BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1235|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1235
Author: Hayashi (D)
Amended: 2/16/10 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-0, 3/22/10
AYES: Negrete McLeod, Wyland, Aanestad, Correa, Florez,
Oropeza, Walters, Yee
NO VOTE RECORDED: Calderon
SUBJECT : Healing arts: peer review
SOURCE : California Medical Association
DIGEST : This bill 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 an 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 bill is nearly identical to AB 120 (Hayashi)
which passed the Senate on August 17, 2009, with a
vote of 35-0 (Consent). The only difference is that
AB 120 was contingent on the enactment of SB 820
(Negrete McLeod). SB 820 was vetoed by the Governor.
CONTINUED
AB 1235
Page
2
ANALYSIS :
Existing law:
1. Provides for the professional review of specified
healing arts licentiates through a peer review process.
Existing law defines the term "peer review body" as
including a medical or professional staff of any health
care facility or clinic licensed by the Department of
Public Health.
2. Requires specified persons are to file a report,
designated as an "805 report," with a licensing board
within 15 days after a specified action is taken against
a person licensed by that board. Existing law provides
various due process rights for licentiates who are the
subject of a final proposed disciplinary action of a
peer review body, including authorizing a licentiate to
request a hearing concerning that action.
3.Requires the Medical Board of California (MBC) to
maintain an 805 report for a period of three years after
receipt.
4.Authorizes the MBC, the Osteopathic Medical Board of
California, and the Dental Board of California to
inspect and copy certain documents in the record of any
disciplinary proceeding resulting in action that is
required to be reported in an 805 report.
5.Requires specified healing arts boards to maintain a
central file of their licensees containing, among other
things, disciplinary information reported through 805
reports.
6.Requires the MBC, the Osteopathic Medical Board of
California, and the California Board of Podiatric
Medicine to disclose an 805 report to specified health
care entities and to disclose certain hospital
disciplinary actions to inquiring members of the public.
Existing law also requires the MBC to post hospital
disciplinary actions regarding its licensees on the
Internet.
CONTINUED
AB 1235
Page
3
This bill:
1. 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, may result in the member's
ineligibility to provide the services covered by the
contract.
2. 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.
3. 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.
4. 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.
5. 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, as specified.
6. 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
CONTINUED
AB 1235
Page
4
impartial, and who have the necessary expertise in the
clinical procedure or area under review.
7. Finds and declares that the sharing of information
between peer review bodies is essential to protect the
public health.
8. 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 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.
9. States that a licentiate under review by a peer review
body requesting records pursuant to item #8 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.
10.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.
CONTINUED
AB 1235
Page
5
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
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.
11.Gives both parties the right to be represented by an
attorney of the party's choice at the party's expense.
12.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.
13.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.
Background
CONTINUED
AB 1235
Page
6
MBC and 805 Peer Review Reporting Requirements . MBC is
responsible for regulating and licensing physicians in
California. MBC revokes, suspends, or limits the practice
of any physicians and surgeons. In exercising regulatory
authority over physicians and surgeons MBC has as its
highest priority the protection of the public. Currently,
MBC regulates 125,612 physicians and surgeons, of which
97,878 reside in California. MBC investigates complaints
against physicians and adopts final decisions in
disciplinary matters against physicians and surgeons.
Section 805 requires any peer review body to report certain
information to 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
2007-08 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.
Similar Legislation
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
MBC on its peer review activities; defined an external peer
CONTINUED
AB 1235
Page
7
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.
SB 700 (Negrete McLeod) made various changes relating to
the peer review and the 805 process. Specifically, SB 700
required 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 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.
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 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 MBC were clarified under this bill. The peer review
body would have to report if a final decision was reached
that the physician and surgeon (1) was incompetent or there
was gross or repeated deviation from the standard of care
involving death or serious bodily injury to one or more
CONTINUED
AB 1235
Page
8
patients, such that the physician and surgeon poses a risk
to patient safety, (2) abused drugs or alcohol resulting in
death or serious bodily injury to a patient, (3) repeated
acts 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. The
Governor vetoed the bill. His veto message indicated 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 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."
CONTINUED
AB 1235
Page
9
AB 120 (Hayashi) is identical to 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 the
Senate Business, Professions and Economic Development
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."
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. It made changes
relating to the qualifications of a hearing officer. The
bill was held in the Assembly Business and Professions
Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 3/23/10)
California Medical Association (source)
OPPOSITION : (Verified 3/23/10)
California Hospital Association
Cedars-Sinai Hospital
ARGUMENTS IN SUPPORT : According to the California
Medical Association (CMA), the bill's sponsor, 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's
office, this bill promotes peer review in a number of ways.
For example, it provides better tools to ensure that peer
CONTINUED
AB 1235
Page
10
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.
ARGUMENTS IN OPPOSITION : The California Hospital
Association has taken an "Oppose Unless Amended" position
on this bill and has a number of suggested amendments to be
made to this bill.
JJA:mw 3/23/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED