Subject: VETO AB 1235 - Lawrence R. Huntoon, M.D., Ph.D., F.A.A.N. - Corporate Control of Medical Peer Review    

From: Lawrence Huntoon, M.D., Ph.D.
Subject: VETO AB 1235 -  Lawrence R. Huntoon, M.D., Ph.D., F.A.A.N. - Corporate Control of Medical Peer Review  

Date:  September 29, 2010 10:40:48 AM PDT

        Sept 29, 2010
        I spent several hours analyzing AB 1235 today and I sent the following e-mail to the Governor of California by e-mail today.

         Subject:  VETO AB 1235 - Corporate Control of Medical Peer Review

        To the Honorable Governor of California, Arnold  Schwarzenegger,

        Dear Governor Schwarzenegger, 

        I urge you to veto AB 1235.
        California has chosen to “opt out” of some of the provisions of the Health Care Quality Improvement Act of 1986 
        (42 U.S.C. Sec. 11101 et seq.), “Because of deficiencies in the federal act and the possible adverse interpretations 
        by the courts of the federal act…” (AB 1235 Section 1, amending Section 809(a)(2) of the Business and Professions Code). 
        However, AB 1235 is even more flawed than the Health Care Quality Improvement Act (HCQIA), and it will further erode 
        due process and fundamental fairness for physicians in peer review proceedings. 
        Hospitals have taken advantage of the strong immunity provided by law, and have frequently abused the peer review process 
        to retaliate against physician whistleblowers who vociferously advocate for quality care and patient safety.  AB 1235 will make 
        this situation worse.
        Ironically, Section 1 of the bill (amending Section 809(a)(5) of the Business and Professions Code) recognizes that:
        “Peer review that is not conducted fairly results in harm to both to patients and healing arts practitioners by wrongfully depriving 
        patients of their ability to obtain care from their chosen practitioner and by depriving practitioners of their ability to care for their 
        patients, thereby limiting much-needed access to care.”  

        Yet AB 1235 will enhance a hospital’s ability to abuse the peer review process and to harm both patients and the physicians 
        who care for them.
        Although Section 809.04 proposes to “…ensure that the peer review process is not circumvented…,” it provides the very means 
        to circumvent it. Hospitals frequently include a provision in exclusive contracts whereby the physician must agree to waive all 
        due process rights under the medical staff  bylaws, including the right to a fair and unbiased peer review.  If a physician under 
        exclusive contract is terminated based on “quality considerations” (Sec. 809.04 (c)), AB 1235 does not provide that physician 
        with the right to a due process peer review hearing.  Other non-contracted physicians in the hospital would be entitled to full due
        process rights in the same situation.  Termination of an exclusive contract based on “quality considerations” would do irreparable 
        harm to a physician’s medical career.  Fundamental fairness dictates that the accused physician should have the opportunity to 
        present his case before an impartial panel of his peers before the ruination of his career is carried out.  Thus, Section 809.04 
        would enhance the ability of hospitals to abuse the peer review process for improper purposes. 
        Section 809.08 also does not prevent a hospital from abusing the peer review process by obtaining an “external peer review” 
        from a physician or physicians who are employed by, contracted by or financially dependent on other hospitals within the “chain” 
        or “system” of hospitals (Sec. 809.07).
        Section 809.2 does not provide for the selection of an impartial, unbiased hearing officer acceptable to the physician under review 
        and to the professional review body.  Although the section states that “…the hearing officer shall gain no direct financial benefit from 
        the outcome…,” it fails to take into account the substantial indirect benefit – i.e. a hearing officer who makes rulings that favor the 
        hospital is more likely to be chosen by the hospital to serve as a hearing officer in the future. 
        Although AB 1235 purports to provide a “reasonable opportunity to voir dire the panel members and any hearing officer…,” 
        the procedure for ruling on challenges to the hearing officer is highly flawed in that the hearing officer is allowed to rule on his own 
        suitability to serve as an impartial hearing officer. 
        AB 1235 also enhances a hospital’s ability to abuse the peer review process for improper motives as it allows the hearing officer to 
        “recommend that the hearing panel terminate the hearing…” (Sec. 809.2).  A hearing officer should be impartial and should not 
        participate in any manner in determining actions by the hearing panel, including recommending an action by the hearing panel.  
        The section allows a hearing officer to influence the actions of the hearing panel, thereby biasing the proceedings.  Even in 
        exceptional circumstances whereby a hearing panel determines that a physician under review is hampering the proceedings, 
        in the interest of fundamental fairness the peer review proceeding should be allowed to continue with the physician’s attorney 
        providing representation in the physician’s absence. 
        AB 1235 provides for a record of the proceedings (Sec. 809.3), but it does not provide for an independent record of the proceedings, 
        such as could be provided by a court reporter.  Just as prosecutors in a court of law are not allowed to be the keeper of the official 
        record, no hospital should be allowed to provide the record of proceedings as such is fundamentally unfair to the physician under review. 
        In summary, fair peer review protects patients.  AB 1235, however, places patients at risk by eroding due process and fundamental 
        fairness in medical peer review. 
        Lawrence R. Huntoon, M.D., Ph.D., F.A.A.N.

        Chairman, AAPS Committee to Combat Sham Peer Review