BILL ANALYSIS
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|Hearing Date:March 22, 2010 |Bill No:AB |
| |1235 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND
ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 1235Author:Hayashi
As Amended:February 16, 2010 Fiscal: No
SUBJECT: Healing arts: peer review.
SUMMARY: Makes changes to the due process requirements for
physicians and surgeons who are subject to a final proposed action of
a peer review body 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.
NOTE : This measure is a new bill and was amended on the Senator
Floor. It was referred to this Committee pursuant to Rule 29.10 by
the Senate Rules Committee. However, this measure is identical to a
bill this Committee heard last year, AB 120 (Hayashi) which was heard
by this Committee on July 6, 2009, and was passed out of this
Committee by a vote of 9-0. Because this measure is considered as a
new bill, the Committee may by a vote of the majority either return
this bill with no further amendments to the Senate floor for
consideration (a motion to "do pass"), amend the bill in Committee as
needed with a motion to "do pass as amended," or hold this measure in
Committee.
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 (NPDB), 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
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to state without disclosure or discovery of previous damaging or
incompetent performance.)
2)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.
3)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.
4) Defines a 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.
5)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:
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.
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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:
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.
6)Requires also for 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.
7)Defines the following terms:
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
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delivery of patient care.
8)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.
9)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.
10)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.
11)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.
12)Specifies that a willful failure to file an 805 report by any
person who is designated or otherwise required by law to file is
punishable by a fine not to exceed one hundred thousand dollars
($100,000) per violation; and a ny 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.
13)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:
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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.
14)Specifies findings and declarations on the reasons California
opted out of some of the provisions of the federal HCQIA. Further
states that peer review be performed by
licentiates, and specifies the duties of the governing bodies of
acute care hospitals in the peer review process.
15)States that a licentiate who is the subject of a final proposed
action of a peer review body for which a report is required to be
filed under Section 805 shall be entitled to written notice of the
final proposed action. Requires the written notice to include the
following information:
a) That an action against the licentiate has been proposed by
the peer review body which, if adopted, shall be taken and
reported pursuant to Section 805.
b) The final proposed action.
c) That the licentiate has the right to request a hearing on the
final proposed action
d) The time limit, within which to request a hearing.
16)Specifies that if a hearing is requested on a timely basis, the
peer review body shall give the licentiate a written notice stating
all of the following: the reasons for the final proposed action
taken or recommended, including the acts of omissions with which
the licentiate is charged; and the place, time, and date of the
hearing.
17)Defines final proposed action as the final decision or
recommendation of the peer review body after an informal
investigatory activity or prehearing meetings.
18)Specifies certain hearing requirements, if a licentiate timely
requests a hearing concerning a final proposed action, including
the following:
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a) The hearing to be held, as determined by the peer review
body, before a trier of fact, which shall be an arbitrator/s
selected by a process mutually acceptable to all the parties or
before a panel of unbiased individuals who shall gain no
financial benefit from the outcome;
b) If a hearing officer is selected, the hearing officer shall
gain no financial benefit from the outcome, shall not act as a
prosecuting officer or advocate, and not entitled to vote.
19)Specifies that the licentiate has a right to the following during
a hearing: The right to voir dire the panel members and any
hearing officer and the right to challenge the impartiality of any
member or hearing officer.
20)Specifies that both parties have a right to the following: a)
Inspect and copy documents; b) all information made available to
the trier of fact; c) To have a record made of the proceedings; d)
To call, examine and cross-examine witnesses; e)To present and
rebut evidence; and, f) To submit a written statement at the close
of the hearing.
21)Specifies who has the burden of presenting evidence and proof
during a hearing.
22)States that upon completion of a hearing concerning a final
proposed action for which an 805 report is required to be filed,
the licentiate and the peer review body have the right to receive
all of the following:
a) A written decision of the trier of fact, including findings
of fact, and a conclusion, as specified.
b) A written explanation of the procedure for appeal of the
decision, as specified.
c) The right to appear and respond.
d) The right to be represented by an attorney or any other
representative designated by the party.
e) The right to receive the written decision of the appellate
body.
23)Allows a peer review body to immediately suspend or restrict
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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.
24)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.
25)Requires the MBC to post on the Internet specified information
regarding licensed physicians, including information relating to
the status of a 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.
This bill:
1)Finds and declares that it is essential that California's peer
review system generate a culture of trust and safety so that health
care practitioners will participate robustly in the process by
engaging in critically important safety activities, such as
reporting incidents they believe to reflect substandard care or
unprofessional conduct and serving on peer review, quality
assurance, and other committees necessary to protect patients.
2)States further that the intent of the Legislature that peer review
bodies be actively involved in the measurement, assessment, and
improvement of quality and that there be appropriate oversight by
the peer review bodies to ensure the timely resolution of issues.
3)States that it is the public policy of the state that licentiates
who may be providing substandard of care be subject to the peer
review hearing and reporting process, as specified.
4)Indicates that to ensure that the peer review process is not
circumvented, prohibits requiring a member of a medical or
professional staff, by contract or otherwise, from altering or
surrendering staff privileges, status, or membership solely due to
the termination of a contract between that member and a health care
facility. States, however, that with respect to services that may
only be provided by members who have, or who are members of a
medical group that have a current exclusive contract for those
identified services, termination of the contract or termination of
the member's employment by the medical group holding the contract,
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may result in the member's ineligibility to provide the services
covered by the contract.
5)Entitles a peer review body of a health care facility to review and
make timely recommendations to the governing body of the facility
and its designee regarding quality considerations relating to
clinical services 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. Requires the
governing body to give great weight to the recommendations.
6)States that the provisions contained in items #3) through # 5) do
not impair a governing body's ability to take action against a
licentiate, as specified.
7)States that it is 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.
8)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.
c) To promote impartial peer review.
9)Defines external peer review as peer review provided by licentiates
who do not practice in the same health care facility as the
licentiate under review, who are impartial, and who have the
necessary expertise in the clinical procedure or area under review.
10)Finds and declares that the sharing of information between peer
review bodies is essential to protect the public health.
11)Requires a peer review body, upon receipt of reasonable copying
and processing costs, to respond to the request of another peer
review body and produce the records reasonably requested concerning
a licentiate under review to the extent not otherwise prohibited by
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state or federal law. Provides that the responding peer review
body has the discretion whether to produce minutes from peer review
body meetings. States that the records produced by a peer review
body pursuant to this provision will be used solely for peer review
purposes and not subject to discovery, as specified. Entitles the
peer review body responding to the request to all confidentiality
protections and privileges provided by law as to the information
and records disclosed pursuant to this provision.
12)States that a licentiate under review by a peer review body
requesting records pursuant to item # 11) above must release the
responding peer review, its members, and the health care entity for
which the responding peer review body conducts peer review, from
liability for the disclosure of records, and the contents of the
records, as specified. Provides that if a licentiate does not
provide a reasonable release that is acceptable to the responding
peer review body, the responding peer review body is not obligated
to produce records.
13)Requires the following of a hearing officer :
a) Disclose all actual and potential conflicts of interest
within the last five years reasonably known to the hearing
officer.
b) Be an attorney licensed to practice law in the State of
California. This provision does not apply to a hearing held
before a panel of dental professional peer review body.
c) States that unless agreed by the parties, an attorney from a
firm utilized by the hospital, the medical staff, or the
involved licentiate within the preceding two years is not
eligible to serve as a hearing officer.
d) Endeavor to ensure that all parties maintain proper decorum
and have a reasonable opportunity to be heard and present all
relevant oral and documentary evidence. Entitles the hearing
officer to determine the order of, or procedure for, presenting
evidence and argument during the hearing and have the authority
and discretion to make all rulings on questions pertaining to
matters of law, procedure, or the admissibility of evidence.
Further requires the hearing officer to take all appropriate
steps to ensure a timely resolution of the hearing, but may not
terminate the hearing process, unless in the case of flagrant
noncompliance with the procedural rules governing the hearing
process or egregious interference with the orderly conduct of
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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 peer review body.
14)Gives both parties the right to be represented by an attorney of
the party's choice at the party's expense.
15)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 not to
be represented by an attorney. States that unless otherwise agreed
by the parties, this election is binding.
16)States that if a licentiate does not provide the written notice,
as specified within the required timeframe, the peer review body
may be represented by an attorney even if the licentiate later
elects not to be represented by an attorney.
FISCAL EFFECT: This bill has been keyed "nonfiscal" by Legislative
Counsel.
COMMENTS:
1.Purpose. According to the California Medical Association (CMA),
the Sponsor of this measure, this bill will improve the peer review
system in California to ensure quality health care is being
provided to patients. CMA points out that the peer review system
works very well in most facilities, but it can be open to
manipulation and unreasonable delay in others. According to the
Author, this bill promotes peer review in a number of ways. For
example, it provides better tools to ensure that peer review bodies
have adequate information concerning licentiates by mandating the
sharing of peer review records. It also prevents schemes that
circumvent the peer review process through contractual
arrangements, and provides increased fairness for the licentiate
under review, making it more likely that all physicians will
participate in the peer review system.
2.Background.
a. What is Peer Review? 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
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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.
b. 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 participate
in peer review, and created the NPDB. The National Practitioner
Data Bank (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
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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. On May 27, 2009, the Public
Citizen released a report on the failure of hospitals to
discipline and report substandard physicians entitled "Hospitals
Drop the Ball on Physician Oversight Failure of Hospitals to
Discipline and Report Doctors Endanger Patients." The report
indicated that although federal law requires hospitals to report
to a national databank physicians whose admitting privileges are
revoked or restricted for more than 30 days, hospitals fail to
report and take appropriate actions against physicians
practicing substandard care. The report pointed out that this
failure deprives state medical boards of critical information
needed for regulatory oversight and creates the potential for
patient harm. It should be noted that this report is consistent
with findings that have been made since tracking of reporting
since 1990. 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 NPDB 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 "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.
c. 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
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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 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 138 805 reports in 2007-2008
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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.
d. 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
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.
e. 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
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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 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 of all practitioners and not just those
with performance issues.
f. Lumetra Report - Comprehensive Study of Peer Review in
California.
SB 231 (Figueroa) Chapter 674, Statutes of 2005, required the MBC
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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: 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; 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, healthcare 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 |Populati |Final |% of |
| |on |Sample |Population |
|----------------+----------+-----------+---------------|
|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% |
| | | | |
-------------------------------------------------------
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 have 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 regarding 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
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physicians would never be subject 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.
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 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 , CMA ,
California Ambulatory Surgery Association , various hospitals
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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. It should be noted that this bill creates an early
reporting mechanism to the MBC of specific cases, similar to the
concept specified during the hearing. 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
independent of a hospital's investigation.
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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 Last Year.
a. SB 58 (Aanestad) 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 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.
b. SB 700 (Negrete McLeod) made various changes relating to the
peer review and the 805 process. Specifically, SB 700 required
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; prohibited 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 found that the peer review resulting in the
disciplinary action was conducted in bad faith and the licensee
notified the board of such finding; required 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
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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: the licentiate departed
from the standard of care; the licentiate suffered from mental
illness or substance abuse; or, the licentiate engaged in sexual
misconduct. SB 700 was held on the inactive file on the Senate
floor and on January 26, 2010 was amended with language from SB
820.
c. SB 820 (Negrete McLeod) 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 they taken against a physician.
The reasons for the peer review body of a health facility,
clinic, etc. to make a confidential report to the Board were
clarified under this measure. The peer review body would have
to report if a final decision was reached that the physician and
surgeon was: (1) incompetent or there was gross or repeated
deviation from the standard of care involving death or serious
bodily injury to one or more patients, such that the physician
and surgeon poses a risk to patient safety; (2) drug of alcohol
abuse by a physician and surgeon involving death or serious
bodily injury to a patient; (3) repeated act of excessive
prescribing or furnishing of drugs; (4) was found to be involved
in sexual misconduct with a patient; or, (5) had substance
abuse or mental health problems. Other changes were made to
address some of the concerns of the California Hospital
Association. This measure was vetoed by the Governor. The
Governor indicated in his veto message the following:
"Peer review is an extremely important part of assuring the
integrity and quality of care provided in our California
hospitals. Unfortunately, the peer review process has also been
criticized over the years because it increases litigious
behavior, and lacks transparency and responsiveness. While
perhaps well-intentioned, this bill does not provide a solution
to the problem, but rather, jeopardizes the entire process by
narrowing the reporting element to "serious" cases of
incompetence involving only patients. How is this good policy?
For example, what about a physician that engages in egregious
behavior against hospital staff or even other physicians? How
does this serve the public by keeping these reports from the
Medical Board?
This bill also fails to align with recent Joint Commission
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requirements that hospitals adopt a "zero tolerance" policy
towards physicians engaging in disruptive behavior in their
interactions with nurses and other hospital staff. A peer
review body should not be limited from acting on this type of
behavior and in fact, should be encouraged to act more swiftly.
I believe the peer review process is worth preserving. It does
however, deserve to be thoroughly reviewed and reworked to
ensure that inappropriate behavior of any kind is immediately
acted upon. I would ask that the author and interested
stakeholders work with my Department of Consumer Affairs to
streamline and improve the peer review process in order to
increase its effectiveness in taking action against providers
that jeopardize quality or safety measures."
d. AB 120 (Hayashi) is identical to this measure (AB 1235) and
the only difference is that AB 120 from last year was made
contingent on the enactment of SB 820 before it left this
Committee. Since SB 820 was vetoed by the Governor, the
Governor was unable to sign AB 120 and indicated in his veto
message the following:
"I have encouraged the authors and interested stakeholders to work
with my Department of Consumer Affairs on streamlining and
improving the peer review process in a way that increases the
overall effectiveness and reporting mechanisms to the Medical
Board of California."
e. AB 834 (Solorio) 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.
6.Similar Legislation This Year. SB 700 (Negrete McLeod), as
indicated, was amended on January 26, 2010, on the Senator Floor
with language that is identical to SB 820 which was vetoed by the
Governor. This measure is pending in the Assembly Business and
Professions Committee.
7.Arguments in Opposition. The California Hospital Association (CHA)
has taken an "Oppose Unless Amended" position on this measure and
has a number of suggested amendments to be made to this bill.
a. CHA objects to statutory provisions in Section 2 of this bill
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that prevent the termination of privileges due to the
termination of a contract. For reasons stated, the CHA would
like this provision removed from the bill.
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b. CHA opposes any provisions that would permit a peer review
body or the medical staff to intervene or undermine the ability
of a governing body of a facility to enter into contracts for
the provisions of services at that facility. For this reason,
CHA prefers that Section 3 of the bill, which requires the
governing body to give "great weight" to the recommendations of
the peer review body regarding quality considerations of
licentiates with whom the facility contracts, be modified to
allow peer review bodies to provide "timely advice" to the
governing body so they may give "consideration" but not "great
weight to that advice.
c. CHA is also opposed to Section 4 of the bill which has a
provision requiring the mandatory sharing of peer review records
between peer review bodies. For reasons stated, the CHA would
like this provision removed from the bill.
d. CHA is also concerned with the definition of "external peer
review" as "peer review provided by licentiates who do not
practice in the same health care facility as the licentiate
under review, who are impartial, and who have the necessary
expertise in the clinical procedure or area under review." CHA
argues that if external peer review is to be defined that the
term "licentiates" should be broadened to accommodate
out-of-state experts, as hospitals frequently call on these
experts or an out-of-state peer review consulting service.
e. CHA is opposed to the restriction in Section 5 of the bill
that would prohibit an attorney from a firm which has
represented a hospital or a peer review body within the prior
two years from serving as a hearing officer. CHA's concern can
be addressed by simply deleting the phrase "from a firm" in this
provision.
f. CHA has concerns with the provision in Section 5 regarding
the decision by the hearing officer to terminate the hearing
process. CHA prefers that the sentence which allows termination
of the hearing process for specified circumstances be deleted
and that the provision be amended to state that the hearing
officer cannot independently terminate the hearing process. CHA
additionally would like to include a sentence that states that
"the hearing panel may terminate the hearing on its own
initiative or upon recommendation of the hearing officer." They
argue that this is consistent with current case law.
g. CHA is opposed to the change in existing law by Section 6
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that would allow both parties to a peer review hearing to be
represented by an attorney of the party's choice, at the party's
expense. CHA sees no compelling reason to change current law
whereby this issue is addressed by the Medical Staff Bylaws.
SUPPORT AND OPPOSITION:
Support:
California Medical Association (Sponsor)
Opposition:
None on file as of March 17, 2010.
Oppose Unless Amended:
California Hospital Association
Consultant:Bill Gage