HBA-MPM, NMO H.B. 1491 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1491
By: Hochberg
Public Health
7/26/1999
Enrolled



BACKGROUND AND PURPOSE 

The Internal Revenue Service (IRS) ruled that medical school faculty
physicians must be treated as employees for federal income tax purposes.
Prior to the 76th Legislature, state law prohibited the corporate practice
of medicine, in effect prohibiting private medical schools from employing
faculty physicians.  This situation presented a dilemma for the Baylor
College of Medicine, the only private medical school in Texas.  H.B. 1491
authorizes an accredited private medical school to employ faculty
physicians for clinical practice activities. Additionally, it requires such
a medical school to establish a committee to oversee the provisions of this
Act. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly granted to the Texas State Board of Medical
Examiners in SECTION 1 (Section 5.12, Article 4495b, V.T.C.S.) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 4495b, V.T.C.S. (Subchapter E, Medical Practice
Act), by adding Section 5.12, as follows: 

Sec. 5.12.  EMPLOYMENT OF PHYSICIANS BY PRIVATE MEDICAL SCHOOL.  (a)
Authorizes a private, nonprofit medical school (medical school) to retain
all or part of the professional income generated by a physician for medical
services if the physician is employed as a faculty member of the school and
provides medical services as part of the physician's responsibilities.  In
order to retain this income, the medical school must be certified under
Subsection (d) of this section; be accredited by the Liaison Committee on
Medical Education; and have been appropriated funds by the 75th
Legislature, Regular Session, 1997. 

(b)  Requires a medical school subject to this section to establish a
committee consisting of at least five actively practicing physicians who
provide care in the clinical program of the medical school.  Requires the
committee to approve existing policies, or adopt new ones if none exist; to
ensure that a physician whose professional income is retained under
Subsection (a) of this section is exercising the physician's independent
medical judgment in providing care to patients in the medical school's
clinical programs.  Provides that the policies must include those relating
to credentialing, quality assurance, utilization review, peer review,
medical decision-making, governance of the committee, and due process. 

(c)  Requires each committee member under Subsection (b) to provide to the
Texas State Board of Medical Examiners (board) biennially a signed and
verified statement which includes specific information regarding medical
licensing and certain other duties required of committee members. 

(d)  Provides that a private school that retains a physician's professional
income under Subsection (a) of this section must be certified by the board
as being in compliance with the section.  Requires the board to prescribe
an application form to be provided to the school and authorizes the board
to adopt rules as necessary to administer this section.  Authorizes the
board to prescribe and assess a fee for the certification of a school and
for investigation and review of the school in an amount not to exceed that
assessed on an organization described by Section 5.01(a) (Certification of
Certain Organizations), Article 4495b, V.T.C.S. (Medical Practice Act).
This subsection requires the board to approve and certify any health
organization  formed solely by persons licensed by the board upon
application by the organization and presentation of satisfactory proof to
the board that the organization meets certain specifications.  Requires the
board to certify the organization on a form it adopts and under the rules
it promulgates. 


(e)  Provides that a private medical school certified under Subsection (d)
must provide the board a biennial report certifying that the school is in
compliance with this section. Authorizes the board to suspend or revoke the
school's certification, if it is determined that the school has failed to
comply with this section. 

(f)  Makes a private medical school's authority to retain a physician's
professional income inapplicable to a physician providing care in a
facility owned or operated by the school that is established outside the
school's historical geographical service area as it existed on the
effective date of this section. 

(g)  Requires the board to adopt rules requiring the disclosure of
financial conflicts of interest by a committee member. 

(h)  Provides that this section does not affect the reporting requirements
under Section 5.06(d) (Reporting and Confidentiality Requirements), Article
4495b, V.T.C.S. (Medical Practice Act).  This subsection requires certain
persons engaged in the field of medicine or other related fields to report
relevant information to the board relating to the acts of other persons
engaged in the field of medicine or a related field if the reporting person
determines that the other person poses a continuing threat to the public
welfare through the practice of medicine or acupuncture or practice as a
physician assistant.  This subsection also prohibits the duty to report
under this section from being nullified through contract. 

(i)  Makes this section inapplicable to a private medical school certified
under this section if all or substantially all of the school's assets are
sold. 

SECTION 2.Emergency clause.
  Effective date: upon passage.