80R9340 MSE-D

By: Turner H.B. No. 3035

A BILL TO BE ENTITLED

AN ACT

relating to the authority of physicians and chiropractors to form certain entities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 22, Business Organizations Code, is amended by adding Section 22.0561 to read as follows:

Sec. 22.0561. CORPORATIONS FORMED BY PHYSICIANS AND CHIROPRACTORS. (a) Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may form a corporation that is jointly owned, managed, and controlled by those practitioners to perform a professional service that falls within the scope of practice of those practitioners and consists of:

(1) carrying out research in the public interest in medical science, medical economics, public health, sociology, or a related field;

(2) supporting medical education in medical schools through grants or scholarships;

(3) developing the capabilities of individuals or institutions studying, teaching, or practicing medicine or chiropractic;

(4) delivering health care to the public; or

(5) instructing the public regarding medical science, public health, hygiene, or a related matter.

(b) When physicians and chiropractors form a corporation that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, the certificate of formation or bylaws of the corporation, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner. The Texas Medical Board and the Texas Board of Chiropractic Examiners continue to exercise regulatory authority over their respective licenses.

SECTION 2. Subchapter B, Chapter 152, Business Organizations Code, is amended by adding Section 152.0551 to read as follows:

Sec. 152.0551. PARTNERSHIPS FORMED BY PHYSICIANS AND CHIROPRACTORS. (a) Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may create a partnership that is jointly owned by those practitioners to perform a professional service that falls within the scope of practice of those practitioners.

(b) When physicians and chiropractors create a partnership that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner.

(c) The Texas Medical Board and the Texas Board of Chiropractic Examiners continue to exercise regulatory authority over their respective licenses.

SECTION 3. Section 301.012, Business Organizations Code, is amended by adding Subsection (a-1) and amending Subsection (f) to read as follows:

(a-1) Persons licensed as physicians by the Texas Medical Board and persons licensed as chiropractors by the Texas Board of Chiropractic Examiners may jointly form and own a professional association or a professional limited liability company to perform professional services that fall within the scope of practice of those practitioners.

(f) When doctors of medicine, osteopathy, and podiatry, [or] doctors of medicine, osteopathy, and optometry or therapeutic optometry, [or] mental health professionals, or physicians and chiropractors form a professional entity as provided by Subsections (a), (a-1), (b), and (c), the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner.

SECTION 4. Article 2.01, Texas Non-Profit Corporation Act (Article 1396-2.01, Vernon's Texas Civil Statutes), is amended by amending Subsection B and adding Subsections E and F to read as follows:

B. This Act shall not apply to any corporation, nor may any corporation be organized under this Act or obtain authority to conduct its affairs in this State under this Act:

(1) If any one or more of its purposes for the conduct of its affairs in this State is expressly forbidden by any law of this State.

(2) If any one or more of its purposes for the conduct of its affairs in this State is to engage in any activity which cannot lawfully be engaged in without first obtaining a license under the authority of the laws of this State to engage in such activity and such license cannot lawfully be granted to a corporation, except as provided by Subsections [Subsection] C and F.

(3) If any one or more of its purposes for the conduct of its affairs in this State is to organize Group Hospital Service, Rural Credit Unions, Agricultural and Livestock Pools, Mutual Loan Corporations, Co-operative Credit Associations, Farmers' Co-operative Societies, Co-operative Marketing Act Corporations, Rural Electric Co-operative Corporations, Telephone Co-operative Corporations, or fraternal organizations operating under the lodge system and heretofore or hereafter incorporated under Articles 1399 through 1407, both inclusive, of Revised Civil Statutes of Texas, 1925.

(4) If any one or more of its purposes for the conduct of its affairs in this State is to operate a bank under the banking laws of this State or to operate an insurance company of any type or character that operates under the insurance laws of this State.

E. Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may organize a nonprofit corporation under this Act that is jointly owned, managed, and controlled by those practitioners to perform a professional service that falls within the scope of practice of those practitioners and consists of:

(1) carrying out research in the public interest in medical science, medical economics, public health, sociology, or a related field;

(2) supporting medical education in medical schools through grants or scholarships;

(3) developing the capabilities of individuals or institutions studying, teaching, or practicing medicine or chiropractic;

(4) delivering health care to the public; or

(5) instructing the public regarding medical science, public health, hygiene, or a related matter.

F. When physicians and chiropractors organize a nonprofit corporation that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, articles of incorporation, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner. The Texas Medical Board and the Texas Board of Chiropractic Examiners continue to exercise regulatory authority over their respective licenses.

SECTION 5. Subsection (B), Section 2, Texas Professional Association Act (Article 1528f, Vernon's Texas Civil Statutes), is amended by adding Subdivision (2-a) and amending Subdivision (4) to read as follows:

(2-a) Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may form an association that is jointly owned by those practitioners to perform a professional service that falls within the scope of practice of those practitioners.

(4) When doctors of medicine, osteopathy, and podiatry, [or] mental health professionals, or physicians and chiropractors form an association that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner. The state agencies exercising regulatory control over professions to which this subdivision applies continue to exercise regulatory authority over their respective licenses.

SECTION 6. Subsection A, Article 11.01, Texas Limited Liability Company Act (Article 1528n, Vernon's Texas Civil Statutes), is amended by amending Subdivision (2) and adding Subdivision (5) to read as follows:

(2) Except as provided by Subdivisions (3), [and] (4), and (5) of this subsection, a professional limited liability company:

(a) may be organized under this Act only for the purpose of rendering one specific type of professional service and ancillary services; and

(b) may not render more than one kind of professional service.

(5) Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may organize a professional limited liability company that is jointly owned by those practitioners to perform a professional service that falls within the scope of practice of those practitioners. When physicians and chiropractors organize a professional limited liability company that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner. The Texas Medical Board and the Texas Board of Chiropractic Examiners continue to exercise regulatory authority over their respective licenses.

SECTION 7. Section 2.02, Texas Revised Partnership Act (Article 6132b-2.02, Vernon's Texas Civil Statutes), is amended by adding Subsection (f) to read as follows:

(f) Authority of Physicians and Chiropractors to Create Partnership. Physicians licensed by the Texas Medical Board and chiropractors licensed by the Texas Board of Chiropractic Examiners may create a partnership that is jointly owned by those practitioners to perform a professional service that falls within the scope of practice of those practitioners. When physicians and chiropractors create a partnership that is jointly owned by those practitioners, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner. The Texas Medical Board and the Texas Board of Chiropractic Examiners continue to exercise regulatory authority over their respective licenses.

SECTION 8. 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, 2007.