BILL ANALYSIS
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|Hearing Date:April 20, 2009 |Bill No:SB |
| |700 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND
ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 700Author: Negrete McLeod
As Amended:April 13, 2009 Fiscal: Yes
SUBJECT: Healing arts: peer review.
SUMMARY: Makes various changes relating to the peer review
process in which a final proposed action may be imposed on a
licentiate, if certain conditions are met, 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. Requires the
Medical Board of California 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. Prohibits 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 finds that the peer
review resulting in the disciplinary action was conducted in bad
faith and the licensee notifies the board of such finding.
Requires 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.
Existing law:
1)Establishes the federal Health Care Quality Improvement Act
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(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 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.
States that the protection of the public is the highest
priority of the MBC in exercising its functions.
3)Requires the MBC, along with other specified health care
licensing boards, to create and maintain a central file of the
names of all persons who hold a license, certificate, or
similar authority. Requires the central file to be created
and maintained to provide an individual historical record for
each licensee and must include specified information including
the following: any conviction of a crime, any judgment or
settlement in excess of $3,000, any public complaints as
specified, and any disciplinary information, as specified.
States that the content of the central file that is not public
record under any other provision of law is confidential.
Allows a licensee to submit any exculpatory or explanatory
statements or other information to be included in the central
file.
4)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
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the purpose of reviewing the quality of professional care
provided by members or employees of that entity.
5) Defines a licentiate for purposes of item # 4) above, as a
physician and surgeon, doctor of podiatric medicine, clinical
psychologist, marriage and family therapist, clinical social
worker, or dentist.
6)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.
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
of 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.
7)Requires also for an 805 report to be filed within 15 days
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after the imposition of a summary suspension of staff
privileges, membership, or employment, if the summary
suspension remains in effect for over 14 days.
8)Defines the following terms:
a) Staff privileges as any arrangement under which a
licentiate is allowed to practice in or provide care for
patients in a health facility. Such arrangements include,
but are not limited to, full staff privileges, active staff
privileges, limited staff privileges, auxiliary staff
privileges, courtesy staff privileges, locum tenens
arrangements, and contractual arrangements to provide
professional services, including arrangements to provide
outpatient services.
b) Denial or termination of staff privileges, membership,
or employment includes failure or refusal to renew a
contract or to renew, extend, or reestablish any staff
privileges, if the action is based on medical disciplinary
cause or reason.
c) Medical disciplinary cause or reason as the aspect of a
licentiate's competence or professional conduct that is
reasonably likely to be detrimental to patient safety or to
the delivery of patient care.
9)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.
10)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.
11)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.
12)States that if another peer review body is required to file
an 805 report, a health care service plan is not required to
file a separate report with respect to action attributable to
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the same medical disciplinary cause or reason. Further
specifies that if the MBC or a licensing agency of another
state revokes or suspends, without a stay, the license of a
physician and surgeon, a peer review body is not required to
file an 805 report when it takes an action as a result of the
revocation or suspension.
13)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.
14)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.
15)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:
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.
16)Specifies findings and declarations on the reasons California
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opted out of some of the provisions of the federal HCQIA.
17)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.
18)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.
19)Defines final proposed action as the final decision or
recommendation of the peer review body after an informal
investigatory activity or prehearing meetings.
20)Specifies certain hearing requirements, if a licentiate
timely requests a hearing concerning a final proposed action,
including the following:
a) The hearing to be held, as determined 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.
21)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
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impartiality of any member or hearing officer.
22)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.
23)Specifies who has the burden of presenting evidence and proof
during a hearing.
24)Allows a peer review body to immediately suspend or restrict
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.
25)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.
26)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.
27)Requires, subject to specified limitations, any accusations
filed against a physician and surgeon be filed within three
years after the MBC discovers the act or omission alleged as
the grounds for disciplinary action, or within seven years
after the act or omission alleged as the grounds for
disciplinary action, whichever occurs first.
28)Requires the MBC, the Osteopathic Medical Board of
California, and the California Board of Podiatric Medicine to
disclose to an inquiring member of the public specific
information regarding enforcement actions taken against a
licensee.
This bill:
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1)Requires 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, and the licensee who is the
subject of the report notifies the MBC of such finding.
2)Prohibits the MBC, the OMBC, and the California Board of
Podiatric Medicine from disclosing to an inquiring member of
the public 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
finds that the peer review resulting in the disciplinary
action was conducted in bad faith and the licensee notifies
the board of the finding.
3)Defines peer review as a process in which a peer review body
reviews the basic qualifications, staff privileges,
employment, medical outcomes, and professional conduct of
licentiates to determine whether the licentiate may practice
or continue to practice in a health care facility, clinic, or
other setting providing medical services and, if so, to
determine the parameters of that practice.
4)Clarifies that the definition of peer review body includes any
clinic specified in the Health and Safety Code, and deletes
reference to licensed clinics.
5)Clarifies that if any of the following are imposed on a
licentiate as a result of an action by a peer review body: a)
a licentiate's application for staff privileges or membership
is denied or rejected for a medical disciplinary cause or
reason, b) a licentiate's membership, staff privileges, or
employment is terminated or revoked for a medical disciplinary
cause or reason, or c) 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,
an 805 report must be filed by the chief of staff or 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 with the relevant agency within
15 days after the effective date on any of the actions
specified above, regardless of whether a hearing has occurred,
as specified.
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6)Clarifies that if a licentiate undertakes any of the
following: a) resigns or takes a leave of absence from
membership, staff privileges, or employment;
b) withdraws or abandons his or her application for
membership, staff privileges, or employment; or c) withdraws
or abandons his or her request for renewal of membership,
staff privileges or employment after receiving notice of a
pending investigation initiated for a medical disciplinary
cause or reason after receiving notice that his or her
application for membership, staff privileges, or employment is
denied or will be denied for a medical disciplinary cause or
reason, the chief of staff or whoever is authorized under
existing law must file an 805 report within 15 days after the
licentiate takes the action.
7)Clarifies existing law by requiring an 805 report to be filed
within 15 days following the imposition of summary suspension
of staff privileges, membership, or employment, if the summary
suspension remains in effect for a period in excess of 14
days, regardless of whether a hearing has occurred, as
specified.
8)Requires an 805 report to be maintained electronically for
dissemination purposes for a period of three years after
receipt.
9)Requires 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:
a) The licentiate departed from the standard of care.
b) The licentiate suffered from mental illness or substance
abuse.
c) The licentiate engaged in sexual misconduct
10)Entitles the relevant agency, without subpoena, to inspect
and copy the following unredacted documents in the record of
any formal investigation required to be reported pursuant to
item # 9) above:
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a) Any statement of charges
b) Any document, medical chart, or exhibit.
c) Any opinions, findings, or conclusions;
d) Any peer review minutes or reports.
11)States that the information reported pursuant to item # 9)
above shall be kept confidential and not subject to discovery,
but the information may be reviewed, as specified, and may be
disclosed in any subsequent disciplinary hearing, as
specified.
12)Specifies that the report required by item # 9) above is in
addition to any other report currently required to be reported
under Section 805.
13)Defines formal investigation for purposes of item # 9) above
as an investigation performed by a peer review body based on
the allegations specified above.
14)Requires that a licensee's central file of individual
historical record that is maintained by specified agencies
include information reported pursuant to item # 9) above.
15)Entitles the MBC, the Osteopathic Medical Board of
California, and the Dental Board of California to inspect and
copy specified documents relating to any disciplinary
proceeding resulting in an action that is required to be
reported pursuant to Section 805 without subpoena and that the
specified documents be unredacted. Includes in the list of
documents that may be copied and inspected any peer review
minutes or reports.
16)Prohibits the disclosure of an 805 report to specified health
care entities if a court finds that the peer review resulting
in the 805 report was conducted in bad faith and the licensee
who is the subject of the report notifies the board of the
court's finding.
17)Requires the MBC to remove from its Internet Website any
information concerning a hospital disciplinary action that is
posted on the Internet Website if a court finds that peer
review resulting in a hospital disciplinary action was
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conducted in bad faith and the licensee notifies the MBC of
the court finding.
18)Requires the MBC to post on the Internet a factsheet that
explains and provides information on the reporting
requirements under Section 805.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. The Author is the sponsor of this measure.
According to the Author, this bill is necessary to ensure that
the current peer review process continues to protect the
public from incompetent physicians. The Author points out
that given the indispensable nature of health care, high
quality patient care is vital. Patients expect their treating
physicians or other medical professionals to be competent and
qualified, and physicians who fail to meet established
professional standards must be discovered, reviewed and
disciplined if necessary in a timely manner. The Author
indicates that physician peer review is one of the regimes
used to ensure that quality of care is delivered while
minimizing medical errors and managing patient risks.
The Author further points out that the MBC is the agency
ultimately responsible for the oversight of physicians and
surgeons and it is necessary that the MBC must be notified
when its licensees are practicing below the standard of care,
have substance abuse or mental illness problems, or have
committed sexual misconduct. Furthermore, the Author states
that it is not the bill's intent to cast physicians and
surgeons in a false light but to improve the delivery of
quality health care to consumers.
2.Background.
a. What is Peer Review? In peer review, physicians
evaluate their colleagues' work 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
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including patient injury, disruptive conduct, substance
abuse, or other medical staff complaints. A peer review
committee investigates the allegation, comes to a decision
regarding the physician's conduct, and takes appropriate
remedial actions. However, there is reluctance among
physicians to serve on peer review committees due to the
risk of involvement in related future litigation, including
medical malpractice lawsuits against a physician under
review. In addition, there has been rising concern
relating to "sham peer review." Sham peer review is the
use of the peer review system to discredit, harass,
discipline, or otherwise negatively affect a physician's
ability to practice medicine or exercise professional
judgment for a non-medical or patient safety related
reason. Other criticisms of peer review include over
legalization of the process, lack of transparency in the
system, and burdensome human and financial toll peer review
brings not only to the hospital but also to a physician
under review.
b. Federal Requirements. Recognizing that peer review is
necessary to maintain and improve quality medical care,
Congress, in 1986, enacted the HCQIA. HCQIA established
standards for hospital peer review committees, provided
immunity for those who participate in peer review, and
created the NPDB. The 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
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boards of dentistry against physicians and dentists; (3)
professional review actions primarily taken against
physicians and dentists by hospitals and other health care
entities, including health maintenance organizations, group
practices, and professional societies; (4) actions taken by
the Drug Enforcement Administration (DEA), and (5)
Medicare/Medicaid Exclusions.
It appears that hospitals may not be complying with the
reporting requirements of the NPDB. 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 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
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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 one hundred thirty-eight
805 reports in 2007-2008 from hospitals/clinics (74),
health care service plans (17), and medical group/employers
(47). Out of all of these reports, one accusation was
filed, 92 cases are pending disposition and 45 cases were
closed. The number of 805 reports varies from year to year
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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. 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
California Medical Association (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 practice evaluation" (OPPE.) The FPPE
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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 for all practitioners and not just
those with performance issues.
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f. Lumetra Report - Comprehensive Study of Peer Review in
California.
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 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 |Population|Final |% of |
| | |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% |
| | | | |
-------------------------------------------------------
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Medical entities, particularly hospitals, exhibited a
substantial amount of anxiety about providing Lumetra with the
information they requested. Over one third of hospitals
communicated with Lumetra via their attorneys. A number of
entities or their attorneys sent letters to Lumetra detailing
their reasons for refusing to submit the requested information
to Lumetra. Most of these letters reference a telephone
conference call held on October 5, 2007 which was arranged by
the California Hospital Association. This conference call was
ostensibly to allow Lumetra to address concerns and answer
questions that the hospitals had regarding the information
Lumetra sought. According to Lumetra, "a few individuals
dominated the call and expressed a desire to substantially
change the study design." Due to the conference call and other
concerns Lumetra set up a website that described the study
purposes, pertinent legislation, and posted answers to
frequently asked questions.
Lumetra outlined the vital information categories which it
sought information from medical entities regarding their peer
review process including peer review hearing minutes, peer
review and hospital by-laws, and other related documents.
Unfortunately, despite a legislative mandate and immunity from
discovery or other adverse action for disclosure of the
information to Lumetra, it encountered significant problems
gathering the information from the medical entities it surveyed.
Many entities refused to comply with the requests for a variety
of reasons; the two most common reasons given by entities for
non-participation were: (1) lack of time/resources/staff to
provide the information; and (2) fear of legal discovery/breach
of confidentiality requirements.
i. Findings of Lumetra's Study:
(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
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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 on 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
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
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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.
ii. Lumetra Study Recommendations:
(1) Redesign the peer review process and create an
independent review organization. Allow the current peer
review system to continue where a health care entity acts
as a "first level" screener, as defined, and continues to
investigate complaints and conduct periodic reviews of
physicians. If a physician's action related to patient
care does not meet the standards of care at the screening,
then the physician would be referred to an unbiased
independent review organization with no vested interest in
the review outcome. The independent review organization
then conducts its own investigation, including random site
visits and audits, and makes recommendations regarding the
filing on an 805 report or any other action. A copy of
all recommendations would be sent to the MBC. Any serious
issues/events would be "fast-tracked" and reported to the
independent review organization within five hours. The
independent review organization would then investigate and
take immediate action. The independent review
organization would also be responsible for maintaining a
database and a tracking system to monitor trends.
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(2) Improve transparency of the entire peer review
process. The MBC would notify interested parties when an
investigation begins, concluded, and when changes will be
made on the MBC's website regarding a physician's status.
The MBC website must be redesigned to include more
information available indefinitely to the general public
about a physician's profile, and the website must be
redesigned to make it user-friendly to the general public
so that the average layperson can chart and understand the
entire process with minimal difficulty.
(3) Revise role of the MBC. The MBC would continue to
investigate all 805 reports, and make determinations about
any licensee's action. MBC would be required to initiate
an investigation within 48 hours of receiving an 805
report, and make recommendations within 5 days of
completing the investigation.
(4) Revise due process hearings or 809 process.
Remove 809 hearing process from health care entities and
have the independent review organization or the MBC
conduct them to ensure fairness and timeliness. Create a
professional jury of practicing physicians comprised of
all licensed physicians who rotate and serve for a set
period of time. Eliminate the requirement that the MBC
obtain a subpoena for documents related to a complaint or
broaden subpoena power to include all related medical and
peer review hearing related documents.
(5) Emphasize credentialing and re-credentialing.
Credentialing and re-credentialing should still occur at
the healthcare entity level and the healthcare entity
would report any changes in credentialing or privilege to
practice to the independent review organization.
(6) Promote education of physicians, entities, and
the general public. The MBC should create programs to
continuously educate and update all physicians and
employees of health care entities required to submit 805
reports and any related laws and regulations. Further,
patient and public rights must be clearly summarized on
the MBC's website. Lastly, the MBC is to emphasize to
entities that there are penalties for failure to file an
805 report.
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(7) Clarify and improve specific provisions of
existing law. The Legislature should clarify whether or
not an 809 hearing is required prior to submission of an
805 report; or whether or not the hearing before the 805
is only waived after a summary suspension of greater than
14 days or a termination/revocation of privileges.
Further, there is a need to clarify whether or not failure
to complete patient records should trigger an 805 report.
The MBC and Legislature should require a tracking system
in each entity and require peer review body minutes to be
maintained and available for a period of 5 years which is
separate from all other committee business. Require all
medical facilities and groups to have peer review bodies
and procedures as well as being made subject to 805
reporting
requirements. Define specifically what peer review consists
of and what events trigger a peer review.
(8) Identify Funding Sources. Funding is needed to
implement these recommendations and funding sources could
include increasing licensing fees, charging malpractice
insurance companies a percentage of the premiums they
receive, charging entity attorneys a percentage of their
billing incomes, and use a percentage of malpractice
awards to fund the process.
(9) Pilot Project. The Study specifies that these
recommendations be made part of a 5-year pilot program to
determine which have positive and negative impacts on peer
review reporting and whether or not further fixes or
changes are needed.
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 ,
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California Medical Association , California Ambulatory Surgery
Association , various hospitals 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
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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.
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 this Session.
a. SB 58 (Aanestad) among other provisions, provides 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; requires a peer review body to annually report to
the MBC on its peer review activities; defines an external
peer review organization; encourages external peer review
under certain conditions; mandates external peer review for
specific circumstances; and, establishes an early detection
and resolution program for physicians and surgeons in lieu
of the filing of an 805 report. SB 58 is currently pending
in this Committee.
b. SB 788 (Wyland) among other provisions, would revise the
definition of a licentiate and peer review body for
purposes of an 805 report to include licensed professional
clinical counselors. SB 788 is pending in this Committee
and will be heard of April 27, 2009.
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c. AB 120 (Hayashi) makes changes to peer review provisions
in existing law including the following: Encourages a peer
review body of a health care facility to obtain external
peer review, as specified; requires a peer review body to
respond to the request of another peer review body and
produce records requested concerning a licentiate;
prohibits a member of a medical or professional staff 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;
gives the licensee the choice of having a peer review
hearing before a mutually acceptable arbitrator or a panel
of unbiased individuals and makes specified changes
relating to a hearing officer. AB 120 is currently pending
in the Assembly Business and Professions Committee.
d. AB 834 (Solorio) authorizes a peer review body to
impose, and a licentiate may accept, voluntary remediation
when deemed appropriate by the peer review body, including
for a medical disciplinary cause or reason; makes changes
relating to the qualifications of a hearing officer.
e. AB 245 (Ma) Requires the MBC to verify information on
licensed physicians and surgeons posted on its Internet
Website. AB 245 is currently pending in the Assembly
Business and Professions Committee.
6.Oppose Unless Amended. The California Hospital Association
(CHA) has taken an oppose unless amended position on this
bill. CHA states that new requirements of reporting
investigations for peer review bodies where there is a
departure from the standard of care, mental illness, substance
abuse and sexual misconduct, will have a number of deleterious
effects including chilling the peer review process, very low
threshold for reporting and reporting could distract from
meaningful board oversight.
7.Author's Amendments. The Author is proposing to amend this
bill in an effort to try and address CHA concerns. The
amendments clarify that the report required by this bill,
where there is deviation from the standard of care, must
result in patient harm , or includes any adverse event as
specified in existing law under the Health and Safety Code,
and that the report would be filed with the MBC after a
decision or recommendation by a peer review body.
Furthermore, the Author intends that this report should not be
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disclosed to entities that are required to request a report
from the MBC prior to granting or renewing staff privileges.
NOTE : Double-referral to Rules Committee second.
SUPPORT AND OPPOSITION:
Support: None on file as of April 15, 2009
Oppose Unless Amended: California Hospital Association
Opposition: None on file as of April 15, 2009
Consultant:Rosielyn Pulmano