Current through Reg. 49, No. 38; September 20, 2024
(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.
