Smith v. Selma Community Hospital
| Decision Date | 21 July 2008 |
| Docket Number | No. F050816.,F050816. |
| Citation | 164 Cal.App.4th 1478,80 Cal. Rptr. 3d 745 |
| Parties | BRENTON R. SMITH, Plaintiff and Respondent, v. SELMA COMMUNITY HOSPITAL, Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
McCormick, Barstow, Sheppard, Wayte & Carruth, Lawrence T. Wayte and Jerry D. Casheros for Defendant and Appellant.
Andrews & Hensleigh, Barbara J. Hensleigh and John J. Aumer for Plaintiff and Respondent.
Selma Community Hospital's (SCH) medical executive committee recommended the termination of the medical staff membership and hospital privileges of Brenton R. Smith, M.D., based solely on the termination of his privileges at two Hanford hospitals. Smith invoked the next stage of the peer review process by requesting a formal hearing. The judicial review committee sat as a trier of fact at that hearing. It found that the SCH medical executive committee had not shown by a preponderance of the evidence that its recommendation was "reasonable and warranted" as required by SCH bylaws and Business and Professions Code section 809.3, subdivision (b)(3).1 SCH appealed the decision to its governing board. The governing board reversed, concluding that, among other things, the judicial review committee was obligated to accept as true the findings of the Hanford hospitals.
Smith challenged the governing board's decision by filing a petition for writ of mandate. The superior court granted Smith's petition, reversed the governing board, and directed SCH to reinstate the judicial review committee's decision in favor of Smith.
Based on our independent review of the governing board's decision, we conclude that it erroneously decided a number of questions of law prior to reversing the judicial review committee's decision. First, the governing board misinterpreted that decision in a number of respects. For example, it wrongly concluded that the judicial review committee did not make the findings of fact required by the bylaws. Second, it erred in concluding that the judicial review committee considered irrelevant and inappropriate evidence. Third, it erred in concluding that the judicial review committee was obligated to accept as true the findings of the Hanford hospitals. Fourth, it misapplied the substantial evidence rule.
As a result of these errors, the final decision of the governing board must be overturned and the decision of the judicial review committee reinstated. The superior court reached the same conclusion and its judgment will be affirmed.
We emphasize that this decision does not stand for the proposition that an acute care hospital may never rely solely on the results of peer review proceedings at another hospital when reaching a decision to terminate a physician's privileges and staff membership. In that regard, we only uphold the judicial review committee's finding that, in the circumstances of this case, the results of peer review proceedings at the other hospitals were not enough.
General background information on the peer review process as it exists in California (including the organization of hospitals and their medical staffs) and the terms of the bylaws of SCH's medical staff will provide context for understanding the facts of this case.
Every acute care hospital must have "an organized medical staff responsible to the governing body for the adequacy and quality of the medical care rendered to patients in the hospital." (Cal. Code Regs., tit. 22, § 70703, subd. (a).) As a result, hospitals and medical staffs are separate legal entities. (Medical Staff of Doctors Medical Center in Modesto v. Kamil (2005) 132 Cal.App.4th 679, 685 .) Generally, medical staffs are organized as unincorporated associations. (Ibid.)
A medical staff is required to adopt written bylaws. (Cal. Code Regs., tit. 22, § 70703, subd. (b).) The bylaws must establish formal procedures for evaluating "staff applications and credentials, appointments, reappointments, assignment of clinical privileges, appeals mechanisms and such other subjects or conditions which the medical staff and governing body deem appropriate." (Ibid.) The medical staff also must provide a means for enforcing its bylaws. (Ibid.) In other words, the bylaws must establish a peer review process. That peer review process is subject to minimum procedural standards set by California statute.
In 1986, the United States Congress responded to concerns that the quality of medical care had become a nationwide problem by enacting the Health Care Quality Improvement Act of 1986 (HCQIA). (42 U.S.C. §§ 11101-11152.) Congress found that "[t]his nationwide problem can be remedied through effective professional peer review." (Id., § 11101(3).)
The HCQIA addressed peer review by setting forth minimum procedural protections for those involved in the peer review process. For example, a professional review action may not be taken until, among other things, a reasonable effort has been made to obtain the facts of the matter and adequate notice and hearing procedures are afforded the physician involved. (42 U.S.C. § 11112(a), (b).) Also, in certain circumstances, participants in a professional review are immune from liability for damages. (Id., § 11111(a).)
The HCQIA also requires health care entities to report professional review activities that adversely affect a physician's clinical privileges to the National Practitioner Data Bank (NPDB). (42 U.S.C. §§ 11131-11137; see 45 C.F.R. §§ 60.1-60.14 (2008) [].) Besides reporting, hospitals have a duty to obtain information from the NPDB when a physician applies for clinical privileges and once every two years for physicians who have clinical privileges. (42 U.S.C. § 11135(a).)
Because hospitals monitor the NPDB, an institution's negative decision about a physician can have a snowball effect. (Merkel, Physicians Policing Physicians: The Development of Medical Staff Peer Review Law at California Hospitals (2004) 38 U.S.F. L.Rev. 301, 304.) "If one hospital has identified quality concerns [regarding a physician], it is very likely that this will lead to investigations at other hospitals." (Ibid.)
The HCQIA 2 (Merkel, Physicians Policing Physicians: The Development of Medical Staff Peer Review Law at California Hospitals, supra, 38 U.S.F. L.Rev. at p. 318, fns. omitted.)
By setting minimum procedural standards, the legislation provides hospitals and medical staffs some flexibility in deciding how they will conduct a peer review proceeding. This flexibility is recognized in a legislative finding: (§ 809, subd. (a)(8).)
Consequently, the rules applicable to the peer review conducted in this case have two sources: the legislation contained in sections 809 to 809.9 and the bylaws adopted by the medical staff of SCH.
The medical staff of SCH adopted its current bylaws on June 6, 2002.3 SCH's governing board approved the Bylaws on July 23, 2002. The Bylaws are 77 pages long and contain a preamble, definitions, and 15 articles. The Bylaws are supplemented with medical staff rules and regulations, which are 29 pages long.
The preamble states the Bylaws were adopted to provide for the organization and self-government of the medical staff of SCH. In addition, the "bylaws provide the professional and legal structure for medical staff operations, organized medical staff relations with the Governing Board, and relations with applicants to and members of the medical staff."
The topics addressed by the Bylaws include membership on the medical staff (article II), appointment and reappointment to the medical staff (article IV), clinical privileges (article V), corrective action (article VII), and hearings and appellate reviews (article VIII).
The last sentence of section 5.1 of the Bylaws contains a general reference to the peer review process used at SCH: "Medical staff privileges may be . . . modified or terminated by the governing body of this hospital only upon recommendation of the medical staff, only for reasons directly related to quality of patient care and other provisions of the medical staff bylaws, and only following the procedures outlined in these bylaws."
The peer review process outlined in the Bylaws has three principal stages. The first stage, corrective action, involves an investigation by the peer review body or its designee followed by the peer review body's recommendation regarding corrective action. The second stage is a formal hearing before a body sitting as the trier of fact. The third stage is an appeal of the trier of fact's decision; the appellate body renders the final decision. The stages are described in detail after the definitions.
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