| (a) Corporate Practice of Medicine Doctrine. The corporate
practice of medicine doctrine is a legal doctrine, which generally
prohibits corporations, entities or non-physicians from practicing
medicine. The prohibition on the corporate practice of medicine is
based on numerous provisions of the Medical Practice Act, including §§155.001,
155.003, 157.001, 164.052(a)(8), (13), and 165.156. Section 165.156
of the Medical Practice Act makes it unlawful for any individual,
partnership, trust, association or corporation by use of any letters,
words, or terms, as an affix on stationery or advertisements or in
any other manner, to indicate the individual, partnership, trust,
association or corporation is entitled to practice medicine if the
individual or entity is not licensed to do so.
(b) Applicability. Upon satisfaction of the requirements
of their physician employment enabling statute and to the extent authorized
by their enabling statutes, the following entities may employ a physician
and retain all or part of the professional income generated by the
physician for medical services provided at:
(1) A hospital that primarily provides medical care
to children younger than 18 years of age as provided under §311.061
of the Health and Safety Code, and that:
(A) Is owned or operated by a nonprofit fraternal organization;
or
(B) Has a governing body the majority of members of
which belong to a nonprofit fraternal organization;
(2) A hospital, including health care facilities owned
or operated by the hospital, that is:
(A) designated as a critical access hospital under
the authority of and in compliance with 42 U.S.C. §1395i-4;
(B) a sole community hospital, as that term is defined
by 42 U.S.C. §1395ww(d)(5)(D)(iii); or
(C) located in a county with a population of 50,000
or less;
(3) Baylor County Hospital District (Texas Special
District Code, §1005.063);
(4) Bexar County Hospital District (Texas Health and
Safety Code, §281.0283);
(5) Burleson County Hospital District (Texas Special
District Code, §1010.059);
(6) City of Amarillo Hospital District (Texas Special
District Code, §1001.060);
(7) Dallam-Hartley Counties Hospital District (Texas
Special District Code, §1018.061);
(8) Dallas County Hospital District (Texas Health and
Safety Code, §281.0282);
(9) El Paso County Hospital District (Health and Safety
Code, §281.0285);
(10) Frio Hospital District (Texas Special District
Code, §1030.063);
(11) Harris County Hospital District (Texas Health
and Safety Code, §281.0283);
(12) Jackson County Hospital District (Texas Special
District Code, §1046.062);
(13) Martin County Hospital District (HB 4730, 81st
session);
(14) Matagorda County Hospital District (Texas Special
District Code, §1057.057);
(15) Mitchell County Hospital District (Texas Special
District Code, §1062.060);
(16) Moore County Hospital District (Texas Special
District Code, §1005.063);
(17) North Wheeler County Hospital District (Texas
Special District Code, §1083.062);
(18) Ochiltree County Hospital District (Texas Special
District Code, §1071.062);
(19) Travis County Healthcare District (Texas Health
and Safety Code, §281.0281);
(20) Commissioners court of a county with a population
of 3.3 million or more for the purpose of providing health care services
to inmates in the custody of the sheriff;
(21) U.S. Government and Military Forces;
(22) Private non-profit medical school (Texas Occupations
Code, Chapter 162);
(23) School districts (Texas Education Code, §33.208
and §38.016);
(24) State institutions:
(A) academic institution as defined under §172.8
of this title (relating to Faculty Temporary Permits);
(B) state hospitals as defined under Chapter 552 of
the Texas Health and Safety Code; and
(C) prisons;
(25) Rural health clinics operated in accordance with
42 CFR 491.8 of the Rural Health Services Clinic Act;
(26) Angleton-Danbury Hospital District (Texas Special
District Code, §1002.061); and
(27) Nacogdoches County Hospital District (Texas Special
District Code, §1069.0605).
(c) Reports to the Board. To the extent required by
their enabling statutes, entities permitted to hire physicians, shall
appoint or otherwise ensure that a physician is selected to be the
chief medical officer or member of a hospital district medical executive
board, and the chief medical officer or members of the hospital district
medical executive board shall report to the Texas Medical Board any
action of event that they reasonably and in good faith believe constitutes
a compromise of the independent medical judgment of a physician in
caring for a patient. The Texas Medical Board may provide such reports
to the Department of State Health Services and other regulatory agencies
as necessary.
(d) Discontinuation of Eligibility. If an entity no
longer meets the criteria to employ physicians, the entity must change
its contractual relationships with physicians in order to establish
an independent contractor relationship with the physicians.
(e) Professional Liability Coverage. If a hospital
provides professional liability coverage for a physician employed
by the hospital, the physician shall have the following rights, to
the extent required by the hospital's enabling statute:
(1) the physician may participate in the selection
of the professional liability coverage;
(2) the physician has the right to an independent defense
if the physician pays for that independent defense; and
(3) the physician shall retain the right to consent
to the settlement of any action or proceeding brought against the
physician.
|
| Source Note: The provisions of this §177.17 adopted to be effective December 22, 2011, 36 TexReg 854822; amended to be effective March 7, 2012, 37 TexReg 1514; amended to be effective January 27, 2013, 38 TexReg 294; amended to be effective January 20, 2014, 39 TexReg 282 |
