BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 700|
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                                 THIRD READING


          Bill No:  SB 700
          Author:   Negrete McLeod (D)
          Amended:  5/20/09
          Vote:     21

           
           SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE :  7-2, 4/20/09
          AYES:  Negrete McLeod, Corbett, Correa, Florez, Oropeza,  
            Romero, Yee
          NOES:  Aanestad, Walters
          NO VOTE RECORDED:  Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SENATE FLOOR  :  19-15, 5/14/09 (FAIL)
          AYES:  Alquist, Calderon, Corbett, DeSaulnier, Florez,  
            Hancock, Kehoe, Leno, Lowenthal, Negrete McLeod, Oropeza,  
            Padilla, Pavley, Romero, Simitian, Steinberg, Wiggins,  
            Wolk, Yee
          NOES:  Aanestad, Ashburn, Benoit, Cogdill, Cox, Denham,  
            Ducheny, Dutton, Harman, Hollingsworth, Huff, Maldonado,  
            Strickland, Walters, Wyland
          NO VOTE RECORDED:  Cedillo, Correa, Liu, Runner, Wright,  
            Vacancy


           SUBJECT  :    Healing arts:  peer review

           SOURCE  :     Author


           DIGEST  :    This bill makes various changes relating to the  
          peer review process in which a final proposed action may be  
                                                           CONTINUED





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          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.  In addition this bill requires the  
          Medical Board of California 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, and  
          prohibits disclosure by certain health care regulatory  
          bodies of any summaries of hospital disciplinary actions  
          that result in the termination or revocation of a  
          licensee's staff privileges for medical disciplinary cause  
          or reason if a court finds that the peer review resulting  
          in the disciplinary action was conducted in bad faith and  
          the licensee notifies the board of such finding.

           Senate Floor Amendments  of 5/20/09 delete the requirement  
          that an 805 report must be submitted regardless of whether  
          a hearing on a final proposed action has occurred.  Clarify  
          the documents which a health board may obtain during an  
          investigation of report, and clarify report  
          confidentiality.

           Senate Floor Amendments  of 5/11/09 clarify when a report  
          pursuant to a determination by a peer review body shall be  
          made to the relevant agency.

           ANALYSIS  :    

          Existing Law:

           1.Provides for the professional review of specified  
             healing arts licentiates through a peer review process.   
             Existing law defines the term "peer review body" as  
             including a medical or professional staff of any health  
             care facility or clinic licensed by the State Department  
             of Public Health.

           2.Requires specified persons are to file a report,  
             designates as an "805 report," with a licensing board  
             within 15 days after a specified action is taken against  
             a person licensed by that board.  Existing law provides  
             various due process rights for licentiates who are the  
             subject of a final proposed disciplinary action of a  







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             peer review body, including authorizing a licentiate to  
             request a hearing concerning that action.

           3.Requires the Medical Board of California to maintain an  
             805 report for a period of three years after receipt.

           4.Authorizes the Medical Board of California, the  
             Osteopathic Medical Board of California, and the Dental  
             Board of California to inspect and copy certain  
             documents in the record of any disciplinary proceeding  
             resulting in action that is required to be reported in  
             an 805 report.

           5.Requires specified healing arts boards to maintain a  
             central file of their licensees containing, among other  
             things, disciplinary information reported through 805  
             reports.

           6.Requires the Medical Board of California, the  
             Osteopathic Medical Board of California, and the  
             California Board of Podiatric Medicine to disclose an  
             805 report to specified health care entities and to  
             disclose certain hospital disciplinary actions to  
             inquiring members of the public.  Existing law also  
             requires the Medical Board of California to post  
             hospital disciplinary actions regarding its licensees on  
             the Internet.

          This bill:

           1.Requires the Medical Board of California 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, and the licensee who is the subject of the report  
             notifies the Medical Board of California of such  
             finding.

           2.Prohibits the Medical Board of California, the  
             Osteopathic Medical Board of California, and the  
             California Board of Podiatric Medicine from disclosing  
             to an inquiring member of the public 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  







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             court finds that the peer review resulting in the  
             disciplinary action was conducted in bad faith and the  
             licensee notifies the board of the finding.

           3.Defines peer review as a process in which a peer review  
             body reviews the basic qualifications, staff privileges,  
             employment, medical outcomes, and professional conduct  
             of licentiates to determine whether the licentiate may  
             practice or continue to practice in a health care  
             facility, clinic, or other setting providing medical  
             services and, if so, to determine the parameters of that  
             practice.

           4.Clarifies that the definition of peer review body  
             includes any clinic specified in the Health and Safety  
             Code, and deletes reference to licensed clinics.

           5.Clarifies that if any of the following are imposed on a  
             licentiate as a result of an action by a peer review  
             body an 805 report must be filed by the chief of staff  
             or 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 with the relevant agency within 15 days after the  
             effective date on any of the actions specified:

             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. 

           6.Clarifies that if a licentiate undertakes any of the  
             following the chief of staff or whoever is authorized  
             under existing law must file an 805 report within 15  
             days after the licentiate takes the action:







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             A.    Resigns or takes a leave of absence from  
                membership, staff privileges, or employment.

             B.    Withdraws or abandons his or her application for  
                membership, staff privileges, or employment.

             C.    Withdraws or abandons his or her request for  
                renewal of membership, staff privileges or employment  
                after receiving notice of a pending investigation  
                initiated for a medical disciplinary cause or reason  
                after receiving notice that his/her application for  
                membership, staff privileges, or employment is denied  
                or will be denied for a medical disciplinary cause or  
                reason. 

           7.Clarifies existing law by requiring an 805 report to be  
             filed within 15 days following the imposition of summary  
             suspension of staff privileges, membership, or  
             employment, if the summary suspension remains in effect  
             for a period in excess of 14 days, regardless of whether  
             a hearing has occurred, as specified.

           8.Requires an 805 report to be maintained electronically  
             for dissemination purposes for a period of three years  
             after receipt.

           9.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 a peer  
             review body makes a decision or recommendation regarding  
             the disciplinary action to be taken against a licentiate  
             based on the peer review body's determination, following  
             formal investigation of the licentiate, which any of the  
             following occurred:

             A.    The licentiate departed from the standard of  
                care and there was patient harm.

             B.    The licentiate committed or was responsible for  
                the occurrence of an adverse event described in  







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                existing law.

             C.    The licentiate suffered from mental illness or  
                substance abuse.

             D.    The licentiate engaged in sexual misconduct.

          10.Specifies that a peer review body shall not await a  
             final proposed action, as defined in existing law, for  
             purposes of filing this report.

          11.Entitles the relevant agency, without subpoena, to  
             inspect and copy the following unredacted documents in  
             the record of any formal investigation required to be  
             reported pursuant to item # 9) above:

             A.    Any statement of charges.

             B.    Any document, medical chart, or exhibit.

             C.    Any opinions, findings, or conclusions.

          12.States that the information reported pursuant to item #  
             9) above shall be kept confidential and not subject to  
             discovery, but the information may be reviewed, as  
             specified, and may be disclosed in any subsequent  
             disciplinary hearing, as specified.

          13.Specifies that the report required by item # 9) above is  
             in addition to any other report currently required to be  
             reported under Section 805.

          14.Defines formal investigation for purposes of item # 9)  
             above as an investigation performed by a peer review  
             body based on an allegation that any of the acts listed  
             in #9) above occurred..

          15.Requires that a licensee's central file of individual  
             historical record that is maintained by specified  
             agencies include information reported pursuant to item #  
             9) above.

          16.Entitles the Medical Board of California, the  
             Osteopathic Medical Board of California, and the Dental  







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             Board of California to inspect and copy specified  
             documents relating to any disciplinary proceeding  
             resulting in an action that is required to be reported  
             pursuant to Section 805 without subpoena and that the  
             specified documents be unredacted.  Includes in the list  
             of documents that may be copied and inspected any peer  
             review minutes or reports.

          17.Prohibits the disclosure of an 805 report to specified  
             health care entities if a court finds that the peer  
             review resulting in the 805 report was conducted in bad  
             faith and the licensee who is the subject of the report  
             notifies the board of the court's finding. 

          18.Requires the Medical Board of California to remove from  
             its Internet website any information concerning a  
             hospital disciplinary action that is posted on the  
             Internet website if a court finds that peer review  
             resulting in a hospital disciplinary action was  
             conducted in bad faith and the licensee notifies the  
             Medical Board of California of the court finding.

          19.Requires the Medical Board of California to post on the  
             Internet a factsheet that explains and provides  
             information on the reporting requirements under Section  
             805.

           Background

          What is Peer Review  ?  In peer review, physicians evaluate  
          their colleagues' work to determine compliance with the  
          standard of care.  Peer reviews are intended to detect  
          incompetent or unprofessional physicians early and  
          terminate, suspend, or limit their practice if necessary.   
          Peer review is triggered by a wide variety of events  
          including patient injury, disruptive conduct, substance  
          abuse, or other medical staff complaints.  A peer review  
          committee investigates the allegation, comes to a decision  
          regarding the physician's conduct, and takes appropriate  
          remedial actions.  However, there is reluctance among  
          physicians to serve on peer review 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  







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          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 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.

          According to the Medical Board of California, 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.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  5/27/09)

          Medical Board of California

           OPPOSITION  :    (Verified  5/27/09) (Previous version)

          California Hospital Association







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          California Medical Association

           ARGUMENTS IN SUPPORT :    According to the author's office,  
          this bill is necessary to ensure that the current peer  
          review process continues to protect the public from  
          incompetent physicians.  The author's office points out  
          that given the indispensable nature of health care, high  
          quality patient care are vital.  Patients expect their  
          treating physicians or other medical professionals to be  
          competent and qualified, and physicians who fail to meet  
          established professional standards must be discovered,  
          reviewed and disciplined if necessary in a timely manner.   
          The author's office indicates that physician peer review is  
          one of the regimes used to ensure that quality of care is  
          delivered while minimizing medical errors and managing  
          patient risks.

          The author's office further points out that the Medical  
          Board of California is the agency ultimately responsible  
          for the oversight of physicians and surgeons and it is  
          necessary that the Medical Board of California must be  
          notified when its licensees are practicing below the  
          standard of care, have substance abuse or mental illness  
          problems, or have committed sexual misconduct.   
          Furthermore, the author's office states that it is not the  
          bill's intent to cast physicians and surgeons in a false  
          light but to improve the delivery of quality health care to  
          consumers.

          ARGUMENTS IN OPPOSITION  :    The California Hospital  
          Association states in opposition, "SB 700 seeks to add a  
          new Section 805.01 to the Business and Professions Code,  
          which would, in part, require reporting of investigations  
          by peer review bodies that find a departure in the standard  
          of care, mental illness, substance abuse, and sexual  
          misconduct.  The bill was amended on April 22 to further  
          qualify the reporting for a departure of the standard of  
          care, "the licentiate departed from the standard of care  
          and there was patient harm, including, but not limited to,  
          any of the adverse events described in paragraph (1) of  
          subdivision (b) of Section 1279.1 of the Health and Safety  
          Code."  This reporting will be in addition to any report  
          required under Section 805.  We are very concerned that  
          reporting at this early juncture will have a number of  







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          deleterious effects, including:  (1) a chilling effect on  
          peer review in that it is likely to make reviewers more  
          reluctant than they already are to reach adverse standard  
          of care decisions; and (2) not 
          providing meaningful information for the medical board  
          since the reporting threshold is so low.  This could  
          distract attention from meaningful medical board  
          oversight."  
           

          JJA:do  5/27/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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