BILL ANALYSIS Ó ----------------------------------------------------------------------- |Hearing Date:June 13, 2011 |Bill No:AB | | |655 | ----------------------------------------------------------------------- SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Curren D. Price, Jr., Chair Bill No: AB 655Author:Hayashi As Amended:June 1, 2011 Fiscal: No SUBJECT: Healing arts. SUMMARY: Requires a peer review body to produce relevant peer review information about a physician and surgeon that was subject to peer review for a medical disciplinary cause or reason. Existing law: 1)Establishes the Medical Board of California (MBC) to license, regulate and discipline physicians and surgeons in California and states that the protection of the public is the highest priority of the MBC in exercising its functions. 2)Provides for the professional review of specified healing arts licentiates by a peer review body, as defined, including: (Business& Professions Code (BPC) § 805) 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 AB 655 Page 2 by members or employees of that entity. 3)Defines a licentiate, for purposes of item # 2) above, as a physician and surgeon, doctor of podiatric medicine, clinical psychologist, marriage and family therapist, clinical social worker, or dentist. (Id.) 4)Requires an 805 report to be filed by the chief of staff, chief executive officer, medical director, or administrator of any peer review body and the chief executive officer or administrator of a health facility or clinic, as defined, with the relevant agency having regulatory jurisdiction over a licentiate under the following: (Id.) a) Within 15 days after the effective date of any of the following that occur as a result of an action of a peer review body: i) A licentiate's application for staff privileges or membership is denied or rejected for a medical disciplinary cause or reason. ii) A licentiate's membership, staff privileges, or employment is terminated or revoked for a medical disciplinary cause or reason. iii) Restrictions are imposed, or voluntarily accepted, on staff privileges, membership, or employment for a cumulative total of 30 days or more for any 12-month period, for a medical disciplinary cause or reason. b) Within 15 days if a licentiate does any of the following based on information indicating medical disciplinary cause or reason: (Id.) i) Resigns or takes a leave of absence from membership, staff, or employment. ii) Withdraws or abandons an application for staff privileges or membership. iii) Withdraws or abandons the request for renewal of privileges or membership. 5)Requires also for an 805 report to be filed within 15 days after the imposition of a summary suspension of staff privileges, AB 655 Page 3 membership, or employment, if the summary suspension remains in effect for over 14 days. (Id.) 6)Defines the following terms: (Id.) a) Staff privileges as any arrangement under which a licentiate is allowed to practice or provide care for patients in a health facility. Such arrangements include, but are not limited to, full staff privileges, active staff privileges, limited staff privileges, auxiliary staff privileges, courtesy staff privileges, locum tenens arrangements, and contractual arrangements to provide professional services, including arrangements to provide outpatient services. b) Denial or termination of staff privileges, membership, or employment includes failure or refusal to renew a contract or to renew, extend, or reestablish any staff privileges, if the action is based on medical disciplinary cause or reason. c) Medical disciplinary cause or reason as the aspect of a licentiate's competence or professional conduct that is reasonably likely to be detrimental to patient safety or to the delivery of patient care. 7)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. (Id.) 8)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. (Id.) 9)Requires, prior to granting or renewing staff privileges for any physician and surgeon, psychologist, podiatrist or dentist, any licensed health care facility, health care service plan or medical care foundation, or the medical staff of an institution, to request a report from the MBC, the Board of Psychology, the Osteopathic Medical Board of California, or the Dental Board of California to determine if any 805 report has been made, indicating that the applying physician and surgeon, psychologist, podiatrist or dentist has been denied staff privileges, been removed from medical staff, or had his or her staff privileges restricted as provided in Section 805. Prohibits providing any report in the following circumstances: AB 655 Page 4 (BPC § 805.5) 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. 10)Provides that peer review action may only be taken against the licentiate by the peer review body if certain procedures and rules are followed including written notice to the licentiate 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. (BPC § 809 et seq.) This bill: 1)Finds and declares that the sharing of information between peer review bodies is essential to protect the public health. 2)Requires a peer review body, upon receipt of reasonable processing costs, to respond to the request of another peer review body and produce relevant peer review information about a licentiate that was subject to peer review by the responding peer review body for a medical disciplinary cause or reason. 3)Requires the responding peer review body to determine the manner by which to produce the information specified in #2) above and may elect to do so through: 1) a written summary of relevant peer review information, or 2) a relevant peer review record. 4)Provides that relevant peer review information or peer review record includes, but is not limited to, allegations and findings, explanatory or exculpatory information submitted by a licentiate, any conclusions made, or actions taken, and the reasons for those actions, to the extent not prohibited by state or federal law. Prohibits the information from identifying any other person, except the licentiate. 5)Indicates that the information produced by a peer review body shall be used solely for peer review purposes and shall not be subject to discovery, as specified. AB 655 Page 5 6)States that the responding peer review body acting in good faith is not subject to civil or criminal liability for providing information to the requesting peer review body pursuant to this bill. 7)Entitles the peer review body responding to the request to all confidentiality protections and privileges provided by law as to the information disclosed. 8)Requires the following prior to the release of any information pursuant to this bill: a) The requesting peer review body shall, upon request, sign a mutually agreeable peer review sharing agreement with the responding peer review body. Requires the requesting peer review body to indemnify the responding peer review body for any and all claims, demands, liabilities, losses, damages, costs, and expenses, including reasonable attorney's fees, resulting in any manner, directly or indirectly, from the receiving peer review body's improper release or disclosure of information that is shared. b) The licentiate under review by the peer review body requesting information pursuant to this section shall, upon request, release the responding peer review body, its members, and the health care entity for which the responding peer review body conducts peer reviews, from liability for the disclosure of information. 9)Provides that the responding peer review body is not obligated to produce the relevant peer review information unless both of the following conditions are met: a) The licentiate provides a release, as specified in #8 above that is acceptable to the responding peer review body. b) The requesting peer review body signs a mutually agreeable peer review sharing agreement, as specified in #8) above with the responding peer review body. FISCAL EFFECT: Unknown. This bill has been keyed "nonfiscal" by Legislative Counsel. COMMENTS: 1.Purpose. The California Medical Association (CMA) is the Sponsor of this measure. According to CMA, this bill facilitates the medical peer review process by specifying procedures peer review bodies must AB 655 Page 6 follow in requesting and sharing peer review information with other peer review bodies. CMA indicates that nearly all peer review in California is done efficiently, timely, and in a manner that protects patients from quality of care deficiencies. However, the current peer review system has certain weaknesses. Physicians are often reluctant to serve on peer review committees due to the risk of involvement in related future litigation, including medical malpractice lawsuits against a physician under review. In addition, there has been rising concern relating to "sham peer review," 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. Sharing information between peer review bodies will both increase consumer protection and protect physicians. CMA also states that "this bill reflects the mutual agreement reached between CMA and the California Hospital Association toward improving the peer review system." 2.Background. In peer review, physicians evaluate their colleagues' practice to determine compliance with the standard of care. Peer reviews are intended to detect incompetent or unprofessional physicians early and terminate, suspend, or limit their practice if necessary. Peer review is triggered by a wide variety of events including patient injury, disruptive conduct, substance abuse, or other medical staff complaints. A peer review committee investigates the allegation, comes to a decision regarding the physician's conduct, and takes appropriate remedial actions. However, there is reluctance among physicians to serve on peer review committees due to the risk of involvement in related future litigation, including medical malpractice lawsuits against a physician under review. In addition, there has been rising concern relating to "sham peer review." Sham peer review is the use of the peer review system to discredit, harass, discipline, or otherwise negatively affect a physician's ability to practice medicine or exercise professional judgment for a non-medical or patient safety related reason. Other criticisms of peer review include over legalization of the process, lack of transparency in the system, and burdensome human and financial toll peer review brings not only to the hospital but also to a physician under review. 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 participate in peer review, and created the National Practitioner Data Bank (NPDB). The NPDB is a confidential repository of AB 655 Page 7 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. According to the MBC, it received 138 805 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. 3.Due Process Provisions (Section 809 et seq.). In 1989, several due process provisions for physicians subject to an 805 report were adopted and codified under Section 809 et seq. of the Business and Professions Code. Committee analysis on SB 1211 (Keene, Chapter 336, Statutes of 1989), which contained the provisions of Section 809, indicated that the 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 AB 655 Page 8 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. 4.Previous Related Legislation. a) AB 1235 (Hayashi) of 2010 included various revisions to the due process requirements of the medical peer review process, including provisions relating to the production of peer review information which are similar to this measure. AB 1235 was vetoed by former Governor Schwarzenegger who indicated: "It is with sincere disappointment that I am unable to sign this hospital peer review measure. I vetoed two bills on this subject last year, with a clear message for the interested stakeholders to work together, along with my Administration, on this extremely complicated and complex issue. Unfortunately, this consensus did not occur. As California stands ready to implement health reform, we need hospitals and physicians to work in new and more efficient ways. I believe both parties are working to provide quality care to patients but there are better ways to work together. Litigation and protracted contract disputes are not going to be mechanisms to achieve this common goal. I would encourage the author to keep working with these parties in the coming year as this problem must be addressed. I believe that a final consensus product that first, and most importantly, protects patients while also allowing hospitals and physicians to work together can be reached." b) SB 700 (Negrete McLeod), Chapter 505, Statutes of 2010, made various changes relating to peer review and the 805 process, including requiring 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 confidential report with the relevant agency within 15 days after completion of a formal investigation of a licentiate for specified actions. c) SB 58 (Aanestad) of 2009, among other provisions, provided for changes in a physician and surgeon's central file of individual historical records and the information that is publicly disclosed regarding licensing and enforcement actions; required a peer AB 655 Page 9 review body to annually report to the MBC on its peer review activities; defined an external peer review organization; encouraged external peer review under certain conditions; mandated external peer review for specific circumstances; and, established an early detection and resolution program for physicians and surgeons in lieu of the filing of an 805 report. SB 58 was held on the Senate Appropriations suspense file. d) SB 820 (Negrete McLeod) of 2009, included many of the provisions of SB 700 and included the requirement that a physician peer review body of a hospital make a confidential report to the MBC regarding a disciplinary action taken against a physician. SB 820 was vetoed by then Governor Schwarzenegger. e) AB 120 (Hayashi) of 2009, is identical to AB 1235, and the only difference is that AB 120 was made contingent on the enactment of SB 820. Since SB 820 was vetoed by the Governor, the Governor was unable to sign AB 120. f) AB 834 (Solorio)of 2009, authorized a peer review body to impose, and a licentiate to accept, voluntary remediation when deemed appropriate by the peer review body, including for a medical disciplinary cause or reason; made changes relating to the qualifications of a hearing officer. AB 834 was held in the Assembly Business and Professions Committee. g) 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. 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." Among other findings, the Lumetra Study indicated there is variation and inconsistency in entity peer review policies and standards; there is poor tracking of peer review events; there is confusion regarding 805 reporting; lack of coordination among state agencies, and licensing agencies; and the costs of peer review are burdensome. 5.Arguments in Support. The California Hospital Association states that the peer review information sharing contained in this bill will improve the peer review process and provide better protection for patients. AB 655 Page 10 NOTE : Double-referral to Judiciary Committee (second.) SUPPORT AND OPPOSITION: Support: California Medical Association (Sponsor) California Hospital Association Opposition: None on file as of June 3, 2011 Consultant:Rosielyn Pulmano