By: West  S.B. No. 761
         (In the Senate - Filed February 17, 2011; February 23, 2011,
  read first time and referred to Committee on Intergovernmental
  Relations; March 14, 2011, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 4, Nays 0;
  March 14, 2011, sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 761 By:  West
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the employment of physicians by certain hospitals
  associated with nonprofit fraternal organizations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 311, Health and Safety Code, is amended
  by adding Subchapter E to read as follows:
  SUBCHAPTER E.  EMPLOYMENT OF PHYSICIANS BY CERTAIN HOSPITALS
  ASSOCIATED WITH NONPROFIT FRATERNAL ORGANIZATIONS
         Sec. 311.061.  APPLICABILITY OF SUBCHAPTER. This subchapter
  applies only to a hospital that employs or seeks to employ a
  physician, that primarily provides medical care to children younger
  than 18 years of age, and that:
               (1)  is owned or operated by a nonprofit fraternal
  organization; or
               (2)  has a governing body the majority of members of
  which belong to a nonprofit fraternal organization.
         Sec. 311.062.  EMPLOYMENT OF PHYSICIANS PERMITTED. (a)  A
  hospital may employ a physician and retain all or part of the
  professional income generated by the physician for medical services
  provided at the hospital if the hospital satisfies the requirements
  of this subchapter.
         (b)  The billing and receipt of third-party reimbursement
  for medical care at a hospital does not affect the authority granted
  to the hospital under this section.
         Sec. 311.063.  HOSPITAL DUTIES AND POLICIES. (a)  A
  hospital that employs physicians under this subchapter shall:
               (1)  appoint a chief medical officer, who may be a
  member of the hospital's medical staff; and
               (2)  adopt, maintain, and enforce policies to ensure
  that a physician employed by the hospital exercises the physician's
  independent medical judgment in providing care to patients at the
  hospital.
         (b)  The policies adopted under this section must include:
               (1)  policies relating to:
                     (A)  credentialing;
                     (B)  quality assurance;
                     (C)  utilization review;
                     (D)  peer review; and
                     (E)  medical decision-making; and
               (2)  the implementation of a complaint mechanism to
  process and resolve complaints regarding interference or attempted
  interference with a physician's independent medical judgment.
         (c)  The policies adopted under this section:
               (1)  must be approved by the chief medical officer of
  the hospital; and
               (2)  shall control and prevail in the event of a
  conflict with any other policies of a hospital under this
  subchapter.
         (d)  For all matters relating to the practice of medicine,
  each physician employed by a hospital under this subchapter shall
  ultimately report to the chief medical officer of the hospital.
         (e)  The chief medical officer shall immediately report to
  the Texas Medical Board any action or event that the chief medical
  officer reasonably and in good faith believes constitutes a
  compromise of the independent medical judgment of a physician in
  caring for a patient.
         Sec. 311.064.  CONSTRUCTION OF SUBCHAPTER. This subchapter
  may not be construed as authorizing the governing body of a hospital
  to supervise or control the practice of medicine as prohibited
  under Subtitle B, Title 3, Occupations Code.
         SECTION 2.  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, 2011.
 
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