BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 1070
Assemblymember Hill
As Amended June 23, 2009
Hearing Date: July 14, 2009
Business and Professions Code; Government Code
GMO:jd
SUBJECT
Physicians: Reporting Requirements
to the California Medical Board
DESCRIPTION
This bill, sponsored by the Medical Board of California (MBC),
would make various changes to the rules relating to the
reporting of settlements of over $30,000, arbitration awards of
any amount, or civil judgments of any amount to the California
Medical Board, the Osteopathic Medical Board of California, or
the California Board of Podiatric Medicine by licensees and
others. It would extend the sunset date of a vertical
enforcement and prosecution model and the Health Quality
Enforcement Division within the Department of Justice to July 1,
2012.
BACKGROUND
The MBC regulates and licenses physicians in the state. It is
empowered to issue, revoke, suspend, or limit the license to
practice of any physician, in order to achieve its legislative
purpose to protect the public. To date, 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.
Existing law requires that licensees, insurers providing
professional liability insurance to licensees, and governmental
agencies that self-insure licensees report settlements of over
$30,000, arbitration awards of any amount, or civil judgments in
(more)
AB 1070 (Hill)
Page 2 of ?
any amount to the Medical Board of California. It specifies the
form and the information that must be reported. (Bus. and Prof.
Code Sec. 801.01).
According to the MBC, in certain settings, when a person
sustains injury resulting from services rendered by professional
staff, a hospital or an insurance group may offer a patient an
amount of money to cover the cost of future treatments in order
to eliminate the certainty of a possibly unnecessary malpractice
claim. When such an action is taken, the matter is not reported
to the MBC because it does not fit into the reporting
requirements under the present rules. The MBC contends that
these cases should still be investigated if the injury is
alleged to have occurred due to the actions of a physician and
surgeon. The MBC proposes to clarify this and some other rules
related to its consumer protection purposes.
AB 1070 was heard in the Committee on Business, Professions and
Economic Development on June 29, 2009, passed on a 7 to 3 vote
and referred to this committee.
CHANGES TO EXISTING LAW
Reports submitted under Business and Professions Code Section
801.01
1. Existing law provides for 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. (Bus. and Prof. Code Sec. 2000 et seq.)
Existing law requires a complete report to be sent to the MBC,
the Osteopathic Medical Board of California (OMBC), or the
California Board of Podiatric Medicine (CBPM) on any
settlement of over $30,000, an arbitration award of any
amount, or a civil judgment of any amount of a claim or action
for damages for death or injury caused by a licensee's alleged
negligence, error or omission in practice or by the rendering
of unauthorized professional services. (Bus. and Prof. Code
Sec. 801.01. All references are to this Code unless otherwise
indicated.)
This bill would make legislative findings and declarations
that existing law requiring the reporting of settlements over
$30,000 and arbitration or civil judgments of any amount is
AB 1070 (Hill)
Page 3 of ?
essential to the protection of the public and that the
reporting requirements are intended to be interpreted broadly
in order to expand reporting obligations.
2. Existing law requires the report required by Sec. 801.01 to
come from the insurer providing professional liability
insurance to the involved licensee, the licensee or his or her
counsel if the licensee does not have professional liability
insurance, or a state or local government agency that
self-insures the licensee. The report must be made within 30
days of the written settlement agreement, the service of the
arbitration award, or the entry of a civil judgment. (Sec.
801.01(d).)
This bill would expressly declare the University of California
as a state agency that self-insures a licensee and is
therefore required to make Sec. 801.1 reports.
3. Existing law requires an insurer to notify a claimant or
claimant's counsel that the insurer has sent the report to the
MBC, the OMBC, or the CBPM and if the notice was not received
within 45 days of the specified date the settlement,
arbitration award, or judgment was entered, the claimant or
claimant's counsel is required to make the report. Failure to
comply with this provision carries a penalty of not less than
$50 nor more than $500 per offense, and a penalty of not less
than $5,000 nor more than $50,000 for a knowing and
intentional failure to comply or a conspiracy or collusion not
to comply with this notification requirement. (Sec. 801.01(e)
and (f).)
This bill would make this provision applicable to any entity
or licensee required to make the report to the MBC, OMBC, or
CBPM.
This bill would increase the civil penalty for a violation of
this provision from a fine of not less than $50 and not more
than $500, to not less than $500 and not more than $5,000, and
would remove all penalties for a knowing or intentional
failure to comply or conspiracy not to comply.
4. Existing law authorizes the MBC, OMBC, and the CBPM to
develop a prescribed form for this Sec. 801.01 report, and
requires specified information to be included in the report.
(Sec. 801.01(h).)
AB 1070 (Hill)
Page 4 of ?
This bill would include, in addition to the information
required under existing law, the following:
(1) in the description of the facts of each claim, charge or
allegation, the licensee's role in the care or professional
services provided to the patient with respect to those
services at issue in the claim or action;
(2) a copy of the award document (settlement, judgment or
arbitration award).
5. Existing law requires a state or local governmental agency
that self insures licensees to make the Sec. 801.01 report
within 30 days of the settlement, award, or judgment, as
specified. (Sec. 801.01(b)(3).)
This bill would require the state or local governmental agency
to do all of the following with respect to each licensee who
will be identified in the report:
(1) provide a written notice that the agency intends to
submit a report identifying the licensee, the specific
reasons for identifying the licensee and the amount of the
settlement or award apportioned to the licensee. All
records used to determine this information would be
provided with this notice.
(2) advise the licensee that he or she may provide a
response and supporting materials within 10 days of
receiving the notice;
(3) provide the licensee, with five days' prior notice, the
opportunity to personally present arguments to the body
that will make the final decision whether or not to
identify the licensee in the report.
This bill would provide that the requirements for notice to
licensees as stated above shall not be construed to modify the
contents of the report or the timeframe for the filing of the
report.
Miscellaneous provisions related to enforcement by the board
6. Existing law prohibits the president of the MBC from
participating as a member of the enforcement and disciplinary
panel of the board. (Sec. 2008.)
This bill would permit the president of the MBC to be on that
panel if there is a vacancy in the membership of the MBC.
7. Existing law requires that medical records of a patient
requested by the MBC to be produced by licensees or health
AB 1070 (Hill)
Page 5 of ?
care facilities, when accompanied by the patient's written
authorization for release of the records to the board, within
15 days of receipt of the request, or face a civil penalty of
$1,000 per day after the court orders such documents to be
produced, payable to the board. (Sec. 2225.5.)
This bill would require that the records produced be certified
(as specified by the board), and place a $10,000 cap on the
amount of the civil penalty authorized.
8. Existing law authorizes the MBC to take specified
disciplinary actions or impose specified penalties on a
licensee, including suspension or revocation of the license,
probation, public reprimand and, if desired, a requirement
that the licensee complete educational courses, and any other
conditions of probation. (Sec. 2227.)
This bill would allow an administrative law judge who heard
the matter before the Medical Quality Hearing Panel to
recommend, as a disciplinary action of the board, the public
reprimand of the licensee, accompanied by a requirement that
the licensee complete educational courses approved by the
board.
9. Existing law requires the MBC to request a licensed
physician and surgeon to report to the board at the time of
license renewal, any specialty board certification the
licensee holds that is issued by a member board of the
American Board of Medical specialties, in addition to other
specified information. (Sec. 2425.3)
This bill would require that all of this information also be
provided immediately upon issuance of an initial license by
the MBC.
10. This bill makes findings and declarations relating to
various types of risk management programs that encourage early
intervention in order to address known complications and other
unanticipated events requiring medical care, and where some
entities even provide financial assistance to individual
patients to help them address these unforeseen health care
concerns. (Proposed Sec. 804.5)
This bill declares the Legislature's intent not to allow such
financial assistance to limit the interaction of the patient
with, or interfere with that patient's rights before, the MBC.
AB 1070 (Hill)
Page 6 of ?
This bill would prohibit the inclusion of any of the following
provisions in any program of early intervention, patient
safety, or risk management, or in any contracts for these
programs:
(1) a provision that prohibits the patient from contacting
or cooperating with the board;
(2) a provision that prohibits the patient from filing a
complaint with the board;
(3) a provision that requires a patient to withdraw a
complaint that has already been filed with the board.
Vertical enforcement and prosecution model program
11. This bill would extend. from July 1, 2010 to July 1, 2012,
the sunset date of the statute allowing the vertical
enforcement and prosecution model used by the MBC and the
Department of Justice, and would repeal the statute as of
January 1, 2013, unless extended by a later statute or
repealed by another statute that becomes operative on or
before January 1, 2013. (Sec. 2006.)
12. This bill would add, to the provisions relating to the
vertical enforcement and prosecution model, a requirement that
the MBC establish and implement a plan to assist in team
building between the board's staff and the health Quality
Enforcement Section of the Department of Justice "in order to
ensure a common and consistent knowledge base." (Sec. 12529.6)
COMMENT
1. Need for the bill
The sponsor of this bill, the Medical Board of California (MBC),
states that the provisions in AB 1070 are intended to ensure
that MBC continues to protect the health care of consumers. MBC
points out that current law leaves room for interpretation of
laws governing reporting requirements for licensees and others,
and that MBC cannot effectively protect consumers if reporting
is not consistent and enforced. The MBC is particularly
concerned where patients who sustain injury from services
rendered by professional staff are offered sums of money to
cover future treatments, in order to bypass the need for filing
a malpractice claim. Although this practice may not be
prohibited by law, MBC argues that this activity does not negate
the need for MBC to investigate if the injury allegedly occurred
AB 1070 (Hill)
Page 7 of ?
due to actions of a licensee (physician and surgeon). "The
intent of reporting malpractice settlements, judgments, or
arbitration awards to MBC is to ensure consumer protection by
reviewing the care and treatment [provided by] the physician and
surgeon involved in the care provided to the patient."
As to the extended power of the administrative law judge hearing
a disciplinary matter,
MBC points out that this would prevent the board from having to
go through the process of modifying a recommendation made by an
administrative judge. The other provisions of AB 1070 are
designed to expedite the review and investigation process of
reported incidents.
2. Author's proposed amendments
The author has submitted the following amendments to the bill
for consideration by the committee:
a. Remove the strict deadlines for a state agency to
provide notice, time to respond, and an opportunity for a
personal presentation before the body that will determine
whether or not a licensee would be identified in a report
to the MBC, and replace them with a procedure that gives
the licensee a reasonable opportunity to respond after
receiving notice, and an opportunity to personally present
arguments to the body that will make the decision whether
or not to identify the licensee, all within the 30 day
window prior to the report being made.
b. Provide an option for a licensed physician and surgeon to
decline to state in the report his or her cultural
background and foreign language proficiency.
c. Make other technical amendments.
3. Increased civil penalties for failure to comply
This bill would increase the civil penalty assessable against a
licensee or his or her lawyer, an insurer providing professional
liability insurance to the licensee, and a state or local
governmental agency that self-insures the licensee, for failure
to comply with the reporting requirements of Section 801.01,
from a fine of not less than $50 and not more than $500, to not
less than $500 and not more than $5,000. The bill also would
remove all penalties for a knowing or intentional failure to
comply or conspiracy not to comply.
4. State and local agencies that self-insure licensees are
AB 1070 (Hill)
Page 8 of ?
required to give written notice to licensee prior to reporting
to MBC; UC is a state agency for this purpose
Section 801.01 requires a complete report to the MBC, and
prescribes the contents of the report. The information required
to be reported include the names and last known business and
residential address of every licensee who was alleged to have
acted improperly, whether or not that person was a named
defendant in the action and whether or not the person was
required to pay any damages pursuant to settlement, arbitration,
or judgment. Besides clarifying some of the provisions of the
statutes that govern the reporting of settlements, arbitration
awards, or civil judgments under this section, this bill would
establish a new procedure for state and local agencies that
self-insure licensees for professional liability.
The new procedure for state and local agencies that self-insure
licensees (such as the UC hospitals, county hospitals, state
facilities where medical services are provided) calls for the
agency to give written notice to a licensee who will be
identified in a report. The written notice would include all
supporting records used to make the decision to include that
person in the report, and advise that the licensee may, within
10 days of receiving the notice, provide a written response to
the agency and written materials in support of the licensee's
position. The agency shall include the materials provided in
the report made to the board. The bill also would require the
agency to give the licensee, after giving at least five days'
prior written notice, with the opportunity to personally present
his or her arguments before the body that will make the final
decision to submit a report
This process, which could take up to 27 days of the 30 days'
time within which a report must be submitted, could become
problematic in case time runs short. For example, the
settlement agreement is executed by all parties on July 3, a
Friday. On Monday, the state agency sends a written notice to
three licensees who were part of the team that operated on
patient. If sent by first class mail, the notice will be deemed
served five days after it was placed in the U.S. mail under Code
of Civil Procedure 1013. If the licensee receives it on July 10
(7 days from July 3) and waits until the 9th day after receiving
the written notice, the calendar date would already be July 18.
If sent by courier to the MBC and received on July 20 (since
July 19 is a Sunday), the agency will only have 13 days, of
which four days are weekend days, to review the response.
AB 1070 (Hill)
Page 9 of ?
During this 13 day period, the agency may decide to give the
licensee an opportunity to present himself or herself to the
body that would make the final decision, but must give the
licensee at least five days' notice of that hearing. Assuming
the response is reviewed within two days, the agency can send a
written notice to licensee on July 22, for a hearing on Monday,
July 27. The agency will then have four days to prepare the
report for submittal by August 1, the 30th day from the date the
settlement was signed.
Can a state agency move this quickly in order to meet these
self-imposed deadlines that could be of great consequence to a
licensee? Should the deadlines for the written notices and
responses be left to the state agency to determine for itself?
Suggested amendment: Especially because this new procedure is
not supposed to affect the contents and timeframe for
submitting reports to the MBC, the author may consider removing
the tight deadlines within this provision, and simply require
that within that 30 day period, the state agency shall notify
the licensee proposed to be identified and provide the licensee
with the reasonable opportunity to respond in writing or in
person or both, as long as the process is completed before the
end of that 30 day period. Further, each state or local agency
that self-insures licensees may have different capabilities in
terms of this process, which is the reason the deadlines may be
unrealistic.
Author's amendments noted in Comment 2 addresses these concerns.
For purposes of Section 801.01 reports, the University of
California, constitutionally not a part of any branch of
government, would be considered a state governmental agency for
purposes of the reporting required. The UC operates several
hospitals, campus clinics, and other medical facilities. It has
been deemed a state agency for specific purposes by many
statutes, such as the California Whistleblower Protection Act
and the California Public Records Act. Thus, AB 1070 would
clarify that the University of California is subject to the
reporting requirements of Section 801.01.
5. Prohibitions in contracts to deter malpractice claims
According to the MBC, the practice by some larger entities to
engage in risk management programs that involve "early
AB 1070 (Hill)
Page 10 of ?
intervention" activities, such as payment of money to patients
injured by professional staff within the entities' facilities,
seems to be growing. Since such arrangements occur outside of a
formal complaint, the terms of those claims settlements are not
disclosed to the MBC (because there is no direct requirement in
the statute that those arrangements be reported). This bill
would close that gap by prohibiting certain practices that seem
to have fostered the secrecy behind those arrangements.
Thus AB 1070 would prohibit the inclusion of the following, in
connection with those early intervention programs or contracts:
a provision prohibiting a patient or patients from contacting
or cooperating with the MBC;
a provision prohibiting a patient or patients from filing a
complaint with the MBC; and
a provision requiring a patient or patients to withdraw a
complaint that has been filed with the MBC.
This bill also contains specific findings and declarations
relating to this practice, as follows:
The Legislature recognizes that various types of entities
are creating, implementing, and maintaining patient safety
and risk management programs that encourage early
intervention in order to address known complications and
other unanticipated events requiring medical care. The
Legislature recognizes that some entities even provide
financial assistance to individual patients to help them
address unforeseen health care concerns. It is the intent
of the Legislature, however, that such financial assistance
not limit a patient's interaction with, or his or her rights
before, the Medical Board of California.
6. Production of Patient Medical Records
Under current law, a licensee that fails or refuses to comply
with a request for medical records of a patient, that is
accompanied by the patient's written authorization for release
of records to MBC, within 15 days of receiving the request and
authorization, must pay MBC a civil penalty of $1,000 for each
day that the documents are not produced after the 15th day,
unless there is good cause for the failure. A health care
facility that fails to produce patient medical records within 30
days of receipt of the request could be levied a civil penalty
of up to $1,000 per day that documents are not produced after
the 30th day, up to $10,000. If a request to produce records is
AB 1070 (Hill)
Page 11 of ?
made pursuant to a court order, issued in the enforcement of a
subpoena, the offense is a misdemeanor and the same monetary
penalties apply.
This bill would require that the medical records produced be
certified and would define certified medical records. According
to the MBC, when it requests medical records upon a patient's
initial complaint, certified records are requested, but are not
always provided by the licensee. However, even though the
initial review can be performed without certified medical
records, should the review turn into a full-blown investigation,
MBC will need certified copies of the medical records. In order
to avoid this two-step process of obtaining certified medical
records, then, this bill would require that certified records be
produced when requested.
7. Vertical enforcement and prosecution: MBC and the DOJ HQES:
sharing the burden
SB 1950 (Figueroa, Ch. 1085, Stats. 2002), among other
provisions, required the appointment of an independent
enforcement monitor to evaluate MBC's enforcement system and
establish a priority system for the investigation of complaints
against physicians. The Monitor's 2004 report, Initial Report
of the Medical Board Enforcement Program, made numerous findings
and 65 specific recommendations for reform, including the
utilization of a vertical prosecution model for physicians'
disciplinary cases. Vertical prosecution allows lawyers and
investigators to view each case as a whole, rather than as two,
separate and independent sequential steps: the investigation and
then the prosecution. According to the Monitor, the vertical
prosecution model would improve efficiency and reduce case cycle
time, ensuring the quality and safety of medical care to
Californians.
SB 231 (Figueroa, Ch. 674, Stats. 2005) codified many of the
Monitor's recommendations, including the use of the vertical
prosecution model effective January 1, 2006. SB 231 also
required MBC to report and make recommendations to the Governor
and the Legislature on the vertical prosecution model by July 1,
2007. The model program was to sunset in 2009, but SB 797
(Ridley-Thomas, Ch. 33, Stats. 2008) extended this program to
July 1, 2010, with a report due on July 1, 2009.
This bill would move the sunset date of this program from July
1, 2010 to July 1, 2012, and include, in the mandate to the
AB 1070 (Hill)
Page 12 of ?
Attorney General's Health Quality Enforcement Section (HQES)
authorized by SB 231, the ongoing review of investigative
activities it conducts to support the prosecution of proceedings
against licensees and applicants within the jurisdiction of the
MBC, the California Board of Podiatric medicine, the Board of
Psychology, or any committee under the jurisdiction of the MBC.
The bill also would require the MBC to, among other current
duties with respect to the vertical enforcement and prosecution
program, establish and implement a plan to assist in team
building between its enforcement staff and the staff of the HQES
in order to ensure a common and consistent knowledge base.
Finally, with the extension of the sunset date, the MBC would
also be required to produce a report by March 1, 2011, in
consultation with the DOJ and the Department of Consumer
Affairs, on the vertical enforcement and prosecution model.
Support : None Known
Opposition : None Known
HISTORY
Source : Medical Board of California (sponsor)
Related Pending Legislation : None Known
Prior Legislation :
SB 797 (Ridley-Thomas, Ch. 33, Stats. 2008). See Comment 6.
SB 231 (Figueroa, Ch.. 674, Stats. 2005). See Comment 7.
SB 1950 (Figueroa, Ch. 1085, Stats. 2002). See Comment 6
Prior Vote :
Assembly Business and Professions Committee (Ayes 7, Noes 2)
Assembly Appropriations Committee (Ayes 12, Noes 4)
Assembly Floor (Ayes 48, Noes 30)
Senate Business, Professions and Economic Development Committee
(Ayes 7, Noes 3)
**************
AB 1070 (Hill)
Page 13 of ?