. Most employers, including in the healthcare industry, limit information provided in response to reference requests on former employees, he says.
“This is driven in large part by concern about potential legal liability such as defamation, negligent referral, or retaliation claims. Responses by former employers are usually limited to name, dates of employment, and positions held,” DeSoyza says. “Even for stellar employees, employers are reluctant to deviate from the ‘name, rank, serial number’ policy and provide a substantive reference out of fear of a discrimination claim by another employee who was denied a similar reference.”
In many cases, the hospital can avoid providing negative information but refer the inquiry to the state or professional body that can, says Max Gaujean, JD, a malpractice attorney and founding member in the White Plains, NY, office of the Brown, Gruttadaro, Gaujean, Prato & Sastow law firm.
“If you know that there was an incident that this potential employer will find meaningful, you don’t have to tell them yourself if you know that it has been reported to your state’s office of professional medical conduct or a similar body,” Gaujean says. “That’s the safest course of action. They can get the information and determine on their own whether that has bearing on the employment decision.”
Healthcare employers in most states have reporting obligations regarding misconduct by certain employee classes, DeSoyza notes. In New York, for example, hospitals and other facilities must report certain incidents threatening patient care as well as professional misconduct by physicians and residents to the Department of Health’s Office of Professional Medical Conduct.
There also are reporting obligations for certain misconduct by registered nurses, nurse practitioners, social workers, pharmacists, and other health-related professions, DeSoyza says. Additionally, he says employers can determine whether a prospective employee is on the federal Office of Inspector General’s List of Excluded Individuals/Entities, thereby precluding collection of payment from any federal healthcare program such as Medicare for items or services furnished, ordered, or prescribed by that individual. (See the story in this issue for more on obligations to report.)
Though the former employer can face liability from different angles, they almost always worry most about being sued by the former employee rather than third-party liability for negligent misrepresentation, says David M. Aafedt, JD, shareholder with Winthrop Weinstine law firm in Minneapolis.
“People are always playing it very close to the vest for fear of being faced with a defamation lawsuit,” he says. “That’s the case even though the truth is an absolute defense. As long as the information you are providing is truthful and not provided with actual malice, you will be protected. Nevertheless, you might still face litigation and nobody wants to have that out in the public arena with the potential for it blowing up into something no one anticipated.”
Providing negative information about a past employee also can lead to litigation unrelated to claims of defamation, says H. Carlton Hilson, JD, an attorney with the Burr & Forman law firm in Birmingham, AL. If an employee leaves the hospital, willingly or otherwise, and finds out that a prospective employer was provided a negative review, that employee may be angered enough to bring up past grievances with the employer.
“It might be discrimination of some sort or other allegations that the employer mistreated him or her in a way that is actionable,” he says. “They may have left the hospital with no animosity, and the negative employment review might not be anything they can prevail on in court, but they’re looking for a way to get back at the hospital.”
A written release from the person in question can eliminate most of the risk, says Sherry L. Travers, JD, shareholder with the law firm Littler Mendelson in Dallas. In most cases, that should be easy to obtain because the job seeker wants to do whatever is necessary to get the job.
“That release would authorize a waiver of any claims brought against them related to information they asked you to release,” Travers says.
The hospital is not at risk from not passing on information unless it was obligated by law, Travers says.
“There have been cases in which people tried to make that argument, that you should have told us about this person’s employment experience, but the courts have recognized that is unworkable,” Travers says. “You can’t expect hospitals to expose themselves to liability like that without a legal obligation or a release from the former employee.”
References should not be provided on a case-by-case basis, says Wendy G. Adkins, JD, partner with the law firm of Jackson Kelly in Morgantown, WV. Hospitals should adopt a uniform reference policy detailing what information is to be shared and specifically identifying who is authorized to provide such references on its behalf, she says.
“Any inconsistencies by a hospital on when it chooses to provide a reference, whether positive or negative, could be used to establish a prima facie claim of discrimination. Although patient safety concerns may provide a legitimate, nondiscriminatory reason, the cost of defending such a discrimination claim leads most employers to implement a neutral reference policy,” Adkins says. “However, neutral reference policies are not risk-free. Neutral reference policies must also be applied consistently and not ignored by supervisors or managers outside of the human resources department. Hospitalwide education on any reference policy is critical to ensure consistent application.”
Many states provide statutory protections to employers who provide good faith references for current or former employees to prospective employers, Adkins notes. The protections typically are limited to defamation or invasion of privacy claims. However, if a hospital wants to go beyond a neutral reference and report patient safety concerns, it should educate itself on the parameters of those protections, she advises. State statutes, or even administrative regulation by a state’s department of labor, may provide the specific type of information that can be provided by an employer, the form in which the information must be provided, and the specific individuals with whom the information can be shared.
For example, Adkins notes that West Virginia Code §55-7-18a provides express statutory protections to employers who chose to share adverse information concerning current or former employees to a prospective employer. To be afforded statutory immunity from civil liability, an employer must provide a written reference, and a copy of the written reference must be provided to the current or former employee at the time of disclosure. Also, the reference must only provide “job-related information,” specifically defined in West Virginia as concerning “a person’s education, training, experience, qualifications, conduct, and job performance” and “offered for the purpose of providing criteria to evaluate the person’s suitability for employment.”
The good faith presumption afforded such a reference, however, may be rebutted if the information disclosed is knowingly false; disclosed with reckless disregard for the truth; deliberately misleading; rendered with malicious purpose toward the former or current employee; or disclosed in violation of a nondisclosure agreement or applicable law, Adkins explains.
A hospital should report on poor conduct or job performance that is well-documented and supported by some objective evidence such as annual evaluation ratings, acceptance of responsibility by employee, or patient complaint statistics, she says.
Even with a release, many hospitals are hesitant to provide negative information in response to requests for fear of liability or to avoid being sued by the physician for defamation, says Pamela E. Hepp, JD, shareholder with Buchanan, Ingersoll & Rooney law firm in Pittsburgh. Instead, hospitals have opted to provide basic information as to dates that the physician was on the medical staff but avoid answering questions related to quality, she says.
Hospital administrators commonly believe that such non-answers will appropriately send a red flag to the receiving hospital while avoiding explicitly making negative statements, she says.
However, Hepp notes that a federal court in 2006 found a hospital liable for negligence and misrepresentation when it took such an approach and the requesting hospital granted privileges to the physician, an anesthesiologist who had been terminated because of impairment.
“The case ultimately overturned on appeal the judgment against the hospital on the basis that there is no affirmative duty to respond to such requests, but the concern remains that other courts could similarly impose liability for failing to provide transparent information,” Hepp says. “Suggested best practices are to obtain a specific release before responding, act in good faith and without malice, provide limited but factual and complete information, and where a National Practitioner Data Bank report has been filed, provide information that mirrors or is consistent with that response.”
Financial Disclosure: Author Greg Freeman, Editor Jill Drachenberg, Editor Jonathan Springston, and Nurse Planner Maureen Archambault report no consultant, stockholder, speaker’s bureau, research, or other financial relationships with companies having ties to this field of study. Physician Editor Arnold Mackles, MD, MBA, LHRM, discloses that he is an author and advisory board member for The Sullivan Group and that he is owner, stockholder, presenter, author, and consultant for Innovative Healthcare Compliance Group.