BE CAREFUL WHAT YOU DON'T ASK FOR; HOSPITAL UNABLE TO APPEAL BIG ARBITRATION AWARD IN MEDICAL STAFF DISPUTE
We have reported before on the fact that health care entities should consider including appellate rights in their arbitration award. On April 27, 2011, a California Appellate court issued a new opinion concerning appeals of arbitration awards. The decision, which affirmed a large arbitration award against a hospital in a medical staff dispute, is important to everyone involved in arbitration, and specifically to hospitals, physicians, and medical staffs. Take note: the court affirmed the award of punitive damages against the hospital!
In Shahinian v. Cedars-Sinai Medical Center, 2011 WL 1566971, the court upheld an arbitration award in favor of Dr. Shahinian, a physician then on the medical staff at Cedars-Sinai Medical Center, to the tune of $508,124 in economic damages, $1,603,650 in emotional distress damages, and $2,580,000 in punitive damages. The alleged wrongdoing included Cedars-Sinai's placing such conditions on Dr. Shahinian's clinical privileges as to interfere with his contractual relationships with scheduled patients, retaliating against him for voicing concerns about the clean and sanitary conditions of surgical instruments and taking his clinical privileges, and discriminatorily permitting other physicians to use instruments without the limiting conditions the hospital imposed on him.
Cedars-Sinai appealed on the grounds that the award violated public policy and therefore exceeded the arbitrator's powers. The appellate court disagreed. The arbitration arose under a written contract that settled a prior dispute between the parties. In the settlement, Cedars-Sinai agreed, among other things, not to "retaliate or discriminate against Dr. Shahinian in any unlawful manner with respect to his continued status as a medical staff member, including matters concerning his medical staff privileges" and that although Shahinian's medical staff privileges were governed exclusively by the Medical Staff Bylaws and Departmental procedures, issues regarding Dr. Shahinian's current medical staff privileges would be handled in a non-discriminatory manner on the same terms and conditions as other medical staff members.
Find out how the court ruled after the break.