While acknowledging the need to shield hospital peer reviews from unwarranted attack, the California Supreme Court says that when the Legislature passed a special “whistleblower” statute to help protect patient safety at health facilities, lawmakers intended to allow physicians to sue under the law independent of any competency actions.
The ruling allows Modesto nephrologist Mark Fahlen, MD, to pursue his suit against Sutter Central Valley Hospital even though he did not seek court review of Sutter’s peer review termination of his staff privileges. Dr. Fahlen claims the hospital initiated its peer review not because of his medical competence, but in retaliation for his complaints about the quality of nursing care going back several years.
Dr. Fahlen began clashing with Sutter nurses in 2004, the year he gained staff privileges. He had several more arguments in 2006 through 2008, and on several of those occasions, Dr. Fahlen reported to nursing supervisors or hospital administrators that nurses had been insubordinate and had provided substandard care.
In 2008, the hospital’s medical executive committee recommended against continuing Dr. Fahlen’s staff privileges, but a six-physician judicial review committee reversed that decision in 2010. In 2011, however, the hospital’s board of trustees rejected the JRC’s findings, terminated Dr. Fahlen’s privileges, and filed a report with the Medical Board of California under Business & Professions Code Section 805. When Dr. Fahlen did not seek judicial review of the hospital’s action — the normal course when challenging a peer review decision — but instead filed a whistleblower suit under Health and Safety Code Section 1278.5, the hospital contended that the new suit was barred.
In 2012, the Court of Appeal supported Dr. Fahlen, but February’s decision by the California Supreme Court in Fahlen v. Sutter Central Valley Hospitals, et al. offered more insight into why whistleblower suits must be treated separately from peer review.
The unanimous court noted the whistleblower statute declares, “the public policy of the State of California to encourage patients, nurses, members of the medical staff and other health care workers to notify government entities of suspected unsafe patient care and conditions.” To this end, the statute provides that no health care facility “shall discriminate or retaliate, in any manner, against any patient, employee, member of the medical staff, or any other health care worker… because that person has… presented a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other government agency.”
Under California law, attacks on peer review actions must proceed through a legal process called “administrative mandamus” in which a judge is allowed only a limited opportunity to reverse. So long as the judge can find “substantial evidence” to support the hospital’s action, it must stand and any “common law” tort action by a physician will be dismissed. The court explained the high hurdle: “It is suggested that patient care and safety would be undermined by allowing lay jurors to assess the validity of a medical peer review decision.”
But a specific statute, such as Section 1278.5, that establishes its own patient-safety goals alters the balance of interests, the court said. “A requirement that (Dr. Fahlen) succeed in overturning an allegedly retaliatory… administrative decision before filing a statutory action would very seriously compromise the legislative purpose to encourage and protect whistleblowers.”
In its decision, the state high court acknowledged the possibility of “mixed motive” cases in which peer review proceedings, “though instigated at least in part as retaliation against a whistleblower, nonetheless disclose substantial legitimate medical grounds for restricting or terminating a physician’s hospital staff privileges — reasons that would properly have produced the same decision in the absence of retaliatory animus.”
But in looking at the limited issue before it — that is, simply whether to allow Dr. Fahlen the opportunity to prove his allegations that Sutter wrongfully retaliated against him — the high court declined to speculate on how such a “mixed motive” case should be resolved.
Author Gordon Ownby is General Counsel for the Cooperative of American Physicians, Inc.(CAP).
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