CA Court: Peer Review Committee's Recommendations Not Final

Between July 2000 and December 2001, a committee of six physicians heard the disciplinary charges against Weinberg. He was represented by counsel, and the hearing committee received testimony and other evidence concerning his treatment of nine patients. According to the committee majority, Weinberg had erred in several situations, including: 1) prescribing the wrong drug dosage for a patient, thereby contributing to the patient's death; 2) delaying consultation with a cardiologist; 3) failing to record conversations with a pharmacist about an adjustment to a drug dosage; and 4) recommending the use of a drug that other physicians considered inappropriate. Nonetheless, the majority concluded that the physician's conduct did not warrant suspension of his staff privileges, and recommended giving him the opportunity to cure his deficiencies. Two of the committee members dissented, concluding that Weinberg “represent[ed] a continuing imminent danger to his patients” and recommended his permanent suspension.

In May 2002, the MEC considered the committee's findings and recommended to the Board that Weinberg's privileges not be terminated.

A special subcommittee of the Board, with access to the record of the hearing committee, then reviewed the MEC's report and recommendations. At the request of that subcommittee, and because of the division of opinion within the hearing committee, the Board requested that the MEC reconsider the matter and address six enumerated issues based on the “cumulative results” of the nine case findings. Among these six issues was whether Weinberg posed a risk to patients in his care.

In September 2002, 22 members of the MEC reaffirmed their recommendation that Weinberg's privileges not be terminated. Five members dissented from that recommendation. The MEC also resolved the six enumerated issues. As to whether Weinberg posed a risk to his patients, eighteen MEC members found he did not, seven found he did, and two abstained on that issue. Despite the MEC's recommendation, the Board reviewed the records of the previous proceedings and concluded that Weinberg's medical care “pose[d] a potential and imminent risk to patients in [his] care.” The Board terminated Weinberg's staff privileges.

The Board's final decision observed the lack of unanimity within the hearing committee and the MEC, and stated: “[W]ithout substituting the lay Board members' medical judgment for that of the members of the Hearing Committee or MEC, and even giving great weight to the findings of the Hearing Committee majority, the conclusions and recommendations drawn by the Hearing Committee majority and endorsed by the MEC are not supported by the substantial evidence contained in the record.”

The Board also decided that the hearing committee majority erred by not considering the cumulative or aggregate weight of the evidence in the nine cases it reviewed.

The Appeal

Weinberg challenged the Board's action in the Superior Court of Los Angeles County, contending that the Board overstepped its bounds when it acted against the recommendations of the hearing committee and the MEC. Weinberg's argument hinged on the standard for the Board's decision delineated in California Business and Professions Code ' 809.05, which provides: “It is the policy of this state that peer review be performed by licentiates. This policy is subject to the following limitations … The governing bodies of acute care hospitals have a legitimate function in the peer review process. In all peer review matters, the governing body shall give great weight to the actions of peer review bodies and, in no event, shall act in an arbitrary or capricious manner.”

The lower court ruled against Weinberg, leading him to seek relief in the California Court of Appeal. The court noted that California's peer review statute gives hospital boards a “legitimate function” in the peer review process, but that the statute does not define the extent of that role. The court construed the statute to subject the Board's action to deferential review provided that the Board: 1) acted within its delegated authority; and 2) gave due weight to the findings of the peer review committees within their domain of expertise.

The Court of Appeal held that the Board acted within its authority because it had final responsibility for the quality of medical care at the hospital. The court noted that the Board owed a duty of a fiduciary nature to its patients and the public to deliver safe and competent medical services and that this duty established the Board's authority under the facts to terminate the physician's staff privileges.

The court further held that the peer review committee findings were entitled to deference only to the extent they involved medical expertise and that the Board gave sufficient deference to these findings by accepting them to the extent they involved medical issues, even though the Board rejected the conclusion that the physician should be given the opportunity to resolve his deficiencies. Accordingly, the court held that the Board properly exercised its own judgment in terminating the physician's staff privileges.

The physician argued to the Court of Appeal that California Business & Professions Code ' 809.5 required the Board to accept all peer review committee recommendations. He relied on the statute's dictate that peer review be “performed by licentiates” and argued that the Board's right to act unilaterally should be limited to its express statutory authority to act where the peer review body fails to investigate or initiate disciplinary action and such failure “is contrary to the weight of the evidence.”

The appellate court rejected his argument. The court held that the Board's express statutory authority to act where the peer review body fails to do so does not impliedly limit the Board's authority where the peer review body does act.

In summary, the Court of Appeal construed California Business & Professions Code ' 809.05 to allow a hospital governing board discretion to depart from the recommendations of a peer review committee at least in those situations where, as here, the peer review committee determines that a physician has engaged in substandard care but the committee nonetheless recommends against terminating the physician's staff privileges. In those situations, the Board need only defer to the peer review committee findings to the extent they involve medical expertise.

Moreover, by preserving the hospital Board's discretion to act in the interest of promoting patient care, the Court of Appeal's opinion adheres to the statutory mandate that “[a] governing body and the medical staff shall act exclusively in the interest of maintaining and enhancing quality patient care.” The opinion carefully balances the interests of physicians, hospitals, and patients, but is not likely to be the last word in this complex and important area.

The California Court of Appeal recently interpreted the scope of California Business & Professions Code ' 809.05, subdivision (a) in the case of Weinberg v. Cedars-Sinai Medical Center , 119 Cal. App. 4th 1098; 15 Cal. Rptr. 3d 6; 2004 Cal. App. LEXIS 1017 (5/28/04). Weinberg is the first published opinion dealing with the law, which requires that a hospital governing body give “great weight” to a peer review committee's recommendations regarding disciplinary proceedings against a physician, but authorizes the body to reject those recommendations, provided it does not do so arbitrarily or capriciously. The California Court of Appeal applied this statute to the review of physician disciplinary charges by the governing board of Cedars-Sinai Medical Center after four peer review committee members identified deficiencies in a physician's performance, but nonetheless recommended against terminating his staff privileges.

The Peer-Review Process

Under the rules governing the medical staff at Cedars-Sinai Medical Center, physicians are entitled to a hearing on disciplinary charges at which they can present evidence and cross-examine witnesses before a committee of physicians. The hearing committee makes a recommendation regarding the charges and submits it to the Medical Executive Committee (MEC). The MEC reviews the record to ensure that: 1) the physician received a fair hearing; and 2) the recommendation was supported by the evidence and is consistent with the medical staff's rules and practices. The MEC then makes its own recommendation. The physician in question can appeal from the MEC's recommendation to the hospital's Board of Directors. If no appeal is made, the Board will “either: 1) render a final decision in writing; or 2) remand the matter back to the [MEC] and/or Hearing Committee for further action or deliberation … and render a final decision at the next regularly scheduled Board meeting.”

Between July 2000 and December 2001, a committee of six physicians heard the disciplinary charges against Weinberg. He was represented by counsel, and the hearing committee received testimony and other evidence concerning his treatment of nine patients. According to the committee majority, Weinberg had erred in several situations, including: 1) prescribing the wrong drug dosage for a patient, thereby contributing to the patient's death; 2) delaying consultation with a cardiologist; 3) failing to record conversations with a pharmacist about an adjustment to a drug dosage; and 4) recommending the use of a drug that other physicians considered inappropriate. Nonetheless, the majority concluded that the physician's conduct did not warrant suspension of his staff privileges, and recommended giving him the opportunity to cure his deficiencies. Two of the committee members dissented, concluding that Weinberg “represent[ed] a continuing imminent danger to his patients” and recommended his permanent suspension.

In May 2002, the MEC considered the committee's findings and recommended to the Board that Weinberg's privileges not be terminated.

A special subcommittee of the Board, with access to the record of the hearing committee, then reviewed the MEC's report and recommendations. At the request of that subcommittee, and because of the division of opinion within the hearing committee, the Board requested that the MEC reconsider the matter and address six enumerated issues based on the “cumulative results” of the nine case findings. Among these six issues was whether Weinberg posed a risk to patients in his care.

In September 2002, 22 members of the MEC reaffirmed their recommendation that Weinberg's privileges not be terminated. Five members dissented from that recommendation. The MEC also resolved the six enumerated issues. As to whether Weinberg posed a risk to his patients, eighteen MEC members found he did not, seven found he did, and two abstained on that issue. Despite the MEC's recommendation, the Board reviewed the records of the previous proceedings and concluded that Weinberg's medical care “pose[d] a potential and imminent risk to patients in [his] care.” The Board terminated Weinberg's staff privileges.

The Board's final decision observed the lack of unanimity within the hearing committee and the MEC, and stated: “[W]ithout substituting the lay Board members' medical judgment for that of the members of the Hearing Committee or MEC, and even giving great weight to the findings of the Hearing Committee majority, the conclusions and recommendations drawn by the Hearing Committee majority and endorsed by the MEC are not supported by the substantial evidence contained in the record.”

The Board also decided that the hearing committee majority erred by not considering the cumulative or aggregate weight of the evidence in the nine cases it reviewed.

The Appeal

Weinberg challenged the Board's action in the Superior Court of Los Angeles County, contending that the Board overstepped its bounds when it acted against the recommendations of the hearing committee and the MEC. Weinberg's argument hinged on the standard for the Board's decision delineated in California Business and Professions Code ' 809.05, which provides: “It is the policy of this state that peer review be performed by licentiates. This policy is subject to the following limitations … The governing bodies of acute care hospitals have a legitimate function in the peer review process. In all peer review matters, the governing body shall give great weight to the actions of peer review bodies and, in no event, shall act in an arbitrary or capricious manner.”

The lower court ruled against Weinberg, leading him to seek relief in the California Court of Appeal. The court noted that California's peer review statute gives hospital boards a “legitimate function” in the peer review process, but that the statute does not define the extent of that role. The court construed the statute to subject the Board's action to deferential review provided that the Board: 1) acted within its delegated authority; and 2) gave due weight to the findings of the peer review committees within their domain of expertise.

The Court of Appeal held that the Board acted within its authority because it had final responsibility for the quality of medical care at the hospital. The court noted that the Board owed a duty of a fiduciary nature to its patients and the public to deliver safe and competent medical services and that this duty established the Board's authority under the facts to terminate the physician's staff privileges.

The court further held that the peer review committee findings were entitled to deference only to the extent they involved medical expertise and that the Board gave sufficient deference to these findings by accepting them to the extent they involved medical issues, even though the Board rejected the conclusion that the physician should be given the opportunity to resolve his deficiencies. Accordingly, the court held that the Board properly exercised its own judgment in terminating the physician's staff privileges.

The physician argued to the Court of Appeal that California Business & Professions Code ' 809.5 required the Board to accept all peer review committee recommendations. He relied on the statute's dictate that peer review be “performed by licentiates” and argued that the Board's right to act unilaterally should be limited to its express statutory authority to act where the peer review body fails to investigate or initiate disciplinary action and such failure “is contrary to the weight of the evidence.”

The appellate court rejected his argument. The court held that the Board's express statutory authority to act where the peer review body fails to do so does not impliedly limit the Board's authority where the peer review body does act.

In summary, the Court of Appeal construed California Business & Professions Code ' 809.05 to allow a hospital governing board discretion to depart from the recommendations of a peer review committee at least in those situations where, as here, the peer review committee determines that a physician has engaged in substandard care but the committee nonetheless recommends against terminating the physician's staff privileges. In those situations, the Board need only defer to the peer review committee findings to the extent they involve medical expertise.

Moreover, by preserving the hospital Board's discretion to act in the interest of promoting patient care, the Court of Appeal's opinion adheres to the statutory mandate that “[a] governing body and the medical staff shall act exclusively in the interest of maintaining and enhancing quality patient care.” The opinion carefully balances the interests of physicians, hospitals, and patients, but is not likely to be the last word in this complex and important area.