Update: California Court of Appeal Orders Publication of Natarajan V. Dignity Health

On October 23, 2019, we published a Client Alert regarding Natarajan v. Dignity Health, a California Court of Appeal decision. Natarajan addressed an important question: When may physicians who are the subject of a peer review hearing challenge the hearing officer in their cases on the ground that the hearing officer is biased?  

Despite the importance of the issue Natarajan resolved, there was a problem with the decision: the Court’s decision was not published in the official case reports. That meant that the decision could not be relied on as precedent. Instead, Natarajan applied only to the parties who were involved in that case. We are now pleased to report that on November 20, 2019, the Court of Appeal ordered that Natarajan be published.  

Why is this development important?  

As we reported in October, the Natarajan decision clarified an important aspect of peer review law and answered a recurring question for peer review participants. The Court of Appeal held that simply because an individual has served as a hearing officer for hospitals in a particular health system, that does not disqualify him from future service as a hearing officer for other hospitals in that same system. Dr. Natarajan’s hearing was at a Dignity Health hospital. The Court rejected his argument that because the hearing officer in his hearing had earlier served in that same role for other Dignity hospitals, he should not be allowed to serve again for any Dignity hospital. The Court of Appeal also reaffirmed that the flexible standards of “fair procedure” – not the stricter standards of “constitutional due process” – apply to peer review hearings at private hospitals. This part of the Court’s holding both highlighted and confirmed an important aspect of peer review law.

How did publication happen?

The Court of Appeal’s publication decision came after a concentrated effort. The California Hospital Association (CHA) led a campaign to persuade the Court that Natarajan would, if published, provide important clarity and guidance to the state’s hospitals and medical staffs. In addition, Providence St. Joseph Health, Sharp Healthcare, Dignity Health, and others wrote letters to the Court of Appeal urging publication. Arent Fox represented CHA in this effort.

It’s not over yet

Some steps remain, however, before the Natarajan decision may be cited. Dr. Natarajan has petitioned the California Supreme Court to review the decision. This means the decision will not be final until the Supreme Court acts, which it must do no later than February 28, 2020. We will update you when the Supreme Court decides whether or not to grant review. If Natarajan becomes final, the publication decision is a win for clarity in the peer review process.