California Supreme Court: Medical Staff Bylaws Deviations Do Not Necessarily Create Unfairness; and the Governing Body Indeed Has a Valid Role in Peer Review

In El-Attar vs. Hollywood Presbyterian Medical Center, a unanimous California Supreme Court decided that a violation of a hospital’s medical staff bylaws is not grounds for invalidating the hospital’s final peer review decision unless the violation produces “some injustice.” In so holding, the Supreme Court confirmed that longstanding principles in both case and statutory law will not be overcome by technical deviations from the procedural rules governing peer review proceedings. Along the way, the Supreme Court clarified certain bedrock legal principles that had recently come into question because of challenges by physician advocates. Arent Fox authored an amicus curiae brief on a California health system’s behalf, supporting Hollywood Presbyterian Medical Center’s position in this case.

The El-Attar Case’s Facts

• When Dr. El-Attar came up for reappointment, the Medical Executive Committee (MEC) recommended favorable action. The hospital’s Board disagreed, and denied his reappointment. Dr. El-Attar requested a hearing.

• The hospital’s medical staff bylaws stated that the MEC “shall appoint” a judicial review committee (JRC) when a hearing is requested. Nevertheless, the MEC declined to appoint a JRC, taking the position that “it should be the governing board and not the MEC which arranges and prosecutes the requested hearing.”

• Like the medical staff bylaws of most California hospitals, the bylaws in this case allowed a hearing to take place under the auspices of the Board in such cases (where the action giving rise to a hearing is taken by the Board, not the MEC). The key issue in the case was the medical staff bylaws language that seemed to authorize only the MEC to appoint a JRC.

• Because the MEC refused to appoint a JRC, the Board appointed one. A hearing proceeded and, apart from the identity of the body that appointed the JRC, in all respects complied with state law and the medical staff bylaws. The hearing involved more than 30 separate sessions over a two-year period.

• Dr. El-Attar lost in the JRC hearing and his appeal to the Board was unsuccessful. He then lost his petition for a writ of mandate in Los Angeles Superior Court. The California Court of Appeal, however, held that the Board’s action — in appointing a JRC despite the bylaws language that authorized only the MEC to do so — constituted per se prejudicial error and invalidated the results of the hearing. The Supreme Court granted review.

At oral argument, the Supreme Court justices’ questions were wide-ranging and interesting but seemed to focus on two questions. The first was factual: Was there a delegation by the MEC to the Board, or at least an attempt at delegation, regarding the authority to appoint the JRC? The second question seemed more policy-oriented: If the bylaws state that the MEC “shall appoint” a JRC, and the MEC refuses to do so, can that be the end of the matter, meaning that no hearing will take place?

In other words, as several justices observed, Dr. El-Attar had the right to a hearing and requested one. The Board provided him with a hearing. Was the MEC’s refusal to appoint a JRC essentially a “veto” (in the words of one of the justices) of the entire hearing process?

Regarding the issue of delegation, both the trial court and the Court of Appeal found that a delegation did occur. Thus the question presented to the Supreme Court was whether or not the Court of Appeal correctly held that the delegation was invalid.

The El-Attar Holding

The Supreme Court concluded that the MEC’s delegation of its authority to appoint a JRC to the governing board, even if it violated the bylaws, was not material, and by itself, did not deprive El-Attar of a fair hearing. The Court did not analyze the question of whether the Court of Appeal correctly concluded that the medical staff bylaws did not authorize the MEC to delegate its selection authority over the hearing officer and JRC members. Instead, the Court simply held that it need not decide that issue because:

(E)ven if the Governing Board’s exercise of this authority was contrary to the hospital’s bylaws, it does not necessarily mean Dr. El-Attar is entitled to relief… Not every violation of a hospital’s internal procedures provides grounds for judicial intervention… We have long recognized that departures from an organization’s procedural rules will be disregarded unless they have produced some injustice.

 

(Emphasis added above.)

In this case, the Court posed the central question to be decided as “whether the Court of Appeal was correct to conclude that the violation of Hospital’s bylaws it identified was a material deviation that by itself deprived Dr. El-Attar of a fair hearing.” The Court’s answer: “(w)e hold that such a bylaws violation is not a material deviation that by itself deprived Dr. El-Attar of a fair hearing.”

The Role of the Governing Body in Peer Review

Apart from its holding, the Supreme Court’s opinion confirmed certain principles of peer review law that have long been assumed correct but have been questioned during the past few years.
 

1. The Court first noted that there is no “strict separation between the medical staff and the governing body as prerequisite for a fair peer review system.” In other words, the hospital Board’s involvement in a peer review matter does not, by itself, raise issues of fairness. On the contrary, the Court noted, the governing body, while giving deference to the medical staff’s determinations, “may take unilateral action if warranted.”
    

2. The Court also addressed one long-standing controversy between advocates of individual physicians in peer review, on the one hand, and advocates for medical staffs seeking to take peer review action, on the other: Which is more important — protection of patients or protection of the physician’s rights? Or are both equally important? In El-Attar, the Supreme Court came down squarely on the side of patient protection, stating explicitly that the basis for the Board’s ability to take unilateral action arises from the “primary purpose of the peer review process” which is “to protect the health and welfare of the people of California.&rdquo
    

3. In the same vein, the El-Attar decision clarified one aspect of the Supreme Court’s decision in Mileikowsky v. West Hills Hospital and Medical Center (2009) 45 Cal.4th 1259. In that case, after a physician who had requested a hearing failed to comply with certain discovery orders, the hearing officer dismissed the proceedings without the hearing ever having been convened or submitted to the JRC. Although the hospital’s governing board had upheld the hearing officer’s decision, the Supreme Court in Mileikowsky held that the hearing officer’s error was not “cured.” That decision had been read by some observers as derogating the governing board’s authority.
   
   Not so, according to the El-Attar Court,which stated that Mileikowsky did not change California law, under which a hospital governing body always has a role to play in peer review, and that role is presumably appropriate:
    

   Although Mileikowsky acknowledges the distinct roles played by hospital’s governing body and its medical staff, it does not suggest that these two components of the hospital’s structure must be kept completely separate or that the governing body has no part to play in the conduct of internal review proceedings mandated by the peer review statute.

4. Dr. El-Attar had suggested the hospital governing body’s mere involvement in the hearing process raised an issue of bias. The Supreme Court rejected that notion, and reaffirmed long-standing case law providing that “bias cannot be presumed in the absence of facts established in the probability of unfairness as a practical matter.” Noting that the model medical staff bylaws of both the California Hospital Association and the California Medical Association provide that a hospital’s governing body may participate in the appointment of a peer review hearing panel in circumstances just like those of the El-Attar case, the Court stated that the governing body’s appointment of the hearing panel members did not, by itself, deprive Dr. El-Attar of a fair hearing. In other words, the Court noted, “(s)imply because the governing body of a hospital may be in a position to deprive a physician of a fair hearing does not mean that it is likely to do so.”
   
   The Court concluded: “(w)e see nothing in the mere fact of having been appointed by a hospital’s governing body instead of by the medical staff that would inherently cast doubt on the impartiality of a review hearing participant.”

A Cautionary Note

The Supreme Court stated that its opinion in El-Attar does not mean that medical staff bylaws “are meaningless or that a violation of a bylaws provision that implements procedural protections above and beyond those mandated by the legislature could never be found material.” In other words, bylaws are still important. Hospitals must not assume that simply because in the El-Attar case a deviation from the bylaws was found not to be grounds for reversing a governing board’s decision, that such a deviation may not be important in a future case. For example, the Court noted, a deviation from the bylaws might be evidence of a “bad intent,” or of inappropriate behavior by the hospital or others involved in the hearing process.

The El-Attar decision is good news for peer reviewers in California. It clarifies existing law, and confirms that the primary purpose of peer review is to protect patients, while preserving physicians’ rights. Efforts to protect patients through the peer review process, although occasionally marred by technical defects, will not be rejected simply because of such defects. Even so, hospitals will be well-advised to ensure that their medical staff bylaws clearly delineate the process to follow in a peer review disciplinary proceeding, and to follow that procedure as carefully as possible.