BILL ANALYSIS
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|Hearing Date:June 29, 2009 |Bill No:AB |
| |120 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND
ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 120Author:Hayashi
As Amended:June 22, 2009 Fiscal: No
SUBJECT: Healing arts: peer review.
SUMMARY: Makes changes to the due process requirements for physicians
and surgeons who are subject to a final proposed action of a peer
review body for which a report (commonly referred to as 805 report
pursuant to Section 805 of the Business and Professions Code) is
required to be filed to the appropriate health care regulatory body.
Existing law:
1)Establishes the federal Health Care Quality Improvement Act
(HCQIA) of 1986 which created standards for hospital peer review
committees, provided immunity for those involved in peer review,
and established the National Practitioner Data Bank (NPDB), a
system for reporting physicians whose competency has been
questioned or when the physician has been sanctioned. (HCQIA is
intended to protect peer review bodies from private money damage
liability and prevent incompetent practitioners from moving
state to state without disclosure or discovery of previous
damaging or incompetent performance.)
2)Establishes the Medical Board of California (MBC) to license,
regulate and discipline physicians and surgeons in California
and states that the protection of the public is the highest
priority of the MBC in exercising its functions.
3)Provides for the professional review of specified healing arts
licentiates by a peer review body, as defined, including:
a) A medical or professional staff of any health care
facility or a licensed clinic, or a facility certified to
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participate in the federal Medicare Program as an ambulatory
surgical center.
b) A health care service plan or a disability insurer, as
specified.
c) Any medical, psychological, marriage and family therapy,
social work, dental, or podiatric professional society, as
specified.
d) A committee organized by any entity that functions for the
purpose of reviewing the quality of professional care
provided by members or employees of that entity.
4) Defines a licentiate for purposes of item # 3) above, as a
physician and surgeon, doctor of podiatric medicine, clinical
psychologist, marriage and family therapist, clinical social
worker, or dentist.
5)Requires an 805 report to be filed by the chief of staff, chief
executive officer, medical director, or administrator of any
peer review body and the chief executive officer or
administrator of a health facility or clinic, as defined, with
the relevant agency having regulatory jurisdiction over a
licentiate under the following:
a) Within 15 days after the effective date of any of the
following that occur as a result of an action of a peer
review body :
i) A licentiate's application for staff privileges or
membership is denied or rejected for a medical disciplinary
cause or reason.
ii) A licentiate's membership, staff privileges, or
employment is terminated or revoked for a medical
disciplinary cause or reason.
iii) Restrictions are imposed, or voluntarily accepted, on
staff privileges, membership, or employment for a
cumulative total of 30 days or more for any 12-month
period, for a medical disciplinary cause or reason.
b) Within 15 days if a licentiate does any of the following
based on information indicating medical disciplinary cause of
reason:
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i) Resigns or takes a leave of absence from membership,
staff, or employment.
ii) Withdraws or abandons an application for staff
privileges or membership.
iii) Withdraws or abandons the request for renewal of
privileges or membership.
6)Requires also for an 805 report to be filed within 15 days after
the imposition of a summary suspension of staff privileges,
membership, or employment, if the summary suspension remains in
effect for over 14 days.
7)Defines the following terms:
a) Staff privileges as any arrangement under which a
licentiate is allowed to practice in or provide care for
patients in a health facility. Such arrangements include,
but are not limited to, full staff privileges, active staff
privileges, limited staff privileges, auxiliary staff
privileges, courtesy staff privileges, locum tenens
arrangements, and contractual arrangements to provide
professional services, including arrangements to provide
outpatient services.
b) Denial or termination of staff privileges, membership, or
employment includes failure or refusal to renew a contract or
to renew, extend, or reestablish any staff privileges, if the
action is based on medical disciplinary cause or reason.
c) Medical disciplinary cause or reason as the aspect of a
licentiate's competence or professional conduct that is
reasonably likely to be detrimental to patient safety or to
the delivery of patient care.
8)Requires a copy of the 805 report, and a notice advising the
licentiate of his or her right to submit additional statements
or other information, as specified, to be sent by the peer
review body to the licentiate named in the report.
9)Requires the information to be reported in an 805 report to
include the name and license number of the licentiate involved,
a description of the facts and circumstances of the medical
disciplinary cause or reason, and any other relevant information
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deemed appropriate by the reporter.
10)Requires a supplemental report to be made within 30 days
following the date the licentiate is deemed to have satisfied
any terms, conditions, or sanctions imposed as disciplinary
action by the reporting peer review body.
11)Indicates that the reporting required under Section 805 does
not act as a waiver of confidentiality of medical records and
committee reports. Requires that the information reported or
disclosed be kept confidential, as specified.
12)Specifies that a willful failure to file an 805 report by any
person who is designated or otherwise required by law to file is
punishable by a fine not to exceed one hundred thousand dollars
($100,000) per violation; and a ny failure by the administrator
of any peer review body, the chief executive officer or
administrator of any health care facility, or any person who is
designated or otherwise required by law to file an 805 report,
shall be punishable by a fine not to exceed fifty thousand
dollars ($50,000) per violation.
13)Requires, prior to granting or renewing staff privileges for
any physician and surgeon, psychologist, podiatrist or dentist,
any licensed health care facility, health care service plan or
medical care foundation, or the medical staff of an institution,
to request a report from the MBC, the Board of Psychology, the
Osteopathic Medical Board of California, or the Dental Board of
California to determine if any 805 report has been made,
indicating that the applying physician and surgeon,
psychologist, podiatrist or dentist has been denied staff
privileges, been removed from medical staff, or had his or her
staff privileges restricted as provided in Section 805.
Prohibits providing any report in the following circumstances:
a) If the denial, removal, or restriction was imposed solely
because of the failure to complete medical records.
b) If the MBC found the information reported is without
merit.
c) If a period of three years has elapsed since the report
was submitted.
14)Specifies findings and declarations on the reasons California
opted out of some of the provisions of the federal HCQIA.
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Further states that peer review be performed by
licentiates, and specifies the duties of the governing bodies of
acute care hospitals in the peer review process.
15)States that a licentiate who is the subject of a final proposed
action of a peer review body for which a report is required to
be filed under Section 805 shall be entitled to written notice
of the final proposed action. Requires the written notice to
include the following information:
a) That an action against the licentiate has been proposed by
the peer review body which, if adopted, shall be taken and
reported pursuant to Section 805.
b) The final proposed action.
c) That the licentiate has the right to request a hearing on
the final proposed action
d) The time limit, within which to request a hearing.
16)Specifies that if a hearing is requested on a timely basis, the
peer review body shall give the licentiate a written notice
stating all of the following: the reasons for the final
proposed action taken or recommended, including the acts of
omissions with which the licentiate is charged; and the place,
time, and date of the hearing.
17)Defines final proposed action as the final decision or
recommendation of the peer review body after an informal
investigatory activity or prehearing meetings.
18)Specifies certain hearing requirements, if a licentiate timely
requests a hearing concerning a final proposed action, including
the following:
a) The hearing to be held, as determined by the peer review
body, before a trier of fact, which shall be an arbitrator/s
selected by a process mutually acceptable to all the parties
or before a panel of unbiased individuals who shall gain no
financial benefit from the outcome;
b) If a hearing officer is selected, the hearing officer
shall gain no financial benefit from the outcome, shall not
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act as a prosecuting officer or advocate, and not entitled to
vote.
19)Specifies that the licentiate has a right to the following
during a hearing: The right to voir dire the panel members and
any hearing officer, and the right to challenge the impartiality
of any member or hearing officer.
20)Specifies that both parties have a right to the following: a)
Inspect and copy documents; b) all information made available to
the trier of fact; c) To have a record made of the proceedings;
d) To call, examine and cross-examine witnesses; e)To present
and rebut evidence; and f) To submit a written statement at the
close of the hearing.
21)Specifies who has the burden of presenting evidence and proof
during a hearing.
22)States that upon completion of a hearing concerning a final
proposed action for which an 805 report is required to be filed,
the licentiate and the peer review body have the right to
receive all of the following:
a) A written decision of the trier of fact, including
findings of fact, and a conclusion, as specified.
b) A written explanation of the procedure for appeal of the
decision, as specified.
c) The right to appear and respond.
d) The right to be represented by an attorney or any other
representative designated by the party.
e) The right to receive the written decision of the appellate
body.
23)Allows a peer review body to immediately suspend or restrict
clinical privileges of a licentiate where the failure to take an
action may result in an imminent danger to the health of any
individual, provided that the licentiate is subsequently
provided with the notice and hearing rights as specified.
24)States that specified peer review proceedings does not apply to
state or county hospitals, hospitals owned or operated by the
Regents of the University of California or health facilities
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which serve as primary teaching facilities, as specified.
25)Requires the MBC to post on the Internet specified information
regarding licensed physicians, including information relating to
the status of a license, felony convictions, malpractice
judgment or arbitration awards, or any hospital disciplinary
action that resulted in the termination or revocation of a
licensee's hospital staff privileges for a medical disciplinary
cause or reason.
This bill:
1)Finds and declares that it is essential that California's peer
review system generate a culture of trust and safety so that health
care practitioners will participate robustly in the process by
engaging in critically important safety activities, such as
reporting incidents they believe to reflect substandard care or
unprofessional conduct and serving on peer review, quality
assurance, and other committees necessary to protect patients.
2)States further that the intent of the Legislature that peer review
bodies be actively involved in the measurement, assessment, and
improvement of quality and that there be appropriate oversight by
the peer review bodies to ensure the timely resolution of issues.
3)States that it is the public policy of the state that licentiates
who may be providing substandard of care be subject to the peer
review hearing and reporting process, as specified.
4)Indicates that to ensure that the peer review process is not
circumvented, prohibits requiring a member of a medical or
professional staff, by contract or otherwise, from altering or
surrendering staff privileges, status, or membership solely due to
the termination of a contract between that member and a health care
facility. States, however, that with respect to services that may
only be provided by members who have, or who are members of a
medical group that has, a current exclusive contract for those
identified services, termination of the contract or termination of
the member's employment by the medical group holding the contract,
may result in the member's ineligibility to provide the services
covered by the contract.
5)Entitles a peer review body of a health care facility to review and
make timely recommendations to the governing body of the facility
and its designee regarding quality considerations relating to
clinical services whenever the selection, performance evaluation, or
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any change in the retention or replacement of licentiates with whom
the health care facility has a contract occurs. Requires the
governing body to give great weight to the recommendations.
6)States that the provisions contained in items #3) through # 5) do
not impair a governing body's ability to take action against a
licentiate, as specified.
7)States that it is the policy of the state that in certain limited
circumstances, external peer review may be necessary to promote and
protect patient care in order to eliminate perceived bias, obtain
needed medical expertise, or respond to other particular
circumstances.
8)Encourages a peer review body to obtain external peer review for the
evaluation or investigation of an applicant, privilegeholder, or
member of the medical staff in the following circumstances:
a) Committee or department reviews that could affect a
licentiate's membership or privileges do not provide a
sufficiently clear basis for action or inaction.
b) No current medical staff member can provide the necessary
expertise in the clinical procedure or area under review.
c) To promote impartial peer review.
9)Defines external peer review as peer review provided by licentiates
who do not practice in the same health care facility as the
licentiate under review, who are impartial, and who have the
necessary expertise in the clinical procedure or area under review.
10)Finds and declares that the sharing of information between peer
review bodies is essential to protect the public health.
11)Requires a peer review body, upon receipt of reasonable copying and
processing costs, to respond to the request of another peer review
body and produce the records reasonably requested concerning a
licentiate under review to the extent not otherwise prohibited by
state or federal law. Provides that the responding peer review body
has the discretion whether to produce minutes from peer review body
meetings. States that the records produced by a peer review body
pursuant to this provision will be used solely for peer review
purposes and not subject to discovery, as specified. Entitles the
peer review body responding to the request to all confidentiality
protections and privileges provided by law as to the information and
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records disclosed pursuant to this provision.
12)States that a licentiate under review by a peer review body
requesting records pursuant to item # 11) above must release the
responding peer review, its members, and the health care entity for
which the responding peer review body conducts peer review, from
liability for the disclosure of records, and the contents of the
records, as specified. Provides that if a licentiate does not
provide a reasonable release that is acceptable to the responding
peer review body, the responding peer review body is not obligated
to produce records.
13)Requires the following of a hearing officer :
a) Disclose all actual and potential conflicts of interest within
the last five years reasonably known to the hearing officer.
b) Be an attorney licensed to practice law in the State of
California. This provision does not apply to a hearing held
before a panel of dental professional peer review body.
c) States that unless agreed by the parties, an attorney from a
firm utilized by the hospital, the medical staff, or the involved
licentiate within the preceding two years is not eligible to
serve as a hearing officer.
d) Endeavor to ensure that all parties maintain proper decorum
and have a reasonable opportunity to be heard and present all
relevant oral and documentary evidence. Entitles the hearing
officer to determine the order of, or procedure for, presenting
evidence and argument during the hearing and have the authority
and discretion to make all rulings on questions pertaining to
matters of law, procedure, or the admissibility of evidence.
Further requires the hearing officer to take all appropriate
steps to ensure a timely resolution of the hearing, but may not
terminate the hearing process, unless in the case of flagrant
noncompliance with the procedural rules governing the hearing
process or egregious interference with the orderly conduct of the
hearing, the hearing officer may recommend that the hearing panel
terminate the hearing, provided that this activity is authorized
by the applicable bylaws of the peer review body.
14)Gives both parties the right to be represented by an attorney of
the party's choice at the party's expense.
15)Prohibits a peer review body from being represented by an attorney
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if the licentiate notifies the peer review body in writing no later
than 15 days prior to the hearing that he or she has elected not to
be represented by an attorney. States that unless otherwise agreed
agreed by the parties, this election is binding.
16)States that if a licentiate does not provide the written notice, as
specified within the required timeframe, the peer review body may be
represented by an attorney even if the licentiate later elects not
to be represented by an attorney.
FISCAL EFFECT: Unknown. This bill has been keyed "nonfiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. According to the California Medical Association (CMA), the
Sponsor of this measure, this bill will improve the peer review
system in California to ensure quality health care is being provided
to patients. Currently, the peer review system works very well in
most facilities, but it can be open to manipulation and unreasonable
delay in others. According to the Author, this bill promotes peer
review in a number of ways. For example, it provides better tools
to ensure that peer review bodies have adequate information
concerning licentiates by mandating the sharing of peer review
records. It also prevents schemes that circumvent the peer review
process through contractual arrangements, and provides increased
fairness for the licentiate under review, making it more likely that
all physicians will participate in the peer review system.
2.Background.
a. What is Peer Review? In peer review, physicians evaluate
their colleagues' practice to determine compliance with the
standard of care. Peer reviews are intended to detect
incompetent or unprofessional physicians early and terminate,
suspend, or limit their practice if necessary. Peer review
is triggered by a wide variety of events including patient
injury, disruptive conduct, substance abuse, or other medical
staff complaints. A peer review committee investigates the
allegation, comes to a decision regarding the physician's
conduct, and takes appropriate remedial actions. However,
there is reluctance among physicians to serve on peer review
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committees due to the risk of involvement in related future
litigation, including medical malpractice lawsuits against a
physician under review. In addition, there has been rising
concern relating to "sham peer review." Sham peer review is
the use of the peer review system to discredit, harass,
discipline, or otherwise negatively affect a physician's
ability to practice medicine or exercise professional
judgment for a non-medical or patient safety related reason.
Other criticisms of peer review include over legalization of
the process, lack of transparency in the system, and
burdensome human and financial toll peer review brings not
only to the hospital but also to a physician under review.
b. Federal Requirements. Recognizing that peer review is
necessary to maintain and improve quality medical care,
Congress, in 1986, enacted the HCQIA. HCQIA established
standards for hospital peer review committees, provided
immunity for those who participate in peer review, and
created the NPDB. The NPDB is a confidential repository of
information related to the professional competence and
conduct of physicians, dentists, and other health care
practitioners. Credentialing bodies are required to check
the NPDB database before granting privileges to physicians or
re-appointing them. Entities such as hospitals, professional
societies, state boards, and plaintiffs' attorneys are given
access to the NPDB. In enacting the NPDB, the United States
Congress intended to improve the quality of health care by
encouraging State licensing boards, hospitals, and other
health care entities, and professional societies to identify
and discipline those who engage in unprofessional behavior;
and to restrict the ability of incompetent physicians,
dentists, and other health care practitioners to move from
State to State without disclosure or discovery of previous
medical malpractice payment and adverse action history. The
NPDB is a central repository of information about:
(1) malpractice payments made for the benefit of physicians,
dentists, and other health care practitioners; (2) licensure
actions taken by State medical boards and State boards of
dentistry against physicians and dentists; (3) professional
review actions primarily taken against physicians and
dentists by hospitals and other health care entities,
including health maintenance organizations, group practices,
and professional societies; (4) actions taken by the Drug
Enforcement Administration (DEA), and (5) Medicare/Medicaid
Exclusions.
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It appears that hospitals may not be complying with the
reporting requirements of the NPDB. On May 27, 2009, the
Public Citizen released a report on the failure of hospitals
to discipline and report substandard physicians entitled
"Hospitals Drop the Ball on Physician Oversight Failure of
Hospitals to Discipline and Report Doctors Endanger
Patients." The report indicated that although federal law
requires hospitals to report to a national databank
physicians whose admitting privileges are revoked or
restricted for more than 30 days, hospitals fail to report
and take appropriate actions against physicians practicing
substandard care. The report pointed out that this failure
deprives state medical boards of critical information needed
for regulatory oversight and creates the potential for
patient harm. It should be noted that this report is
consistent with findings that have been made since tracking
of reporting since 1990. In a 1995 report, the Office of
Inspector General of the Department of Health and Human
Services found that for the period September 1, 1990, when
the NPDB became operational, to December 1993, about 75
percent of all hospitals in the country did not report an
adverse action. More current data indicates that for the
period September 1990 through September 30, 1998 about 67% of
hospitals have never reported an adverse action. The most
recent numbers suggest many of the trends highlighted above
continue. The 2006 NPDB Annual Report highlights many of the
same issues reported above continue to be a problem;
including a diminishing number of reports. The 15,843
Medical Malpractice Payment Reports received during 2006 are
8.3 percent less than the number of Malpractice Payment
Reports received by the NPDB during 2005. This decrease
comes after a decrease of 2.2 percent in 2005 in comparison
to 2004. Of those hospitals currently in "active" registered
status with the NPDB, 48.9 percent have never submitted a
Clinical Privileges Action Report. This percentage has slowly
decreased over the years, from 53.4 percent in 2004 and 52.0
percent in 2005.
c. Medical Board of California and 805 Peer Review Reporting
Requirements. The MBC is responsible for regulating and
licensing physicians in California. The MBC revokes,
suspends, or limits the practice of any physicians and
surgeons. In exercising regulatory authority over physicians
and surgeons the MBC has as its highest priority the
protection of the public. Currently, the MBC regulates
125,612 physicians and surgeons, of which 97,878 reside in
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California. The MBC investigates complaints against
physicians and adopts final decisions in disciplinary matters
against physicians and surgeons.
In 1975, the California Legislature passed the Medical Injury
Compensation Reform Act of 1975 (commonly referred to as
MICRA) to limit the legal liability of health care providers
and included special rules for medical malpractice cases.
MICRA encompasses all of the following: 1) limits the
contingency fee counsel may receive in medical malpractice
cases; 2) vests the MBC with the responsibility to protect
the public from incompetent physicians; 3) permits a health
care provider charged with medical malpractice to introduce
evidence of a patient's receipt of compensation from
"collateral sources" such as insurance policies; 4) limits
the time in which a medical malpractice action can be
commenced; 5) requires a patient to provide 90 days' notice
of his or her intent to sue to encourage settlement; 6)
permits a contract for medical services to include a binding
arbitration requirement; 7) permits periodic payment awards,
rather than a lump sum award, for future damages; and 8)
imposes a strict limit of $250,000 on non-economic damages.
Legislative analyses, when MICRA was adopted, indicates that
the primary purpose of MICRA was to reduce the cost of
medical malpractice litigation and restrain a perceived
explosion in the cost of medical malpractice insurance while
preserving the rights of medical malpractice victims to
receive sufficient compensation for their injuries.
As part of MICRA, the California Legislature enacted the basic
provisions of state law governing medical peer review and
mandatory reporting to the MBC. Section 805 requires any
peer review body to report certain information to the MBC or
other relevant physician licensing agency when specified
criteria are met. Generally, an 805 report is required
whenever a doctor's application for membership or staff
privileges is denied for medical disciplinary reasons, or
membership, staff privileges, or employment is terminated,
revoked, or restricted for medical disciplinary reasons. In
addition, if a doctor resigns in the face of an investigation
by a medical peer review body, a report is required.
Although the primary reporting obligation lies with
hospitals, health plans, physician groups, professional
societies and clinics also have reporting obligations.
According to the MBC, it received one hundred thirty-eight 805
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reports in 2007-2008 from hospitals/clinics (74), health care
service plans (17), and medical group/employers (47). Out of
all of these reports, one accusation was filed, 92 cases are
pending disposition and 45 cases were closed. The number of
805 reports varies from year to year, but it appears that
when adjusted to the number of physicians and surgeons
licensed and living in California, or the number of people
living in California, the trend shows a downward direction.
d. Due Process Provisions (Section 809 et seq.). In 1989,
several due process provisions for physicians subject to an
805 report were adopted and codified under Section 809 et
seq. of the Business and Professions Code. Committee
analysis on SB 1211 (Keene, Chapter 336, Statutes of 1989),
which contained the provisions of Section 809, indicated that
the California Medical Association (CMA) was the sponsor of
the legislation, and on the due process provisions of the
measure, CMA indicated that "the clear procedural standards
in SB 1211 will reduce the risk of erroneous peer review
decisions." Under Section 809, any physician, for which an
805 report may be required to be filed, is entitled to
specified due process rights, including notice of the
proposed action, an opportunity for a hearing with full
procedural rights (including discovery, examination of
witnesses, formal record of the proceedings and written
findings). Furthermore, a physician may seek a judicial
review in the Superior Court pursuant to Code of Civil
Procedure Section 1094.5 (writ of mandate). It should be
noted that the due process requirements do not apply to peer
review proceedings conducted in state or county hospitals, to
the University of California hospitals or to other teaching
hospitals as defined.
e. Industry Standards. Private standard setting is also
common in peer review. Organizations like the Joint
Commission (formerly the Joint Commission on Accreditation of
Healthcare Organizations or JCAHO), which accredits over
4,000 hospitals, health care providers and other health care
settings across the country have established peer review
standards for the entities it accredits. In order to receive
Joint Commission accreditation, hospitals must have peer
review and other quality assurance measures. Eligibility for
federal funds such as Medicare and Medicaid often depends on
accreditation. In 2004, the Joint Commission renamed peer
review into "Focused Review of Practitioner Performance"
which was later renamed to Focused Professional Practice
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Evaluation (FPPE). In 2007, the Joint Commission defined two
types of reviews aimed at assuring physician competence: the
FPPE and "ongoing professional practice evaluation" (OPPE.)
The FPPE applies to new applicants for medical staff
membership and to existing practitioners requesting new
privileges for which the hospital has no documented evidence
of their competence. FPPE may also apply to a practitioner
whose current abilities are questioned because of negative
performance issues or because an adequate volume of cases are
not available to assess current competence. In the case of
initial medical staff appointments, the hospital must check
with primary sources to determine whether the practitioner
requesting medical staff membership and privileges has the
requisite current training, knowledge, skills and abilities.
These same parameters must be evaluated for practitioners
during the re-credentialing process, with the additional
requirement that granting of privileges is based in part on
the results of peer review and OPPE. Proctoring is a form of
focused evaluation involving one-on-one evaluation of a
practitioner's performance by another peer practitioner (a
proctor). Direct observation is used to gauge the ability of
the proctoree to perform a procedure or use a new technology.
Focused proctoree evaluation may occur retrospectively
through peer review if on-site, real-time evaluations are not
feasible. In the case where same specialty peer reviewers
are not available internally, external peer review can be
used as a viable substitute for on-site proctoring.
In 2007, the Joint Commission established OPPE because of the
recognition that there is need to evaluate practitioners on
an ongoing basis rather than at the usual two year
reappointment process and allow practitioners to take steps
to improve performance on a more timely basis. OPPE applies
to practitioners who have already been granted patient care
privileges, to revise existing privileges, or to revoke an
existing privilege prior to or at the time of renewal. The
revised OPPE process requires a clearly defined process for
the evaluation of each practitioner's professional practice
which would include the following: who will be responsible
for reviewing performance data, how often the data will be
received, the process to be implemented to make a decision on
whether to continue, limit or revoke privileges, and how the
data will be incorporated into the credentials' files? OPPE
standards require an evaluation for all practitioners and not
just those with performance issues.
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f. Lumetra Report - Comprehensive Study of Peer Review in
California.
SB 231 (Figueroa) Chapter 674, Statutes of 2005, required the
MBC to contract with an independent entity to conduct a
comprehensive study of the existing peer review process. SB
231 required specific components of the study, including: a
comprehensive description of the various steps of and
decision makers in the peer review process; a survey of peer
review cases to determine the incidence of peer review;
assessment of the cost of peer review to licentiates and the
facilities which employ them and the average time consumed on
peer review proceedings and an assessment of the need to
amend Section 805 and Section 809 of the Business and
Professions Code to ensure that they continue to be relevant
to the actual conduct of peer review. Lumetra was chosen by
the MBC to conduct the study and the report was submitted to
the Legislature on July 31, 2008. In the report, Lumetra
concluded that "the present peer review system is broken for
various reasons and is in need of a major fix, if the process
is to truly serve the citizens of California." The study
surveyed California's peer review bodies, including
hospitals, healthcare plans, professional societies, and
medical groups/clinics. The survey included entities from
the entire state of California and represented both urban and
rural entities as well as public and private entities. The
chart below identifies study participation:
-------------------------------------------------------
|Entity type |Population|Final |% of |
| | |Sample |Population |
|----------------+----------+-----------+---------------|
|Hospitals |366 |132 |36.1% |
|----------------+----------+-----------+---------------|
|Health care |51 |28 |54.9% |
|plans | | | |
|----------------+----------+-----------+---------------|
|Professional |9 |9 |100% |
|Societies | | | |
|----------------+----------+-----------+---------------|
|Medical |123 |76 |61.8% |
|groups/clinics | | | |
|----------------+----------+-----------+---------------|
|Total |549 |245 |46.5% |
| | | | |
-------------------------------------------------------
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i. Findings of Lumetra's Study:
(1) Variation and inconsistency in entity peer review
policies and standards. Variations exist on the definition,
procedures, commencement, practice and subject of peer
review. Peer review means different activities to different
entities, and can be triggered by a number of ways but is
mostly part of the quality/safety/risk process of an entity.
In addition, risk management/peer review issues are
combined with mundane issues related to the "business" of an
entity. All medical entities set their own standards for
peer review, some more rigorous than others, and some adhere
to them more meticulously than others. Additionally, each
entity creates its own peer review policies, which can vary
substantially. If a physician is found to have provided
substandard care, that physician may leave or be forced to
leave the entity but can practice elsewhere, potentially
endangering other patients. The peer review process is
often lengthy and can take months or even years. There are
also variations on the name of the peer review body, the
number of members and the length of time a member serves on
a committee (usually could be years before a peer review
action is taken).
(2) Poor tracking of peer review events. Many entities,
especially hospitals, expressed anxiety and concern in
providing documents for review, particularly peer review
minutes, due to fear of legal discovery. Most entities do
not have their documents in electronic form and do not have
readily accessible tracking systems that would allow staff
members to efficiently follow events over time.
(3) Confusion regarding 805 reporting. Few cases lead
to actual 805 reporting because of (a) disagreement or legal
interpretation on whether 809 due process is required before
every 805 report is submitted, and, (b) 809 due process
leads to a substantial delay in the process (often 2 to 5
years). In addition, although entities make a sincere
effort to conduct peer review, it rarely leads to actual 805
or 809 actions, perhaps due to the confusion over when to
file a report. In addition, entities have devised other
methods to correct a physician behavior before filing an 805
report. The most common cases being referred to a high
level peer review are: disruptive physician
behavior/impairment, substandard technical skills, substance
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abuse, and failure to document/record patient treatment. It
is also possible that some physicians would never be subject
to peer review because they have practices that are not
subject to any peer review requirements.
(4) Lack of coordination among state agencies, and
licensing agencies. There is no systematic communication or
coordination among various boards and agencies that would
coordinate patient quality and safety issues. There is much
complexity on the complaint process, enforcement process,
and the public disclosure rules that apply to the MBC.
There is also criticism that the MBC may not quickly
investigate all 805 reports, or if reports were
investigated, the MBC often did not find any wrongdoing. In
addition, others indicated that MBC's follow-up for 805
reports took as long as one year after submission of a
report. It is unclear what factors provide barriers to a
more effective and efficient process. It is also not clear
that MBC receives valid and complete information from
entities or individuals when investigating 805 reports, even
with subpoena power.
(5) Burdensome costs of peer review. Latest data
indicates that an estimated 0-250 hours was spent on peer
review activities. Most of the respondents (68%) indicated
that the cost estimate in the last calendar year was between
$0-50,000 excluding physician costs in time. Cost to an
individual physician ranged from $0-$50,000; focus group
participants indicate that an 809 hearing would never cost
less than $100,000, excluding estimates of physician costs
in time and legal representation for the person being
reviewed, and could cost upwards of several million dollars.
3.Informational Hearing on the Peer Review Process - Reforms Needed.
On March 9, 2009, this Committee held an informational hearing on
physician peer review entitled "Is the Physician Peer Review A
Broken System?" The informational hearing provided a brief overview
of peer review in California and included discussions on how
hospitals and other entities conduct peer review. The hearing also
included a discussion on a legislatively mandated report on peer
review authored by Lumetra, as discussed above, which pointed out
that the peer review process in California is broken and in need of
a major fix for it to truly serve the people. In addition to
representatives from Lumetra, who presented the study, stakeholders,
including representatives from the MBC , California Medical
Association , California Ambulatory Surgery Association , various
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hospitals including Cedars-Sinai Health System , Kaiser Permanente
Medical Group , and UC Davis Medical Center , Department of Managed
Health Care , DPH and the Joint Commission testified during the
hearing. The MBC testified that it does not usually get an 805
report until later and if there is a process whereby it receives
information from hospitals earlier, then this would speed up
consumer protection. In addition, MBC pointed out that smaller
hospitals and surgery centers, because of their size and cost
limitations, usually escape or have little peer review and outside
or external peer review may be appropriate. A few physicians echoed
these sentiments and indicated that to help eliminate inadequate and
malicious peer review, an independent body should perform it.
During the hearing, hospital representatives indicated that the peer
review process is not broken and disagreed with the findings of the
Lumetra report. It appears that hospitals have created different
levels of peer review, depending on the circumstances or cases.
Some hospitals pointed out that practice restrictions may be imposed
on a physician that does not necessarily require an 805 report and
the remedy imposed is usually continuing education or other
performance enhancing activities or corrective actions. One
hospital representative indicated that if impartiality is
compromised, it is not unusual to send a case to another hospital
within the system or to utilize external peer review. Hospital
representatives however cautioned that removing peer review from
hospitals may have unintended consequences and further jeopardize
patient care. In addition, a couple of hospital representatives
indicated that if an interim report or informal reporting mechanism
to the MBC is created, this may improve the process and enhance
patient care. It should be noted that this bill creates an early
reporting mechanism to the MBC of specific cases, similar to the
concept specified during the hearing.
In addition, DPH testified during the hearing on its oversight of
acute care hospitals and the peer review process. It appears that
DPH has no specific authority on peer review but it assures that
elements of professional review by peers exists, usually included in
a hospital bylaws.
Finally, on discussions of how to improve the peer review process, one
physician indicated that there is a need to audit peer review and
DPH must audit hospitals that conduct the peer review, and impose
penalty on hospitals that do not have a peer review process. In
addition, to expand 805 reporting, a mechanism must be created where
complaints about physicians are reported to the MBC and the MBC
conducts its own investigation of the physician and surgeon
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independent of a hospital's investigation.
4.Recent California Supreme Court Decision on Physician Peer
Review. On April 6, 2009, the California Supreme Court issued
an opinion relating to peer review in Mileikowsky v. West Hills
Hospital Medical Center (available at
http://www.courtinfo.ca.gov/opinions/documents/S156986 ). In
this case, the Supreme Court discussed the importance of the
peer review process and pointed out the following: "The primary
purpose of the peer review process is to protect the health and
welfare of the people of California by excluding through the
peer review mechanism those healing arts practitioners who
provide substandard care or who engage in professional
misconduct. This purpose also serves the interest of
California's acute care facilities by providing a means of
removing incompetent physicians from a hospital's staff to
reduce exposure to possible malpractice liability. Another
purpose, if not equally important, is to protect competent
practitioners from being barred from practice for arbitrary or
discriminatory reasons."
5.Similar Legislation this Session.
a. SB 58 (Aanestad) among other provisions, provides for
changes in a physician and surgeon's central file of
individual historical records and the information that is
publicly disclosed regarding licensing and enforcement
actions; requires a peer review body to annually report to
the MBC on its peer review activities; defines an external
peer review organization; encourages external peer review
under certain conditions; mandates external peer review for
specific circumstances; and, establishes an early detection
and resolution program for physicians and surgeons in lieu of
the filing of an 805 report. SB 58 is currently pending in
Senate Appropriations suspense file.
b. SB 700 (Negrete McLeod) Makes various changes relating to
the peer review process in which a final proposed action may
be imposed on a licentiate, if certain conditions are met,
for which a report (commonly referred to as 805 report
pursuant to Section 805 of the Business and Professions Code)
is required to be filed to the appropriate health care
regulatory body. Requires the Medical Board of California to
include in a licensee's central file a finding by a court
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that a peer review resulting in an 805 report was conducted
in bad faith. Prohibits disclosure by certain health care
regulatory bodies of any summaries of hospital disciplinary
actions that result in the termination or revocation of a
licensee's staff privileges for medical disciplinary cause or
reason if a court finds that the peer review resulting in the
disciplinary action was conducted in bad faith and the
licensee notifies the board of such finding. Requires the
chief of staff of a medical or professional staff or other
chief executive officer, medical director, or administrator
of any peer review body and the chief executive officer or
administrator of any licensed health care facility or clinic
to file a report with the relevant agency within 15 days
after completion of a formal investigation of a licentiate if
the investigation resulted in any of the following findings
of fact: the licentiate departed from the standard of care;
the licentiate suffered from mental illness or substance
abuse; or, the licentiate engaged in sexual misconduct. SB
700 is pending on the Senate floor.
c. AB 834 (Solorio) authorizes a peer review body to impose,
and a licentiate may accept, voluntary remediation when
deemed appropriate by the peer review body, including for a
medical disciplinary cause or reason; makes changes relating
to the qualifications of a hearing officer. AB 834 is
pending in the Assembly Business and Professions Committee.
6.Policy Issue : Should this part of the peer review process be
changed without dealing with the problems surrounding the entire
peer review process? As indicated above, there are several
bills currently pending in the Legislature, which are now two
year-bills, including SB 58 (Aanestad) and AB 834 (Solorio)
dealing with remedial actions for physicians and surgeons, and
SB 700 which makes changes to the 805 reporting process. The
Committee may want to consider whether this measure should be
considered in the context of all bills which are attempting to
improve and reform the peer review process; that in adding
additional requirements to the 809 due process protections for
physicians it may burden an otherwise dysfunctional process that
currently exists.
As indicated in this analysis, the 805 reporting process has
serious flaws and there is confusion as to the requirement of
805 reporting, as well substantial delays in the MBC receiving
information regarding disciplinary actions taken against
physicians by hospitals. Lumetra states that few cases lead to
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actual 805 reporting because the 809 due process leads to a
substantial delay in the process (often 2 to 5 years). Will
increasing due process requirements, which could cause further
delays and impede the ability of the MBC to pursue actions
against incompetent physicians, be in the best interest of the
public?
As indicated above, the Section 805 reporting process was codified
in 1975 as part of MICRA. According to a legislatively
appointed enforcement monitor, when discussing the evolution of
the MBC's enforcement program, in exchange for among other
things, capping non-economic damages (pain and suffering) at
$250,000 in medical malpractice actions, the medical profession
agreed to accept and support enhanced regulations of physicians
and surgeons with emphasis on policing the quality of medical
care provided and the removal of incompetent and negligent
physicians from the marketplace. This was the original intent
of Section 805 reporting and up until 1989, hospitals and other
entities submitted 805 reports to the appropriate healthcare
regulatory agencies without the requirement to offer due process
to licensees. The advent of the 809 process has overshadowed
the 805 reporting of physicians who may have serious competency
issues, and as indicated, has resulted in significant delays in
both resolving peer review matters and in a hospital finally
issuing an 805 report and taking appropriate disciplinary action
against the physician.
As indicated by Governor Deukmejian in 1988, when the first
measure ( SB 2565 , Keene) to adopt the 809 provisions was vetoed,
the Governor said "I am concerned that under this bill it will
take longer and be more costly for health facilities and peer
review bodies to take action against a licensee's staff
privileges. This means an incompetent licensee will be
practicing unrestricted that much longer, and it will be longer
before a report is made to the appropriate licensing board under
Section 805 of the Business and Professions Code. This would
have an adverse impact on health care consumers." Furthermore,
an analysis of SB 1211 (Keene, Chapter 336, Statutes of 1989),
opposition to the bill indicated that "Any benefit of the doubt
with regard to the notion of 'due process' must be given to the
patient. Patients suffer when licentiates who should be
'disciplined' are not and continue to practice while litigating
the issue of their competency." Unless the entire peer review
process is "fixed" and the MBC is made immediately aware of
serious cases of incompetent physicians, then any attempt to
change other aspects of the peer review process would appear to
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be premature at this time. This measure for now may compound an
otherwise protracted process that has as its primary mission to
timely discipline physicians who have serious competency issues
regarding their medical practice .
7.Staff Recommendation. The importance of the peer review process
and the remedies necessary to improve the system are complex.
This bill should be considered in the context of all bills which
are attempting to improve and reform the peer review process.
It is recommended that this bill along with other related bills
be considered during an interim study of both the Senate and
Assembly Business and Professions Committees.
NOTE : Double-referral to Rules Committee. This bill is
double-referred. Should it pass out of this Committee, it will be
referred to the Senate Rules Committee.
SUPPORT AND OPPOSITION:
Support:
California Medical Association (Sponsor)
Kaiser Permanente
Opposition:
None on file as of June 24, 2009
Consultant:Rosielyn Pulmano