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.