By: Duncan, et al. S.B. No. 894
(In the Senate - Filed February 23, 2011; March 1, 2011,
read first time and referred to Committee on State Affairs;
March 29, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 0; March 29, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 894 By: Duncan
A BILL TO BE ENTITLED
AN ACT
relating to employment of physicians by certain hospitals.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 AND CONSTRUCTION OF
SUBCHAPTER. (a) This subchapter applies only to a hospital that
employs or seeks to employ a physician and that:
(1) is designated as a critical access hospital under
the authority of and in compliance with 42 U.S.C. Section 1395i-4;
(2) is a sole community hospital, as that term is
defined by 42 U.S.C. Section 1395ww(d)(5)(D)(iii); or
(3) is located in a county with a population of 50,000
or less.
(b) This subchapter may not be construed as authorizing the
governing body of a hospital to supervise or control the practice of
medicine, as prohibited under Subtitle B, Title 3, Occupations
Code.
(c) This subchapter applies to medical services provided by
a physician at the hospital and other health care facilities owned
or operated by the hospital.
Sec. 311.062. EMPLOYMENT OF PHYSICIANS PERMITTED. 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 and other health care facilities owned or
operated by the hospital if the hospital satisfies the requirements
of this subchapter.
Sec. 311.063. HOSPITAL DUTIES AND POLICIES. (a) A hospital
that employs physicians under this subchapter shall:
(1) appoint a chief medical officer who has been
recommended by the medical staff of the hospital and approved by the
governing board of the hospital; and
(2) adopt, maintain, and enforce policies to ensure
that a physician employed by the hospital exercises the physician's
independent medical judgment in providing care to patients at the
hospital and other health care facilities owned or operated by the
hospital.
(b) The policies adopted under this section must include:
(1) policies relating to:
(A) credentialing and privileges;
(B) quality assurance;
(C) utilization review;
(D) peer review and due process; and
(E) medical decision-making; and
(2) the implementation of a complaint mechanism to
process and resolve complaints regarding interference or attempted
interference with a physician's independent medical judgment.
(c) The policies adopted under this section must be approved
by the medical staff of the hospital.
(d) For all matters relating to the practice of medicine,
each physician employed by a hospital under this subchapter shall
ultimately report to the chief medical officer of the hospital. The
policies adopted under this section must be approved by the medical
staff of the hospital. In the event of a conflict between a policy
adopted by the medical staff and a policy of the hospital, a
conflict management process shall be jointly developed and
implemented to resolve any such conflict.
(e) The chief medical officer shall notify the Texas Medical
Board that the hospital is employing physicians under this
subchapter and that the chief medical officer will be the
hospital's designated contact with the Texas Medical Board. The
chief medical officer shall immediately report to the Texas Medical
Board any action or event that the chief medical officer reasonably
and in good faith believes constitutes a compromise of the
independent medical judgment of a physician in caring for a
patient.
(f) The hospital shall give equal consideration regarding
the issuance of medical staff membership and privileges to
physicians employed by the hospital and physicians not employed by
the hospital.
(g) A physician employed by a hospital shall retain
independent medical judgment in providing care to patients at the
hospital and other health care facilities owned or operated by the
hospital and may not be disciplined for reasonably advocating for
patient care.
(h) If a hospital provides professional liability coverage
for a physician employed by a hospital, the physician may
participate in the selection of the professional liability
coverage, has the right to an independent defense if the physician
pays for that independent defense, and shall retain the right to
consent to the settlement of any action or proceeding brought
against the physician.
(i) If a physician employed by a hospital enters into an
employment agreement that includes a covenant not to compete, the
agreement shall be subject to Section 15.50, Business & Commerce
Code, and any other applicable provisions.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.
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