Arkansas joins other states narrowing healthcare peer review privileges for the Patient Safety and Quality Improvement Act of 2005

Two new peer review laws in Arkansas should make it easier for doctors to focus on the practice of medicine instead of peer review concerns.

“Peer review is such an important part of medicine … the more steps taken to make it fair for the physician who’s on the line, the better the decisions will be made by those who need to make them,” said Janet Pulliam, a healthcare attorney with Watts, Donovan & Tilley PA in Little Rock, who frequently represents physicians. “It’s important for peer review committees to know that Arkansas has public policy that supports this kind of fairness.”

Sponsored by Sen. Cecile Bledsoe (R-Rogers), Senate Bill (SB) 790 improves the quality of healthcare and ensures that peer review committees for medical professional associations are afforded confidentiality, while SB 887 established the Arkansas Peer Review Fairness Act. Both bills were approved during the 2013 legislative session.

In SB 887, Bledsoe noted the General Assembly found the peer review process “well established as the most important and effective means of monitoring quality and improving care within an institution,” and that “peer review is essential to preserving the highest standards of medical practice.”

“However, peer review that’s not conducted fairly results in harm to both patients and physicians by limiting access to care and patient choice, and it’s necessary to balance carefully the rights of patients who benefit by peer review with the rights of those who may be harmed by improper peer review,” she said.

Comparing the bills, Pulliam noted that SB 790 doesn’t necessarily require practices to have peer review committees. “It protects communications of physician provider peer review proceedings and communication as privileged without the practice having to involve its attorney in every detail of proceedings and communication,” she explained.

SB 887, allows the physician being reviewed to request a hearing officer who is independent and not employed by the hospital or the firm that regularly represents either the hospital or the physician who is under review “is especially important now that more physicians are being employed by hospitals,” said Pulliam.

The Catalyst

The federal Patient Safety and Quality Improvement Act of 2005 (PSQIA) was the impetus for the bill introductions at the state level. Passage of the PSQIA was geared toward decreasing the occurrence of medical error and improving the quality of healthcare via voluntary reporting by clinicians and healthcare providers of patient safety and quality information – without fear of the potential legal ramifications of disclosure.

Because of its state law counterparts, providers were unlikely to take advantage of the new federal law and voluntarily report patient safety and quality information. States were given the responsibility to consider how interpretations of peer review privilege laws would interact with the creation of a voluntary reporting system designed specifically to address patient safety issues, while also creating a stronger incentive for providers to report their patient safety data in accordance with the PSQIA.

In December 2009, Eric Scott Bell, a healthcare attorney at Rose Law Firm in Little Rock, wrote in Arkansas Law Review’s “Make Way: Why Arkansas and the States Should Narrow Health Care Peer Review Privileges for the Patient Safety and Quality Improvement Act of 2005,” that Arkansas “should reduce its state statutory healthcare quality assurance and privilege to the furthest extent necessary to instigate reporting by healthcare providers.”

“The (PSQIA) provides a self-interest incentive for providers to report patient safety data to PSOs, envisioning a data system that could instigate much-needed change in the U.S. healthcare system,” he wrote, noting that medical errors represent the eighth-leading cause of death in the United States. “But Arkansas’s peer review privilege undermines the effectiveness of this incentive because it provides the same amount of legal protection as the PSQIA without imposing or implementing the PSQIA reporting requirements. Without incentive, the businesses that provide healthcare will not report patient safety and quality information. The pervasiveness of medical error in the U.S. compelled Congress to act by passing the PSQIA, and now Arkansas must act by narrowing its peer review privilege and removing the only significant obstacle to the PSQIA’s vision of significantly improving the U.S. healthcare system.”

Nuts and Bolts

Peer review protection laws fall under three categories: those granting immunity from lawsuits to people and institutions; those declaring peer review work products as privileged and inadmissible in court; and those allowing information related to peer review to remain confidential.

“For myriad public policy reasons, physicians would rather be monitored by their peers, yet at the same time, there’s some kind of hesitancy among physicians to report one another,” said Pulliam, noting that 1986 federal legislation established a national reporting databank which, after going through the peer review process that provides due process to a physician, is publicly accessible. It also encouraged realistic and thorough peer reviews by creating immunity for peer review participants.

Since then, various trends have impacted the peer review process. Hospitals have had two major rushes on physician practices acquisitions – in the 1990s and now. Hospital-owned clinics are subject to Joint Commission review. Also, until recently, the attorney who represented the hospital typically represented the peer review committee.

“Now we’re starting to see that sometimes those interests are competing or different,” said Pulliam. “SB 887 allows the physician under review and those conducting the review the of have a hearing officer who is objective and not potentially conflicted by their representation of the hospital.”

“There’s a general awareness among physicians and hospitals and those who practice law in the industry that both physicians and hospitals need to have adequate protection in these peer review meetings,” she said. “Traditionally, in Arkansas at least, the hearing officers were often either lawyers who had represented the hospital or physicians with close ties to the hospital . SB 887 ”

Pulliam, who is typically hired after physicians have completed one or two steps before the final hearing, is being retained earlier in the process.

“There seems to be more awareness on the part of the practicing physician that there could potentially be a problem,” she said.

The American Bar Association Health Law Section has actively supported public policies to make peer review hearings equally fair to the hospital and to the physician.

“That’s a delicate, important balance,” said Pulliam. “It’s going to become even more so and different as more physicians become employed by hospitals.”

The American Health Lawyers Association (AHLA) recently published the second edition of the Peer Review Hearing Guidebook to address medical staff peer review and credentialing issues, including medical staff hearings. The guidebook provides alternative approaches to various issues; its authors present “best practices” that reconcile the various points of view that may be found in healthcare law.

The AHLA will host a two-part program May 1-2, “Health Care Arbitration and Peer Review Hearings” at the Tremont Chicago Hotel in Chicago to qualify participants to serve as both an arbitrator and a hearing officer for the AHLA Dispute Resolution Service. Participants will receive a complimentary copy of the guidebook, edited by Allan Adelman and Ann O’Connell