A committee of physicians who work at Capitol Hill Hospital has decided that the hospital erred in discharging from the emergency room March 3 a 28-year-old man who died 55 minutes later or massive internal injuries.

According to the report, the vital signs and behavior of Howard B. Smith, who had been injured in an automobile accident, "strongly suggested the need for further observation. . ."

"The committee, in retrospect, concludes that. . . Howard B. Smith should have been held for further observation," the report asserts.

The committee, made up of three Capitol Hill staff physicians and a staff nurse, was asked to investigate the incident after it received considerable attention in the news media.

The city's Department of Human Resources investigated the death of Smith and, after reaching conclusions similar to those of the in-house committee, put the hospital on notice that its emergency room license could be in jeopardy.

That license was reduced to provisional status for 90 days by DHR, during which time city investigators will attempt to determine whether the care given Smith was unusual, or part of a pattern. If it is part of a pattern, the emergency room could be shut down.

The report prepared for the hospital also states that the physician on duty the night Smith was treated has been working in the emergency room since 1971 and "no prior difficulties with his professional performance were noted" in his personnel file.