A new and recently published opinion of the California Second District Court of Appeal, Asiryan v. Medical Staff of Glendale Adventist Medical Center et. al., provides clarity for California medical staffs on the question of whether common law fair procedure rights in peer review processes and hearings are available beyond the statutory rights contained in Business and Professions Code Section 809 et seq. The case also invites some thinking and discussion regarding the risks associated with medical staffs engaging in preliminary discussions with practitioners in the corrective action process.

The Decision and Its Impact

In the Asiryan case, the California Second District Court of Appeal was asked whether the statutory hearing procedures set forth in Business and Professions Code § 809 et seq. supersede common law fair hearing rights that exist in other federal and state law settings. In its review, the Court noted that the early case law in California governing physician rights arising from a medical staff’s corrective action, were grounded in those longstanding doctrines of fair procedure. The Court found, however, that in enacting Section 809 et seq. in 1989, the California legislature intended the statutory law to supersede any common law fair hearing claims against medical staffs. The Court thereby precluded Dr. Asyrian from proceeding with claims beyond those specifically set forth in Section 809 et seq.

For Medical staffs, this means there is no separate action for common law fair hearing rights, only the procedures set forth in Section 809 et seq. apply. The Court also made some effort to narrow the potentially broadened scope of Section 809 et seq. hearing rights that has been perceived under the Economy v. Sutter East Bay Hospitals case. 

In further review of the facts and circumstances giving rise to this litigation, this case invites some further consideration of the risks involved and the manner in which medical staffs might approach discussions related to corrective action.

Case Background

In Asiryan v. Medical Staff of Glendale Adventist Medical Center et. al., Dr. Asiryan’s clinical care and conduct fell under the scrutiny of the Glendale Adventist Medical Center Medical Staff. By February 2018, the Medical Staff placed Dr. Asiryan under investigation. In September 2018, Dr. Asiryan was advised of the concerns related to her clinical care and conduct and invited to meet with an ad hoc committee on October 18, 2018. Prior to that meeting, Dr. Asiryan performed a cesarean section at which the department chair was present. The case involved some difficulties and the baby required resuscitation, intubation, and transfer to the neonatal intensive care unit.

The following day, Dr. Asiryan expressed willingness to resign to avoid possible harm to her reputation and a Section 805 report. The department chair and outgoing chief of staff, however, determined Dr. Asiryan posed an imminent danger to patient safety and summarily suspended Dr. Asiryan on October 16, 2018. During the meeting to advise Dr. Asiryan of the summary action, a discussion related to resignation occurred. Dr. Asiryan claimed she was told that if she resigned, she would not be reported to the Medical Board of California (MBC) or National Practitioner Data Bank (NPDB); whereas, the medical staff claimed it informed Dr. Asiryan that if she resigned, she would be reported to the MBC and NPDB. Dr. Asiryan resigned, and the Medical Staff reported her resignation while under investigation to the MBC and NPDB.

Dr. Asiryan later filed a lawsuit claiming she was tricked into resigning by misrepresentation of the reporting requirements and thereby gave up her summary suspension hearing rights under Business and Professions Code § 809 et seq. She claimed that this constituted a violation of the fair hearing procedures set forth in Section § 809 et seq. (i.e., lack of proper notice) and separately constituted a violation of the common law right to fair hearing procedures. The trial court ruled in motions that only the statutory provisions in Section 809 et seq. applied and allowed the case to go to trial on the claim of misrepresentation by the Glendale Adventist Medical Staff leadership. At trial, the jury found in favor of the Medical Staff, and Dr. Asiryan appealed.

The Court of Appeal addressed an open question in California: Does Business and Professions Code § 809 et seq. supersede the common law right to fair hearing procedures? The Court found yes, in the peer review setting under Business and Professions Code §§ 805 et seq. and 809 et seq., the statutory law supersedes the common law. This means, for medical staffs, there is no separate action for common law fair hearing rights; only the procedures set forth in Section § 809 et seq. apply.

Providers commonly cite to Potvin v. Metropolitan Life Ins. Co. for the proposition that they should get common law fair hearing rights separate from the statutory peer review fair hearing rights. The Court here effectively dismissed such claims by making a clear and decisive distinction between Dr. Asiryan’s case and the Potvin case. It found, “Potvin, addresses obligations of health insurers that are not covered by the California peer review statute.” The Court’s conclusion can be further extended to mean the narrowly enumerated corrective actions that give rise to fair hearing rights and procedures under Business and Professions Code § 809.1 are the only circumstances under which fair hearing rights must be proffered. The Court notably addressed the Economy v. Sutter East Bay Hospitals case in a manner that suggested a narrower reading and understanding of the Economy case than has commonly been perceived. Indeed, the Court rejected the argument that the Economy case stands for the proposition that “‘attempts to indirectly and underhandedly circumvent the spirit of … section 809, while technically complying with the letter of the statute, provides a basis for a statutory action.’” The Court opined “under the unique circumstances of the [Economy] case, when the hospital-affiliated employer terminated the physician [at the hospital’s request for medical disciplinary cause or reason], the hospital’s medical staff necessarily must have also revoked his privileges at the hospital, an act triggering statutory hearing and notice obligations, with which neither the hospital nor its staff had complied.” This is consistent with the Court’s finding in Asiryan v. Medical Staff of Glendale Adventist Medical Center and provides a more narrowed approach to hearing rights than what might have been understood by the Economy v. Sutter East Bay Hospitals case.

Further Considerations

As a more practical point, this case also highlights risks related to discussions with practitioners during the corrective action process. This is a necessary and common practice and, in many cases, considered to be a professional courtesy. Dr. Asyrian’s case, which involved disagreement as to what was said with regard to resignation and reporting requirements, is a reminder, however, that very different versions of the conversations can emanate from the process.

Such conversations may trigger a reporting requirement and must, therefore, be addressed with caution. As a reminder, under California law, medical staffs are required to report a provider to the MBC in the event of resignation, leave of absence, or the withdrawal or abandonment of an application for privileges following notice of an investigation or notice of a pending denial of privileges. Similarly, the NPDB further adds and requires reporting in the event of resignation during an investigation or to avoid investigation. 

In the case of Dr. Asiryan, the discussion of resignation was close in time with both investigative action and adverse corrective action. She wanted to avoid the report to the MBC and the central argument in the litigation was alleged misrepresentation of reporting requirements. The allegations of misrepresentation highlight the need to engage in clear communication related to corrective action and its consequences, hold such a discussion in the presence of multiple members of medical staff leadership, and memorialize the discussion in writing immediately following its conclusion.