Executive
Notes
By Linda Stratton
SB16 - Chapter 614 Expansion of 805 Reporting Obligations
and Penalties
Because there has been a general sense in the Legislature that peer review
is not working, the Legislature changed the system effective January 1,
2002, expanding 805 reporting obligations.
The law requires 805 reporting whenever any of the following occur:
- An application for staff privileges or membership is denied or rejected
for a medical disciplinary cause or reason
- Staff privileges, membership or employment is terminated or revoked
for a medical disciplinary cause or reason
- Restrictions are imposed, or voluntarily accepted, on staff privileges,
membership or employment for a cumulative total of at least 30 days
in any 12-month period, for a medical disciplinary cause or reason
- Staff privileges, membership or employment is summarily suspended
for more than 14 days
- Following notice of an impending investigation based on information
indicating a medical disciplinary cause or reason exists, a licentiate
voluntarily resigns or takes a leave of absence from staff privileges,
membership or employment.
Effective January 1, 2002, reports will also be required where:
- After notice of an impending investigation based on information indicating
a medical disciplinary cause or reason exists, a licentiate withdraws
or abandons an application for or request for renewal of staff privileges
or membership; or
- After notice of the impending denial or rejection of the application
for a medical disciplinary cause or reason, a licentiate withdraws or
abandons an application for or request for renewal of staff privileges
or membership.
Penalties for Failure to Make 805 Reports Increased
Effective January 1, 2002, the penalties for failing to make a required
805 report will be increased 10-fold as follows
Willful failures - A fine not to exceed $100,000, and if the filer
was a physician, potential prosecution for unprofessional conduct.
"Willful": A voluntary and intentional violation of a known
legal duty.
Non-willful failure - A fine not to exceed $50,000. The fine must
be proportional to the severity of the failure to report" based on
written findings on whether:
1. The failure caused patient harm or a risk to patient safety;
2. The person who had the duty to report exercised due diligence, or knew
or should have known that the report would not be filed;
3. There had been a prior failure to file an 805 report.
The fine may also be reduced if the matter involves a small or rural hospital
as defined in Health & Safety Code 124840.
Likelihood of Prosecution for Failure to Make 805 Reports Increased
- Effective January 1, 2002, both DHS and DMHC must notify the appropriate
licensing agency of any 805 reporting violations DHS or DMHC uncovers.
- On the other hand, peer review bodies will not have to make 805 reports
when they take an otherwise reportable action as a result of an unstayed
licensure revocation or suspension.
Prohibition on Automatic Exclusion or Deselection by Health Plans
- Effective January 1, 2002, health plans and health insurers are prohibited
from automatically excluding or deselecting physicians or other health
care professionals who are the subject of an 805 report.
- Moreover, any action that is taken as a result of licensure probation
must be reported pursuant to 805 of a type that is reportable pursuant
to 805, and thus also triggers fair hearing rights under Business &
Professions Code 809 et.seq.
Enhanced Ability to Access 805 Reports
- Effective January 1, 2002, the MBC, OCBC and DBC are directed to establish
a system of electronic notification "designed to achieve early
notification to qualified recipients" of the existence of new 805
reports.
- In addition, the 3-year cut-off after which 805 reports are no longer
communicated pursuant to 805.5 requests will be tolled during any period
the subject of the report obtains a court order precluding disclosure,
unless the board is "finally and permanently precluded" from
disclosing the report.
Comprehensive Study of the Peer Review Process by the Institute for Medical
Quality (IMQ) CMA fought diligently to keep the MBC from coming
in to conduct the investigation of peer review. Getting the IMQ to do
the investigation was the compromise.
The MBC is directed to contract with the Institute for Medical Quality
to conduct a "comprehensive study of the peer review process"
to "evaluate the continuing validity of Section 805 and Sections
809-809.8" and "their relevance to the conduct of peer review
in California," and to issue a report no later than November 1, 2002.
Among other things, the study is to:
1. Determine the incidence of peer review
2. Determine whether 805 requirements are being met
3. Assess the cost of peer review to licentiates and health facilities
4. Assess the time required for completion of peer review proceedings
5. Describe the difficulties encountered by licentiates and health facilities
in participating in peer review or assembling panels.
The IMQ is prohibited from exercising authority over the peer review
process, but peer review bodies, health facilities, clinics and health
plans must: "Cooperate with the Institute and provide data, information
and case files as requested in the time frame specified by the Institute."
Promotion of Early Education Intervention
The MBC is directed to pursue establishment of a pilot program of "early
detection of potential quality problems and resolutions through informal
education interventions." The pilot program is to be similar to that
proposed by the Citizen Advocacy Center, a Washington, D.C. based non-profit
organization whose mission is to serve as a "training, research and
support network for public members of health care regulatory and governing
boards." See www.cacenter.org
CAC has contracted with HRSA to conduct such pilots, which include three
"core essentials."
1. Hospitals must inform licensing boards of every intervention to upgrade
skills and knowledge, and boards must inform hospitals when they identify
practitioners who hold privileges at their facilities
2. Licensing boards must agree to honor the confidentiality of participating
practitioners as long as they are complying with the terms of their intervention
plans
3. Licensing boards must agree to take over the monitoring function if
a participating practitioner leaves the hospital for any reason.
Evaluating SB16 - What Did Not Pass In Its Place?
SB 149: Would have made hospitals and peer review committees liable for
injuries caused by acts similar to acts that occurred previously and should
have been, but were not, reported pursuant to 805.
SB 150: Would have undermined Evidence Code 1157.
SB 16 in its original form: Would have provided for random audits
by the Medical Board and subjected physicians to unprofessional conduct
charged for unintentional failure to make 805 reports.
