The Federal Health Care Quality Improvement

Act of 1986

The Federal Government Becomes Involved

By Joseph Taraska, Esquire

One of the most important pieces of Federal legislation in the last decade involving health care was signed by the President in November of 1986. It is entitled, "The Health Care Quality Improvement Act of 1986" and its purpose is multifold. First, it is designed to encourage peer review by offering immunity from money damages to peer review participants. Secondly, it establishes a mechanism to identify those physicians who are practicing incompetently so as to discourage their ability to relocate their practices.

In considering the need for this legislation, Congress made the following findings:

1. The increasing occurrence of medical malpractice and the need to improve the quality of medical care have become nationwide problems that warrant greater efforts than those that can be, undertaken by any individual state.
    
2. There is a national need to restrict the ability of incompetent physicians to move from state to state without disclosure or discovery of the physicians previous damaging or incompetent performance.

The Act is quite complex and is presented herein only in its most base form so as to assist the physician in understanding those portions that may apply directly to them and affect his practice,

Immunity from peer review activities

The Act provides that those who participate in good faith in professional peer review actions will be immune from money damages under any law of the United States or any state. There are exceptions, of course, for laws which violate the civil rights of any person.

1. The hearing must be conducted before either an arbiter acceptable to the physician and the health care entity; a hearing officer appointed by the entity who is not in direct economic competition with the physician or before a panel of individuals who are appointed by the entity and are not in direct economic competition with the physician.
    
2. The physician must be notified of the hearing not less than thirty days before its occurrence and must be provided with a list of witnesses expected to testify on behalf of the professional review body.
    
3. The physician must have the right at the hearing to representation by an attorney or other person of his choice.
    
4. The physician must have the right to have a record made of the proceedings, copies of which are available to him at his expense.
    
5. The physician must have the right to call, examine and cross examine witnesses.
    
6. The physician must have the right to present evidence determined to be relevant by the hearing officer.
    
7. The physician must have the right to submit a written statement at the close of the hearing.
    
8. Upon completion of the hearing, th physician must have the right to receive the written recommendation of the hearing officer or panel, including the statement of the basis for the recommendations and, further, to receive a written decision of the health care entity, including a statement of the basis for their decision.

If a physician challenges an adverse peer review action by bringing suite and it was found that the suit was frivolous, unreasonable, without foundation or in bad faith, then he will be responsible for paying costs of the suit, including attorneys' fees.

The immunities provided for following the appropriate peer review mechanism apply to suits based on Federal law (such as the Sherman Anti-Trust Act), if the peer review action occurred on or after October 14, 1986. It does not however, apply to actions based on state laws unless the peer review action commenced on or after October 14, 1986. This, however, may be modified by the state which has the option of passing legislation to come under the law each year or opt out from under it altogether.

Reporting of information

In addition to providing immunity, the Act requires that certain information be reported to various agencies. The obvious intent is to discourage incompetent physicians from being able to re-establish practices in other locations and to assist health care entities in obtaining information they require in evaluating physicians.

Reports by the Board of Medical Examiners

Each state's Board of Medical Examiners must report any action that revokes or suspends a physician's license, or reprimands or places a physician on probation for reasons relating to that physician's professional competence or professional conduct. This includes the surrender of a medical license. The information reported includes the name of the physician, a description of the acts and other information respecting the circumstances as required.

Reports of professional review actions taken by health care entities

In addition of state boards, any health care entity (including hospitals) mus report any action on their part wherein they have either accepted the resignation of the clinical privileges of a physician or taken professional review action which adversely affects his clinical privileges for a period of thirty days or more. Professional medical societies are held to the same reporting standard wherein their action adversely affects the membership of a physician in that society. The information to be reported is similar to that required of the state board when reporting to the national repository, In addition, this information, once received by the state board, is to be reported by them to the national repository.

Payments in settlement of malpractice claims

Any entity, including insurance companies, which make a payment under a policy of insurance, self-insurance or otherwise, in settlement or in satisfaction of a judgment in a medical malpractice claim, must report specified information to the national repository. That information includes the name of the physician or health care practitioner, the amount of the payment, the name of any hospital with which the physician is affiliated and any other information required by the central repository.

Duty of hospitals to obtain information

The Act also creates a duty upon each hospital to request from the central repository the information maintained there on certain physicians. These include those physicians who apply to the medical staff and those physicians who are already on the staff on at least an every other year basis. If a hospital fails to do so and a medical malpractice action is brought against the hospital, they will be presumed to have had that information. In other words, the jury will be allowed to infer that they had, or should have had, the information pertaining to the difficulties of the physician that they allowed on their staff.

Discussion

It is much too early to determine the effect that this Act will have on the anticipated goals sought by Congress. The Act is quite intricate and it will require supporting regulations and perhaps court decisions to define the exact meaning and application of the terms. At the outset, however, there are some obvious difficulties. Although the Act does preclude money damages against individuals who will participate in the peer review process, it does not stop such lawsuits. A physician may still file a suite to compel a peer review body to provide him with fundamental fairness in their deliberations. He is precluded from collecting money damages, should he prevail. Additionally, the Act only provides immunity for good faith actions taken by peer review bodies. Most lawsuits brought allege bad faith on the part of the actors. In spite of this, if the suit is frivolous, the physician will be required to pay costs and attorneys’ fees. As noted, only time will answer the question of how effective this legislation will be on a national basis in assisting the health care profession. In any event, in Florida there are already in place statutes which provide a similar immunity and which require reporting to state agencies.