Dishonesty and Unethical Conduct

A California court adds insight into hospital peer review standards and scope of duties for hearing officers
By Erin L. Muellenberg, Esq., and Lauryn Anthony Pollard, Esq.

IN A RECENT opinion issued by the California Fourth District Court of Appeal, the court reaffirmed that dishonesty and unethical conduct can affect patient care and therefore is a basis to deny reappointment; the information in this article is derived from the opinion. In Powell v. Bear Valley Community Hospital, Dr. Robert Powell obtained provisional membership on the medical staff of Bear Valley Community Hospital in Big Bear Lake, California, roughly 10 years after he had his clinical privileges and membership terminated by Brownwood Regional Medical Center in Texas.

Brownwood terminated Dr. Powell’s privileges based on findings that he failed to advise a young boy’s parents that he severed the boy’s vas deferens during a hernia procedure or of the complications post-surgery. Further, Brownwood found that Dr. Powell falsely represented to the medical staff, on at least two occasions, that he fully disclosed the circumstances to the parents. This behavior, which Brownwood considered to be dishonest and obstructive, prevented providing appropriate follow-up care to the patient. Based on the committee’s findings, Brownwood terminated Dr. Powell’s staff membership and clinical privileges. In 2001, the Texas Board of Medical Examiners completed an investigation into Dr. Powell but closed the file after stating the evidence didn’t indicate a violation of the Texas Medical Practice Act. Following the investigation, Dr. Powell received a letter from the Texas Board of Medical Examiners stating the conclusions he could use to inform other hospitals of the matter’s closure.

When Dr. Powell applied for appointment at Bear Valley he was required to attest to whether his privileges had ever been revoked by any facility and provide details. While he replied yes, he did not provide the necessary details to explain his loss of privileges nor the letter from the Texas Board of Medical Examiners. Dr. Powell was granted provisional membership to the medical staff. Bear Valley’s Board of Directors (Board) determined that his application was incomplete based on the fact he had not fully explained his loss of privileges at Brownwood. The Board notified Dr. Powell that his provisional membership had expired, but encouraged him to reapply. Dr. Powell reapplied, submitting additional information regarding his loss of privileges in Texas. After the Board made a decision to deny Dr. Powell’s renewed application, he requested a judicial review committee (JRC) hearing regarding that decision.

Support for Hospital Board of Directors’ Action
The JRC found that the Board’s action was reasonable and supported by substantial evidence showing Dr. Powell’s dishonesty and deceitfulness based on: His repeated failure to produce the letter from the Texas Board of Medical Examiners regarding his earlier loss of privileges; his attempt to mislead Bear Valley by producing a different letter from the Texas Board of Medical Examiners; and the misleading information he provided regarding the circumstances that led to his loss of privileges in Texas. The Board affirmed the JRC’s findings after Dr. Powell waived his right to an administrative appeal. Dr. Powell filed a petition for writ of administrative mandamus in the Superior Court, which was unsuccessful, followed by an appeal. The Court of Appeal affirmed the decision of the Superior Court. First, the court affirmed that a physician does not have an absolute right to reappointment.

The Court of Appeal affirmed that the failure of an applicant to provide the supporting information necessary for the medical staff to make a recommendation (or the governing body to make a decision) will render the application incomplete and does not transform the expiration of an appointment into a decision to deny or terminate the privileges.

Second, the court explained that a lapse in provisional privileges while a physician submits a more complete application is not a reportable event under Business and Professions Code Section 805 and does not trigger the right to a JRC hearing. Thus, the court held that Dr. Powell was not entitled to a hearing relating to his initial provisional staff privileges.

Third, the court held that the Board properly exercised independent judgment and after giving great weight to the medical staff’s recommendation did not exceed its authority by denying Dr. Powell’s reapplication. The continued misrepresentations and inability to produce relevant evidence by Dr. Powell showed a propensity for dishonesty and unethical conduct that could affect patients and their care.

Last, the court provided additional insight into hospital peer review standards and the scope of duties provided to hearing officers. The court discussed that hearing officers have the power to determine the relevancy of evidence, rule on requests for information, and impose safeguards as necessary to protect the peer review process.

To read the opinion visit www.courts.ca.gov/ opinions/documents/D072616.PDF.

Erin L. Muellenberg, Esq., (emuellenberg@polsinelli.com) is a principal in the Los Angeles office of Polsinelli, a national law firm; Lauryn Anthony Pollard, Esq. (lpollard@polsinelli.com) is an associate in the Los Angeles office.