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june 2017

 

A Physician’s Right to Fair Procedure

 

For any physician, being forcefully removed from either a medical staff or a preferred physicians network is a concerning event. Fortunately, however, California physicians have a right to due process regarding their staff memberships, as well as their insurance contracts. In most instances, physicians cannot be terminated, excluded or impeded from practicing medicine in an arbitrary manner. This article explores the evolution of the law, while highlighting the current embodiment of these rights.

 

Origins of Fair Procedure

The body of law constituting “fair procedure” traces its roots back to common law notions of due process. Starting in the 1960s, the courts included a physician’s ability to practice medicine as an interest to be protected. This meant that if a medical staff attempted to expel a physician member from its ranks, that physician was guaranteed procedural rights ensuring that he or she could challenge the decision before its finalization.

 

As health care evolved, issues began to arise regarding the scope and function of the fair procedure doctrine. Eventually, the courts delineated two categories of conduct that would violate the law in favor of a physician: the substantive arbitrariness category and the deficient procedure category. The first category refers to the rationale provided by the medical staff for the expulsion of the physician—it must “make sense” and not be frivolous in nature. As to the latter category regarding procedural aspect dictates that, at a minimum, a medical staff must provide the physician with notice of the charge that includes the reasoning for his or her expulsion, and an opportunity to dispute the accusations warranting removal. This process often manifests in an administrative hearing, where the physician is entitled to representation by an attorney.

 

Fair Procedure Prior to an “805 Report”

In the 1970s, the California state legislature passed a law requiring that a medical staff send a report to the Medical Board when an expulsion or suspension of a member physician is the result of a “medical disciplinary cause or reason.”1 This is often referred to as an “805 report.”2Before the medical staff can send this report, however, the physician is entitled to substantial due process. Of note, the code provides, in detail, all the procedural processes owed to a physician facing expulsion or suspension, including thorough explanations of the notice and hearing requirements.

 

It is crucial that a physician facing a potential 805 report understand these rights for two reasons. First, upon receiving an 805 report, the Medical Board will likely conduct an investigation that could result in suspension or revocation of the physician’s medical license. Second, potential employers generally ask prospective employee physicians to disclose whether their medical staff privileges have been previously suspended or revoked. Thus, the issuance of an 805 report can have severe consequences on a physician’s career prospects, as potential employers will typically become aware of the circumstances underlying any 805 report.

 

Expanding to Insurance Plans and Beyond

As medicine and insurance have become inextricably linked, it is important for family physicians to understand their rights with respect to preferred physician networks (and other similar arrangements). A physician’s practice is often entirely dependent upon membership in these networks, as the insurance companies hold tremendous market power. The California Supreme Court recognized this in 2000, finding that the process of deselection, or exclusion, from a preferred physician network must adhere to the common law principles of fair procedure explained above. In other words, before a physician can be removed from a preferred provider network, he or she is entitled to due process protections under common law, similar to those discussed above.

 

conclusion

No physician wants to deal with the threat of termination, nor an “805 report.” Fortunately, the law has evolved to recognize this concern, providing procedures to protect physicians.

 

As always, this article does not reflect a complete list of legal issues that may arise, nor does it constitute legal advice. Physicians should retain a lawyer who specializes in health care law to help navigate the labyrinth of laws and regulations, allowing the physician to focus on providing quality medical care.

 

 


1. The quoted language reflects the code’s current amended state.

2. The law is codified in California Business and Professional Codes §§ 805-809, with section 805 specifically discussing sending of a report to the medical board.

 

About the Author

Scott Kessenick practices in all areas of Kessenick Gamma & Free, LLP specialization, a San Francisco firm providing legal representation to physicians, physician groups, and other health care professionals. He may be reached at skessenick@kgf-lawfirm.com

 

 

Disclaimer

The articles provided in Practice Management News are general. They do not constitute legal, practice management or coding advice in any particular factual situation or create at attorney-client relationship. Consult your attorney or other professional for advice in your particular situation.