On February 19, 2025, the California Court of Appeal published a decision, Lin v. Board of Directors of PrimeCare Medical Network, Inc., 108 Cal.App.5th 1163, emphasizing California Business and Professions Code’s requirement that peer review be conducted by licentiates and highlighting the singular exception outlined by Section 809.05 — that only governing bodies of acute care hospitals have a legitimate function in the peer review process.

In this case, Dr. Lin was employed by a medical group that contracted with a health care service plan, PrimeCare, a corporation licensed as a health service plan under the Knox-Keen Health Care Service Plan Act, to provide care to health plan members. PrimeCare was responsible for conducting peer review functions for the medical group. Following a patient encounter where Dr. Lin was alleged to have been physically aggressive with an elderly patient, PrimeCare’s chief medical officer summarily suspended Dr. Lin’s privileges. Several days later, PrimeCare’s Quality Improvement Committee upheld the suspension. Dr. Lin requested a formal hearing to challenge that action and an evidentiary hearing was held before a judicial hearing committee (JHC) composed of physicians. The JHC found that the summary suspension was not reasonable and warranted because PrimeCare failed to establish that Dr. Lin posed an imminent danger to anyone, notwithstanding the single incident of inappropriately touching the patient. Under its Fair Hearing Plan, PrimeCare asked its corporate Board of Directors to defer taking final action to allow further briefing. Ultimately, the Board of Directors conducted an independent review of the evidence and reversed the JHC decision, finding that the JHC applied the incorrect burden of proof and that the evidence supported the reasonableness of the suspension. Dr. Lin filed a petition for writ of administrative mandamus challenging the Board’s decision. The trial court issued a writ of mandate requiring the Board to adopt the JHC’s decision as its final action and to reinstate Dr. Lin’s privileges. On appeal, the appellate court affirmed that decision.

Both the trial court and the Court of Appeal agreed that because PrimeCare’s Board of Directors was not composed of “licentiates,” it exceeded its authority under California Business and Professions Code section 809.05 in overturning the JHC’s decision. The appellate court emphasized that California’s peer review statute requires that “peer review be performed by licentiates,” which are defined in Business and Professions Code section 805 to include physicians, podiatrists, dentists, licensed midwives, physician assistants, “103” and “104” nurse practitioners, clinical psychologists, therapists, social workers. The only exception to this requirement applies to acute care hospitals. Specifically, Business and Professions Code section 809.05(a) acknowledges that the “governing bodies of acute care hospitals have a legitimate function in the peer review process” and, in addressing peer review matters, they must “give great weight to the actions of peer review bodies.” But in this case, the appellate court held that because PrimeCare was not an acute care hospital and its Board was not composed of licentiates, its Board was not authorized to perform peer review under Section 809.05 and by reversing the decision of the JHC, which was composed of licentiates, the Board exceeded its authority. While this is ultimately an issue for the Legislature to clarify, the Court of Appeal suggested that under the current language of Business and Professions Code Section 809.05, if a health care service plan like PrimeCare wants to provide appellate review of a hearing committee’s decision, it could assign the appellate function to a panel of licentiates overseen by the Board.

In light of this decision, peer review bodies that engage in peer review — health care service plans and potentially ambulatory surgery centers — should evaluate their procedures to ensure that peer review actions are always taken by licentiates.