A California court recently concluded that exhaustion of administrative remedies was not required as a condition precedent to reinstatement of a physician. The summary description of this holding is somewhat misleading, because it is commonly accepted that physicians must exhaust their administrative remedies, i.e., the medical staff peer review hearing process, before pursuing either civil or equitable remedies. The California holding would apparently contradict that.
However, the California case involves peculiar circumstances. The physician was both a member of medical staff of the hospital and an employee of the hospital. The hospital summarily suspended the physician’s clinical privileges and terminated the physician’s employment. During an extended period of legal posturing, the parties were unable to agree upon a medical staff peer review process, due to technicalities in the due process procedures which gave both sides an arguable position about the appointment of a hearing officer.
During that period, the physician petitioned for an injunction reinstating her employment. The court cited an earlier California case holding that there must be a “pre-termination” hearing with respect to the employment if continued employment presented no immediate danger to patients. The court reasoned that since the physician’s clinical privileges were already summarily suspended and the physician could, therefore, not pose any risk to patients, the physician was, therefore, entitled to a pre-termination hearing with respect to the termination of her employment. Since the pre-termination hearing had not been held, the court ordered reinstatement of the petitioner’s employment and the hospital placed the physician on paid administrative leave.