Livelihood on the Line: Surgeon Sues Hospital over Alleged Disparagement, Malicious Peer Review
By Joey Berlin Texas Medicine June 2021


 In less than two years, San Antonio cardiothoracic surgeon J. Marvin Smith III, MD, says his distinguished surgical career spanning about five decades was effectively wiped out.


According his lawsuit, it came at the hands of the hospital where he’d served as chief of staff and performed the vast majority of his surgeries.

A past president of the Bexar County Medical Society – like his late father before him – and a veteran of numerous leadership positions in organized medicine, Dr. Smith said he never expected to find himself a target of revenge. Nor did he expect to become the victim of a notorious stealth weapon of hospitals known as malicious peer review.

But his lawsuit filed in Bexar County District Court in September 2020 claims that’s what he encountered from Methodist Healthcare System of San Antonio beginning in late 2018, when the hospital questioned his fitness to practice, poisoned his reputation, and caused termination of his privileges at another hospital.

“Now that Dr. Smith cannot renew his privileges at other hospitals because of Methodist’s actions, his income is effectively $0,” Dr. Smith’s lawsuit states.

“I was on the standards and ethics committee of the STS, the Society of Thoracic Surgeons, for eight years … so I had a little bit of insight into these things. I’ve spent my career trying to promote good results and good behavior,” Dr. Smith told Texas Medicine. “So it was kind of a bitter pill to swallow when they started accusing me of all these things.”

The suit accuses Methodist Healthcare System of business disparagement and “willful and intentional” interference with business relations. It also asks the court to disallow amendments Methodist is attempting to make to its medical-staff bylaws, which Dr. Smith alleges would take away physicians’ ability to challenge the peer review process in the courts.

“I’m not normally a litigious type of person,” Dr. Smith said. “But one of the reasons we filed [the lawsuit] was that Methodist [proposed to change] their bylaws. And one of the things they had in their [proposed] bylaws was that if you were granted staff privileges within the hospital, you had to agree not to sue them no matter what they did to you. Who’s going to sign that?”

Methodist has generally denied Dr. Smith’s claims in court documents. Methodist and an attorney for the hospital did not respond to Texas Medicine’s requests for comment.

“Mounting misinformation”

Dr. Smith’s allegations have more than a passing similarity with the ones Houston cardiothoracic surgeon Miguel Gomez, MD, made against Memorial Hermann Health System.

Dr. Gomez eventually won a multimillion-dollar judgment against Memorial Hermann in 2017 over what he claims was anticompetitive, business-depressing activity, including distorted patient data and defamatory statements. (See “A Victory for the Underdog,” June 2017 Texas Medicine, pages 24-30, Memorial Hermann unsuccessfully challenged that verdict in an appeals court but has continued its challenge in the Texas Supreme Court.

“It’s similar to the Gomez case; [there are] some factual differences,” said Eric Pullen, Dr. Smith’s attorney in the Methodist lawsuit. “But at the heart of it was this desire to get the physician out, to keep him from practicing. And the financial damage to Dr. Smith is substantial. He essentially lost his practice.”

Dr. Smith’s lawsuit notes his “long and decorated career:” He was chief of staff at Methodist Hospital Texsan and helped establish TexSan Heart Hospital, which opened in 2001 as a physician-owned facility until Methodist bought it following passage of the Affordable Care Act.

According to Dr. Smith’s suit, his “criticisms of nursing care” were part of what resulted in Methodist’s retaliation attempts.

“Dr. Smith was not one of these doctors that just kind of went along with things,” Mr. Pullen said. “If he did not believe it was in the best interest of his patient, if he believed that it resulted in extended hospital stays or additional costs, he was vocal about it. I think obviously, there were individuals within management at the hospital that didn’t like that.”

The lawsuit claims that in November 2018, Methodist “[o]ut of the blue” provided Dr. Smith with statistical information showing he had an excessive mortality rate on coronary artery surgeries, and an “unacceptable” rate for aortic surgeries. Methodist didn’t provide Dr. Smith with any underlying data or information on the cases it used to draw its conclusions until Dr. Smith retained an attorney who demanded it, court documents say.

 Pending the hospital’s review of “concerning” cases, Dr. Smith agreed to pre- and post-operative consults with Methodist’s heart team in the face of discipline or revocation of his privileges, his lawsuit claims.

“He subsequently faced a mounting misinformation campaign regarding his practice while the peer review process was ongoing. He further discovered that this misinformation campaign was shared with physicians prior to the formal initiation of the peer review process. … Methodist refused to answer his questions and refused to end its investigation even after Dr. Smith provided thorough explanations of each of his ‘questionable’ cases and data for more accurate metrics of success in cardiothoracic surgery,” court records state.

In February 2019, the hospital requested that Dr. Smith “submit to outside evaluations of his medical condition and his surgical competency.” Upon getting a new list of data on his mortality rates in March 2019, Dr. Smith alleges he “pointed out multiple errors in the document,” and the new data “clearly did not support the conclusions Methodist reached” previously. But the suit says Methodist didn’t take action on Dr. Smith’s request to correct its calculations.

“After going through this for [several] months, saying, ‘Listen, I want to see the statistics you’re talking about, let’s get together and discuss, etc.,’ they finally backed off,” Dr. Smith told Texas Medicine. “They said, ‘Oh no, we were wrong. Your statistics are all right.’ But in the interim, they had made me agree to all sorts of things which I would’ve never done had I not been sort of convinced that I had a problem.”

Dr. Smith eventually hired his own experts who “indicated there was no basis for a conclusion that Dr. Smith was not fully competent to practice medicine.”

But the hospital “did not relent” and “stepped up its campaign more maliciously than ever before,” the suit claims. Dr. Smith alleges Methodist refused to provide to Baptist Health System documents confirming his privileges at Methodist – which caused Dr. Smith to lose his privileges at Baptist.

“Methodist has succeeded in totally blocking Dr. Smith’s ability to practice cardiothoracic surgery in San Antonio, despite no evidence or findings that Dr. Smith poses any danger to patients whatsoever,” the suit claims. It also alleges Methodist has published misleading patient mortality data to disparage Dr. Smith to other physicians and health care representatives to discourage them from working with him.

Methodist’s court filing claims Dr. Smith hadn’t identified anyone associated with Methodist who had made false and disparaging statements, or what the alleged disparaging information was or when Methodist was said to have published it.

Right to sue

Another piece of Dr. Smith’s suit targets potential medical-staff bylaw changes at Methodist that, according to his filing, attempt to take away staff’s right to sue over peer review activity.

The proposed bylaws, according to the suit, would make any applicant for privileges at the hospital agree “not to initiate any legal action” against the hospital regarding clinical privileges. The proposed language gives the hospital immunity for any activities “in the course of credentialing and other medical peer review or professional review activities.”

That language, Dr. Smith’s suit claims, would make the peer review process itself “the sole and exclusive” way to address actions the hospital takes affecting medical staff appointments or clinical privileges. His filing asks the court to void the proposed bylaw language, saying it has “a tendency to and will injure the public good.”

The filing alleges the bylaw amendments “were developed by the Methodist Hospital Board and sent to some, but apparently not all members of the Methodist Medical Staff” by e-mail for a vote. Methodist intends to use the proposed bylaws “to bar Dr. Smith from taking legal action against it for its malicious peer review proceeding,” the suit claims.

Dr. Smith has asked the court to nullify the bylaws amendments saying they “cannot take away legal rights granted to physicians by state and federal statutes. … Under Texas and federal law, Dr. Smith has a statutory right to sue Methodist if the peer review proceeding was conducted with malice.”

In its court response, Methodist said the bylaw amendments weren’t being applied to Dr. Smith’s allegations in the suit “and there are no other physicians similarly situated.”

At press time, TMA’s Board of Trustees had not evaluated Dr. Smith’s case for possible TMA intervention via a friend-of-the-court brief. But Gary Floyd, MD, chair of the Board of Trustees, says it’s important for TMA to serve as a backstop for physicians against “contrived attempts to get them off of [hospital] staff.”

“When they’re employed or contracted, they think the big group and the big hospital has their back,” Dr. Floyd added. “Unfortunately, the big group and the big hospital really cater to their bottom line, not to standing behind their physicians.”


Tex Med. 2021;117(6):28-30
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Last Updated On

June 10, 2021

Originally Published On

May 27, 2021

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