California law extends whistle-blower protections

Medical staff members in California are getting protection from retaliation for filing formal complaints against health facilities about subpar treatment or conditions. The medical and hospital communities disagree about whether this change to the state's health care whistle-blower law will interfere with peer review.

The California Medical Assn. pushed to expand the law to let medical staff doctors sue a hospital if they suspect unfair treatment for reporting quality problems to the facility, its medical staff, or a government or accrediting body. The statute previously applied just to patients, nurses and "other health care workers." The change was set to take effect Jan. 1.

"What really prompted this was the fear that patient care was being compromised by the inability of physicians to come forward when they had concerns about the treatment of patients," said Brett Michelin, the CMA's associate director of government relations.

He cited examples of doctors having research grants taken away or office leases terminated for reporting unnecessary procedures performed at a hospital. Unjustified peer review was another concern, Michelin noted.

"If peer review is, in fact, the form of retaliation, then doctors will be protected, and that is absolutely a legitimate goal of this legislation," he said. "But [peer review is] just one of many forms of retaliation that doctors need to be protected from, and we felt [the law] was justified to protect physicians' ability to stand up and report potential abuse."

However, the California Hospital Assn. argues the change in the law could do more harm than good when it comes to peer review.

The CHA argues the original whistle-blower statute was meant to apply primarily to hospital employees, which medical staff are not.

"Everybody wants quality of care and reporting methods in place," said Gail Blanchard-Saiger, a CHA attorney and vice president of labor and employment. "Our concern is [that] extending what was supposed to be employee protections to physicians has unintended consequences for the peer-review process."

For example, under the whistle-blower changes, medical staff members can file a retaliation claim against a hospital for alleged discrimination within 120 days of the physician's filing of a quality complaint, she said. This could prematurely stop any peer review activity that might arise after the report. It remains unclear whether a doctor could sue the peer review committee directly under the statute.

Blanchard-Saiger said other state laws already prohibit retaliation against physicians who advocate for medically appropriate health care for their patients. Doctors also qualify for federal whistle-blower protections, she said.

But some physicians felt those laws fell short when it came to filing a formal grievance against a health facility, according to the CMA. The whistle-blower statute allowed health care workers who prevailed in a retaliation lawsuit to qualify for reinstatement and reimbursement for lost income and legal costs. Those remedies now apply to medical staff members. The amendments also give medical staff members the added protection of any type of court order a judge finds necessary. These could include restoring a terminated contract or privileges during the peer-review process or blocking peer-review proceedings if a court finds them inappropriate, said Gregory Abrams, former CMA legal counsel, who assisted the association on the bill.

Peer review protected, doctors say

Still, there are safeguards in place to protect peer review, he said. A provision gives the court the discretion to block a doctor's request for peer-review-related documents as part of his or her discrimination claim until the hearings end.

Abrams said hospitals also can stop an unwarranted lawsuit against peer review through the anti-SLAPP (Strategic Lawsuits Against Public Participation) law. The statute prohibits doctors from filing unfounded suits to chill free speech on public issues. The California Supreme Court in 2006 ruled that peer review serves such a public function.

Abrams said courts generally are reluctant to interfere with peer review. In addition, it would be difficult for a doctor to prove retaliatory peer review in the face of an anti-SLAPP motion, he noted. If the physician loses, he or she must pay the other party's attorney's fees.

"The doors to the court are very well-guarded against interrupting any peer-review proceeding," Abrams said.

The CHA's Blanchard-Saiger disagreed, saying the amended law conflicts with other statutes that ensure that peer review remains confidential and runs its course before doctors challenge the results. "The presumption is that [the peer review] is retaliation for the complaint, and participation might be chilled because of that scrutiny," she said. "And if the process has already started, can it continue?"

In addition, she contends the discovery provisions in the revised whistle-blower statute put an unnecessary burden on hospitals and medical staff to defend against potential disclosures of privileged peer-review-related materials. As for the anti-SLAPP remedy, Blanchard-Saiger said, "generating more litigation is not the best answer."