BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 655 (Hayashi)
As Amended June 1, 2011
Hearing Date: June 28, 2011
Fiscal: No
Urgency: No
RD
SUBJECT
Healing Arts: Peer Review
DESCRIPTION
This bill would mandate the sharing of relevant peer review
information, as specified, between peer review bodies if
specified requirements are met. The bill would add to existing
peer review due process provisions the following requirements
with respect to the sharing of peer review information:
information produced by a peer review body shall be used
solely for peer review purposes and shall not be subject to
discovery to the extent provided in existing law;
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;
the responding peer review body shall be entitled to all
confidentiality protections and privileges provided by law as
to the information disclosed pursuant to the bill;
prior to any release of information, the requesting peer
review body must, upon request, sign a mutually agreeable
agreement with the responding peer review body, and indemnify
the responding peer review body, as specified; and
the responding peer review body is not obligated to produce
the relevant peer review information unless (1) the licentiate
provides a release, as described, which is acceptable to the
responding peer review body and (2) the requesting peer review
body signs a mutually agreeable peer review sharing agreement,
as specified above.
BACKGROUND
(more)
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California's Medical Injury Compensation Reform Act (MICRA),
governs the medical peer review and mandatory reporting to the
Medical Board of California (MBC) for "licentiates" (a physician
and surgeon, podiatrist, clinical psychologist, marriage and
family therapist, clinical social worker, or dentist). (Bus. &
Prof. Code Sec. 800 et seq.) Peer review is a process by which
a committee of licensed medical personnel evaluates the
qualifications of physicians applying for staff privileges,
establishes the standards and procedures for patient care,
evaluates medical outcomes, assesses the performance of
physicians on staff, and reviews other matters critical to the
hospital's functioning. California law recognizes that "Ýp]eer
review, fairly conducted, is essential to preserving the highest
standards of medical practice" and that peer review, not fairly
conducted, can cause harm to both patients and practitioners by
limiting access to care (Bus. & Prof. Code Sec. 809(a)(3)-(4)).
In 1986, Congress passed the federal Health Care Quality
Improvement Act (HCQIA) in effort to provide peer review bodies
qualified immunity for peer review participation and to prevent
incompetent practitioners from moving from state to state
without disclosure or discovery of previous damaging or
incompetent performance. HCQIA established the National
Practitioner Data Bank (NPDB), a national repository for
reporting information about physicians or other health
practitioners' whose competency has been questioned or had
adverse actions taken involving their staff privileges or
memberships, in order to help hospitals make more informed
hiring decisions and better monitor their current medical staff.
As such, the NPDB is made available to state licensing boards,
hospitals, and other physician employers in the state; the
database, however, contains only limited information.
In California, if a peer review body takes specified actions for
a medical disciplinary cause or reason, such as terminating or
revoking staff privileges or employment, or if a physician takes
certain action, such as resigning or taking a leave of absence,
upon notice of a denial of staff privileges or notice of a
pending investigation initiated for medical disciplinary cause
or reason, a written report (known as an "805 report") must be
filed within 15 days after the effective date of that action.
(Bus. & Prof. Code Sec. 805.) Those 805 reports are filed with
the MBC and ultimately provided to the NPDB. California also
affords due process rights to licentiates facing peer review
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proceedings, to which this bill would be adding. To facilitate
peer review, existing state law provides for immunity,
confidentiality, and limited discovery of peer review related
proceedings.
As a result of the peer review system created by HCQIA and
MICRA, a hospital that wishes to hire a physician may find after
checking the NPDB that the physician has had an 805 report filed
against him or her and need to find further information to help
determine if they still wish to hire that physician. Still,
current laws surrounding peer review, however, do nothing to
encourage the sharing of this information and peer review groups
would face confidentiality and liability type issues for doing
so.
AB 1235 (Hayashi, 2010) contained various revisions relating to
the due process requirements of the medical peer review process,
including provisions relating to the production of peer review
information that were similar to this measure. Governor
Schwarzenegger ultimately vetoed AB 1235 for not having reached
a consensus among the stakeholders, finding that the bill would
have resulted in litigation and protracted contract disputes.
In contrast, this bill is the result of a compromise between the
sponsor, the California Medical Association (CMA), and the
California Hospital Association (CHA).
To enhance the effectiveness of peer review organizations and
facilitate their intent under both California law and federal
HCQIA law, this bill would require a peer review group to share
relevant information, as defined by the bill, about a licentiate
subject to their peer review with any requesting peer review
body, unless specified requirements are not met. This bill
would also add provisions regarding peer review immunity,
confidentiality, and discovery. Lastly, this bill would provide
for indemnity of the peer review party providing information by
the requesting peer review body.
CHANGES TO EXISTING LAW
1. Existing federal law , the Health Care Quality Improvement
Act (HCQIA), requires specified information to be reported by
various entities including, among other things, any instances
of revocation or suspension or other restriction of a
physician's license, relating to the physician's professional
conduct or competence. (42 U.S.C. Secs. 11131-11134.)
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Existing federal law , HCQIA and the Medicare and Medicaid
Patient and Program Protection Act of 1987, establishes the
NPDB, as a database of information relating to healthcare
professional's professional competence and conduct. This
information is collected and disseminated through the NPDB,
including reports on all licensure actions taken against all
healthcare practitioners. Peer review bodies must report any
negative actions or findings taken against healthcare
practitioners or organizations. (42 U.S.C. Sec. 1396r-2,
"Section 1921.")
Existing law provides that peer review is a process by which a
peer review body reviews the basic qualifications, staff
privileges, employment, medical outcomes, or professional
conduct of licentiates to make recommendations for quality
improvement and education, if necessary, in order to do either
or both of the following:
determine whether a licentiate may practice or continue
to practice, and, if so, to determine the parameters of
that practice; or
assess and improve the quality of care rendered in a
health care facility, clinic, or other setting providing
medical services. (Bus. & Prof. Code Sec. 805(a)(1).)
Existing law provides that "peer review body" includes:
a medical or professional staff of any health care
facility or clinic as specified;
a health care service plan licensed as specified, or a
disability insurer as specified;
any medical, psychological, marriage and family therapy,
social work, dental or podiatric professional society, as
specified; and
a committee organized by any entity consisting of or
employing more than 25 licentiates of the same class that
functions for the purpose of reviewing the quality of
professional care provided by members or employees of that
entity. (Bus. & Prof. Code Sec. 805(a)(1)(B).)
Existing law defines "805 report" as a written report that
must be filed by a chief of staff of a medical director, or
administrator of any peer review body and the chief executive
officer or administrator of any licensed health care facility
or clinic within 15 days after the effective date of any of
the following occurs as a result of a peer review body action:
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a licentiate's application for staff privileges or
membership is denied or rejected for a medical disciplinary
cause or reason;
a licentiate's membership, staff privileges, or
employment is terminated or revoked for a medical
disciplinary cause or reason; or
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. (Bus.
& Prof. Code Sec. 805(a)(7).)
Existing law requires the filing of an 805 report by a
reporter, as specified, within 15 days after a licentiate
takes any of the following actions upon receiving notice of a
pending investigation for a medical disciplinary cause or
action or that his or her application for membership or staff
privileges is denied or will be denied for a medical
disciplinary cause or action:
resigns or takes leave of absence;
withdraws or abandons the application for staff
privileges or membership; or
withdraws or abandons his or her request for renewal of
staff privileges or membership. (Bus. & Prof. Code Sec.
805(a)(8).)
This bill , upon receipt of reasonable processing costs, would
require a peer review body to respond to the request made by
another peer review body and produce relevant peer review
information about a licentiate who was subject to its peer
review for a medical disciplinary cause or reason.
This bill would require the responding peer review body to
determine the manner by which to produce the information
specified and may do so through: (1) a written summary of
relevant peer review information, or (2) a relevant peer
review record.
This bill would provide 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.
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2. Existing federal law , the Privacy Act, protects the
contents of federal systems of records on individuals, like
those contained in the NPDB, from disclosure without the
individual's consent, except as specified. The published
routine uses of NPDB information do not allow disclosure to
the general public, but does permit the limited release of
information as the HCQIA provisions allow. (5 U.S.C. Sec.
552(a).)
Existing law requires the MBC to maintain a central file
regarding each licensee, including specified information, such
as disciplinary information reported pursuant to Section 805.
(Bus. & Prof. Code Sec. 800(a)(4).)
Existing law requires any contents of a central file that are
not public records under any other provision of law be kept
confidential, as specified. (Bus. & Prof. Code Sec. 800(c).)
This bill would prohibit the identification of any person
except the licentiate in the information shared.
This bill would grant the responding peer review body all
confidentiality protections and privileges provided by law as
to the information disclosed.
3. Existing law provides that no person shall incur any civil
or criminal liability as the result of making any report
required by this section. (Bus. & Prof. Code Sec. 805(j).)
Existing law provides that there shall be no monetary
liability on the part of, and no cause of action or damages
other than economic or pecuniary damages against a hospital
for any action taken upon the recommendation of its medical
staff, or against any other person or organization for any
action taken, or restriction imposed, and required to be
reported pursuant to Business and Professions Code Section
805, if it is reported in accordance with that section. (Civ.
Code Sec. 43.97.)
This bill would provide that a responding peer review body
acting in good faith is not subject to civil or criminal
liability for providing information pursuant to the bill.
This bill would require the following prior to the release of
any information:
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the requesting peer review body shall, upon request,
sign a mutually agreeable peer review sharing agreement
with the responding peer review body. That agreement shall
indemnify the responding peer review body for any and all
claims, 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 shared information; and
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.
This bill would provide that the responding peer review body
is not obligated to produce the relevant peer review
information unless:
the licentiate provides a release, as specified above
that is acceptable to the responding peer review body; and
the requesting peer review body signs a mutually
agreeable peer review sharing agreement, as specified in
above with the responding peer review body.
4. Existing law provides specific due process rights to
licentiates subject to peer review proceedings. (Bus. & Prof.
Code Sec. 809 et. seq.)
Existing law provides that nothing in Sections 809 to 809.7,
inclusive, shall affect the availability of judicial review,
as specified, nor provisions relating to discovery and
testimony, as specified. (Bus. & Prof. Code Sec. 809.8.)
Existing law provides that the written records of interviews,
reports, statements, or memoranda of such committees relating
to such medical or psychiatric studies are subject to the
Civil Discovery Act but shall not be admitted as evidence in
any action or before any administrative body, agency, or
person. Existing law also provides that the disclosure, with
or without the consent of the patient, of information
concerning him or her to such committee does not make
unprivileged any information that would otherwise be
privileged under specified existing law provisions. However,
notwithstanding those referenced sections, such information is
subject to discovery except that the identity of any patient
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may not be discovered unless the patient consents to such
disclosure. (Evid. Code Sec. 1156.1.)
Existing law provides, among other things, that neither the
proceedings nor the records of a peer review body shall be
subject to discovery. Existing law also provides that no
person in attendance at a meeting of any of those committees
shall be required to testify as to what transpired at that
meeting. The prohibition relating to discovery or testimony
does not apply, however to the statements made by any person
who is a party to an action or proceeding the subject matter
of which was reviewed at that meeting, or to any person
requesting hospital staff privileges, or in any action against
an insurance carrier alleging bad faith by the carrier in
refusing to accept a settlement offer within the policy
limits. (Evid. Code Sec. 1157.)
This bill would mandate that the information produced by a
peer review body be used solely for peer review purposes and
not be subject to discovery, as specified.
This bill would contain various findings and declarations.
COMMENT
1. Stated need for the bill
According to the author:
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.
The CMA, the sponsor of this bill, states:
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This bill reflects the mutual agreement reached between the
CMA and the California Hospital Association toward improving
the peer review system. Currently, the peer review system
works very well in most facilities, but it can be open to
manipulation and unreasonably delay in others. AB 655 seeks
to improve the peer review system in California and ensure
that quality health care is being provided to patients. This
bill helps to create an environment more conducive to peer
review through increased transparency which, ultimately,
improves the quality of care provided to patients. AB 655
limits the ability of physicians from moving to the next
hospital and avoiding the peer review process.
2. This bill extends existing immunity from liability for peer
review bodies that share information as required by this bill
This bill seeks to promote the sharing of information between
peer review committees to further assist hospitals to have the
information they need before hiring a physician who may have had
adverse action taken against him or her, either voluntarily or
not, for medical disciplinary reason or cause. To that end,
this bill would provide that a peer review body responding to
the request for information by another peer review body is not
subject to civil or criminal liability if they acted in good
faith in providing that information. This bill would also
provide that a responding peer review body would not be
obligated to provide any information requested unless the
licentiate releases the peer review body, its members, and the
health care entity from liability for the disclosure of
information in compliance with that section.
a. Extending limited immunity to the sharing of relevant
peer review information
Although immunity provisions are never preferable because
they, by their nature, prevent an injured party from seeking a
particular type of recovery, the immunity provisions proposed
by this bill may arguably be appropriate due to the nature of
peer review bodies and the associated benefits to patients.
As background, courts in the 1960s began to impose liability
on hospitals and health corporations for negligence in the
selection and supervision of medical staff, based on a
hospital's duty to the patient which was premised upon
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patients' necessary reliance on hospitals to monitor the
quality of care rendered in their facilities. (The Health
Care Quality Improvement Act of 1986: Its History, Provisions,
Applications, and Implications (1990) 16 Am. J. L. and Med.
455, 458-459.) As a result, hospital boards delegated
physician review responsibilities to peer review committees to
shield themselves from corporate liability. Physicians,
however, would retaliate against action taken against them by
peer review groups by filing suit against the hospital's board
directors, trustees, and individual physicians on peer review
committees. (Id. at 461.) In response to these suits and to
support the ability of peer review committees to carry out
their intended functions, states began to pass legislation to
provide some measure of immunity to peer review members.
(Id.)
California's existing law provides limited immunity for peer
review groups, and this bill would extend similar immunity to
peer review groups who share information with another peer
review group.<1> By requiring sharing of peer review
information, however, this bill would potentially open the
possibility of new claims against hospitals and their peer
review staff. While, as noted above, immunity provisions are
generally not preferable, the benefits to patients as a result
of the proposed sharing of information potentially outweigh
the inherent costs in immunizing the good faith sharing of
information regarding licentiates.
--------------------------
<1> For example, Civil Code Section 43.97 specifically
provides that there shall be no monetary liability on the part
of, and no cause of action or damages other than economic or
pecuniary damages, shall rise against a hospital for any
action taken upon the recommendation of its medical staff, or
against any other person or organization for any action taken,
or restriction imposed, and required to be reported pursuant
to Section 805 of the Business and Professions Code, if it is
reported in accordance with that section. This immunity from
monetary liability, however, does not apply to an action
knowingly and intentionally taken for the purpose of injury a
person affected by the action or infringing upon a person's
rights. Existing law also already provides that no person
shall incur any civil or criminal liability as the result of
making any report required by Section 805. (Bus. & Prof. Code
Sec. 805(j).)
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Committee staff also notes the similarity between the immunity
provided in existing law, requiring that there be no action
knowingly and intentionally taken for the purpose of injury or
infringing upon a person's rights, and the first provision of
immunity from civil and criminal liability under this bill,
which is expressly qualified by the statement "acting in good
faith," thereby limiting the scenarios under which that
immunity from civil or criminal liability could be claimed.
In addition, the second immunity provision, providing that the
licentiate must release the responding peer review body, its
members, and the health care entity from liability for the
disclosure of information in compliance with this section,
while not expressly limiting the immunity to actions in good
faith, arguably still would be limited as such in practice on
the basis that the section does not authorize the release of
non-relevant information or provide for immunity from bad
faith acts.
Committee staff also notes the importance of the licentiate
providing a release from liability, as the information
contained in those records can be confidential and personal to
the licentiate. If he or she decides not to do so, and
thereby prevents release of those records, it is foreseeable
that a hospital otherwise wishing to hire that physician will
refrain from doing so. However, these decisions are within
the rights of both the physician and the hospital, and the
function of peer review would arguably still be served by
allowing for hospitals to make more informed choices where a
physician does in fact allow for the release of records.
b. Potential release of patient information within peer
review documents
By providing that a responding peer review body is immune from
any civil or criminal liability that may arise from providing
information to the requesting peer review body acting if the
responding peer review body acts in good faith, this bill
would protect a peer review body and its members from
liability that might arise from the accidental release of a
patient's information.
Peer review documents, having to do in part with the review of
a licentiate's treatment of a patient, may contain information
about the patient, his or her condition, and as his or her
treatment, as that information (absent the patient's name or
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other identifying information) would be pertinent to the
outcome of the peer review proceedings. Such information is
confidential.
Addressing this sensitivity, this bill defines "relevant peer
review information" to limit the scope of what can be shared,
limits what can be shared with the protections of immunity
from liability, and requires identifiable information of
anyone not the licentiate to be removed from the shared
information. To otherwise require further restrictions, such
as requiring all patient information to be redacted within
peer review documents, would arguably defeat the purpose of
this bill, which is to give hospitals necessary information to
better decide whether to hire a physician whose professional
conduct or competence was the subject of an 805 report. To be
able to properly assess whether the conduct or competence at
hand rises is such that warrants refusing to hire the
physician, whether it perhaps simply warrants limiting staff
privileges, or whether a second chance is justified under the
circumstances-the facts of the case as determined by the peer
review are necessarily relevant.
3. This bill requires the requesting peer review body to
indemnify the peer review body providing it with information
as required by this bill
This bill would provide that before a responding party releases
any information as otherwise required by the bill, the peer
review body requesting the release of that information must,
upon request, sign a mutually agreeable peer review sharing
agreement with the peer review body, and must indemnify the
responding peer review body for any and all claims, demands,
liabilities, losses, damages, costs, and expenses, including any
reasonable attorney's fees, that result, directly or indirectly,
from the receiving body's improper release or disclosure of the
shared information.
The result of this provision would be an operative immunity for
the peer review body providing that information to them (the
responding peer review body). At the same time, the bill would
not controvert a licentiate's or other injured party's ability
to seek legal redress against the peer review body who had
requested that information be shared with them and then
improperly released or disclosed that information. Given that
the responding peer review body could not control the actions of
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the requesting peer review, and that the information would not
have been released by the responding peer review body but for
the request made and the legal requirement to produce that
information requested, this indemnity provision does not appear
unreasonable.
Public policy would arguably support placing the onus of
defending litigation or claims for injuries and the
responsibility of associated costs from that litigation or claim
which arose out of the improper release or disclosure of peer
review information by the requesting peer review body, on the
requesting peer review body. Such an indemnification provision
would arguably also prevent any delays of settlements or
judgments being paid to the injured party because of
cross-complaints or lengthy litigation between the peer review
bodies involved.
4. This bill ensures any information that is shared as a
result of the bill remains confidential and nondiscoverable as
otherwise provided for under existing law
This bill would grant to the responding peer review body all the
confidentiality protections and privileges provided by law as to
the information provided to another peer review body pursuant to
this bill. Separately, this bill would also mandate that
information produced by a peer review body pursuant to the
requirements of the bill be used solely for peer review purposes
by the requesting peer review body. Additionally, it would
prohibit the discovery of that information to the extent
provided for in specified Evidence Code sections or other
applicable provisions of law.
Existing law relating to peer review already provides for the
confidentiality of peer review information (see Bus. & Prof.
Code Sec. 800(c) and 5 U.S.C. Sec. 552(a)) and provides that,
generally, information contained in written records of
interviews, reports, statements or committee memoranda are not
admissible even if discoverable, and that the records of a peer
review body are immune from discovery (see Evid. Code Secs.
1156.1 and 1157). Evidence Code Section 1157, specifically,
represents a legislative choice between competing public
concerns and embraces the goal of medical staff candor in
appraising their peers at the cost of impairing a plaintiff's
access to evidence revealing the competency of the hospital's
staff. That section, with several exceptions, bars discovery of
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reports and other documents generated during peer review of care
rendered by certain health care professionals in an effort to
encourage candor by ensuring a measure of confidentiality. (See
Deering's Ann. (2010) Evid. Code Sec. 1157.)
Committee staff notes the importance of ensuring the continued
confidentiality and immunity from discovery in making the
sharing of such records between peer review bodies practicable
and advantageous. From a public policy standpoint, if a party
can simply discover the records of a responding peer review body
or get access to those records from the receiving peer review
body, existing provisions that seek to protect these records
from discovery and to ensure their confidentiality would be
undermined. Without these types of assurances, any candor of the
peer review process would quickly dissipate due to fear that a
later request for peer review information pursuant to this bill
would provide an alternate route to obtaining information that
would otherwise be confidential and not discoverable. In order
to ensure that the production of these peer review documents is
not deemed a waiver of confidentiality or otherwise controvert
the immunity from discovery by allowing for the sharing of peer
review information between peer review bodies, this bill applies
confidentiality and discovery provisions to shared information
as well.
5. AB 1235 veto message
Governor Schwarzenegger vetoed a similar bill, AB 1235, last
year. In his veto message, the governor stated:
It is with sincere disappointment that I am unable to sign
this Ýbill]. I vetoed two bills on this subject last year,
with a clear message for the interested stakeholders to work
together . . . 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. . . . 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 yearÝ,] 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.
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The CHA supports this version of the bill based on compromise
reached with the CMA.
Support : California Hospital Association (CHA)
Opposition : None Known
HISTORY
Source : California Medical Association (CMA)
Related Pending Legislation : SB 146 (Wyland), among other
things, include professional clinical counselors in the
definition of "licentiates." This bill is the Assembly
Judiciary Committee.
Prior Legislation :
AB 1235 (Hayashi, 2010), See Background.
SB 700 (Negrete McLeod, Ch. 505, Stats. 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.
SB 58 (Aanestad, 2009), in part, would have required a peer
review body to annually report its activities to the MBC;
defined external peer review and required it in specific
circumstances; and established an early detection and resolution
program in lieu of an 805 report. SB 58 was held in the Senate
Appropriations Committee suspense file.
SB 820 (Negrete McLeod, 2009), contained many of the same
provisions of SB 700 (Negrete McLeod, Ch. 505, Stats. 2010). SB
820 was vetoed.
AB 120 (Hayashi, 2009), was identical to AB 1235 but was made
contingent on SB 820's enactment, which was vetoed.
Prior Vote :
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Senate Committee on Business, Professions & Economic Development
(Ayes 9, Noes 0)
Assembly Floor (Ayes 70, Noes 0)
Assembly Committee on Business, Professions & Consumer
Protection (Ayes 9, Noes 0)
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