The family of a cerebral palsy sufferer will sue a Melbourne hospital where he was the alleged victim of patient abuse which was caught on camera.

Months after Billy Aivaliotis arrived at Caulfield Hospital relatives were worried about his weight loss and unexplained repeated bruises.

With Mr Aivaliotis, 33, unable to explain what was happening to him, a hidden camera planted by family uncovered the alleged abuse - including being grabbed around the throat - by a male nurse.

Family lawyer Nick Korkliniewski said Mr Aivaliotis's parents and sisters were "extremely distraught" about what they found on the January 22 footage.

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"They had made their concerns known to the wider nursing staff but they fell on deaf ears," Mr Korkliniewski told AAP.

Alfred Health, which operates Caulfield Hospital, became aware of the serious concerns last week and began an internal investigation, notifying police after Mr Aivaliotis's family revealed the video.

"The staff member involved was stood down and no longer works for Alfred Health," a statement said.

"The video material presented to us by the family is distressing and shocking, and not in keeping with the culture of advanced care patients and families should experience in our hospitals."

Mr Aivaliotis was in hospital for rehabilitation after being hit by a car in 2017.

"Billy suffers from cerebral palsy, has been hit by a car, and now this," Mr Korkliniewski said.

"His brain injury is such that he was not properly able to articulate what was happening.

"We have the intention of shortly bringing claims against the hospital under disability discrimination legislation and state laws."

Police said they were investigating a number of alleged unlawful assaults on a patient at the hospital.

A 30-year-old Cranbourne West man was interviewed and released pending further inquiries.