Clash with hospital led to restriction of duties

Court records indicate that Cedars-Sinai recruited Hrayr K. Shahinian, MD, to establish and direct its skull-base surgery program in 1996. The doctor's experience at the hospital was rocky from the start, says his attorney Robert C. Baker, JD, a partner with the law firm of Baker, Keener & Nahra in Los Angeles.

The hospital's neurosurgeons doubted his qualifications for the task, and even the chairman who had recruited him noted that he had alienated hospital management, Baker says. Shahinian stated in August 2002 that the hospital's lack of support for the program compromised patient care, and a month later he was notified that his position as a faculty physician and the program's director would end in one year.

Before that year was up, Shahinian registered complaints over the unavailability, malfunctioning, and inadequate reprocessing of surgical instruments, Baker says. Court records report that a hospital investigation bore out Shahinian's protests and revealed that certain instruments, which had been routinely flash sterilized, were contaminated with bioburden.

After his termination, Shahinian sued Cedars-Sinai for tortious discharge in violation of public policy, a suit that was settled in June 2005, Baker says. Under the settlement, the hospital agreed to extend Shahinian operating privileges in a non-retaliatory manner and to properly maintain its supply of surgical instruments, Baker says. The disputes continued, however. There was disagreement over who was responsible for maintaining the surgeon's custom instruments, and the hospital issued a 90-day moratorium on Shahinian performing any surgeries at the center while it investigated the surgeon's safety concerns. The parties then argued about the conditions Shahinian would have to meet to perform surgeries there. These conditions included providing his own sets of instruments, having his own employee clean them prior to sterilization, and personally inspecting the instruments before use or agreeing that the hospital's instrument handling process was satisfactory.

Shahinian sued the hospital again in December 2006 and argued that the hospital had restricted his privileges and damaged his career without a fair hearing process. The surgeon and the hospital agreed to arbitrate the matter. In November 2009, the arbitrator concluded that the hospital's moratorium on Shahinian's surgeries was unlawfully retaliatory, Baker says.

The arbitrator pointed to the fact that no other surgeon was barred from operating or burdened with conditions because of concerns over the safety of the hospital's practices, and the arbitrator noted that the moratorium was enacted without a peer review or hearing process. Shahinian was awarded $508,124 in economic damages for breach of contract and interference with his practice, $1.6 million in emotional distress damages and $2.6 million in punitive damages, Baker says. Shahinian agreed to give up his staff privileges at Cedars-Sinai.

After agreeing to the arbitrated award, the hospital took it to court and argued that it exceeded the arbitrator's powers and violated public policy. The trial court rejected this claim, and the appeals court recently upheld that ruling.

"Defendant may be unhappy with the result, but defendant agreed to 'final and binding' arbitration, and that is what it got," the court wrote in its decision. "None of these rules of law or public policies is implicated when a hospital becomes embroiled in a dispute with a doctor that has nothing to do with the doctor's competence or the doctor's professional conduct that puts patient care and safety at risk."