The Basics: What Every Physician Needs to Know About Medical Staff and Other Types of Disciplinary Proceedings

by Thomas R. Bradford, Esq.

The mind set of most physicians is that peer review proceedings resulting in disciplinary action is something that happens to "the other guy." While understandable and, for the most part, true, every physician needs to have a basic understanding about the nature and origin of disciplinary proceedings, one's rights and obligations, and preventive and coping strategies. This article will hopefully put you on the road to understanding.

I. The Present Day Nature of Disciplinary Proceedings
Outside of the context of licensing board matters, disciplinary proceedings most frequently arise at health facilities, primarily hospitals. This can occur as a result of an initial application for appointment to a medical staff, a subsequent reappointment application, routine peer review processes, patient/staff complaints, and due to conduct considered below the standard of care, an eminent danger to the health and safety of patients, disruptive to hospital operations, unprofessional, and/or unethical. The initial catalyst may or may not appear trivial, however, it is imperative that physicians understand the potential and likelihood for a "snowball effect."

Most physicians have more than a passing familiarity with disciplinary proceedings that can arise at the medical staff level. Unfortunately, the advent of managed care has opened up a new and growing area of exposure. Few physicians can practice nowadays without contracts with insurers and other payers of healthcare services. These entities are increasingly scrutinizing physicians pursuant to the same triggers as hospitals.

There are obvious and not so obvious implications from disciplinary proceedings. They carry the specter of negative impact on reputation and professional standing, the scope of one's practice, and the financial ability to earn a living. They also frequently serve as the impetus for licensing actions by the Medical Board of California. Physicians today find themselves under the microscope as in no time in the past. As such, it is important to understand and know how to cope in this new environment.

II. Disciplinary Actions in the Payer Contracting Arena
The advents of managed care now requires physicians to apply to become paneled providers for health insurance companies, HMOs, and the like. With few exceptions, these contractual arrangements are the physicians' economic life blood. Without them, most physicians cannot survive in practice today. Yet, to become a paneled provider, a physician must apply in much the same way as he/she applies for medical staff membership. Utilizing the same information that a hospital uses, an insurance carrier decides whether the applicant will be made a member of the provider panel. It will consider education, training, experience, claims history, hospital affiliations, and the existence of hospital and licensing board actions. Like the 600 lb. gorilla, the payer has broad discretion in granting provider status with the physician having little recourse when an application is denied. Physicians have greater protection once accepted as a panel provider, however these rights are more limited than in the medical staff setting. Most provider plans contain provisions that will result in the physician being automatically dropped in the event that his/her medical staff privileges are summarily suspended, limited, or revoked; or where the Medical Board of California has initiated action resulting in probation, suspension, or license revocation.

The issues of summary suspension of hospital privileges and probationary license status warrant special mention. It is intellectually easier for a physician to understand why a payer would cancel a provider agreement when a physician's privileges have been curtailed or his/her medical staff membership has been revoked for issues relating to quality patient care. The foregoing occurs after the physician has exercised, or at least had the opportunity to exercise, a full menu of procedural due process rights. Yet, summary suspension is different. Under California law, a summary suspension can be imposed at a hospital when a physician poses an eminent danger to the health and safety of patients, is disruptive to hospital operations, or has engaged in unethical or unprofessional behavior. The agreements that physicians sign with payers obligates the physician to immediately advise the payer when a summary suspension has been imposed. This will trigger an automatic delisting before the physician has had an opportunity to exercise his/her due process rights. The delisted physician cannot challenge the payer's action as it was a contractual term agreed to by the physician at the onset.

Plans vary on whether or not probationary license status results in automatic delisting. You need to consult your provider agreements for details in this regard. However, many plans require that the physicians at all times maintain an "unrestricted" license to practice medicine. A license revocation action initiated by the Medical Board of California (called an Accusation) can conclude, either by settlement or administrative ruling, with the physician still having a license to practice medicine; but with a license that is subject to very specific terms and conditions of probation. While in most cases the physician can do everything he/she did before, the license is considered "restricted" by terms of probation. Under many plans this will result in automatic delisting with little recourse. Still in others, the payer will decide on the delisting with the physician having limited rights to challenge the decision. Whatever rights exist, are set out in the plan and have already been agreed to by the physician.

Patient complaints are the final trigger that can place a physician's panel provider status in jeopardy. The payer will investigate all complaints, but the nature and extent of the investigation varies depending upon the complaint itself. Patients can and do complain about the quality of care provided and usually the payer will ask the physician, pursuant to a duly signed authorization, for a copy of the patients medical records and a written explanation. This material is then reviewed internally, with the payer making a determination as to whether or not action is necessary. Often times the physician's only contact is with the payer's point person and not with the internal committee that reviews the complaints, the records, and the written response. Handled the same way, but far more dangerous are patient complaints of unethical or unprofessional conduct, particularly complaints of drug abuse and sexual impropriety.

The decision to seek or not to seek legal counsel is obviously a personal choice, and the decision should be weighed carefully. Yet, keep in mind that this disciplinary issue can be a mine-field, very dangerous to the unwary.

III. Disciplinary Action in the Medical Staff Setting
Without a doubt, disciplinary actions against physicians arise mostly in the medical staff settings. They take the form of corrective action, judicial review hearings, and appellate reviews. The rights, duties, and obligations of the physician and the medical staff are always set out in great detail in the medical staff bylaws, rules, and regulations. Virtually every physician knows that these procedures are outlined in the bylaws, but few, quite understandably, give them any scrutiny until the need arises. When it does, you should read the bylaws carefully to know what your are up against and seriously consider the retention of counsel to guide you through the process. The following discussion outlines the typical processes.

A. Corrective Actions
A corrective action is the "lowest" level of disciplinary proceedings that a physician can face in the medical staff setting. It generally arises when a judgment is made by an officer of the medical staff, a department chief, the chair of a standing committee, the hospital chief executive officer, or the Board of Trustees that a physician's activities or professional conduct may be considered below standard or disruptive to hospital operations. One of these individuals must submit a written request for actions to the Medical Executive Committee (MEC). The written request must be supported by details where privileges are at risk. The MEC must forward the request to the appropriate department chair who must immediately appoint an ad hoc committee to conduct an investigation.

Up to this point, the targeted physician may or may not know that something is afoot. However, once the Ad Hoc Committee has been appointed, the physician must be notified by certified mail that an investigation is in progress, about the nature of the charges, his/her rights to be interviewed, and of the potential for a report to the Medical Board of California and the National Practitioner Data Bank if privileges may be affected for more than 30 days in a calendar year for "medical disciplinary cause or reason." It is imperative that physicians realize that corrective action can be, and often is, the beginning of a very long process that can lead to a battle with the Medical Board of California to keep one's license.

The Ad Hoc Committee then embarks on its investigation. It will gather and examine documents, usually medical records. It can interview hospital employees and medical staff members with pertinent information bearing on the investigation. At some point the Ad Hoc Committee will interview the targeted physician. Generally speaking, the Ad Hoc Committee must send a letter to physician letting him/her know of his right to being interviewed, the general nature of the charges, the date, time, and place for the interview, in addition to the certified mail notice discussed above. The Committee is working on time constraints imposed by the bylaws within which it must provide a written report to the MEC.

To use the analogy of a fire, the quicker it is extinguished, the better. The same is true of disciplinary proceedings. At the correction action level, the physician interview is the best tool as it gives the physician the opportunity to discuss, explain, or refute the charges. The physician does not have the right to attorney representation during the interview, but an attorney can be consulted so that the physician is properly prepared. The physician cannot present witnesses in his/her own defense, although documents will generally be received and considered by the committee. Often times, the physician is invited to submit a written statement, but the benefits of this option should be carefully weighed. Any such writings submitted should be drafted and signed by legal counsel on the physician's behalf, as it eliminates the risk that it will be used against the physician as the disciplinary process unfolds.

The Ad Hod Committee may seek to tape record the interview. The committee has no right to tape record the interview without the targeted physician's permission, which should always be respectfully withheld. A verbatim transcript is more difficult to attack, than the medical staff coordinator's transcription of her hand written notes.

The Ad Hod Committee will make a record of its proceedings in the form of minutes, which will include notes on the interview. A Court Reporter's record is not prepared. The Ad Hod Committee will then forward its report, along with recommendations, to the MEC.

The MEC has a wide variety of available options. It can reject or modify the recommendations of the Ad Hod Committee. As to the physician, the outcome could be no action whatsoever or a variety of disciplinary actions ranging from a verbal warning, letter of admonition/reprimand, to continuing medical education, proctoring, and consultation requirements; to reduction, suspension, or termination of medical staff privileges. Further, the MEC must specifically determine whether or not the basis of the action concerns quality of patient care. If so, the required statutory reporting to the Medical Board of California and the National Practitioner Data Bank may occur.

The targeted physician is generally notified by mail as to the outcome of the corrective action process. If the MEC recommends an action that will result in a limitation of privileges, the targeted physician must receive notice by certified mail, advising him/her of the recommendations, the reasons for same, the right to a hearing under the bylaws, and of the potential for reporting to the Medical Board and the Data Bank where it has been determined that the action was necessary because the targeted physician's conduct has adversely affected patient care. The matter then proceeds to the hearing phase.

B. Judicial Review Hearing
The notice received by the targeted physician will reference the physician's right to request a hearing to challenge the adverse recommendation. The targeted physician has a limited time period within which he/she can request a hearing usually 30 days from receipt of the notice. The request for hearing must be in writing and addressed to the individuals specified in the bylaws. The targeted physician waives his/her right to a hearing if he/she fails to timely submit a written request. The recommendation of the MEC then becomes final with its adoption by the Board of Trustees, with the required reports being sent to the Medical Board and Data Bank timely.

The bylaws will set the period of time within which the physician is to receive notice by certified mail of the time, place, and date for the hearing. The time period is shorter when the physician is under summary suspension, to move the matter through hearing process as expeditiously as possible. The time period for commencement of the hearing can be extended upon mutual agreement of the parties and, in reality, usually is.

The notice of the hearing must also include a specific list of the charges on which the action is based. While some of this may be repetitive of earlier information provided to the physician, procedural due process requires that the notice at this point specifically delineate the charges that the physician faces. The notice must also provide a listing of the medical records at issue, if applicable.

A hearing officer is appointed by the hospital. This is generally an attorney or a retired judge. The hearing officer can be questioned by the targeted physician for bias and/or prejudice. Generally speaking, the hearing officer should not have performed any substantial legal work for the hospital or its medical staff. If so, it is generally easy to get such an individual replaced. However, the MEC or the Chief of Staff will designate those physician's who comprise the judicial review panel. The number of physicians will vary according to the bylaws but is generally not less than three to five. An odd number is always preferred. The members of the panel are subject to voir dire and can be excluded if it is demonstrated that they had prior active participation in the adverse recommendation or may derive a financial gain from the outcome. The bylaws usually recommend, but do not require that the panel contain at least one physician in the same specialty as the targeted doctor.

In the large communities, it is generally not difficult to assemble a panel of physicians from the hospital's own medical staff. Unfortunately, this can not always be done in smaller communities with small medical staffs. Under these circumstances, physicians from outside the community are recruited but they are subject to the same challenges for bias and financial gain.

A hearing officer presides over the hearing to ensure that it is conducted in an orderly fashion. Some bylaws permit the hearing to proceed where a majority, but not all of the panel members, are present. The targeted physician should always object to this occurring.

A record of the Judicial Review Hearing must be maintained. While tape recordings and minutes are acceptable, the prevailing practice today is to have the proceedings recorded by court reporter who administers an oath to each and every witness who testifies.

Under California Law, the targeted physician does not have the right to legal counsel at the hearing. However, some bylaws extend this right to the physician. At a minimum, the bylaws must allow the physician to be assisted at the hearing by a personal representative who is a licensed physician and preferably a member of the medical staff. The MEC appoints its representative, usually one of its members, to act on its behalf.

Bylaws that do not afford the right to counsel as a matter of course will invariably permit the targeted physician to make a request to the hearing panel that he/she be allowed to be represented by counsel at the hearing. The hearing panel has sole discretion to grant or deny the request. If it permits the targeted physician to be represented by an attorney, the MEC likewise can have its legal counsel present.

The rational behind the state law that does not extend the right of counsel to judicial review hearings is based on the premise that peer review proceedings are best dealt with on a physician to physician basis. However, this rationale has long since lost its practical benefits. Because of the adverse consequences of an unfavorable outcome, the targeted physician should always seek the advice of legal counsel. Even if the request for legal counsel at the hearing is denied, this does not preclude the targeted physician from obtaining the assistance and guidance of an attorney in preparing for the hearing. In fact, you can have your attorney literally outside the hearing room immediately available to you.

The targeted physician must be present at the hearing. Most bylaws will deem a failure to show without good cause as a waiver of hearing rights and an acceptance of the adverse recommendation. Scheduling problems can always be worked out, as long as there is good cause.

The judicial review hearing is an administrative process and the rules of evidence are less strict. The hearing officer is permitted to admit into evidence any relevant matter, even hearsay. The hearing officer should advise the members of the panel that it should weigh the evidence offered in light of its relative strengths and weaknesses.

In the criminal and civil arenas, the burden of proof is placed on the prosecutor and the plaintiff, respectively. A defendant need not offer any evidence whatsoever. This is not the case in the judicial review hearing. The MEC has the initial burden of going forward to present facts in support of the adverse recommendation. The targeted physician then has the burden of showing that the charges lack factual basis or that the recommendation is arbitrary, capricious or unreasonable. The standard applicable to both is preponderance of the evidence.

At the hearing, the targeted physician has the right to call and examine witnesses on his/her own behalf, introduce documentary evidence, and cross-examine the witnesses called against him/her. The targeted physician need not testify on his own behalf, but it would foolish not to do so as he/she can be called by the MEC.

Neither the MEC nor the targeted physician has subpoena power. In the trial setting, counsel for a party can issue a subpoena commanding the appearance of a witness. There is no such ability at a judicial review hearing. This can create some practical problems in light of the flexible application of the rules of evidence. The MEC can seek to introduce declarations and writings of people adverse to the targeted physician who are not subject to cross-examination. Yet compelling arguments of fairness can be made against this occurring. The foregoing aside, most of the witnesses that need to testify will in fact be there.

Hearings are generally held in the evenings to accommodate the schedules of the panel members. It is rare that a hearing can be completed in one session. Multiple sessions, usually extending over a period of weeks or months, are the norm. The hearing concludes with each side giving closing arguments and the hearing panel adjourning for private deliberations.

Most bylaws permit the hearing officer to participate in the deliberations. The hearing officer's role is guidance, as opposed to direction. The hearing officer has no vote, but is clearly in a position to influence the outcome. The hearing officer will prepare the written findings, conclusions and recommendations of the panel, which must be signed by the panel members and transmitted to the MEC within a time specified in the bylaws; usually 30 days or less. The panel can affirm, modify, or reject the recommendation of the MEC. It also needs to make a determination as to whether or not the targeted physician's actions adversely affect patient care because of statutory reporting requirements. The executed report is then sent by certified mail to the targeted physician with copies simultaneously being provided to the MEC, the hospital, and legal counsel. Appellate rights are then triggered.

C. The Appeal Process
Both the MEC and the physician have the right to appeal to the Board of Trustees to challenge the decision. The time period for submitting a written request is specified in the bylaws. A failure to make a timely request operates as a waiver. The demand should include a request to present an oral argument, if one is desired which it always should be. The time period for convening the appellate body is delineated in the bylaws and a certified letter must be sent to both sides specifying the time, place, and date for oral argument.

The appeal body is confined to the members of the Board of Trustees and the bylaws will specify the minimum number required. They body appoints one of its members to serve as the chair. Legal counsel for the hospital (not the medical staff) is usually involved in the coordinating activities at this level. This individual will provide advice and guidance to the appellate body as necessary. Almost always, it is the physician who requests the appeal. There is no right to the presence of counsel when the appeal body convenes for oral argument, unless counsel participated in the hearing. The targeted physician has a right to access to the record prepared by the panel, including all exhibits as well as the panel's Report. The physician is entitled to all material considered favorable as well as unfavorable to his/her position.

The bylaws permit the targeted physician to submit a written statement outlining the procedural and substantive challenges he/she is making. The bylaws will usually specify the time period when this written brief is due as well as the time period in which the MEC must respond.

The hearing panel and the appellate body both review and consider procedural challenges. In this regard the roles are overlapping. However, as it relates to an analysis of the decision on the merits, the roles are decidedly different. The panel reviews and considers all relevant evidence and then comes to its decision. The role of the appellate body is not to determine whether or not it agrees with the decision of the panel, but rather whether the decision is supported by reasonable evidence and is not arbitrary or capricious. The appellate body must affirm the panel determination as long as the decision is supported by the evidence, even if the members of the appellate body would come to a different decision. Challenges at the appellate level are based solely on the record from the hearing. New or additional evidence may be considered by the appellate body, in its sole discretion, under unusual circumstances only; such as it being newly discovery since the hearing.

The chances of a physician succeeding on appeal are slim. The physician can have the underlying decision reversed if he/she can demonstrate that there has been a denial of procedural due process or a substantive violation of law. However, this is unlikely to occur when counsel are involved. Even when the physician does not have counsel, the attorneys for the MEC should be monitoring the process to insure that the targeted physician is granted all his procedural due process rights.

The decision can also be overturned if there has been a violation of substantive law. Again, this is unlikely to happen for the reasons discussed above. The physician's best shot is an attack on the decision being arbitrary and capricious.

Reversal on appeal most often occurs when the appellate body is convinced that there has been an over reaction by the MEC and the panel to the evidence, "finding that the punishment does not fit the crime." The targeted physician must appeal to the common sense of the members of the appellate body with them hopefully reaching the opinion that the decision was indeed arbitrary and capricious.

The appellate body will deliberate and render an opinion. It can confirm, modify, or reverse the panel's decision. It can also remand the matter for further review. The appellate body must provide a written report to the Board of Trustees within the time specified in the bylaws, unless it is remanded for further review.

Once the appellate process is completed, the final decision is made by the Board of Trustees. It must do so within a time specified in the bylaws and give written notice to both sides by certified mail. If the Board is going to adopt a position averse to the MEC, many Bylaws require the convening of a joint conference committee which includes members from the MEC as well as the Board, who must meet and confer before the Board's action becomes final.

As with the corrective action and judicial review processes, the Board must make a determination as to whether or not the action against the physician arose because of adverse quality care. If so, then the Medical Board and Data Bank must be promptly notified.

IV. Post Hospital Remedies - The Writ Process
When, and only when, a physician has exhausted administrative remedies in the corrective action, judicial review, and appeal processes, can he/she invoke the powers of the court. This is done utilizing a proceeding called a Writ of Mandamus. In essence this is an appeal to a higher body. To prevail, the targeted physician must demonstrate a violation of procedural due process, substantive law, or a decision that is arbitrary and capricious.

The question often asked by physicians is if they can initiate legal action against a hospital and members of its medical staff for the perceived injustice of a medical disciplinary action. The answer is yes, but the prerequisites to a lawsuit pose significant hurdles. First of all, state law extends immunity to physicians involved in peer review proceedings as long as they act in good faith and without malice. If so, the immunities are absolute. If there is a legitimate question of bad faith, a legal action may lay, however, it can only be pursued after the targeted physician exhausts all administrative remedies and reverses the underlying adverse action on a writ. This is true even when the physician's claims are based on state and federal anti-discrimination statutes.

V. New Environment
A physician can survive and even thrive in this new environment. An early proactive response is the best defense. It is always to the physician's advantage to bring disciplinary proceedings to a conclusion as quickly as possible.

2002 Bonne, Bridges, Mueller O'Keefe & Nichols

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