Physician whistle-blowers can sue hospitals without delay, appeals court rules

Judges say a law enables California doctors to take immediate legal action against health centers suspected of retaliation.

By Alicia Gallegos — Posted Sept. 3, 2012

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A 2007 amendment to California’s whistle-blower protection law allows physicians lodging complaints about hospitals to sue the facilities for retaliating against them without the doctors first having to exhaust lengthy administrative remedies, a federal appeals court has ruled.

The ruling encourages more doctors to speak up about patient care concerns in health facilities, said Long X. Do, legal counsel for the California Medical Assn. The CMA wrote a friend-of-the-court brief in support of the doctor who is the plaintiff in the case.

“If you suffer retaliation and you can’t get your day in court for two years down the road, then basically there is no whistle-blower protection,” Do said. The ruling “preserves the protection that the Legislature enacted for physicians in the hospital setting.”

The decision stems from a dispute between nephrologist Mark Fahlen, MD, and Memorial Medical Center based in Modesto, Calif. Between 2004 and 2008, Dr. Fahlen reported several problems with Memorial nursing staff to nursing supervisors and the center’s administration, according to court documents. He said nurses were failing to follow his directions, thus endangering patients’ lives. In one instance, nurses refused to follow the doctor’s order to shock a patient with defibrillator paddles, he said. In another instance, medical staff allegedly ignored Dr. Fahlen’s order to transfer a patient to intensive care.

Nurses also complained about Dr. Fahlen’s behavior. Subsequently, the physician was fired, and the hospital refused to renew his staff privileges. A peer committee consisting of six physicians reviewed the decision and found no professional incompetence by Dr. Fahlen, according to court records. The panel reversed the hospital’s decision, but the center’s board overturned the reversal.

Dr. Fahlen did not seek judicial review of the decision to revoke his privileges, instead opting to sue the hospital and assert a whistle-blower retaliation claim. A 2007 provision of California’s Health and Safety Code states that medical staff physicians who experience retaliation after raising patient safety concerns can sue a hospital for damages and reinstatement of privileges. However, the hospital argued that the physician first had to file an administrative petition asking a judge to review the privileges decision before the doctor could file a whistle-blower claim. A trial court ruled in favor of Dr. Fahlen, and the defendants appealed.

In its Aug. 14 decision, the Court of Appeal of the State of California, 5th Appellate District, upheld the lower court ruling that said Dr. Fahlen had the right to sue as a whistle-blower without first exhausting administrative remedies. The Legislature’s intent is clear that medical personnel must be protected from retaliation when they report conditions that endanger patients, the court said.

“This policy of putting patients first would be undermined if retaliation victims had to pursue writ review before seeking the statute’s protection,” judges said. “If we accepted the hospital’s argument in this case, [Dr.] Fahlen could have to spend years pursuing writ relief before being able even to assert his whistle-blower claim in court. This type of delay is incompatible with the Legislature’s goals.”

Hospitals decry legal “shortcut”

The ruling weakens the peer review hearing process and compromises hospitals’ ability to make appropriate patient care decisions, said Jana DuBois, vice president and legal counsel for the California Hospital Assn. The CHA filed a friend-of-the-court brief in favor of Memorial Medical Center in the case.

Historically, doctors who want to challenge revoked privileges first must ask a trial judge to decide whether the decision was appropriate. If a judgment is made against a doctor on this issue, he or she then can sue.

Under that sequence, “it’s a judge who is looking at the entire history of a case and evaluating whether this physician was [afforded] due process,” DuBois said. “It’s not a jury of lay people who are making a decision about a peer review. What this [ruling does] is decouple that process. & If a physician doesn’t like the outcome of a peer review, [he or she] can file a lawsuit for damages and shortcut this process and base it on whistle-blower claims.”

The appeals court ruling “throws a monkey wrench” into a long line of case law and statutory requirements that protect patients and preserve quality care, she said.

At this article’s deadline, attorneys for Memorial Medical Center had not returned messages and emails seeking comment.

Doctors deserve to be able to fight unfair treatment by hospitals immediately, instead of wasting time in administrative processes, said Stephen Schear, Dr. Fahlen’s attorney. He said decision-making about medicine increasingly is being handled by corporate managers and hospital administrators.

“In that culture, it’s extremely important that physician whistle-blowers be protected legally,” he said. “There’s been a pattern by some health care corporations to retaliate against whistle-blower physicians who complain about a problem.”

He added that with the court decision, “physicians can be much more confident now that if they complain about patient safety problems, they’ll have some protection.”

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Case at a glance

Can a physician sue a hospital for whistle-blower retaliation before exhausting administrative remedies?

The Court of Appeal of the State of California, 5th Appellate District says yes. The court said the Legislature’s intent is clear that medical personnel must be protected from retaliation when they report conditions that endanger patients. The ruling means physicians may bring legal challenges directly under the whistle-blower protection statute, rather than first seeking a potentially lengthy judicial review of the case.

Impact: The ruling encourages physicians to report patient safety concerns and strengthens legal protections for doctors, the California Medical Assn. said. The California Hospital Assn. said the decision unfairly allows physicians to shortcut the dispute process.

Mark T. Fahlen, MD, v. Sutter Central Valley Hospitals et al., the Court of Appeal of the State of California, 5th Appellate District, Aug. 14 (link)

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External links

Mark T. Fahlen, MD, v. Sutter Central Valley Hospitals et al., Court of Appeal of the State of California, 5th Appellate District, Aug. 14 (link)

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