The board's chairman, Dr. Dinesh Patel, said this morning that while the board agreed that Dr. Bean-Bayog had engaged in "substandard care," there were no grounds to suspend her. He cited affidavits from most of Dr. Bean-Bayog's current patients and said the board had determined that her practice did not constitute an immediate threat to the public. 'Regresion and Transference'

Neither Dr. Bean-Bayog nor her lawyer, James J. Barry, returned phone calls Monday. But in a statement to Boston television stations last Friday she termed the charges "outlandish and false," saying, "I categorically deny that I ever had any sexual relations with this patient or that I otherwise exceeded the proper bounds of psychotherapy."

The papers, filed by Mr. Lozano's family as part of a medical malpractice and wrongful death lawsuit, charge that Dr. Bean-Bayog, who is 48 years old, manipulated Mr. Lozano "into a dangerous cycle of regression and transference wherein the patient was caused to become completely dependent, as a 3-year-old child, on Dr. Bean-Bayog as his mother." At the same time, the suit contends, Dr. Bean-Bayog made him "participate in vivid sadomasochistic sexual fantasies," and made him have sexual intercourse with her.

As evidence, the Lozanos' lawyer, Andrew C. Meyer Jr., introduced several thousand pages of letters and notes described as being in Dr. Bean-Bayog's handwriting, including flash cards she gave Mr. Lozano with orders to "run over these cards every day until you know them all by heart and are starting to believe them."

One card reads: "I'm your Mom and I love you and you love me very very much. Say that 10 times." Another card reads: "I love spending time with you. I'm going to miss you, so many things about you, the closeness and the need and the phenomenal sex and being so appreciated."