Bichai v. DaVita, Inc.

Filed 12/20/21
CERTIFIED FOR PARTIAL PUBLICATION *
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
WILLIAM N. BICHAI,
F079815
Plaintiff and Appellant,
(Super. Ct. No. BCV-18-100245)
v.
DAVITA, INC., OPINION
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Kern County. Stephen D.
Schuett, Judge.
William N. Bichai, in pro. per.; Fenton Law Group, Henry R. Fenton and Dennis
E. Lee for Plaintiff and Appellant.
Law Offices of LeBeau Thelen, Patrick C. Carrick; Post & Schell, Robin Lock
Nagele and Elizabeth M. Hein for Defendant and Respondent.
-ooOoo-
Plaintiff William N. Bichai, M.D., filed this lawsuit to challenge the denial of his
application for appointment to the medical staff of a dialysis clinic. The superior court
denied Bichai’s request for a writ of administrative mandate pursuant to Code of Civil
Procedure section 1094.5. Bichai appealed.
* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of parts III. and IV. of the Discussion.
This appeal addresses the procedural fairness of the hearing Bichai received after
the clinic’s peer review committee recommended his application be denied. The
procedures for such a hearing are established by the medical staff bylaws and California’s
peer review statute. The hearing officer, applying burdens specified in the bylaws,
concluded that (1) the clinic sustained its initial burden of presenting evidence to support
the denial of staff privileges and (2) Bichai did not sustain his burden of proving that the
denial “lacks any substantial factual basis, or is otherwise arbitrary or capricious.”
We conclude the burden of proof contained in the medical staff bylaws is not
consistent with the preponderance of the evidence standard required by Business and
Professions Code section 809.3, subdivision (b)(2). 1 We further conclude the statute
controls in the event of an inconsistency, the application of the bylaws’ more demanding
burden of proof constituted procedural error, the error deprived Bichai of a fair hearing
and, therefore, was prejudicial. As a result, he is entitled to a writ of administrative
mandamus vacating the hearing officer’s decision.
We therefore reverse the judgment.
FACTS
Defendant DaVita, Inc., is a Delaware corporation that owns and operates several
dialysis facilities in California’s Central Valley. The medical staff at the DaVita facilities
are formed by the physicians practicing there. The medical staff is accountable to both
the facility’s governing body and to DaVita for the quality of medical services provided.
The medical staff’s activities are governed by the “Medical Staff Bylaws, Rules and
Regulations” (Bylaws) that the DaVita Physician Council approved in 2015.
The Bylaws describe the nature of medical staff membership and clinical
privileges, the procedures for appointment and reappointment to the medical staff,
1 Subsequent unlabeled statutory references are to the Business and Professions
Code.
2.
categories of medical staff, and how the medical staff is governed. Article XIII of the
Bylaws, titled “FAIR HEARING PLAN,” addresses (1) the decisions that trigger a
physician’s right to a hearing, (2) the process for requesting and scheduling the hearing,
(3) the procedural steps that must be completed before the hearing, and (4) procedures for
the hearing itself. The right to a hearing is triggered by the denial of appointment or
reappointment to the medical staff. The Bylaws’ hearing procedures include the burden
of proof requirement challenged by Bichai in this appeal.
Bichai is a licensed nephrologist and internist who moved to Bakersfield in 2008
and joined Kern Nephrology Medical Group, which was owned by Umamaheswara
Varanasi, M.D. Bichai obtained privileges at facilities operated by DaVita and Fresenius,
the two major dialysis competitors in the United States. In 2009, a dispute arose between
Varanasi and Bichai, and Bichai left the practice group and became a solo practitioner.
In October 2009, a deputy general counsel for DaVita notified Bichai about a
series of complaints that Bichai had inappropriately solicited patients of other physicians,
including Varanasi, and engaged in disruptive behavior. Varanasi has a close relationship
with DaVita and is the medical director at three of the four DaVita facilities where Bichai
practiced.
In January 2010, Bichai’s privileges at four of DaVita’s facilities were suspended
based on allegations of unprofessional and disruptive conduct during the preceding two
and a half months. Bichai contends the allegations were false and were motivated by
Varanasi’s desire to eliminate Bichai as a competitor.
In November 2011, DaVita’s Credentialing and Peer Review Committee (Peer
Review Committee) voted to revoke Bichai’s privileges. The next month, the governing
bodies of the three DaVita facilities voted to revoke Bichai’s privileges. Bichai retained
counsel and attempted an informal resolution of the dispute.
In May 2013, DaVita and Bichai executed a confidential settlement agreement and
mutual release, which stated it was effective as of April 22, 2013. The agreement
3.
provided that Bichai would have a mentor at DaVita’s facilities. Section 4 of the
agreement stated in part:
“In the event that the mentor reports to DaVita that Dr. Bichai is not
adhering to community standards (including documentation standards) as to
one or more patients, each patient’s records will be submitted to an external
reviewer secured through MD Review or as otherwise agreed to by the
parties, and paid for jointly by Da Vita and Dr. Bichai. If the external
reviewer concurs that Dr. Bichai’s management of the patient is not
adhering to community standards (including the documentation standards
set forth in Section 3), Dr. Bichai will voluntarily resign his medical staff
membership and clinical privileges at all Da Vita facilities, and agree to
waive his hearing rights and will fully waive any and all litigation rights
against DaVita, including all officers, directors, employees and agents. Dr.
Bichai understands that such a resignation would be the subject of a
‘Section 805’ report to the [Medical] Board of [California].” 2
On February 13, 2014, DaVita provided Bichai a report and findings of an MD
Review consultant and advised Bichai that, based on the findings, he was to voluntarily
resign his medical staff membership and clinical privileges at all DaVita facilities.
DaVita also advised Bichai that the resignation was reportable to the Medical Board of
California. Bichai asked that the decision be reconsidered. On February 20, 2014,
DaVita sent Bichai a second notice of deemed resignation that stated the resignation was
final and nonappealable.
In March 2014, DaVita filed an 805 report with the Medical Board of California.
The report stated, Bichai “was deemed to resign his medical staff membership and
clinical privileges on March 15, 2014, by agreement.… [Bichai] entered into a
confidential settlement agreement with DaVita that resulted in his resignation while
2 Under section 805, licensed health care facilities in California must file a report
with the appropriate state agency when a peer review body takes certain adverse action
against a licentiate. (Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478,
1483, fn. 2 (Selma Hospital).) Such a report is commonly called an “ ‘805 report.’ ”
(Ibid.; see § 805, subd. (b) [facility “shall file an 805 report with relevant agency within
15 days after” specified action by peer review body].)
4.
under investigation for a medical disciplinary cause or reason. There was no final finding
or determination as to the clinical concerns, and the deemed resignation has rendered
those issues moot.”
Fifteen months later, in June 2015, Bichai attempted to regain privileges at DaVita
by submitting a physician credentialing application. DaVita deferred consideration of
this application because a formal accusation by the Medical Board of California was
pending against Bichai. In September 2015, the Medical Board amended its accusation
against Bichai. The accusation was related to complaints made by three hospitals in
Bakersfield. In March 2016, the Medical Board withdrew the amended accusation.
In May 2016, after the withdrawal, Bichai submitted another physician
credentialing application to DaVita. While the application was being evaluated, Bichai
completed the University of California San Diego Physician Assessment Clinical
Education (PACE) Program. (Bichai v. Dignity Health (2021) 61 Cal.App.5th 869, 872.)
In January 2017, the PACE Program issued its findings that he was fit for duty without
accommodations, although it recommended that he desist from self-treatment, undergo
psychiatric consultation for his anxiety, reduce his patient volume, and read guidelines
about boundaries in the use of electronic communications. Bichai provided a copy of the
PACE Program report to the Peer Review Committee. He also submitted a copy of a
quality pulse survey dated November 30, 2016.
On February 3, 2017, the Peer Review Committee voted to deny Bichai’s
application. The committee concluded that the documentation submitted by Bichai “does
not provide sufficient assurance to the [committee] that the kinds of clinical, ethical, and
professional conduct issues that were present during Dr. Bichai’s prior appointment to the
DaVita Medical Staff will not arise if he is again appointed to the Medical Staff.”
Dr. John Robertson, in his capacity as chief medical officer, sent Bichai a notice of
proposed adverse action and hearing rights dated February 10, 2017. The last paragraph
of the notice informed Bichai that he had 30 days to request a hearing and, if no request
5.
was made, his right to a hearing would be deemed waived and the denial of appointment
would become final.
In March 2017, an attorney representing Bichai sent a request for hearing to
DaVita by e-mail. In an attempt to resolve the matter before the hearing, Bichai
presented additional documents to DaVita. In September 2017, the Peer Review
Committee met, considered the documents, and voted unanimously not to alter its
previous decision to deny Bichai’s application.
In November 2017, DaVita notified Bichai that the formal hearing he requested
would take place on December 12 and 13, 2017. Before the hearing, Bichai and DaVita
entered into an arbitration agreement in which they chose an arbitrator and agreed the
arbitrator would “decide their disputes arising out of DaVita Healthcare’s denial of Dr.
Bichai’s application for appointment to the DaVita Medical Staff.” They also agreed “the
hearing shall be conducted according to … section 809, et seq. and Article IV of the
Medical Staff Bylaws .… Arbitrator shall decide all questions of law and fact to the
denial of Dr. Bichai’s application for appointment and shall render a written decision as
required by the Medical Staff Bylaws.” In this opinion, the term “hearing officer” is used
to refer to the attorney chosen by the parties as arbitrator. 3
The hearing proceeded as scheduled. In January 2018, the hearing officer issued a
41-page written report concluding that the Peer Review Committee’s decision to deny
Bichai’s application was supported by the record and “Bichai has not established that he
is currently capable of meeting the qualifications set forth in Section 3.3(h), (i) and (j) of
the Medical Staff Bylaws.” The contents of the report describing the burden of proof
imposed on Bichai are discussed in part II.B., post.
3 The parties’ choice of a hearing officer is allowed by section 809.2, subdivision
(a), which states that the trier of fact in a peer review hearing shall be “selected by a
process mutually acceptable to the licentiate and the peer review body” or an unbiased
individual who meets certain requirements.
6.
PROCEEDINGS
In February 2018, Bichai filed this lawsuit to challenge the hearing officer’s
decision. In July 2018, he filed a second amended complaint for unfair competition and
petition for writ of mandamus.
In October 2018, the superior court sustained a demurrer to the unfair competition
cause of action and entered an order dismissing that claim with prejudice. The litigation
proceeded on Bichai’s request for a writ of administrative mandamus pursuant to Code of
Civil Procedure section 1094.5.
A copy of the administrative record was lodged with the superior court and the
parties submitted briefs addressing whether a writ of administrative mandamus was
appropriate. Bichai’s briefing contended (1) substantial evidence did not support the
hearing officer’s decision, (2) the hearing officer should not have admitted hearsay
evidence, (3) the evidence overwhelmingly established his fitness for membership on the
medical staff, (4) the wrong burden of proof was applied and constituted reversible legal
error, and (5) his 2014 deemed resignation was invalid under section 809.6 and,
therefore, he was still a member of the medical staff. In March 2019, the superior court
held a hearing and took the matter under submission.
In May 2019, the superior court issued its decision, concluding the hearing officer
applied the correct standard of proof and substantial evidence supported the hearing
officer’s findings and decision. The court also concluded Bichai’s deemed resignation in
2014 pursuant to the terms of a settlement agreement did not violate section 809.6.
In June 2019, the court filed a judgment in favor of DaVita that stated Bichai’s
petition for writ of administrative mandamus was denied. Bichai filed a timely appeal.
In a letter dated October 19, 2021, Bichai informed the court that he was
requesting oral argument, that he would represent himself, and that the services of his
attorneys had been terminated in July 2021. This court interpreted the letter as a
substitution of attorney pursuant to California Rules of Court, rule 8.36(b) and recognized
7.
Bichai as a self-represented appellant. Thus, Bichai appeared at the December 2021 oral
argument and presented arguments on his own behalf.
DISCUSSION
I. BASIC LEGAL PRINCIPLES
A. Standard of Review
In a peer review proceeding addressing a physician’s membership on a medical
facility’s staff, the final decision on membership and privileges is subject to judicial
review by administrative mandamus. (See § 809.8 [judicial review]; Code Civ. Proc.,
§ 1094.5 [administrative mandamus].) An appellate court reviews the final peer review
decision, “not the reasoning or actions of the superior court.” (Selma Hospital, supra,
164 Cal.App.4th at p. 1499.)
The first issue a reviewing court considers is whether the correct standards were
used in conducting the hearing and reaching a final decision. (Michalski v. Scripps
Mercy Hospital (2013) 221 Cal.App.4th 1033, 1042 (Michalski); Hongsathavij v. Queen
of Angels etc. Medical Center (1998) 62 Cal.App.4th 1123 [whether correct standards
were applied is threshold issue].) Here, the parties agree that appellate courts conduct a
de novo review when determining whether the correct standards were applied.
A failure to apply the correct standards does not automatically result in the
issuance of a writ vacating the peer review decision. (El-Attar v. Hollywood
Presbyterian Medical Center (2013) 56 Cal.4th 976, 990–991 (El-Attar).) “ ‘Rather the
question is whether the violation resulted in unfairness, in some way depriving the
physician of adequate notice or an opportunity to be heard before impartial judges.’ ”
(Id. at p. 991.) In other words, a deviation from the correct standards must be prejudicial.
(Ibid.) “Whether a hearing officer’s procedural rulings give rise to prejudicial error is a
question of law reviewed independently on the administrative record.” (Natarajan v.
Dignity Health (2021) 11 Cal.5th 1095, 1111 (Natarajan).)
8.
Our Supreme Court has addressed the relief available when a physician
demonstrates a peer review decision is tainted by a prejudicial error. Such an “error
would entitle the licentiate to a new hearing. Judicial review cannot, of course, stand in
for a fair proceeding in the first instance.” (Natarajan, supra, 11 Cal.5th at p. 1112.)
The rationale for a court not rendering a final decision on the merits of a physician’s
application for staff membership is that judges are untrained and courts are ill-equipped
to make such decisions. (See Goodstein v. Cedars-Sinai Medical Center (1998) 66
Cal.App.4th 1257, 1266.)
If the correct standards were applied, the reviewing court’s second inquiry is
whether the administrative findings of fact are supported by substantial evidence. (Code
Civ. Proc., § 1094.5, subds. (c), (d) [substantial evidence standard for administrative
findings]; see Michalski, supra, 221 Cal.App.4th at p. 1041 [appellate and trial court
review administrative record to determine whether findings of administrative body are
supported by substantial evidence in light of the whole record].) The parties agree the
substantial evidence standard applies to factual findings.
B. Historical Overview of the Correct Procedural Standards
The common law doctrine of fair procedure was the initial source of the minimum
protections for physicians subject to adverse action in a peer review proceeding. (El-
Attar, supra, 56 Cal.4th at p. 986.) The doctrine was applied to the private association’s
membership decisions to assure the action taken was both substantively rational and
procedurally fair. (Ibid.)
In 1986, Congress passed the Health Care Quality Improvement Act of 1986
(HCQIA; 42 U.S.C. §§ 11101–11152), which “envisioned minimal due process rights for
those involved in the peer review process.” (Merkel, Physicians Policing Physicians:
The Development of Medical Staff Peer Review Law at California Hospitals (2004) 38
U.S.F. L.Rev. 301, 318.) HCQIA allows states to opt out if their own legislation includes
certain basic procedural protections. (Ibid.)
9.
In 1989, the Legislature chose to opt out of HCQIA and “design its own peer
review system” because of perceived “deficiencies in the federal act and the possible
adverse interpretations by the courts.” (§ 809, subd. (a)(2).) California’s peer review
statute was codified in sections 809 through 809.9, became effective January 1, 1990, and
established minimum procedural standards that must be followed in certain peer review
proceedings. (Selma Hospital, supra, 164 Cal.App.4th at p. 1483.) The Legislature
declared the new laws “provide a more careful articulation of the protections for both
those undertaking peer review activity and those subject to review, and better integrate
public and private systems of peer review.” (§ 809, subd. (a)(9)(A).) As a result of the
new legislation, “peer review in California hospitals has changed dramatically” since the
common law era. (Merkel, Physicians Policing Physicians: The Development of Medical
Staff Peer Review Law at California Hospitals, supra, 38 U.S.F. L.Rev. at p. 318.)
Under California’s peer review statute, the rules governing the peer review process
have two basic sources—the statute itself and the medical staff bylaws. (Selma Hospital,
supra, 164 Cal.App.4th at p. 1484.) The statute requires the medical staff bylaws of an
acute care hospital to include “written provisions implementing Section 809 to 809.8,
inclusive.” (§ 809, subd. (a)(8).) Here, DaVita is not an acute care hospital and,
therefore, it is not explicitly subject to this requirement. DaVita contends that, pursuant
to section 809.6, subdivision (a), its Bylaws may contain “any additional notice and
hearing provisions … which are not inconsistent with Sections 809.1 to 809.4,
inclusive.” 4 Based on section 809.6, we conclude sections 809.1 through 809.4 control
when provisions in the Bylaws are not consistent with the statutory requirements.
4 Section 809.1 states that a licensed physician who is the subject of a final
proposed action of a peer review body for which an 805 report is required shall be
entitled to written notice and the notice shall inform the physician of his or her right to
request a hearing on the final proposed action. Section 809.2 sets forth a range of
procedural requirements that apply to any requested hearing, including the inspection of
documents, exchange of witness lists, continuances, and timing for commencement of the
10.
II. BYLAWS’ ALLOCATION OF THE BURDEN OF PROOF
A. Bylaws’ Provision Contradicts the Statute
Bichai contends the Bylaws’ allocation of the burden of proof violates the
requirements of section 809.3, subdivision (b). In response, DaVita contends the Bylaws’
burden of proof requirement is not inconsistent with the statute and, therefore, is
permissible under section 809.6, subdivision (a). As explained below, we conclude the
Bylaws impose a more difficult burden of proof and, therefore, the Bylaws’ burden of
proof provision is not consistent with the statutory requirement.
Section 809.3, subdivision (b) addresses the burden of presenting evidence and the
burden of proof during the hearing addressing a denial or revocation of staff privileges:
“(1) The peer review body shall have the initial duty to present evidence
which supports the charge or recommended action.
“(2) Initial applicants shall bear the burden of persuading the trier of fact by
a preponderance of the evidence of their qualifications by producing
information which allows for adequate evaluation and resolution of
reasonable doubts concerning their current qualifications for staff
privileges, membership, or employment. Initial applicants shall not be
permitted to introduce information not produced upon request of the peer
review body during the application process, unless the initial applicant
establishes that the information could not have been produced previously in
the exercise of reasonable diligence.
“(3) Except as provided above for initial applicants, the peer review body
shall bear the burden of persuading the trier of fact by a preponderance of
the evidence that the action or recommendation is reasonable and
warranted.” (Italics added.)
The burden of presenting evidence and the burden of proof also is addressed by
Bylaws section 13.8.7, which states in full: “The DaVita committee whose action or
hearing. Section 809.3 sets forth the rights of the parties during a hearing concerning a
final proposed action. Section 809.4 specifies the rights of the parties upon completion of
the hearing, including the right to a written decision of the trier of fact and an explanation
of the procedure, if any, for appealing the decision.
11.
recommendation is at issue shall have the initial burden of presenting evidence in support
of such adverse recommendation or action. The Physician who requested the hearing
shall thereafter have the burden of proving that the adverse action or recommendation
lacks any substantial factual basis, or is otherwise arbitrary or capricious.” (Italics
added.)
It is plain from the wording of the first sentence of Bylaws section 13.8.7, which
addresses DaVita’s burden of presenting evidence, that it is consistent with the initial
duty to present evidence specified in section 809.3, subdivision (b)(1). In contrast, the
wording of the second sentence of Bylaws section 13.8.7 does not track the language in
section 809.3, subdivision (b)(2).
Our analysis of whether the burden of proof in the Bylaws is consistent with the
peer review statute begins with the meaning of the statutory term “preponderance of the
evidence.” (§ 809.3, subd. (b)(2).) An often-quoted definition of the term
“preponderance of the evidence,” states it “simply means what is says, viz., that the
evidence on one side outweighs, preponderates over, is more than, the evidence on the
other side, not necessarily in number of witnesses or quantity, but in its effect on those to
whom it is addressed.” (People v. Miller (1916) 171 Cal. 649, 652.) The Supreme Court
also quoted a decision stating that, in a civil case, a preponderance of the evidence
“ ‘meant such evidence as, when weighed with that opposed to it, has more convincing
force, and from which it results that the greater probability is in favor of the party upon
whom the burden rests.’ ” (Id. at p. 653.) More recently, our Supreme Court stated the
preponderance of the evidence standard “simply requires the trier of fact ‘to believe that
the existence of a fact is more probable than its nonexistence.’ ” (In re Angelia P. (1981)
28 Cal.3d 908, 918; see CACI No. 200 [obligation to prove—more likely true than not
true].) The preponderance of the evidence standard also has been described as the
“ ‘weight of the evidence,’ i.e., more than 50 percent proof.” (Union Pacific Railroad
Co. v. State Bd. of Equalization (1991) 231 Cal.App.3d 983, 1000.) We conclude
12.
subdivision (b)(2) of section 809.3 used the term “preponderance of the evidence” in
accordance with these definitions.
Next, we consider the meaning of the Bylaws’ requirement that an applicant prove
a recommendation to deny privileges “lacks any substantial factual basis.” “Any”
ordinarily means “of whatever kind” or “without restriction.” (Zabrucky v. McAdams
(2005) 129 Cal.App.4th 618, 628.) The term “substantial” appears in many legal
contexts, including the substantial factor test for causation. That test refers to “a factor
that a reasonable person would consider to have contributed to the harm. It must be more
than a remote or trivial factor. It does not have to be the only cause of the harm.” (CACI
No. 430.) When used to describe evidence, “substantial” means of ponderable legal
significance, reasonable in nature, credible, and of solid value. (Brewer v. Murphy
(2008) 161 Cal.App.4th 928, 935–936; see Sandarg v. Dental Bd. of California (2010)
184 Cal.App.4th 1434, 1440 [evidence is substantial if any reasonable trier of fact could
have considered it reasonable, credible and of solid value].)
The substantial evidence standard has been compared directly to the
preponderance of the evidence standard by federal courts reviewing administrative
proceedings in which social security disability benefits were denied. (E.g., Holohan v.
Massanari (9th Cir. 2001) 246 F.3d 1195, 1201, 1211 [“Evidence can be ‘substantial’ if it
is more than a scintilla, even though less than a preponderance”].) The same
interpretation has been adopted in other contexts.
For example, in Hynson, Westcott & Dunning, Inc. v. Richardson (1972) 461 F.2d
215, the court recognized the term “ ‘substantial evidence’ ” in a federal statute was a
milder term than “ ‘preponderant evidence’ ” or “ ‘conclusive evidence.’ ” (Id. at p. 220.)
Similarly, in Butler v. Oak Creek-Franklin School Dist. (E.D.Wis. 2001) 172 F.Supp.2d
1102, the court concluded the “substantial evidence” standard of proof was lower than a
preponderance of the evidence and, therefore was not acceptable in a student disciplinary
hearing. (Id. at p. 1119.) The court stated the lower standard “would allow government
13.
officials to make decisions that they themselves believe are more likely than not wrong.”
(Ibid.; see Note, The Process That Is Due: Preponderance of the Evidence As the
Standard of Proof for University Adjudications of Student-on-Student Sexual Assault
Complaints (2012) 53 B.C. L.Rev. 1613, 1633–1639 [comparing the substantial evidence
standard to the preponderance of the evidence standard].)
Based on the foregoing comparisons of the substantial evidence standard to the
preponderance of the evidence standard, we conclude a standard of proof requiring an
applicant to prove the lack of any substantial factual basis for the Peer Review
Committee’s recommendation imposed a more demanding standard of proof than the
preponderance of the evidence standard required by section 809.3, subdivision (b)(2).
For instance, an applicant whose evidence constitutes 60 percent proof would satisfy the
preponderance of the evidence standard, yet fail to prove the denial of privileges lacks
any substantial factual basis because 40 percent proof would qualify as a substantial
factual basis. Therefore, we conclude the Bylaws’ burden of proof is not consistent with
the statutory requirements and, as a result, is not enforceable. (§ 809.6, subd. (a).) 5
B. Standard Applied by the Hearing Officer
DaVita contends that, regardless of what the Bylaws say, the hearing officer
applied the correct burden of proof. We disagree.
The hearing officer’s 41-page written report contains many references to the
burden of proof. For instance, it phrased the two substantive issues in terms of (1) the
Peer Review Committee’s initial burden of presenting evidence to support its
recommendation and (2) Bichai’s burden of proving the recommendation lacked any
5 We note that the “lacks substantial factual basis” appears in the staff bylaws of
medical facilities located in other states. (See Johnson v. Spohn (5th Cir. 2009) 334
Fed.Appx. 673, 682–683 [Texas]; Williams v. University Medical Center of Southern
Nevada (D.Nev. 2010) 688 F.Supp.2d 1111, 1132; W.S.K. v. M.H.S.B. (Ind.App. 2010)
922 N.E.2d 671, 684; Volcjak v. Washington County Hospital Association (1999) 124
Md.App. 481, 493.)
14.
substantial factual basis or was otherwise arbitrary or capricious. The report quoted the
Bylaws’ burden of proof provision, section 13.8.7, in its entirety and cited that section at
least three other times. For example, under a heading for findings and recommendations,
the report stated:
“Having reviewed the pretrial briefs of the parties and having
considered the evidence both testimonial and documentary admitted into
the Administrative Record at the hearing, and having considered arguments
of counsel, I rule as follows:
“RULING: I conclude that DaVita Credentialing and Peer Review
Committee sustained its initial burden pursuant to Section 13.8.7 of the
Medical Staff Bylaws to present evidence in support of its adverse
recommendation to deny Dr. Bichai’s Application for Appointment to the
Medical Staff. I further find that Dr. Bichai has not sustained his burden of
proving that the adverse action or recommendation denying his Application
for Medical Staff privileges lacks any substantial factual basis, or is
otherwise arbitrary or capricious.”
These conclusions were restated near the end of the written report, along with a
summary of the evidence:
“Having concluded that the [Peer Review Committee] of DaVita has
sustained its initial burden presenting evidence as referenced above,
analysis then shifts to whether Dr. Bichai has sustained his burden of
proving that the adverse action or recommendation denying his Application
for Medical Staff Privileges (1) lacks any substantial basis, or (2) is
otherwise arbitrary or capricious. I find that Dr. Bichai has failed to sustain
that burden.
“The extensive and timely documentation (see [Peer Review
Committee] Exhibits 1-21) of multiple peer review issues both behavioral
and clinical that have plagued Dr. Bichai from 2009 to 2014 constitute the
requisite substantial basis in fact referenced in the burden of proof. While
Dr. Bichai has impressive, educational background and training, including
having attended a prestigious residency program at the UCLA/VA facility
in Los Angeles and thereafter, a prestigious fellowship program in
nephrology at Cedars Sinai, the evidence that Dr. Bichai proffered set forth
in his Exhibits A-Y and as testified as to by him did not convince me that
the detailed and documented history of peer review issues, both clinical and
behavioral involving Dr. Bichai at the DaVita facilities, and at other
15.
hospitals in Bakersfield, lacked factual support or rational bases, or that the
denial was arbitrary or capricious.”
We conclude the foregoing quotes of the written report demonstrate that the
burden of proof allocated to Bichai in Bylaws section 13.8.7 played an important role in
the hearing officer’s ultimate conclusion. Furthermore, the hearing officer’s statement
that “Bichai has not established that he is currently capable of meeting the qualifications
set forth in Section 3.3(h), (i) and (j) of the Medical Staff Bylaws” does not, in our view,
counteract the specific references to the burden of proof and does not demonstrate the
hearing officer actually applied a preponderance of the evidence standard. Because the
written report plainly states that the hearing officer applied the standard set forth in
Bylaws section 13.8.7, we reject DaVita’s contention that the hearing officer applied the
correct burden of proof.
C. Application of an Incorrect Burden of Proof was Prejudicial
Having concluded the hearing officer applied an incorrect legal standard in
reaching a final decision, we next conduct an independent evaluation of whether the legal
error was prejudicial. (Natarajan, supra, 11 Cal.5th at p. 1111.) The test for prejudice
asks whether the violation resulted in unfairness, in some way depriving the physician of
an opportunity for an impartial hearing. (See El-Attar, supra, 56 Cal.4th at p. 991.)
As background for our analysis of prejudice in this case, we note that where jury
instructions place the burden of proof on the wrong party, the error usually is prejudicial.
(Zuckerman v. Underwriters at Lloyd’s, London (1954) 42 Cal.2d 460, 484; see Buzgheia
v. Leasco Sierra Grove (1997) 60 Cal.App.4th 374, 393 [giving wrong party the burden
of proof on dispositive issue was a major instructional error] (Buzgheia).) In an
administrative proceeding where the agency placed the burden of proof on the wrong
party, the court annulled the agency’s decision and remanded to the agency for further
proceedings. (Coffin v. Alcoholic Beverage Control Appeals Bd. (2006) 139 Cal.App.4th
471, 480–481.)
16.
In comparison, where a jury instruction imposes the burden on the correct party
but departs from the usual wording of the burden of proof, “minor errors are usually
harmless, but major errors may not be.” (Buzgheia, supra, 60 Cal.App.4th at p. 393.)
Witkin states that while minor errors in an instruction describing the burden of proof are
often harmless, “if the variance actually misstates the law and imposes a greater burden
of proof, it may be reversible error.” (7 Witkin, Cal. Procedure (5th ed. 2008) Trial,
§ 295, p. 348.)
In this case, the hearing officer imposed a greater burden of proof. (Cf. Estate of
Chambers (2009) 175 Cal.App.4th 891, 897 [probate court imposed an incorrect, lesser
standard of proof; probate order reversed with remand for application of correct standard
of proof].) We conclude the more demanding burden of proof resulted in unfairness to
Bichai. The PACE Program findings and the Quality Pulse Survey dated November 30,
2016, contain more recent information than the documentation of Bichai’s past problems
at DaVita facilities. The trier of fact could have regarded those more recent documents as
constituting a preponderance of the evidence as to Bichai’s current qualifications. Thus,
there is a reasonable probability that application of the correct burden of proof would
have produced a result more favorable to Bichai.
Consequently, we conclude the hearing officer’s application of the wrong standard
of proof was prejudicial error that rendered the proceeding unfair to Bichai. During oral
argument, Bichai asserted that he qualified for appointment to the medical staff, DaVita
was set against him and would never grant his application, and, as a result, this court
should direct DaVita to grant him privileges. This request for relief is beyond our
authority. Precedent of the California Supreme Court establishes that procedural error in
the administrative hearing entitles Bichai to a new hearing. (Natarajan, supra, 11 Cal.5th
1095, 1112.) Consequently, we cannot direct the trial court to issue a writ of mandate
requiring DaVita grant him staff membership and privileges.
17.
III. HEARSAY EVIDENCE *
Bichai also contends the superior court’s judgment should be reversed because the
hearing officer improperly admitted hearsay evidence and this error was prejudicial. We
briefly address this evidentiary issue because it might arise in the new hearing provided
after issuance of the writ.
Bichai cites Government Code section 11513, subdivision (d) for the principle that
hearsay evidence is inadmissible in an administrative proceeding unless it is introduced to
corroborate nonhearsay evidence. He also argues the hearsay evidence is not admissible
under the standard set forth in the Bylaws.
Subdivision (d) of Government Code section 11513 states: “Hearsay evidence
may be used for the purpose of supplementing or explaining other evidence but over
timely objection shall not be sufficient in itself to support a finding unless it would be
admissible over objection in civil actions. An objection is timely if made before
submission of the case or on reconsideration.” Government Code section 11513 “applies
to any agency as determined by the statutes relating to that agency.” (Gov. Code,
§ 11501, subd. (a).) “ ‘Agency’ ” refers to state boards, commissions and officers. (Gov.
Code, § 11500, subd. (a).) The final decision in the peer review process was not made by
an agency. Consequently, we conclude the hearsay provision in Government Code
section 11513 does not apply to the peer review hearing.
Bylaws section 13.8.2 states the hearing officer shall “make all rulings on matters
of law, procedure, and the admissibility of evidence.” The admissibility of evidence is
addressed in Bylaws section 13.8.6, which states:
“The hearing is an administrative hearing and need not follow strict rules of
evidence. Any relevant evidence shall be admitted if, in the judgment of
the Presiding Officer, it is the sort of evidence upon which responsible
persons customarily rely in the conduct of serious affairs.”
* See footnote, ante, page 1.
18.
Pursuant to the Bylaws, the decision whether to admit the records from peer
review proceedings at other health care facilities is committed to the judgment of the
hearing officer. In the absence of any authority stating such records are categorically
unreliable, the question of admissibility should be decided in the first instance by the
hearing officer conducting the hearing on remand. Consequently, our directions for the
issuance of a writ will not include a provision directing that the records relating to other
peer review proceedings be excluded from evidence.
IV. 2014 DEEMED RESIGNATION *
Bichai contends the 2014 deemed resignation was invalid under section 809.6 and,
therefore, he is still a member of DaVita’s medical staff as a matter of law. Much of
Bichai’s briefing on the issues related to the deemed resignation asserts trial court error.
However, our review is limited to the final peer review decision itself, “not the reasoning
or actions of the superior court.” (Selma Hospital, supra, 164 Cal.App.4th at p. 1499.)
The hearing officer’s decision addressed the claimed invalidity of Bichai’s deemed
resignation and his related request for reinstatement. The decision described the
documents leading up to the deemed resignation and then stated:
“Based upon this documented history admitted into evidence by DaVita and
based upon the relevant testimony of Dr. Robertson and Dr. Bichai, I
conclude Dr. Bichai has not established a prima facie case, for
reinstatement of his prior Medical Staff privileges and membership.
Having been represented by counsel, and having entered into agreements
providing that having requested, but chosen not to pursue, hearings to
challenge these denials of reappointment, Dr. Bichai has waived his right to
contend in this hearing that denial of reappointment was ‘unlawful’ or that
he is entitled to reinstatement.”
Accordingly, we consider whether the hearing officer erred in determining Bichai
waived his right to challenge the deemed resignation. “Under California law, a waiver is
the intentional relinquishment or abandonment of a known right or privilege. [Citation.]
* See footnote, ante, page 1.
19.
Waiver is a question of fact [citation] and always is based upon intent [citation].” (Selma
Hospital, supra, 164 Cal.App.4th at p. 1506.) The intent to waive may be expressed in
words, either oral or written, or implied by a party’s conduct. (Waller v. Truck Ins.
Exchange, Inc. (1995) 11 Cal.4th 1, 31.) Because waiver presents a question of fact, we
review the hearing officer’s finding to determine whether it is supported by substantial
evidence. (Code Civ. Proc., § 1094.5, subds. (c), (d) [substantial evidence standard for
administrative findings]; see Michalski, supra, 221 Cal.App.4th at p. 1041 [substantial
evidence standard applied to findings in peer review proceeding].)
Here, Bichai did not express in words an intent to waive his right to challenge the
deemed resignation. Consequently, we consider whether such an intent was implied by
his conduct.
Bichai did many things that are not consistent with challenging the deemed
resignation. In June 2015, Bichai submitted a physician credentialing application to
DaVita. Applying for privileges implies Bichai was not a member of the medical staff,
which further implies the deemed resignation was valid and effective. In May 2016, after
the Medical Board of California withdrew its amended accusation, Bichai submitted
another physician credentialing application to DaVita. The second application also
implied that the deemed resignation was effective. These implications were not
contradicted by Bichai until December 2017, when he first claimed the deemed
resignation was invalid. Thus, more than three and a half years elapsed from the time
DaVita filed an 805 report describing the deemed resignation until Bichai first raised his
challenge. Based on the passage of time and Bichai’s pursuit of applications for medical
staff membership and privileges, we conclude there is substantial evidence of conduct
impliedly waiving the right to challenge the validity of the deemed resignation.
Consequently, the hearing officer’s finding of waiver will be upheld.
20.
DISPOSITION
The judgment is reversed. The matter is remanded to the superior court with
instructions to issue a writ of administrative mandamus directing DaVita to vacate the
hearing officer’s decision and grant Bichai a new administrative hearing. Bichai shall
recover his costs on appeal.
FRANSON, ACTING P. J.
WE CONCUR:
PEÑA, J.
SMITH, J.
21.