In California, a hospital’s administrative action affecting a physician’s staff privileges gets great deference from the courts. But what if the hospital’s action is alleged to be taken in retaliation for a physician’s complaints about hospital employees?
According to a new appellate opinion, a hospital’s usual defense to a physician’s lawsuit after a peer review decision requiring the doctor to first obtain judicial relief from the action — is not necessary when it would conflict with California’s “whistleblower” statute.
The opinion, Mark T. Fahlen v. Sutter Central Valley Hospital, issued by the Fifth District Court of Appeal, recounts allegations of a Modesto nephrologist’s several-year history of tense encounters with nursing staff regarding the care of his patients. According to the physician, he reported to hospital authorities that some nurses failed to follow his instructions. In some instances, he believed that nurses endangered patients’ lives.
After an investigation, the Medical executive Committee of the Memorial Medical Center recommended in August 2008 that Dr. Fahlen’s staff privileges not be renewed. (Under the hospital’s bylaws, the executive committee is charged with the review of applications for staff privileges at the facility and for initiating corrective or disciplinary action against medical staff.)
Upon learning of the decision, Dr. Fahlen requested a hearing. Pursuant to its bylaws, the medical center set up a hearing by the Judicial review Committee (JrC), composed of six staff physicians and an attorney hearing officer. In its notice to Dr. Fahlen, the executive committee issued a statement of charges against him, including 17 incidents of disruptive or abusive behavior toward hospital staff from 2004 to 2008, plus an allegation of “abusive and contentious behavior” in 2008 toward an investigator appointed by the executive committee.
After conducting multiple evidentiary hearings between 2009 and 2010, the Judicial review Committee issued its written findings, which concluded that the executive committee “did not sustain its burden of proving that its recommendations not to reappoint Dr. Fahlen to the medical staff… for medical disciplinary cause or reason is reasonable or warranted.” Specifically, though the JrC found Dr. Fahlen’s interaction with the nursing staff on several occasions was “inappropriate and not acceptable,” it said that the evidence did “not establish any professional incompetence” on Dr. Fahlen’s part or behavior “reasonably likely to be detrimental to patient safety.” the JrC found that the medical center could have pursued other options with Dr. Fahlen, such as counseling.
Under the bylaws, the final decision on privileges rests with the medical center’s board of trustees, which in 2011 reversed the decision of the JrC and decided to not reappoint Dr. Fahlen to the medical staff.
Rather than seeking direct judicial review of the board’s action, Dr. Fahlen filed a complaint for damages and injunctive relief against the medical center’s operator, Sutter Central Valley Hospitals, under Civil Code Section 1278.5, which prohibits a health facility from retaliating against members of medical staff (and other health care workers) for complaints of quality of care, services, or conditions at the facility. Though Sutter asked the trial court to dismiss Dr. Fahlen’s suit because of his failure to first pursue his full administrative remedies, the trial court judge allowed the physician’s “whistleblower” suit to go forward.
On review, the Court of Appeal rejected the notion that Dr. Fahlen had to meet California’s longstanding requirement that hospital privilege actions first be challenged directly in the courts before a related suit may proceed, reasoning: “Legitimate peer review activities do not include retaliation against medical staff for complaints about quality of care.”
Unless the state Supreme Court intervenes, Dr. Fahlen must still prove that his actions toward the nursing staff qualify for protection and that the medical center’s decision was retaliatory. but in allowing the dispute to go forward, the case is certain to add another element to the legal considerations of hospital administrators.
Author Gordon Ownby is General Counsel for the Cooperative of American Physicians, Inc. (CAP).
If you have questions about this article, please contact us. This information should not be considered legal advice applicable to a specific situation. Legal guidance for individual matters should be obtained from a retained attorney.