Health Care Quality Improvement Act of 1986 - Title I: Promotion of Good Faith Professional Review Activities - Provides protection from liability under Federal and State law for members of a professional review body who, in good faith and after a reasonable effort to obtain the facts, take actions which adversely affect the clinical privileges or professional society membership of a physician. Applies this Act to State laws for professional review actions occurring on or after July 1, 1989, unless a State elects to: (1) opt-in early; or (2) opt-out. Title II: Reporting of Information - Requires any entity (including insurance companies) making a payment in a medical malpractice action to report certain information to the Secretary of Health and Human Services and to State licensing boards, including: (1) the name of the physician or health care provider; (2) the amount of the payment; (3) the name of any hospital with which the physician or health care provider is associated; and (4) a description of the acts and injuries upon which the claim was based. Imposes civil penalties for the failure to report such information. Requires each Board of Medical Examiners which revokes or suspends a physician's license for reasons relating to the physician's professional competence or conduct to report such information to the Secretary. Requires each health care entity which takes a professional review action that restricts the clinical privileges of a physician to report such information to the Board of Medical Examiners. Requires hospitals to obtain certain information from the Secretary regarding staff physicians (or physicians being considered for staff positions). Directs the Secretary to make such information available to: (1) the physician; (2) State licensing boards; (3) hospitals; and (4) other health care entities. Title III: Definitions - Defines certain terms for the purposes of this Act.