Mid-Atlantic Health Law TOPICS

The California Supreme Court recently held, in Fahlen v. Sutter Central Valley Hospitals, that a physician could sue a hospital under the State's whistle-blower statute for terminating the physician's privileges in retaliation for his reports of substandard care by hospital nurses, without the physician first exhausting his challenge to the adverse peer review decision under the hospital's medical staff by-laws.

The court reasoned that the whistle-blower statute declares a policy of encouraging health care workers to report unsafe patient care. The statute implements this policy by forbidding health care facilities from retaliating or discriminating against workers who complain about quality of care issues, and by giving workers the right to sue in court when such retaliation or discrimination occurs.

A. The Decision

The court unanimously held that the plain language of the whistle-blower statute did not condition a worker's rights under the statute on a prior successful challenge to the hospital's adverse peer review decision against the whistle-blower. Indeed, such a condition would seriously undermine the purpose of the whistle-blower statute.

This was especially true because the hospital's peer review proceeding was not an administrative forum designed to consider the physician's claim of discriminatory treatment in retaliation for his reports about substandard patient care by others. Instead, the ostensible purpose of the proceeding was to address charges against the physician that deficiencies in his own competence constituted a danger to patient care. In other words, the peer review proceeding was not a forum for redressing a claim of retaliation, but instead was allegedly the means by which that retaliation occurred.

The court concluded that "[t]he Legislature cannot have intended . . . to so limit the physician's statutory right to persuade a judicial fact finder, in the first instance, that the adverse hospital action actually occurred because of, and in retaliation for, his or her efforts to report concerns about the hospital's quality of care."

B. Maryland's Whistleblower Act

Maryland has its own Health Care Worker Whistleblower Protection Act. The Maryland Whistleblower Act prohibits an employer from taking, or refusing to take, any personnel action as reprisal against an employee because the employee: (1) discloses or threatens to disclose an illegal practice; (2) provides information to any public body conducting an investigation of the employer; or (3) objects to an illegal practice.

The protections provided under the Maryland Whistleblower Act only apply if: (1) the employee has a reasonable, good faith belief that the employer is still engaged in the illegal practice; (2) the employer's practice poses a substantial and specific danger to the public health or safety; and (3) the employee has reported the practice to a supervisor in writing and afforded the employer a reasonable opportunity to correct the practice, or the employee has followed the employer's compliance plan, if there is one.

An employee who is subject to a personnel action in violation of the Maryland Whistleblower Act may bring a lawsuit, and a court may, among other things, reinstate the employee, require compensation for lost wages, and assess reasonable attorney's fees.

Significantly, similar to the situation in California, there is no requirement in the Maryland Whistleblower Act that the employee must exhaust any employer-provided grievance procedures pertaining to the personnel action before the whistleblower proceeds to court.

C. Conclusion

While many peer review disputes have historically involved lengthy internal medical staff proceedings before the parties ever reach a court, the Fahlen case indicates that such steps may potentially be bypassed if the affected physician alleges that the peer review action is in retaliation for the physician complaining about unsafe activities.