AN ACT
 1-1     relating to the establishment of pharmacy peer review committees.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Subsection (q), Section 17, Texas Pharmacy Act
 1-4     (Article 4542a-1, Vernon's Texas Civil Statutes), is amended to
 1-5     read as follows:
 1-6           (q)  Board investigative files and all information and
 1-7     materials compiled by the board in connection with an investigation
 1-8     are confidential and are not subject to disclosure under Chapter
 1-9     552, Government Code, and are not subject to disclosure, discovery,
1-10     subpoena, or other means of legal compulsion for their release to
1-11     anyone other than the board or its employees or agents involved in
1-12     licensee discipline except that this information may be disclosed
1-13     to:
1-14                 (1)  persons involved with the board in a disciplinary
1-15     action against the licensee;
1-16                 (2)  pharmacist or pharmacy licensing or disciplinary
1-17     authorities of other jurisdictions;
1-18                 (3)  a pharmaceutical or pharmacy peer review committee
1-19     as outlined in Section 27A or 42 of this Act;
1-20                 (4)  law enforcement agencies; and
1-21                 (5)  persons engaged in bona fide research, if all
1-22     individual-identifying information has been deleted.
1-23           SECTION 2.  The Texas Pharmacy Act (Article 4542a-1, Vernon's
1-24     Texas Civil Statutes) is amended by adding Section 42 to read as
 2-1     follows:
 2-2           Sec. 42.  PEER REVIEW.  (a)  The following words and terms,
 2-3     when used in this section, have the following meanings unless the
 2-4     context clearly indicates otherwise:
 2-5                 (1)  "Pharmacy peer review committee" means:
 2-6                       (A)  a pharmacy peer review, judicial, or
 2-7     grievance committee of a pharmacy society or association that is
 2-8     authorized to evaluate the quality of pharmacy services or the
 2-9     competence of pharmacists and suggest improvements in pharmacy
2-10     systems to enhance patient care; or
2-11                       (B)  a pharmacy peer review committee established
2-12     by a person who owns a pharmacy or employs pharmacists that is
2-13     authorized to evaluate the quality of pharmacy services or the
2-14     competence of pharmacists and suggest improvements in pharmacy
2-15     systems to enhance patient care.
2-16                 (2)  "Pharmacy society or association" means a
2-17     membership organization of pharmacists that is incorporated
2-18     pursuant to the Texas Non-Profit Corporation Act (Article 1396-1.01
2-19     et seq., Vernon's Texas Civil Statutes) or that is exempt from the
2-20     payment of federal income taxes pursuant to Section 501(c) of the
2-21     Internal Revenue Code of 1986.
2-22           (b)  A pharmacy peer review committee may be established to
2-23     evaluate the quality of pharmacy services or the competence of
2-24     pharmacists and suggest improvements in pharmacy systems to enhance
2-25     patient care.  The committee may review documentation of
2-26     quality-related activities in a pharmacy, assess system failures
 3-1     and personnel deficiencies, determine facts, and make
 3-2     recommendations or issue decisions in a written report that can be
 3-3     used for contiguous quality improvement purposes.  A pharmacy peer
 3-4     review committee includes the members, employees, and agents of the
 3-5     committee, including assistants, investigators, attorneys, and any
 3-6     other agents that serve the committee in any capacity.
 3-7           (c)  Except as otherwise provided by this section, all
 3-8     proceedings and records of a pharmacy peer review committee are
 3-9     confidential, and all communications made to a pharmacy peer review
3-10     committee are privileged.  If a judge makes a preliminary finding
3-11     that such proceedings, records, or communications are relevant to
3-12     an anticompetitive action or an action brought under federal civil
3-13     rights provisions under 42 U.S.C. Section 1983, then such
3-14     proceedings, records, or communications are not confidential to the
3-15     extent they are deemed relevant.
3-16           (d)  The final report of and any written or oral
3-17     communications made to a pharmacy peer review committee and the
3-18     records and proceedings of the committee may be disclosed to
3-19     another pharmacy peer review committee, appropriate state or
3-20     federal agencies, national accreditation bodies, or the state board
3-21     of registration or licensure of this or any other state.
3-22           (e)  Disclosure to the affected pharmacist of confidential
3-23     pharmacy peer review committee information pertinent to the matter
3-24     under review shall not constitute waiver of the confidentiality
3-25     provisions provided by this section. If a pharmacy peer review
3-26     committee takes action that could result in censure, license
 4-1     suspension, restriction, limitation, or revocation by the board or
 4-2     denial of membership or privileges in a health care entity, the
 4-3     affected pharmacist shall be provided a written copy of the
 4-4     recommendation of the pharmacy peer review committee and a copy of
 4-5     the pharmacy peer review committee's final decision, including a
 4-6     statement of the basis for the decision.
 4-7           (f)  Unless disclosure is required or authorized by law,
 4-8     records or determinations of or communications to a pharmacy peer
 4-9     review committee are not subject to subpoena or discovery and are
4-10     not admissible as evidence in any civil judicial or administrative
4-11     proceeding without waiver of the privilege of confidentiality
4-12     executed in writing by the committee.  The evidentiary privilege
4-13     created by this section may be invoked by any person or
4-14     organization in any civil judicial or administrative proceeding
4-15     unless the person or organization has secured a waiver of the
4-16     privilege executed in writing by the chairman, vice chairman, or
4-17     secretary of the affected pharmacy peer review committee.  If a
4-18     pharmacy peer review committee, a person participating in peer
4-19     review, or any organization named as a defendant in any civil
4-20     action filed as a result of participation in peer review may use
4-21     otherwise confidential information in the committee's, person's, or
4-22     organization's own defense or in a claim or suit under Subsection
4-23     (i) of this section, a plaintiff in such proceeding may disclose
4-24     records or determinations of or communications to a peer review
4-25     committee in rebuttal to information supplied by the defendant.
4-26     Any person seeking access to privileged information must plead and
 5-1     prove waiver of the privilege.  A member, employee, or agent of a
 5-2     pharmacy peer review committee who provides access to otherwise
 5-3     privileged communications or records in cooperation with law
 5-4     enforcement authorities in criminal investigations is not
 5-5     considered to have waived any privilege established under this
 5-6     section.
 5-7           (g)  All persons, including governing bodies and medical
 5-8     staffs of health care entities, shall comply fully with a subpoena
 5-9     for documents or information issued by the board as otherwise
5-10     authorized by law.  The disclosure of documents or information
5-11     under such subpoena does not constitute a waiver of the privilege
5-12     associated with pharmacy peer review committee proceedings.
5-13     Failure to comply with such subpoena constitutes grounds for
5-14     disciplinary action against the facility or individual by the
5-15     appropriate licensing board.
5-16           (h)  A cause of action does not accrue against the members,
5-17     agents, or employees of a pharmacy peer review committee from any
5-18     act, statement, determination, or recommendation made or act
5-19     reported, without malice, in the course of peer review according to
5-20     this section.
5-21           (i)  A pharmacy peer review committee, a person participating
5-22     in peer review, or a health care entity named as a defendant in any
5-23     civil action filed as a result of participation in peer review may
5-24     use otherwise confidential information obtained for legitimate
5-25     internal business and professional purposes, including use in the
5-26     committee's, person's, or entity's own defense.  Such use does not
 6-1     constitute a waiver of the confidential and privileged nature of
 6-2     pharmacy peer review committee proceedings.
 6-3           (j)  Reports, information, or records received and maintained
 6-4     by the board pursuant to this section are considered investigative
 6-5     files and are confidential and may only be released as specified in
 6-6     Section 17(q) of this Act.
 6-7           SECTION 3.  This Act takes effect September 1, 1999.
 6-8           SECTION 4.  The importance of this legislation and the
 6-9     crowded condition of the calendars in both houses create an
6-10     emergency and an imperative public necessity that the
6-11     constitutional rule requiring bills to be read on three several
6-12     days in each house be suspended, and this rule is hereby suspended.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 780 passed the Senate on
         March 25, 1999, by the following vote:  Yeas 31, Nays 0; and that
         the Senate concurred in House amendments on May 4, 1999, by the
         following vote:  Yeas 30, Nays 0.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 780 passed the House, with
         amendments, on April 23, 1999, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
         Approved:
         _______________________________
                     Date
         _______________________________
                   Governor