Business Law

Bichai v. Dignity Health (Feb. 25, 2021, ordered published Mar. 12, 2021, F078658) __ Cal.App.5th __ [2021 WL 948647]

Medical staff credentialing recommendations cannot support a physician’s action against a hospital, a separate legal entity.

Dr. William Bichai surrendered his medical staff privileges at Mercy Hospital in 2012. He had privileges at San Joaquin Community Hospital (SJC Hospital), but had been on a leave of absence since 2013. In 2016, Dr. Bichai reapplied for medical staff membership at Mercy Hospital. He interviewed with the medical executive committee (MEC) of Mercy Hospital’s medical staff and was informed by the chief of staff that he would be granted conditional privileges. Dr. Bichai later got into verbal altercations with doctors at SJC Hospital regarding the treatment of his former patient. The MEC of Mercy Hospital’s medical staff then recommended that Mercy Hospital deny Dr. Bichai’s reapplication for privileges based on his conduct at SJC Hospital, believing it reflected faulty judgment and an inability to follow rules, regulations, policies, and medical ethics. The Mercy Chief of Staff notified Dr. Bichai of the MEC’s recommendation and his right to challenge it by requesting a hearing before a judicial review committee of the medical staff. Dr. Bichai requested the administrative hearing, and then sued both Mercy Hospital and SJC Hospital. 

Dr. Bichai’s lawsuit alleged, among other things, unfair competition in violation of Business and Professions Code section 17200 and a conspiracy to retaliate against him in violation of Health and Safety Code section 1278.5. Mercy Hospital demurred, asserting that Dr. Bichai failed to exhaust administrative remedies and did not state a valid claim because his complaint rested on the conduct of Mercy Hospital’s medical staff, a separate legal entity. The trial court sustained the demurrer. It rejected the failure to exhaust administrative remedies argument (because exhaustion is not required before asserting a section 1278.5 claim), but ruled that Mercy Hospital had not taken any adverse action against Dr. Bichai. Dr. Bichai appealed.

The Court of Appeal affirmed, holding that Dr. Bichai’s claims against Mercy Hospital were not ripe. A lawsuit is ripe when a cause of action has accrued, and a cause of action accrues when there is wrongdoing, causation, and harm. Here, there was no wrongdoing by Mercy Hospital—it had made no decision based on the MEC’s recommendation that it deny Dr. Bichai’s reapplication for privileges, and the MEC is a separate legal entity whose conduct is not imputed to the hospital. Accordingly, any claims Dr. Bichai might have against Mercy Hospital had not accrued and thus were not ripe. The Court rejected Dr. Bichai’s contention that Armin v. Riverside Community Hospital (2016) 5 Cal.App.5th 810 had decided that wrongdoing by a medical staff is wrongdoing by the hospital. The court also rejected Dr. Bichai’s claim that the trial court erred by failing to grant him leave to amend his complaint because the trial court had given leave. 

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or htwatson@horvitzlevy.com.

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