BILL ANALYSIS
AB 120
Page 1
ASSEMBLY THIRD READING
AB 120 (Hayashi)
As Amended June 1, 2009
Majority vote
BUSINESS & PROFESSIONS 11-0
-----------------------------------------------------------------
|Ayes:|Hayashi, Emmerson, | | |
| |Conway, Eng, Hernandez, | | |
| |Nava, Niello, | | |
| |John A. Perez, Price, | | |
| |Ruskin, Smyth | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
-----------------------------------------------------------------
SUMMARY : Amends the medical peer review process by recommending
external peer review in limited circumstances, requires peer
review bodies to share information, establishes the duties of a
hearing officer, and sets parameters for attorney
representation. Specifically, this bill :
1)Declares the public policy of the state that healthcare
licentiates who may be providing substandard care be subject
to the peer review hearing and reporting process set forth, as
specified.
2)Prohibits a member of a medical or professional staff, by
contract or otherwise, 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 to ensure that the peer review process is
not circumvented.
3)States that with respect to services that may only be provided
by members who have, or who are members of a medical group
that has a current exclusive contract for certain identified
services, termination of the contract, or termination of the
member's employment by the medical group holding the contract,
may result in the member's ineligibility to provide the
services covered by the contract.
AB 120
Page 2
4)Requires the peer review body of a health care facility to be
entitled to review and make recommendations to the governing
body of the facility regarding quality considerations whenever
the selection, performance evaluation, or any change in the
retention or replacement of licentiates with whom the health
care facility has a contract occurs, and requires the
governing body to give great weight to these recommendations.
5)Preserves the right of a governing body's ability to take
action against a licentiate, as specified.
6)Declares the policy of the state that in certain limited
circumstances, external peer review may be necessary to
promote and protect patient care in order to eliminate
perceived bias, obtain needed medical expertise, or respond to
other particular circumstances.
7)Encourages a peer review body to obtain external peer review
for the evaluation or investigation of an applicant, privilege
holder, or member of the medical staff in the following
circumstances:
a) Committee or department reviews that could affect a
licentiate's membership or privileges do not provide a
sufficiently clear basis for action or inaction;
b) No current medical staff member can provide the
necessary expertise in the clinical procedure or area under
review; and,
c) To promote impartial peer review.
8)Requires a peer review body to respond to the reasonable
request of another peer review body and produce the records
requested concerning a licentiate under review to the extent
not otherwise prohibited by state or federal law, upon
AB 120
Page 3
reasonable receipt of copying costs.
9)Prohibits the records produced from being subject to discovery
to the extent provided in Section 1156.1 and 1157 of the
Evidence Code, and any other applicable sections of law.
10)Requires the peer review body responding to the request to be
entitled to all confidentiality protections and privileges
provided by law as to the information and records disclosed.
11)Requires a hearing be held, as determined by the peer review
body, before a trier of fact, which shall be an arbitrator or
arbitrators selected by a process mutually acceptable to the
licentiate and the peer review body, or before a panel of
unbiased individuals, as specified.
12)Prohibits a hearing officer from gaining direct financial
benefit from the outcome of a hearing, requires the hearing
officer to disclose all actual and potential conflicts of
interest within the last five years as reasonably known to the
hearing officer, prohibits the hearing officer from acting as
a prosecuting officer or advocate, and prohibits the hearing
officer from voting.
13)Requires the hearing officer to be an attorney licensed to
practice law in the State of California. Except as otherwise
agreed by the parties, attorneys from a firm utilized by the
hospital, the medical staff, or the involved licentiate within
the preceding two years shall not be eligible.
14)Requires that the timeframe within which a hearing must
commence, as specified, be tolled for purposes of complying
with the process of selecting a hearing officer, provided the
AB 120
Page 4
parties are engaged in a good faith attempt to select a
mutually acceptable hearing officer.
15)Requires the hearing officer to endeavor to ensure that all
parties maintain proper decorum and have reasonable
opportunity to be heard and present all relevant oral and
documentary evidence.
16)Requires the hearing officer to be entitled to determine the
order of, or procedure for, presenting evidence and argument
during the hearing and shall have the authority and discretion
to make all rulings on questions pertaining to matters of law,
procedure, or the admissibility of evidence.
17)Requires the hearing officer to take all appropriate steps to
ensure a timely resolution of the hearing, but may not
terminate the hearing process. However, in the case of
flagrant noncompliance with the procedural rules governing the
hearing process or egregious interference with the orderly
conduct of the hearing, the hearing officer may recommend that
the hearing panel terminate the hearing, provided that this
activity is authorized by the applicable bylaws of the medical
staff.
18)States that during a hearing concerning a final proposed
action for which reporting is required to be filed, as
specified, both parties shall have the right to be represented
by an attorney of the party's choice at the party's expense,
however:
a) Prohibits a peer review body from being represented by
an attorney if the licentiate notifies the peer review body
in writing no later than 15 days prior to the hearing that
he or she has elected to not be represented by an attorney.
Except as otherwise agreed to by the parties, this
AB 120
Page 5
election shall be binding;
b) If the licentiate does not provide the written notice
described within the required timeframe, the peer review
body may be represented by an attorney even if the
licentiate later elects to not be represented by an
attorney; and,
c) Dental professional society peer review bodies may be
represented by an attorney even if the licentiate declines
to be represented by an attorney.
19)Defines "external peer review" as peer review provided by
licentiates who are not members of the peer review body, who
are impartial, and who have the necessary expertise in the
clinical procedure or area under review.
20)Makes legislative findings and declarations.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal.
COMMENTS : According to the author's office, "This bill will
improve the peer review system in California to ensure quality
health care is being provided to patients. Currently, the peer
review system can be open to manipulation and unreasonable
delay. This bill will provide for a more effective peer review
process in which physicians and surgeons are continuously
monitored and assessed to improve the quality of care that is
provided to patients."
Medical peer review is the process by which a professional
review body considers whether a practitioner's clinical
privileges or membership in a professional society will be
adversely affected by a physician's competence or professional
conduct. The foremost objective of the medical peer review
process is the promotion of the highest quality of medical care
as well as patient safety.
AB 120
Page 6
Variations exist on the procedures, commencement, practice and
subject of peer review. All medical entities set their own
standards for peer review, some more rigorous than others, and
some adhere to them more meticulously than others. The peer
review process is often lengthy and can take months or even
years. Although peer review is supposed to be an objective
review of professional skills, 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.
California law entitles a licentiate who is the subject of a
final action of a peer review body to specified due process
rights. Under Business and Professions Code Section 809, a
physician about whom an 805 report may be filed is entitled to
notice of the proposed action and an opportunity for a hearing
with full procedural rights, including discovery, examination of
witnesses, formal record of the proceedings and written
findings. A physician may contest the results of this hearing
with judicial review in Superior Court.
When a licensee is disciplined for a medical cause or reason by
a peer review committee, the MBC receives an 805 report so that
it may take appropriate action. According to the MBC in 2007,
it received 138 reports from a licensee pool of 125,612
physicians. 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.
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 the study to include a comprehensive description of the
various steps of, and decision makers in, the peer review
process; a survey of peer review cases to determine the
incidence of peer review; and an assessment of the cost of peer
review to licentiates. 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
AB 120
Page 7
the citizens of California."
The Lumetra Study focused heavily on the reporting process to
the MBC that follows peer review. This bill does not address
those issues, but it does attempt to resolve the report's
recommendation that the process be redesigned to afford for
greater fairness to the physician under review. One of the more
significant changes to current law is the selection process for
the 809 hearing officer; the bill affords for mutual agreement
of either the officer or a third party selection service, but if
this is not achieved, each side chooses candidates which are
ranked and chosen according to score, and in case of a tie, by
drawing lots.
Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301
FN: 0001336