81R33228 ALB-F
By: Duncan S.B. No. 1500
Substitute the following for S.B. No. 1500:
By: Smith of Harris C.S.S.B. No. 1500
A BILL TO BE ENTITLED
AN ACT
relating to the employment of physicians by certain hospitals.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 281, Health and Safety
Code, is amended by adding Section 281.0282 to read as follows:
Sec. 281.0282. DALLAS COUNTY HOSPITAL DISTRICT; EMPLOYMENT
OF HEALTH CARE PROVIDERS AND PHYSICIANS. (a) The board of the
Dallas County Hospital District may appoint, contract for, or
employ physicians, dentists, and other health care providers as the
board considers necessary for the efficient operation of the
district.
(b) The term of an employment contract entered into under
this section may not exceed four years.
(c) This section may not be construed as authorizing the
board of the Dallas County Hospital District to supervise or
control the practice of medicine, as prohibited by Subtitle B,
Title 3, Occupations Code.
(d) The authority granted to the board of the Dallas County
Hospital District under Subsection (a) to employ physicians shall
apply only as necessary for the district to fulfill the district's
statutory mandate to provide medical care for the indigent and
needy residents of the district as provided by Section 281.046.
(e) The Dallas County Hospital District shall establish a
committee consisting of at least five actively practicing
physicians who provide care in the district. The committee shall
approve existing policies or adopt new policies, if no policies
exist, to ensure that a physician who is employed by the district is
exercising the physician's independent medical judgment in
providing care to patients.
(f) The chair of the committee must be a member of the
executive committee of the Dallas County Hospital District's
medical staff.
(g) The policies adopted or approved by the committee shall
include policies relating to credentialing, quality assurance,
utilization review, peer review, medical decision-making,
governance of the committee, and due process.
(h) Each member of a committee shall provide biennially to
the chief medical officer of the Dallas County Hospital District a
signed, verified statement indicating that the committee member:
(1) is licensed by the Texas Medical Board;
(2) will exercise independent medical judgment in all
committee matters, including matters relating to credentialing,
quality assurance, utilization review, peer review, medical
decision-making, and due process;
(3) will exercise the committee member's best efforts
to ensure compliance with the Dallas County Hospital District's
policies that are adopted or established by the committee; and
(4) will report immediately to the Texas Medical Board
any action or event that the committee member reasonably and in good
faith believes constitutes a compromise of the independent medical
judgment of a physician in caring for a patient.
(i) The committee shall adopt rules requiring the
disclosure of financial conflicts of interest by a committee
member.
(j) For all matters relating to the practice of medicine,
each physician employed by the board shall ultimately report to the
chief medical officer of the Dallas County Hospital District.
SECTION 2. Chapter 311, Health and Safety Code, is amended
by adding Subchapter E to read as follows:
SUBCHAPTER E. EMPLOYMENT OF PHYSICIANS BY CERTAIN HOSPITALS
Sec. 311.061. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a hospital that employs or seeks to employ a
physician, has a medical staff of not more than 15 physicians, and:
(1) is designated as a critical access hospital under
the authority of and in compliance with 42 U.S.C. Section 1395i-4;
or
(2) is a sole community hospital, as that term is
defined by 42 U.S.C. Section 1395ww(d)(5)(D)(iii).
Sec. 311.062. EMPLOYMENT OF PHYSICIAN PERMITTED. (a) A
hospital may employ a physician and retain all or part of the
professional income generated by the physician for medical services
provided at the hospital if the hospital:
(1) is certified by the Texas Medical Board under
Section 162.001(d), Occupations Code;
(2) satisfies the requirements of Subchapter A,
Chapter 162, Occupations Code, including Texas Medical Board rules;
and
(3) satisfies the requirements of this subchapter.
(b) The requirements of this subchapter and Subchapter A,
Chapter 162, Occupations Code, may not be voided or waived by
contract.
Sec. 311.063. HOSPITAL POLICIES. (a) A hospital shall
adopt, maintain, and enforce policies to ensure that a physician
employed under this subchapter whose professional income is
retained under Section 311.062 exercises independent medical
judgment when providing care to patients at the hospital.
(b) The policies adopted under this section must include
policies relating to:
(1) credentialing and privileges;
(2) quality assurance;
(3) utilization review;
(4) peer review;
(5) medical decision-making; and
(6) due process.
(c) The policies adopted under this section, including any
amendments to the policies, must be approved by the hospital
governing board after input from the medical staff as appropriate.
(d) The policies adopted under this section must include the
implementation of a complaint mechanism for processing and
resolving complaints regarding interference or attempted
interference with the physician's independent medical judgment.
The policies must address the manner in which the public can access
board complaint procedures.
(e) The policies of the hospital must be drafted and
interpreted in a manner that reserves to physicians, including
physicians employed and physicians not employed by the hospital,
the sole authority to engage in the practice of medicine.
Sec. 311.064. CREDENTIALING AND PRIVILEGES. (a) A
physician employed by a hospital under this subchapter 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) A hospital shall 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.
This subchapter may not 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),
Occupations Code, and that holds a certificate of authority issued
under Chapter 844, Insurance Code.
Sec. 311.066. MEDICAL STAFF BYLAWS. The medical staff
bylaws of a hospital may not discriminate against or favor a
physician based solely on the physician's employment status with
the hospital, including emergency call or charity care obligations.
Sec. 311.067. FAIR PROCESS; PEER REVIEW. (a) Termination
of a physician's employment by a hospital is subject to a fair
review process.
(b) A hospital that employs physicians shall provide peer
review and quality assurance through a multi-hospital peer review
agreement, an external independent peer review organization, or an
internal peer review process approved by the hospital governing
board with appropriate input from the medical staff.
Sec. 311.068. REFERRAL OF PATIENTS. (a) In this section,
"referral" means referral for admissions, diagnostic tests and
procedures, surgeries, or other health care services.
(b) An employment agreement entered into between a
physician and a hospital under this subchapter:
(1) must state that the hospital may not set goals
regarding referrals;
(2) may not set, as a condition of employment, the
volume or number of referrals that must be made; and
(3) may not set a performance standard based directly
or indirectly on the number or volume of referrals.
Sec. 311.069. NONRETALIATION REQUIREMENTS. (a) A hospital
may not terminate, retaliate against, or otherwise penalize a
person who reports in good faith to the hospital or the Texas
Medical Board a violation or attempted violation of this
subchapter, Subchapter A, Chapter 162, Occupations Code, or Texas
Medical Board rules.
(b) A hospital may not prohibit, restrict, or discourage a
physician from communicating with the hospital or advocating for a
patient regarding medically appropriate health care.
(c) A physician who makes a report under this section:
(1) is immune from civil liability for a report made in
good faith; and
(2) may not be disciplined by the Texas Medical Board
for any corporate practice of medicine violation related to the
reported action, event, or policy.
SECTION 3. Section 162.001, Occupations Code, is amended by
amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) The board by rule shall certify a health organization
that:
(1) applies for certification on a form approved by
the board; [and]
(2) presents proof satisfactory to the board that the
organization meets the requirements of Subsection (b), [or] (c), or
(d); and
(3) states that the health organization has consulted
with the organization's medical staff before filing an application
for certification under Subsection (d), if appropriate.
(d) The board shall certify a health organization to employ
physicians licensed by the board if the organization is in
compliance with Subchapter E, Chapter 311, Health and Safety Code,
and this subchapter, including board rules.
SECTION 4. Subchapter A, Chapter 162, Occupations Code, is
amended by adding Sections 162.004-162.007 to read as follows:
Sec. 162.004. EMPLOYER AND EMPLOYEE REQUIREMENTS. The
following requirements apply to an organization certified under
Section 162.001(d) that employs physicians:
(1) the organization shall ensure that each physician
retains independent medical judgment in providing care to patients
at the organization and may not be penalized for reasonably
advocating for patient care;
(2) the organization shall provide a certain portion
of medical services free of charge, or at a reduced fee commensurate
with a patient's ability to pay;
(3) a physician employed by the organization shall
participate in the provision of services under Subdivision (2);
(4) an organization may not include or enforce a
noncompete clause in a physician employment contract or condition
privileges on the continuation or termination of an employment
contract; and
(5) a physician who has privileges at the organization
and is employed by the hospital and a physician who is not employed
by the hospital must be given equal consideration and treatment in
the creation and execution of all medical staff bylaw provisions
regardless of the physician's employer.
Sec. 162.005. FEES; ENFORCEMENT. (a) The board may charge
a reasonable fee as necessary for the certification of an
organization under Section 162.001(d) and for the investigation,
review, and enforcement of the organization's compliance with this
subchapter and Subchapter E, Chapter 311, Health and Safety Code.
(b) The board may adopt and impose fines and administrative
remedies, including the revocation of certification under Section
162.003, for a violation of this subchapter or Subchapter E,
Chapter 311, Health and Safety Code.
Sec. 162.006. BIENNIAL COMPLIANCE STATEMENT. When an
organization applies for certification, and every two years after
that date, an organization seeking certification under Section
162.001(d) shall provide to the board a compliance statement signed
by the organization's chief executive officer attesting that the
organization is in compliance with all requirements for
certification and continued certification, including the
requirements of this subchapter and Subchapter E, Chapter 311,
Health and Safety Code.
Sec. 162.007. DOCUMENTS IN SUPPORT OF CERTIFICATION AND
BIENNIAL COMPLIANCE STATEMENTS. (a) An organization shall submit
to the board at the time application for certification under
Section 162.001(d) is made a copy of the hospital's policies,
bylaws, and medical staff bylaws that demonstrate compliance with
the requirements of this subchapter and Subchapter E, Chapter 311,
Health and Safety Code.
(b) An organization certified under Section 162.001(d)
shall submit to the board as part of the organization's biennial
compliance statement copies of any changes or amendments to the
hospital's bylaws, policies, and medical staff bylaws that were
submitted to the board after the organization's initial approved
application for certification.
SECTION 5. This Act takes effect September 1, 2009.