BILL ANALYSIS
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|Hearing Date:April 27, 2009 |Bill No:SB |
| |58 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 58 Author:Aanestad
As Amended: April 22, 2009 Fiscal: Yes
SUBJECT: Physicians and surgeons: peer review.
SUMMARY: 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. Provides for changes in
a physician and surgeon's central file of individual historical
records and to information that are publicly disclosed regarding
licensing and enforcement actions against physicians and surgeons,
including information disclosed on the Internet website of the
Medical Board of California (MBC). Establishes an early detection
and resolution program, to be administered by a peer review 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, 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 MBC to license, regulate and discipline
physicians and surgeons in California. States that the
protection of the public is the highest priority of the MBC in
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exercising its functions.
3)Requires the MBC, along with other specified health care
licensing boards, to create and maintain a central file of the
names of all persons who hold a license, certificate, or similar
authority. Requires the central file to be created and
maintained to provide an individual historical record for each
licensee and must include specified information including the
following; any conviction of a crime, any judgment or settlement
in excess of $3,000, any public complaints as specified, and any
disciplinary information, as specified. States that the content
of the central file that are not public records under any other
provision of law is confidential. Allows a licensee to submit
any exculpatory or explanatory statements or other information
to be included in the central file.
4)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
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.
5) Defines 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.
6)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 within 15 days after the effective date of any of the
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following that occur as a result of an action of a peer review
body:
a) A licentiate's application for staff privileges or
membership is denied or rejected for a medical disciplinary
cause or reason.
b) A licentiate's membership, staff privileges, or employment
is terminated or revoked for a medical disciplinary cause or
reason.
c) 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.
7)Requires also for an 805 report to be filed within 15 days if a
licentiate does any of the following based on information
indicating medical disciplinary cause of reason:
a) Resigns or takes a leave of absence from membership,
staff, or employment.
b) Withdraws or abandons an application for staff privileges
or membership.
c) Withdraws or abandons the request for renewal of
privileges or membership.
8)Requires 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.
9)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.
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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 means that 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.
10)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.
11)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.
12)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.
13)States that if another peer review body is required to file an
805 report, a health care service plan is not required to file a
separate report with respect to action attributable to the same
medical disciplinary cause or reason. If the Medical Board of
California or a licensing agency of another state revokes or
suspends, without a stay, the license of a physician and
surgeon, a peer review body is not required to file an 805
report when it takes an action as a result of the revocation or
suspension.
14)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.
15)Specifies the following penalties for failure to file an 805
report:
a) A willful failure to file an 805 report by any person who
is designated or otherwise required by law to file is
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punishable by a fine not to exceed one hundred thousand
dollars ($100,000) per violation.
b) Any 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.
16)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.
17)Prohibits providing any report pursuant to the provisions in
item #15) above 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.
18)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.
19)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
which serve as primary teaching facilities, as specified.
20)Requires the MBC to post on the Internet specified information
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regarding licensed physicians, including information relating to
the status of 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.
21)Requires, subject to specified limitations, any accusations
filed against a physician and surgeon be filed within three
years after the MBC discovers the act or omission alleged as the
ground for disciplinary action, or within seven years after the
act or omission alleged as the ground for disciplinary action,
whichever occurs first.
22)Requires all licensed physicians to complete not less than 50
hours of approved continuing education during each two-year
period immediately preceding the expiration date of the license
as a condition of license renewal.
This bill:
1)Finds and declares that there is a need to reform the peer
review process and how peer review when conducted
inappropriately could be damaging to the professional careers of
the health care providers involved.
2)Provides for changes in a physician and surgeon's central file
of individual historical records, as follows:
a) Requires the MBC to remove disciplinary information from a
licensee's central file if a court reverses a disciplinary
action reported pursuant to Section 805, or if the MBC's
independent investigation exonerates the licensee from the
charges forming the basis of the reported disciplinary
action.
b) Prohibits the MBC from including a summary suspension of
staff privileges, employment, or membership reported pursuant
to Section 805 in the licensee's central file unless the
board confirms, by independent investigation, that the
suspension is supported by substantial evidence of risk to
patients.
3)Makes the following changes to information that are publicly
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disclosed regarding licensing and enforcement actions against
physicians and surgeons:
a) Requires the MBC to include in the information disclosed
to the public any exculpatory or explanatory statement
regarding a hospital disciplinary action provided by a
licensed physician, as specified.
b) Prohibits the MBC from disclosing 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 reverses a hospital
disciplinary action or if MBC's independent investigation
exonerates the licensee from the charges forming the basis of
the hospital disciplinary action.
4)Requires a peer review body to annually report to the MBC on its
peer review activities involving its licensees and to comply
with any requests from the MBC for more detailed information.
Requires the information reported for this purposes to be kept
confidential.
5)Prohibits the MBC from providing any information or report made
pursuant to Section 805 about a physician and surgeon to a
health facility or institution if a court reverses the denial,
removal or restriction.
6)Prohibits the MBC from sending a copy of an 805 report to a
health facility of institution if the 805 report is filed
pursuant to an imposition of summary suspension of a physician
and surgeon unless the MBC confirms, by independent
investigation that is suspension is supported by substantial
evidence of risk to patients.
7)Requires the MBC to provide with any report requested by a
health facility any exculpatory or explanatory statement
provided by a licensed physician and surgeon regarding an 805
reports, as specified.
8)Makes the following changes to existing law requirements on
Internet disclosure of information on physicians and surgeons:
a) Requires the MBC to post on the Internet any exculpatory
or explanatory statement regarding hospital disciplinary
actions provided by the licensee.
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b) Requires the MBC to remove and not post any hospital
disciplinary actions that resulted in the termination or
revocation of a licensee's hospital privileges for a medical
disciplinary cause or reason if: a) a court reverses the
hospital disciplinary action or b) if the MBC's independent
investigation exonerates the licensee from the charges
forming the basis of the hospital disciplinary action.
9)Requires the MBC to adopt and administer standards allowing a
physician and surgeon to receive credit for up to 10 hours of
continuing education each year for participating in a peer
review body without compensation.
10)Establishes an Early Detection and Resolution Program (EDR) for
physicians and surgeons, to be administered by a peer review
body, subject to the following:
a) Requires the peer review body, where it deems appropriate,
to give a physician and surgeon the option of completing an
EDR.
b) Requires that a physician and surgeon participating in an
EDR to do any of the following for a period of time
designated by the peer review body as a condition of
completion of an EDR:
i) Be observed during patient care interventions by
another physician and surgeon.
ii) Consult another physician and surgeon prior to
implementing a course of care.
iii) Complete education or training designated by the peer
review body.
c) States that a physician and surgeon does not have a right
to a hearing concerning a peer review body's final proposed
action while participating in or after successfully
completing EDR. Indicates that the time to request the
hearing as specified will be tolled pending the physician and
surgeon's successful completion of EDR.
d) Prohibits a peer review body that allows a physician to
participate in an EDR from filing an 805 report for any
action that resulted in referral to EDR while a physician and
surgeon participates in EDR or after the physician and
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surgeon successfully completes the EDR.
e) Prohibits a physician and surgeon who successfully
completes an EDR from being subjected to any disciplinary
action by the peer review body or by the MBC for any action
that resulted in referral to an EDR. States however that
participation in an EDR shall not preclude the peer review
body or the MBC from investigating or continuing to
investigate, or from taking or continuing to take
disciplinary action against, a physician and surgeon for any
unprofessional conduct that does not serve as a basis for
referral to EDR.
f) Indicates that the time limit for filing an accusation, as
provided in existing law, shall be tolled from the date on
which a peer review body notifies the board of the physician
and surgeon's participation in EDR until the date that the
board receives notice from the peer review body that the
physician and surgeon failed to successfully complete an EDR.
g) Prohibits a physician and surgeon participating in an EDR
from establishing staff privileges at any new facility while
participating in an EDR.
h) Requires a peer review body to notify the MBC and health
care facilities where a physician and surgeon has staff
privileges of such physician's participation in an EDR and
when participation has ceased, including information on
whether or not the physician and surgeon successfully
completed an EDR.
i) Allows a physician and surgeon to refuse to participate in
an EDR and instead request a hearing concerning the final
proposed action as provided in existing law.
j) Specifies that costs incurred in connection with an EDR
shall be the sole responsibility of the participating
physician and surgeon.
11)Prohibits, except for disclosures specified in item h) above, a
peer review body from disclosing information obtained in
administering an EDR that individually identifies patients,
participants in an EDR, individual health care professionals,
peer review bodies, or their committees or members, or
individual health care facilities.
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12)Finds and declares that it is the intent of the Legislature
that peer review of professional health care services be done
efficiently, on an ongoing basis, and with an emphasis on early
detection of potential quality problems and resolutions through
informal educational interventions.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1)Purpose. The Author is the Sponsor of this measure. According
to the Author, the current system does not successfully identify
all doctors who are not fit to practice medicine, and allows
inappropriate use of the review process for personal or
professional retaliation. An unofficial code of silence guides
the treatment of physicians whose care is inferior at best and
dangerous at worst. Those physicians attempting to report
concerns with care may be reluctant to do so out of fear of
retribution or misuse of information for litigation. Internal
reviews are now done by the facility that profits from the work
of the doctor evaluated. Cases are reviewed by close colleagues
of the physician in question. These same colleagues often have
a personal relationship with the doctor being investigated, and
may be unaware of the inevitable conflict of interest that
exists when a peer is asked to judge or criticize a friend,
respected mentor, or business competitor. "Sham" peer review
can be used by entities to discipline whistleblowers or
eliminate competition. This measure provides the framework to
improve patient safety through reform of peer review, the
process by which cases of patient harm or potential harm are
studied by health care facilities. Peer review must be
conducted without the dangerous conflict of interest that exists
when professional ties, personal relationships and fear of
malpractice lawsuits jeopardize honest, critical examination.
The Author also states that peer review undertaken for motives
unrelated to patient safety compromises the integrity and
effectiveness of the process.
2)Background.
a) Federal Requirements. Recognizing that peer review is
necessary to maintain and improve quality medical care,
Congress in 1986 enacted the Health Care Quality Improvement
Act (HCQIA). HCQIA established standards for hospital peer
review committees, provided immunity for those who
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participate in peer review, and created the National
Practitioner Data Bank (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. It appears that
hospitals may not be complying with the reporting
requirements of the NPDB. 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 National Practitioner Data Bank 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
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"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.
b) Medical Board 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 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
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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
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.
c) Due Process Provisions. 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.
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d) 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
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
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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.
e) 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: 1) a comprehensive description of the various
steps of and decision makers in the peer review process; 2) 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, health care 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 |
|----------------+----------+-----------+---------------|
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|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% |
| | | | |
-------------------------------------------------------
Medical entities, particularly hospitals, exhibited a substantial
amount of anxiety about providing Lumetra with the information
they requested. Over one third of hospitals communicated with
Lumetra via their attorneys. A number of entities or their
attorneys sent letters to Lumetra detailing their reasons for
refusing to submit the requested information to Lumetra. Most of
these letters reference a telephone conference call held on
October 5, 2007 which was arranged by the California Hospital
Association. This conference call was ostensibly to allow Lumetra
to address concerns and answer questions that the hospitals had
regarding the information Lumetra sought. According to Lumetra,
"a few individuals dominated the call and expressed a desire to
substantially change the study design." Due to the conference
call and other concerns, Lumetra set up a website that described
the study purposes, pertinent legislation, and posted answers to
frequently asked questions.
Lumetra outlined the vital information categories which it sought
information from medical entities regarding their peer review
process including peer review hearing minutes, peer review and
hospital by-laws, and other related documents. Unfortunately,
despite a legislative mandate and immunity from discovery or other
adverse action for disclosure of the information to Lumetra, it
encountered significant problems gathering the information from
the medical entities it surveyed. Many entities refused to comply
with the requests for a variety of reasons. The two most common
reasons given by entities for non-participation were: (1) lack of
time/resources/staff to provide the information; and (2) fear of
legal discovery/breach of confidentiality requirements.
i) Findings of Lumetra's Study:
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(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 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 on 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
abuse, and failure to document/record patient treatment. It
is also possible that some physicians would never be subject
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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.
ii) Lumetra Study Recommendations:
(1) Redesign the peer review process and create an
independent review organization. Allow the current peer
review system to continue where a health care entity acts as
a "first level" screener, as defined, and continues to
investigate complaints and conduct periodic reviews of
physicians. If a physician's action related to patient care
does not meet the standards of care at the screening, then
the physician would be referred to an unbiased independent
review organization with no vested interest in the review
outcome. The independent review organization then conducts
its own investigation, including random site visits and
audits, and makes recommendations regarding the filing on an
805 report or any other action. A copy of all
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recommendations would be sent to the MBC. Any serious
issues/events would be "fast-tracked" and reported to the
independent review organization within five hours. The
independent review organization would then investigate and
take immediate action. The independent review organization
would also be responsible for maintaining a database and a
tracking system to monitor trends.
(2) Improve transparency of the entire peer review
process. The MBC would notify interested parties when an
investigation begins, concluded, and when changes will be
made on the MBC's website regarding a physician's status.
The MBC website must be redesigned to include more
information available indefinitely to the general public
about a physician's profile, and the website must be
redesigned to make it user-friendly to the general public so
that the average layperson can chart and understand the
entire process with minimal difficulty.
(3) Revise role of the MBC. The MBC would continue to
investigate all 805 reports, and make determinations about
any licensee's action. MBC would be required to initiate an
investigation within 48 hours of receiving an 805 report,
and make recommendations within 5 days of completing the
investigation.
(4) Revise due process hearings or 809 process. Remove
809 hearing process from health care entities and have the
independent review organization or the MBC conduct them to
ensure fairness and timeliness. Create a professional jury
of practicing physicians comprised of all licensed
physicians who rotate and serve for a set period of time.
Eliminate the requirement that the MBC obtain a subpoena for
documents related to a complaint or broaden subpoena power
to include all related medical and peer review hearing
related documents.
(5) Emphasize credentialing and re-credentialing.
Credentialing and re-credentialing should still occur at the
healthcare entity level and the healthcare entity would
report any changes in credentialing or privilege to practice
to the independent review organization.
(6) Promote education of physicians, entities, and the
general public. The MBC should create programs to
continuously educate and update all physicians and employees
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of health care entities required to submit 805 reports and
any related laws and regulations. Further, patient and
public rights must be clearly summarized on the MBC's
website. Lastly, the MBC is to emphasize to entities that
there are penalties for failure to file an 805 report.
(7) Clarify and improve specific provisions of existing
law. The Legislature should clarify whether or not an 809
hearing is required prior to submission of an 805 report; or
whether or not the hearing before the 805 is only waived
after a summary suspension of greater than 14 days or a
termination/revocation of privileges. Further, there is a
need to clarify whether or not failure to complete patient
records should trigger an 805 report. The MBC and
Legislature should require a tracking system in each entity
and require peer review body minutes to be maintained and
available for a period of 5 years which is separate from all
other committee business. Require all medical facilities
and groups to have peer review bodies and procedures as well
as being made subject to 805 reporting requirements. Define
specifically what peer review consists of and what events
trigger a peer review.
(8) Identify Funding Sources. Funding is needed to
implement these recommendations and funding sources could
include increasing licensing fees, charging malpractice
insurance companies a percentage of the premiums they
receive, charging entity attorneys a percentage of their
billing incomes, and use a percentage of malpractice awards
to fund the process.
(9) Pilot Project. The Study specifies that these
recommendations be made part of a 5-year pilot program to
determine which have positive and negative impacts on peer
review reporting and whether or not further fixes or changes
are needed.
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
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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
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. 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 700 (Negrete McLeod) makes various changes relating to the
Section 805 reporting process: (1) Requires the MBC to include in
a licensee's central file a finding by a court that a peer review
resulting in an 805 report was conducted in bad faith; (2)
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 findings;
(3)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:
(a) the licentiate departed from the standard of care; (b) the
licentiate suffered from mental illness or substance abuse; or,
(c) the licentiate engaged in sexual misconduct.
b) SB 788 (Wyland) among other provisions, would revise the
definition of a licentiate and peer review body for purposes of
an 805 report to include licensed professional clinical
counselors. SB 788 is pending in this Committee and will be
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heard on April 27, 2009.
c) AB 120 (Hayashi) makes changes to peer review provisions in
existing law including the following: Encourages a peer review
body of a health care facility to obtain external peer review, as
specified; requires a peer review body to respond to the request
of another peer review body and produce records requested
concerning a licentiate; prohibits a member of a medical or
professional staff from being required to alter or surrender
staff privileges, status, or membership solely due to the
termination of a contract between that member and a health care
facility; gives the licensee the choice of having a peer review
hearing before a mutually acceptable arbitrator or a panel of
unbiased individuals and makes specified changes relating to a
hearing officer. AB 120 is currently pending in the Assembly
Business and Professions Committee.
d) 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 currently pending
in the Assembly Business & Professions Committee.
e) AB 245 (Ma) Requires the MBC to verify information on licensed
physicians and surgeons posted on its Internet Website. AB 245
is currently pending in the Assembly Business and Professions
Committee.
6)Concerns. The California Medical Association (CMA) has taken a
no position on a prior version of this bill but expressed some
concerns. CMA points out that the requirement in this bill for
a peer review body to annually notify the MBC on its review
activities and to comply with requests for further information
from the MBC may flood MBC with information with little value,
including reviews of little evidence of quality of care
concerns. CMA also states that it appreciates the value in
allowing physicians to obtain additional education and training
when need is indicated.
7)Oppose unless Amended. The California Hospital Association
(CHA) has taken an oppose unless amended position on a prior
version of this bill, and most of the provisions that CHA had
opposed were deleted in the April 20, 2009 version of this bill.
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8)Policy Concerns.
a) Balancing physician interests with public protection.
This bill establishes an EDR program for physicians and
surgeons to be administered by a peer review body, and
prohibits the filing on an 805 report for any action that
resulted in referral to an EDR. It also delays the time that
the MBC could file an accusation against a physician who
participates on an EDR, regardless of the severity of the
action that resulted in referral to the EDR. Does this
approach strike the proper balance between physician
interests and protecting the public from potentially harmful
physicians? Does the EDR program established by this bill
tilt the balance towards shielding problem physicians and
allowing them to practice medicine to the detriment of
patients?
b) Program Components/Requirements. There are several
provisions in this bill that need clarification, including
the following:
i) Standards . This bill gives a peer review body the
authority to offer an EDR program to a physician where it
deems appropriate, but no objective standards as to when an
EDR may be appropriate. One of the findings of the Lumetra
report as cited above is the lack of uniformity under the
current peer review process. Lumetra points out that there
is variation among entities on what activities would
trigger a peer review process. Will this bill further
promote variation in the peer review process? What are the
consequences, especially to the public, of a process that
lacks objective standards for participation in an EDR?
ii) Timeliness . This bill also allows a peer review body
to require a physician to do specific actions for a period
of time as a condition for participation in an EDR.
However, timeliness is essential when rehabilitating
physicians to avoid patient harm, and the absence of a
specific timeframe on the length of time a physician may
participate may be important to successful completion of an
EDR. Should a timeframe be established to clearly define
the length of time from referral to final completion to
avoid abuse of the process? In addition, should there be
clear demonstration by a physician that participation in an
EDR is adequate so as not to put the public safety at risk?
Furthermore, should parameters be established for a
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physician to continue to practice while participating in an
EDR?
iii) Audit of EDR . In an effort to ensure that EDR is not
being abused or misused, should the MBC, as the agency
ultimately responsible for the regulation of physicians, be
allowed to view critical components of the program?
c) Transparency of EDR. This bill prohibits filing of an 805
report by a peer review body for any action that resulted in
referral to EDR while the physician participates in the
program. Moreover, although the bill allows notification to
the MBC of the participation of a physician and surgeon to an
EDR, the bill is not clear on whether the MBC has the ability
to obtain information on the reasons for a physician's
referral to an EDR. One of the recommendations of the
Lumetra report was to improve the transparency of the peer
review process. Does this bill promote transparency of the
process? Should MBC be notified of the reasons for the
recommendation to an EDR, rather than just notified of the
participation?
d) Independent Investigation Required by MBC. This bill
prohibits the MBC from including summary suspension
information on a licensee's central file unless the MBC
confirms by independent investigation that the suspension is
supported by substantial evidence of risk to patients.
However, the bill does not specify what process the MBC
should follow when conducting independent investigations. In
addition, what are the risks to the MBC if it decides there
was no substantial risk to patients and retains the
information in a licensee's central file? Will this new
process create a system where MBC would be subjected to
lawsuits challenging its determination in such cases?
SUPPORT AND OPPOSITION:
Support: Association of California Healthcare Districts (prior
version)
Opposition: None on file as of April 22, 2009
Consultant:Rosielyn Pulmano