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Physician Discipline in California – A Code Blue Emergency

by David M. Galie

On April 5, 1989 Robert Fellmeth, a professor of law and Director of the Center for Public Interest Law (CPIL) at the University of San Diego School of Law, issued a report entitled “Physician Discipline in California: A Code Blue Emergency – An Initial Report on the Physician Discipline System of the Board of Medical Quality Assurance.” Most of these recommendations have been adopted through massive legislative changes beginning in 1990, and more are coming. These changes have proven disastrous to physicians’ rights. What physicians accepted once as a necessity to remove the few “bad apples” has become an assault on the entire profession. Yes, it is a Code Blue emergency for physicians, not a Code Blue emergency for public protection as stated.

There has been a major increase to more than 100 Medical Board investigators statewide. The MBC has no policy to hire college-educated candidates who could bring with them an understanding of medical and scientific issues. Instead, the Board typically has filled its investigator positions with former street cops, who typically have little or no education beyond high school, or have the usual A.A. diploma in “police science” from a community college.

Board investigators are considered “peace officers” and have the same authority as uniformed law enforcement personnel. The individual investigators carry guns, and the Regional Medical Offices are issued shot-guns. Recently, an attorney who represents a hospital medical staff was called and told that investigators from the Medical Board were at the facility and demanding records. When this attorney arrived he asked one investigator if he had a subpoena. The ex-cop replied “No, but I have a gun.”

The specter of a para-military organization policing the medical profession is upon us. The cop mentality of the Medical Board’s investigative staff was demonstrated by the recent $60,000 purchase of a sophisticated wire transmitter and recording system. For what use? A senior investigator who was wired, using a false name and forged identity, testified under oath that her instructions going into a physician’s office were: “…to see if I could go in and get narcotics and see if I would be groped.”

Expert reviewers selected by the Medical Board’s regional medical consultants have not produced the desired numbers of disciplinary actions against physicians, and the Board has had to settle for less stringent discipline than it wanted. Dixon Arnett, Executive Director of the Medical Board, never considered that perhaps the cases themselves were weak on merit. Instead, Arnett, a defeated political officeholder, proposed the creation of a panel of expert witnesses under his control, from which he could hire by private contract, and remedy this “problem” of too little punishment.

At a recent Board meeting, Arnett made the extraordinary proposal that he be given the sole power to sign an order summarily suspending a physician from practice. This proposal is now on the Board’s legislative agenda for 1995. Also on the agenda is a provision to provide protection from liability for any witness who testifies against a physician at Board proceedings.

Arnett makes a frontal assault on the confidentiality of medical staff peer review records, heretofore believed to be protected by Evidence Code 1157. Arnett has asserted that the legislative protection for peer review proceedings simply does not apply to the MBC, notwithstanding that he proposed that very exception to the Legislature, which refused to give it to him!

If this material is open to the Medical Board, there is no way it will not find its way into the hands of plaintiffs’ medical malpractice lawyers. The Union of American Physicians and Dentists, CMA plus several other groups, have filed powerful amicus briefs challenging Arnett’s position.

The severe anti-physician sentiment is reflected in a recent case by Arnett’s statements to the media about the guilt of a physician while the trial was still in progress.

The Center for Public Interest Law recommended a “legal strike force” to prosecute physicians. In accordance with this recommendation, the health Quality Enforcement Section (HQES), headed by a Senior Assistant Attorney General, was established. This Section works almost exclusively for the Medical Board. It obtains search warrants, investigative subpoenas, supports undercover operations and prosecutes physicians. It is funded from your licensing fees.

At a time when severe budgetary restraints are limiting every other civil section in the AG’s office, the section that polices physicians is flourishing and expanding, and appears to have unlimited financial resources. Deputy AGs from all other sections of the AG’s office are drawn to work in this office and bill the MBC about twice the hourly rate they are otherwise paid. In fiscal year 1993-94, physician licensing fees were paid to the AG’s office in the amount of $5,885,971 to pay other lawyers (AG deputies), to investigate and prosecute physicians.

Even this lucrative gravy train has an upper limit from licensing fees. A new Board policy now allows the MBC to make physicians actually pay for their own investigation and prosecution. John Lancara, Arnett’s Chief of Enforcement, said at the February Board Meeting: “When licensees know they may be ordered to pay these costs (of their own investigation and prosecution) they may be much more willing to settle the case…” In cases where the physician settles rather than litigates against the MBC, the payments vary from around $2,000 to about $7,000. Doesn’t this assure that marginal cases will be prosecuted, and more vigorously than in the past?

In a humanitarian gesture, an elderly physician prescribed a narcotic for a patient who he believed in good faith had AIDS. When the patient died at home, the coroner reported the physician to the MBC. In the meantime, the physician shut down his practice and retired. He placed his license in retired status. He surrendered his DEA privileges.

One and one-half years after the physician closed his practice, the MBC filed a formal Accusation seeking to discipline him. Was cost recovery behind that Draconian action?

Unfortunately, the best advice for a physician in today’s hostile environment is to have NOTHING whatsoever to do with the Medical Board of California. NEVER voluntarily initiate contact with “your” Medical Board. If they contact you, DON’T respond except through an attorney. The MBC represents the long and intrusive arm of big government. It is not your Board and it no friend of the physician.

The next best way to protect yourselves from an unfriendly government and the branch that directly affects you, the MBC, is to take control of it. Attorneys who are in the trenches fighting the MBC on individual cases can do only so much. Physicians can and must protect themselves on the political front. There is strength in numbers. You must organize and make the financial sacrifices necessary to protect yourselves. To play on the political front requires money and votes.

You physicians pay a heavy price to obtain and keep a medical license. You work through 20-24 years of education, the last decade of which is increasingly rigorous training. You have made great personal and financial sacrifices, ending your training deeply in debt. You then proceed with expensive, continuing medical education every year. You are threatened by hospitals and their paid medical staff officers by PEER REVIEW sanctions. This then makes you subject to entombment in the National Practitioner Data Bank. You are hassled by insurance companies with incomprehensible billing procedures. You are asked to reduce your standard of care by the managed care companies but still accept the risks for this. The PPOs, HMOs, and hospital foundations treat you as an expendable commodity. The DEA punishes you severely if you transgress their arcane regulations. You put up with patient demands while making yourself available to them at all hours of the day, night, weekends, and holidays. You are subject to unrelenting attacks from lawyers.

And now your licensing board, the MBC, joins in the attack. Dixon Arnett has said that physicians as a political force in California are dead. Considering your personal, your family, and society’s investment in your license, you are now being attacked at the very foundation of society – threatening you and your family’s very existence.

You and your organization must stand up for the fight. Will it be your hospital, foundation, insurance carrier, IPA, or managed care organization? Or will it be the UAPD or the CMA? Time is of the essence. Remember, the National Practitioner Data Bank computer is a permanent tomb.


This is a revision of an address given before the 7th Triennial Convention of the California Federation of the Union of American Physicians & Dentists on September 24, 1994.

David M. Galie, Esq., a former Deputy Attorney General practices law with the firm of Freeman & Galie in San Francisco, limited to representation of physicians and other health care professionals in regulatory, licensing, medical staff, and employment matters. He may be reached at 415-885-5728.