On Sept. 29, 2010, California Gov. Arnold Schwarzenegger signed Senate Bill 700 (SB 700) into law. SB 700 adds Section 805.01 to the California Business and Professions Code and also amends several other related sections. In short, SB 700 adds new layers of complexity to the reporting laws relating to physician discipline. We summarize below the provisions that will require the attention of peer review bodies after the new law becomes effective on January 1, 2011:

• Increased reporting requirements for hospitals. Currently, reports to licensing boards (called 805 reports) are required only in fairly rare circumstances: either within fifteen (15) days after a summary action (an action that takes effect immediately), or not until after a recommended action has resulted in final governing body action against a physician and the physician has exhausted all hearing rights – a process that usually takes months. The new law requires 805 reports within 15 days after a peer review body has recommended actions based on certain serious concerns, including:
  1. Serious deviations from the standard of care involving death or serious bodily injury to patients
  2. The misuse of dangerous drugs or alcoholic beverages;
  3. Excessive or abusive “prescribing, furnishing, or administering of controlled substances” and related acts; and
  4. Sexual misconduct with patients.
In other words, those cases will require 805 reports much earlier than before, and in the end the same peer review action may result in two reports — one at the beginning of formal recommended action in the matter, and another after the exhaustion of the physician’s internal appeal rights. This added report requirement may produce negative reactions from both peer reviewers and the physicians who are the subjects of peer review. For example, medical staff leaders contemplating action against a medical staff member may face more reluctance than ever to recommend action.. Accused physicians may seek court relief earlier than before in order to avoid seeing a report issued before he or she has a chance to contest the recommended action.
• New requirements for notifications to physicians and other licentiates about their rights when reports are filed with the Medical Board (or other applicable licensing board, such as the Osteopathic Board or the Podiatric Board). This is primarily a record-keeping and notice-giving requirement. Peer review bodies that keep records and give notice correctly will avoid difficulty stemming from the new law, but failure to do so will create unwelcome issues when, for example, physicians file lawsuits to challenge the adverse peer review action.
• New rights for licentiates to submit to their licensing board’s online database statements about findings of bad faith in peer review proceedings. In some cases physicians now may submit their own “side of the story” for inclusion in the licensing board’s public database, but only in cases involving findings of bad faith against the peer review body. The peer review body has no right to submit any rebuttal.

If you have questions about planning for compliance with SB 700, please contact Lowell Brown, Sarah Benator, Mark Phillips or Collin Seals in our Los Angeles office, or the Arent Fox attorney who regularly handles your legal affairs.