Iowa justices say hospitals must take ‘reasonable care’ in choosing physicians

The Iowa Board of Medicine has ordered a Cedar Rapids obstetrician to pay a $2,500 fine for abandoning a patient he left under anesthesia. (Photo via Nevada State Board of Medical Examiners)

Ruling in a case involving a physician who performed surgery while under investigation by state licensing officials, the Iowa Supreme Court has said hospitals have “a duty to exercise reasonable care” in employing physicians.

The ruling stems from a lawsuit filed almost five years ago by Roxanne Rieder, who alleged Mercy Medical Center of Cedar Rapids was negligent in the credentialing of Dr. David Segal.

Court records indicate that on May 8, 2015, Segal performed upper neck and lower back surgery on Rieder. In the days immediately after the surgery, Rieder experienced severe pain in her lower back and was unable to lift her left leg out of the hospital bed. Segal decided to perform additional procedures to fix the issue.

On the same day Rieder was discharged from the hospital, the Iowa Board of Medicine filed a public statement of charges against Segal, whom the board had been investigating.

The board alleged Segal “demonstrated professional incompetency” when he failed to provide appropriate neurosurgical care to numerous patients. Although the board’s investigation into Segal had been kept confidential until the statement of charges was filed, Segal later acknowledged that before operating on Rieder, he had alerted Mercy to the fact that he was under investigation.

After being discharged from the hospital, Rieder continued to experience pain and numbness in her neck, arms and legs and she sought treatment elsewhere. In December 2016, she sued Segal and Mercy. Days later, the board’s charges against Segal were resolved when Segal agreed to cease practicing surgery in Iowa.

In a press release issued at the time, the board stated, “Dr. Segal discontinued his surgical practice due to his health condition of Parkinsonism, which impacts the steadiness of his hands during surgery … Dr. Segal agreed that he will not engage in the practice of surgery under his Iowa medical license.”

Eventually, all of the claims in Rieder’s lawsuit were either settled or  dismissed, except for the credentialing claim against Mercy. The hospital sought dismissal of that claim, arguing in court that “there is no duty for the hospital to take immediate action with regard to a doctor’s privileges upon finding out there is an open investigation by the Board of Medicine.”

Rieder’s attorneys resisted that effort, pointing to an expert witness, Dr. Charles Pietrafesa, who stated that Mercy breached the standard of care by failing to take action against Segal as soon as it became aware of the board’s concerns. They said Mercy should have immediately limited or suspended Segal’s surgical privileges, even if it was only on a conditional or temporary basis.

The district court disagreed and granted Mercy’s motion for summary judgment on that issue, ruling that “Mercy Hospital did not owe a duty to suspend or revoke Dr. Segal’s credentials or privileges at the hospital in any way based solely upon the knowledge that an investigation had been opened by the Iowa Board of Medicine.”

The court said Mercy “could not have known, nor should it have known, that he posed a serious risk to his patients, as the formal charges had not been filed yet and no final decision had been made.”

After the district court entered its order, the litigation continued with other issues still unresolved. As part of that process, Dr. Pietrafesa claimed Mercy breached the standard of care not only because of the board investigation, but because of other factors: Segal had been sued seven times for medical malpractice; concerns regarding his competency had led to him being sent to the Center for Personalized Education for Physicians in 2012; and the Board of Medicine had issued subpoenas for patient records and complication rates.

Mercy filed a motion to strike Pietrafesa’s opinion and argued that since evidence of prior malpractice suits was not admissible at trial, it could not be considered in deciding the issue of summary judgment. The district court agreed, and granted Mercy’s second motion for summary judgment.

The Iowa Court of Appeals reversed that decision, prompting Mercy to appeal, claiming again it had no duty to investigate Segal based on what it knew of the Board of Medicine’s interest in Segal.

“We disagree,” the Iowa Supreme Court said in its ruling, adding that “the hospital always has a duty to exercise reasonable care in granting privileges to physicians.”

The court also noted that whether Mercy breached the duty of reasonable care based solely upon the board’s action was no longer material to the Rieder case, since it now included other factors such as Segal’s malpractice-litigation history.

The justices said while “it is true that prior lawsuits against a defendant are generally inadmissible in medical malpractice lawsuits,” the prior litigation evidence “may be directly relevant” to a hospital’s credentialing decisions.

“The relevant question is not whether evidence of the prior lawsuits against Dr. Segal was admissible; the relevant question presented is whether Dr. Pietrafesa’s opinion regarding the standard of care based, in part, on his knowledge of the prior lawsuits was admissible. On that question, we conclude Dr. Pietrafesa’s opinion regarding the standard of care and breach of the standard of care was admissible.”

The evidence in the Rieder case, the court said, indicates “Mercy did nothing” in response to the licensing board’s investigation and Segal’s past malpractice claims.

That evidence is “relevant to show Mercy should have known Dr. Segal posed a serious risk to his patients and Mercy was negligent in granting and maintaining his surgical privileges at its facilities,” the court said.

The court’s decision vacates the earlier decision of the Iowa Court of Appeals, reverses the judgment of the district court, and remands the case back to district court for further proceedings.

Clark Kauffman
Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.