A state medical board decided early this morning not to suspend a Harvard Medical School psychiatrist accused of having an affair with a patient who later committed suicide.

The state Board of Registration in Medicine concluded after a five-hour emergency meeting that Dr. Margaret H. Bean-Bayog '65 engaged in "substandard care," but it did not suspend her from practicing.

After hearing testimony from Bean-Bayog, the board issued a statement early this morning saying that Bean-Bayog's "continued practice does not constitute an immediate or serious threat to the public health, safety and welfare."

Bean-Bayog, who is assistant clinical professor of psychiatry, is charged in a malpractice and wrongful death suit with manipulating a patient, Paul Loosen, into dependence on her and then abandoning therapy, causing him to become suicidal.

Loosen, who was 28 and three months short of graduating from Harvard Medical School, killed himself with a lethal cocaine injection in Texas last April.

Luzon's family filed suit in November charging that Bean-Bayou had sex with Lozano and used unethical medical practices to regress him to the psychological level of an infant.

Bean-Bayog, 48, of Lexington, issued a statement last week denying the charges and specifying that she did not have sex with Lozano. She left the board meeting yesterday without comment.

"I categorically deny that I ever had any sexual relations with this patient or that I otherwise exceeded the proper bounds of psychotherapy," Bean-Bayog said in the statement.

Before the board meeting, she refused to comment on the allegations and directed reporters to her attorneys. Her lawyers did not return repeated telephone calls.

Bean-Bayog was placed on a leave of absence and taken off all referral list at the Medical School last May when the school's administrators were notified that a complaint had been filed.

"Dr. Bean-Bayog will remain on leave pending the outcome of any proceedings," said Sylvia C. Memolo, a Medical School spokesperson.

In addition to the legal proceedings, the school will conduct its own investigation of the case, Memolo said.

The state board referred Bean-Bayog's case to the Division of Law Appeals for a formal hearing. Until then, she will be supervised by another psychiatrist, the board ruled.

State Consumer Affairs Secretary Gloria Larson, whose office oversees the medical board, ordered the starling information that has come to light."

If the allegations are true, we are talking about serious malpractice her," Larson said in an interview during a visit to Radcliffe last night.