On April 9th, the Senate State Affairs Committee passed SB 1500 by Duncan 5 votes to 1. The lone no vote on the committee was form Dr. Bob Deuell, the Senator from Greenfield. The bill now moves to the floor of the Senate. That same day, there were 10 TORCH-Member hospitals on hand to tell their story to the Senate Intergovernmental Relations Committee. These hospitals all filed changes to their enabling legislation that would allow them to directly employ physicians. Their testimony made a tremendous impact on the members of the committee, even though the bills were left pending further discussion among the committee, bill authors, hospitals and physicians.
An ophthalmologist and Chairman of the TMA Board of Trustees, Lyle S. Thorstenson, testified in support of the prohibition against the corporate practice of medicine. In his testimony, he stressed that the doctors clinical autonomy was sacred and that this effort by hospitals to employ physicians was tantamount to practicing medicine without a license. TMA’s marketing department has recently gone full tilt in their effort to paint small rural hospitals, which have a mission to provide essential healthcare services to their community, as loaded guns. TMA’s latest message is that hospital CEOs are ready and willing to sacrifice the best interests of the patients they serve.
Texas is one of only five states that continues to explicitly define or actively enforce some form of the prohibition of the corporate practice of medicine. However, Texas does allow private nonprofit medical schools, school districts, nonprofit health organizations certified by the Texas Medical Board, federally qualified health care centers, and migrant, community, and homeless centers to employ physicians. Additionally, the legislature has allowed approximately 10 hospital districts to change their enabling legislation to employ physicians. The state itself is allowed to employ physicians to work in state academic medical centers, state hospitals, and prisons.
Many smaller Texas communities report that the prohibition against the hiring of physicians is a significant factor contributing to the inability to recruit and retain physicians to serve in those communities. When an individual physician is required to establish a sole practitioner office that requires health insurance and retirement benefits, the cost and administrative burden can be a deterrent to agreeing to practice in a small community.
As proposed, S.B. 1500 provides that a hospital that is designed as a critical access hospital, is a sole community hospital, or is located in a county with a population of 50,000 or less is permitted to employ a physician.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 311, Health and Safety Code, by adding Subchapter E, as follows:
SUBCHAPTER E. EMPLOYMENT OF PHYSICIANS BY CERTAIN HOSPITALS
Sec. 311.061. APPLICABILITY OF SUBCHAPTER. Provides that this subchapter applies only to a hospital that is designated as a critical access hospital under the authority of and in compliance with 42 U.S.C. Section 1935i-4; is a sole community hospital, as that term is defined by 42 U.S.C. Section 1395ww(d)(5)(iii); or is located in a county with a population of 50,000 or less.
Sec. 311.062. EMPLOYMENT OF PHYSICIAN PERMITTED. (a) Authorizes a hospital to employ a physician and retain all or part of the professional income generated by the physician for medical services provided at the hospital.
(b) Authorizes a hospital located in a county with a population of 50,000 or less to continue to employ any physicians employed by the hospital on or before the date of release of a federal decennial census that shows the county’s population exceeds 50,000. Prohibits the hospital from employing a new physician after that date.
Sec. 311.063. HOSPITAL POLICIES. (a) Requires a hospital to adopt and maintain policies to ensure that a physician employed under this subchapter whose professional income is retained under Section 311.062 exercises the physician’s independent medical judgment in providing care to patients at the hospital.
(b) Requires that the policies adopted under this section include policies relating to credentialing; quality assurance; utilization review; peer review; medical decision-making; and due process.
Sec. 311.064. CREDENTIALING AND PRIVILEGES. (a) Provides that a physician employed by a hospital is subject to the same standards and procedures regarding credentialing, peer review, quality of care, and privileges as a physician not employed by the hospital.
(b) Requires a hospital to give equal consideration regarding the issuance of credentials and privileges to physicians employed by the hospital and physicians not employed by the hospital.
Sec. 311.065. OTHER HOSPITAL-PHYSICIAN RELATIONSHIPS. Prohibits this subchapter from being be construed as altering, voiding, or prohibiting any relationship between a hospital and a physician, including a contract or arrangement with an approved nonprofit health corporation that is certified under Section 162.001(b) (relating to approval and certification of certain health organizations), Occupations Code, and that holds a certificate of authority issued under Chapter 844 (Certification of Certain Nonprofit Health Corporations), Insurance Code.
Please stand by as we enter a very important phase of this process. The senate requires 22 members to agree to allow a bill to be heard on the floor. We will be asking you to canvass the members of the Senate very soon. It is imperative that we maintain 22 votes in order to move this bill to the other side of the Capitol. So prepare your talking points and we’ll let you know when we need you to begin making calls and leaving messages.
