California Hospitalist Wants Federal Court to Declare Disciplinary Hearings Unconstitutional

judge's gavel

A California hospitalist who had his hospital privileges rescinded in 2015 for alleged substandard performance and inadequate record-keeping filed a civil action last month asking a federal court to reinstate those privileges. The action alleges a lack of due process during medical disciplinary hearings violates the 14th Amendment of the U.S. Constitution.

In the case of Natarajan v. Dignity Health, Sundar Natarajan, MD, an internist who once served as medical director at St. Joseph’s Medical Center, a Dignity Health hospital in Stockton, Calif., argues that “pursuant to statute and case law, California has expressly delegated to private health corporations the primary responsibility for monitoring, investigating, disciplining and reporting California physicians. Those private health corporations are now permitted under state law to restrict or remove a physician’s ability to practice medicine without due process of law.”

According to Natarajan’s complaint, medical disciplinary hearings are inherently adversarial and hospitals seeking to impose discipline on a physician may do so for reasons other than a genuine concern for the quality of care of a physician’s care or professional behavior. It also argues that the law governing the adjudication of physician conduct complaints permits the hospital to unilaterally appoint the hearing officer and panel members charged with determining the disciplinary hearing’s outcome.

The complaint further alleges California law permits hospitals to discipline a physician for alleged substandard performance without requiring any objective standard of judgment and without any effective, timely and independent judicial review of a hospital’s disciplinary hearings before, during or after disciplinary actions are taken.

For these reasons, Natarajan is asking the U.S. District Court for the Eastern District of California for a declaratory judgment that California’s laws governing medical disciplinary actions violate the due process requirements of the 14th Amendment of the U.S. Constitution. He also seeks an injunction requiring the reinstatement of his privileges at St. Joseph’s.

This is not Natarajan’s first bite at having California’s system for medical disciplinary hearings annulled. He previously pursued a similar claim in the California court system, which was ultimately rejected by the California Supreme Court on Aug. 12, 2021.

At the heart of the complaint before the California Supreme Court was whether a physician facing the revocation of privileges at a private hospital has the right to disqualify a hearing officer based on the appearance of bias — or must the physician show evidence of actual bias? Natarajan argued that because a hospital might hire a hearing officer again for future work, the hearing officer has a financial incentive to favor the hospital, requiring his or her disqualification for bias.

In a unanimous decision, the Supreme Court determined that while “the possibility of future employment may give rise to a disqualifying conflict, we do not hold that the possibility of future employment always (or nearly always) gives rise to a disqualifying conflict when a hearing officer has been appointed on an ad hoc basis. Potential future employment, on its own, is not automatically disqualifying. If it were, then every hospital would presumably be required to locate and train a new hearing officer for every peer review hearing it holds. This rule would come at considerable cost to the efficiency and the integrity of the peer review process, and with minimal benefit in terms of assurance of hearing officer impartiality. The law imposes no such requirement.”

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