Ruling In Physician Whistle-blower Case Could Have Far-reaching Consequences

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Ruling in Physician Whistle-Blower Case Could Have Far-Reaching Consequences

by George Lauer, California Healthline Features Editor , California Healthline, Thursday, March 6, 2014

A California Supreme Court ruling last month in a case involving a Modesto physician who filed a lawsuit challenging the termination of his hospital privileges could have significant long-lasting ramifications, according to some observers.

In Fahlen v. Sutter Central Valley Hospitals, the court upheld a physician’s right to file a whistle-blower lawsuit before exhausting the peer-review process. Some experts contend the case could fundamentally alter hospital-physician relationships in California.

Mark Fahlen, a nephrologist, filed suit in March 2011 after Sutter Health rescinded his privileges to care for patients at Memorial Medical Center in Modesto. The suit included a whistle-blower claim under the state Health & Safety Code, alleging the hospital’s actions against Fahlen were in retaliation for his complaints about insubordination and substandard care by hospital nurses.

The hospital sought to have the suit dismissed because Fahlen had not first exhausted the peer-review process of challenging the action.

In a unanimous decision, the state Supreme Court ruled a physician claiming that his or her hospital privileges are restricted or terminated as an act of retaliation for whistle-blowing may file a civil suit without first exhausting the professional-review process.

The case was closely watched by hospital officials and physicians, many of whom believe the decision will have an impact on the peer-review process in California hospitals.

The California Hospital Association and California Medical Association filed briefs on opposite sides of the case.

Milestone Case? Depends Who You Ask

Fahlen is definitely a milestone case,” said Steve Schear, Fahlen’s lead attorney.

“It is the first case since the California Supreme Court’s 1976 decision in Westlake v. Superior Court to allow a California physician to go directly to court to sue for bad faith peer review. Because the courts in California and throughout the nation have been extremely deferential to hospital peer review decisions, hospital peer review has become the preferred mechanism of silencing physician whistleblowers.

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