While the court acknowledged that its opinion in Smith v. Selma Community Hospital does not necessarily codify “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[,]” it does specifically note that “in the circumstances of this case, the results of peer review proceedings at the other hospitals were not enough.”
In Nov. 2003, after a peer and judicial review process, the judicial review committee of the Hanford hospitals issued a 23-page decision and report against Brenton R. Smith, MD, listing charges concerning substandard patient care, abusive behavior toward patients and staff, and falsification of records from Jan. 200 to Aug. 2002:
“Of the 34 instances of alleged substandard care, 23 were listed as ‘proven,’ eight were listed as ‘proven in part,’ two were listed as ‘not proven’ and one was listed as ‘proven, but of minimal importance.’ Seven out of 26 charges of abusive behavior were listed as not proven. With respect to falsification of records, five charges were listed as proven, two were listed as not proven, two were listed as proven with extenuating circumstances, and one was listed as proven but not serious.
Based on its evaluation of the charges, the judicial review committee (JRC) of the Hanford hospitals found that Dr. Smith’s summary suspension of Smith and the recommendation that he not be reappointed were “reasonable and warranted.” Dr. Smith appealed, asserting substantial non-compliance with review procedures, bias of the panel and that he had not been allowed to present all relevant evidence. The governing board of Central Valley General Hospital affirmed the decision of the consolidated judicial review committee of the Hanford hospitals; this became the final peer review decision of the Hanford hospitals.
Based on this, Selma Community Hospital’s (SCH) medical executive committee recommended the termination of the medical staff membership and hospital privileges of Brenton R. Smith, MD, based solely on the termination of his privileges at two Hanford (Calif.) hospitals. Dr. Smith invoked the next stage of the peer review process by requesting a formal hearing, at which the hospital’s JRC sat as the trier of fact. Here, the “JRC 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). 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.”
Dr. Smith challenged the governing board’s decision by filing a petition for writ of mandate. The superior court granted the petition, reversed the governing board, and directed SCH to reinstate the JRC’s decision in favor of Dr. Smith. In its review, the appeals court found four errors on the part of the governing board.
1. The governing board misinterpreted the JRC’s decision on several counts. For example, it wrongly concluded that the judicial review committee did not make the findings of fact required by the bylaws. As a result, it erroneously interpreted and thus decided the meaning of the JRC’s decision. Finally, the governing board relied on that interpretation to decide in error that the JRC did not follow fair procedures.
2. The governing board erred in concluding that the judicial review committee considered irrelevant and inappropriate evidence. In its decision, the governing board’s stated that the JRC did not provide a fair procedure because it considered irrelevant or inappropriate evidence. More specifically, that decision stated “the JRC Decision set forth eight paragraphs of highly editorialized summaries of various facts and circumstances giving rise to the JRC hearing. None of these editorial comments were relevant or should have been used in the findings of the JRC.”
However, the appeals court notes:
“The judicial review committee, in its role as trier of fact, was required to determine whether the medical executive committee had persuaded it, by a preponderance of the evidence, that the recommended termination of Smith was reasonable and warranted under the circumstances of this case. Because issue preclusion, exhaustion of remedies, and waiver did not apply, the judicial review committee considered whether it was reasonable for the medical executive committee to treat the findings of the Hanford hospitals as conclusively established and as a sufficient basis for terminating Smith’s privileges at SCH. As a result, the judicial review committee was required to consider (1) the reliability of those findings and (2) the weight those findings should be given as a predictor of Smith’s future behavior at SCH. Therefore, evidence regarding those two points was relevant.”
3. The governing board erred in concluding that the judicial review committee was obligated to accept as true the findings of the Hanford hospitals. “The governing board appeared (1) to interpret the judicial review committee’s decision to mean that the judicial review committee did not accept the Hanford findings as true, and (2) to consider this failure a violation of the judicial review committee’s obligation to treat the Hanford findings as conclusively proven,” writes the appeals court. “… SCH’s governing board committed legal error when it stated: ‘There is no question that the Findings and Conclusions in the Hanford Decision have the full force and effect of a final administrative decision.’ It committed further legal error when it concluded that the judicial review committee'”was obligated to accept as true the findings of the Hanford JRC.'”
4. The governing board misapplied the substantial evidence rule. Because the governing board sat as an appellate body, it was required to apply the substantial evidence standard to the findings of the judicial review committee. The appeals court determined that this standard was applied inappropriately by the governing board, due to two errors: First, it determined that erroneously that “certain evidence was irrelevant or inappropriate”; second, “it erroneously concluded that the findings of the Hanford hospitals were binding and conclusive.”
“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,” writes the appeals court. “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.”
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