BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 120|
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THIRD READING
Bill No: AB 120
Author: Hayashi (D)
Amended: 7/8/09 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 9-0, 7/6/09
AYES: Negrete McLeod, Wyland, Aanestad, Corbett, Correa,
Florez, Romero, Walters, Yee
NO VOTE RECORDED: Oropeza
ASSEMBLY FLOOR : 78-0, 6/3/09 - See last page for vote
SUBJECT : Healing arts: peer review
SOURCE : California Medical Association
DIGEST : This bill 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 an 805 report, pursuant to
Section 805 of the Business and Professions Code) is
required to be filed to the appropriate health care
regulatory body. This bill is contingent upon enactment of
SB 820 (Negrete McLeod).
ANALYSIS :
Existing law:
1. Establishes the federal Health Care Quality Improvement
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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.
4. Defines a licentiate for purposes of #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, as specified.
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. Requires a copy of the 805 report, and a notice advising
the licentiate of his/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.
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8. 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 deemed appropriate by the
reporter.
9. 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.
10.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.
11.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.
12.Defines final proposed action as the final decision or
recommendation of the peer review body after an informal
investigatory activity or prehearing meetings.
13.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.
14.Specifies that both parties have a right to the
following: (a) Inspect and copy documents, (b) to be
provided with 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.
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15.Specifies who has the burden of presenting evidence and
proof during a hearing.
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 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
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considerations relating to clinical services whenever
the selection, performance evaluation, or 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 #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
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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 records disclosed pursuant
to this provision.
12.States that a licentiate under review by a peer review
body requesting records pursuant to #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
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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 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 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.
17.Is contingent upon enactment of SB 820 (Negrete McLeod).
Background
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.
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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 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.
Medical Board of California (MBC) 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
California. The MBC investigates complaints against
physicians and adopts final decisions in disciplinary
matters against physicians and surgeons.
In 1975, the Legislature passed the Medical Injury
Compensation Reform Act of 1975 (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
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medical malpractice action can be commenced, (5) requires a
patient to provide 90 days' notice of his/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 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 138 805 reports in
2007-08 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
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SUPPORT : (Verified 7/14/09)
California Medical Association (source)
Kaiser Permanente
ARGUMENTS IN SUPPORT : According to the bill's sponsor,
the California Medical Association, 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's office, 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.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, Nielsen, John A.
Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Bass
NO VOTE RECORDED: Block, Yamada
JJA:mw 7/14/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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