Action Special Issue: June 3, 2011

TMA Action June 3, 2011 

News and Insights from Texas Medical Association  

POLITICAL PROGNOSIS: TMA Scores Major Victories for Physicians, Patients 

It was a tough legislative session from the outset. With an enormous budget deficit and special interest groups from hospitals to midlevel practitioners to those who wanted to emasculate the Texas Medical Board (TMB) lining up to take on organized medicine, it seemed the Texas Medical Association's agenda for the 2011 Texas Legislature faced tough sledding. But when the session ended on May 30, TMA scored some dramatic victories for physicians and your patients.  

In the final analysis, TMA:  

  • Defended clinical autonomy of physicians employed by hospitals;  
  • Fought off all proposed scope-of-practice expansions for nurse practitioners and other allied health professionals;  
  • Staved off severe cuts to physician fees in Medicaid and the Children's Health Insurance Program (CHIP) that likely would have driven physicians out of those programs; and  
  • Won significant reforms of the TMB disciplinary process to make it much fairer for physicians.  

While the good news was not unanimous across the board for TMA's legislative goals, association leaders say the legislative victories TMA scored this session were far greater than could have been expected at the outset.  

"With the concerns we had early on that nothing would be discussed except the budget shortfall and redistricting, I think we had a good session," said TMA President C. Bruce Malone, MD. "We had some accomplishments in a session that seemed as though it was going to be totally dominated by the budget."  

Physician Employment Win-Win  

The long-standing ban on the corporate practice of medicine was preserved with several carefully controlled expansions for physician employment that included strong protections for clinical autonomy and independent medical judgment. While most states generally ban corporate practice – but provide a general hospital exception – Texas became the first state to pass statutes specifically protecting physicians' clinical judgment.  

Chief among the bills was the first-time extensions of protections for the thousands of physicians employed by hospital-run nonprofit health care corporations, commonly referred to as 501a corporations. SB 1661 by Sen. Robert Duncan (R-Lubbock) and Rep. Todd Hunter (R-Corpus Christi) provides significant protections, makes the physician board of directors responsible for all clinical matters within these organizations, and gives physicians important liability protections within a 501a.  

While a handful of small rural counties introduced bills to allow physician employment – without protections – TMA reached an agreement with the Texas Organization of Rural & Community Hospitals and the Texas Hospital Association to allow employment by small hospitals, generally in counties of 50,000 or fewer, with strong protections for independent medical judgment and medical staff responsibility for all clinical policies from privileges to credentialing to utilization. It was the continuation of discussions that began last session. The bill also requires the hospital's chief medical officer to report to TMB any instance of administrative interference in clinical or patient care decision making.  

Also achieved were bills on behalf of several large urban hospital districts to allow employment of physicians, again with the supervision of all clinical matters centered on a physician medical executive committee. Most are affiliated with medical schools as teaching hospitals.  

The county hospital districts approved for this privilege with protections are Harris, Tarrant, Bexar, and El Paso. Dallas County Hospital District won this ability in 2009, and its enabling legislation served as the template for the others that passed this year. Local county medical societies were integrally involved in the negotiations behind these bills.  

TMB Reform Trifecta  

TMA was able to fight off attempts to weaken TMB, which also would have enabled pro-lawsuit forces to chip away at medical liability reforms of 2003. Despite the efforts of some of TMB's harshest critics, TMA fought off an effort to strip the medical board of much of its ability to protect patients from truly bad doctors and instead enacted a trio of much-needed reform bills that mean physicians will face less bureaucratic hassle from TMB's disciplinary processes.  

"These three bills provide much-needed due process protections for physicians without endangering the 2003 liability reforms that have meant so much to Texas," Dr. Malone said in a letter urging Gov. Rick Perry to sign the bills.  

One of the most important things the bills would do is prohibit the filing of anonymous complaints. But the bills also:  

  • Require TMB to notify the physician when insurance companies, pharmaceutical companies, or third-party administrators file a complaint;  
  • Increase the time for a physician to respond to a complaint notice from 30 days to 45 days;  
  • Allow physicians to tape the proceedings of a TMB informal settlement conference;  
  • Allow TMB to require a remedial action plan rather than impose a fine for a minor administrative violation;  
  • Institute a seven-year statute of limitation on bringing a disciplinary action, mirroring the TMB rule on how long doctors need to keep a patient's medical record; and  
  • Bind TMB to the ruling of an administrative law judge in a proceeding supervised by the State Office of Administrative Hearings.  

While two of the measures – SB 191 and SB 227 by Sen. Jane Nelson (R-Flower Mound) and Rep. Susan King (R-Abilene) – cleared the Senate and House with no opposition, the third bill, SB 190, was bumped off the House local and consent calendar late in the session. That happened as TMB critics tried to load it down with amendments that would have increased the costs of a medical license, imperiled the board's ability to do its job, and ultimately threatened the 2003 liability reforms. Senator Nelson and Sen. Jane Huffman (R-Southside Place) were able to add language from SB 190 to House Bill 680 by Rep. Charles Schwertner, MD (R-Georgetown), which passed.  

Budget Wins and Losses  

Every session is dominated by the budget, but this one seemed like one for the history books. The 82nd session began with a budget shortfall of some $26 billion. The outlook for health-related spending items looked bleak. Early versions of both House and Senate budget bills included 10-percent cuts in physician payments under both Medicaid and CHIP.  

In the end, those cuts did not happen. Lawmakers approved a budget that spends $80.6 billion in state general revenue, down $6.3 billion from the current biennium. In addition to avoiding the Medicaid fee cuts, lawmakers also managed to salvage most of the state's mental health funding and safeguard tobacco cessation spending.  

Senator Nelson and Rep. John Zerwas (R-Richmond) carried SB 23, another critical piece of the byzantine budget puzzle, although it never made it up for a final vote in the House. A nearly identical bill is under consideration now in the special session. SB 23 would have saved about $500 million, primarily in Medicaid and CHIP. A few ways it achieved the savings were by expanding Medicaid managed care into the Rio Grande Valley, requiring Medicaid patients to use medicines on a state preferred drug list, and requiring Texans with disabilities to get home health services through Medicaid first. The Women's Health Program also would have been salvaged under the proposed legislation.  

The biggest hit that health care-related items took likely was in medical education funding, particularly in graduate medical education (GME). Despite TMA's efforts, lawmakers cut funding for the Family Practice Residency Program operated by the Texas Higher Education Coordinating Board (THECB) by nearly 75 percent, and zeroed out funding for the statewide primary care preceptorship, the Primary Care Residency Program, and other GME programs administered by THECB. Lawmakers also cut state GME formula funding by 31 percent, eliminated one of two physician education loan repayment programs, and cut the other loan repayment program by 76 percent.  

TMA and other health care advocates opposed the cuts. They argued the state should have at least maintained funding for those residency programs because they are vital to maintaining the physician-training pipeline.  

Collaborative Gone Awry  

While medical education funding took a hit, a number of TMA's other top priorities fared better. None of the allied health professions achieved any legislation to expand their scope into the practice of medicine, and TMA was able to strip virtually all of the objectionable provisions from SB 1001, which would have allowed chiropractors to form business partnerships with physicians.  

TMA also played a major role in developing SB 8 by Senator Nelson, which would have established a statewide plan for improving quality and increasing efficiency through performance-based measures, test collaborative models between physicians and other health care providers, and require public reporting of preventable readmissions and complications. Those negotiations resulted in the addition of three important provisions to SB 8 to protect physicians in a collaborative arrangement:  

  • Physicians would have an equal say and vote in a collaborative arrangement's governing board.  
  • They also would have due process protections and the ability to participate in more than one collaborative arrangement in their community.  
  • The bill also protects Texas' ban on the corporate practice of medicine.  

House members added several amendments to the bill. One from Rep. Lois Kolkhorst (R-Brenham) would allow Texas to join a multistate health care compact to help fund and administer Medicaid. Rep. Warren Chisum (R-Pampa) attached an amendment that would allow chiropractors to bill insurance companies for their services.

Thanks to Representative Zerwas, TMA was able to add language to the bill to require health care facilities such as hospitals to develop and implement vaccination policies for employees. That language is important because health care workers, especially those who are not immunized against the flu and other preventable diseases, may unknowingly spread these diseases to the patients in their care. An amendment had been added that would require facilities to exempt health care workers from vaccinations if they object for reasons of religion or conscience; however, this was removed in the conference committee report.
 

Also, Rep. Craig Eiland (D-Galveston) added language on silent preferred provider organizations, which would have ensured that physicians and hospitals actually know who is accessing their contract rates. That provision, however, was eliminated in conference committee.  

While SB 8 went down as the regular session expired, it has been revived in the special session of the legislature that started May 31. SB 7, filed in the special session by Sen. Jane Nelson, includes the language from SB 8, as well as a bill that would have initiated quality-based payments in Medicaid and the Medicaid cost-saving bill mentioned above (SB 23).  

Meanwhile, several insurance-related bills that will benefit patients were approved. These include HB 1405 by Rep. John Smithee (R-Amarillo) that requires health insurance companies operating in the small-employer and individual markets to maintain prescription drug coverage at the contracted benefit level until the plan's renewal date, regardless of whether a drug was dropped from the plan's formulary before the renewal date.  

HB 438 by Rep. Senfronia Thompson (D-Houston) improves patient access to oral drugs by requiring health insurers to cover oral anticancer medications on a basis no less favorable than intravenously administered or injected medications. Governor Perry already signed the bill.  

HB 3017 by Representative Smithee prohibits the use of discretionary clauses in health insurance policies. Some insurance products contain clauses that require courts to give discretion to an insurer's interpretation of policy terms and coverage determinations under the policy. While the health insurance contract may list the benefits payable, the clause makes those payments contingent on the insurer's discretion. The use of these clauses created an inherent conflict of interest, as the insurer responsible for providing benefits also can decide what benefits are due.  

End-of-Life Redux  

TMA also worked with a strong coalition of the Texas Catholic Conference, the Alliance for Life, and the Texas Hospital Association against a number of bills aimed at increasing lawsuits around advance directives and "end-of-life" situations. The bills pushed by a trial attorney-backed Texas Right to Life group were stalled in a House Human Services subcommittee.  

TMA strategists worked closely with the Smokefree Coalition, Rep. Myra Crownover (R-Denton), and Sen. Rodney Ellis (D-Houston) on yet another attempt to pass a statewide limitation on smoking in public places such as restaurants and bars. The measure made it farther than ever before, lingering in the closing days of session after being attached to an important budget bill. Representative Crownover was masterful in convincing a divided and decidedly conservative Texas House that the lives and rights of those who breathe secondhand smoke are equal to the rights of smokers to use a carcinogen-laced product around others. Unfortunately, the smoking ban died in the Senate when it was stripped out during the budget negotiations.  

The public health care system was threatened by numerous attacks on food safety and public health data reporting in the name of libertarian stances. Medicine, led by the Texas Pediatric Society, opposed and ultimately killed an attempt to expand access to and sales of raw milk. Language removing any oversight of the "cottage food" industry and farmers markets was substantially altered and improved by local health official representatives.  

There were also changes to how the Department of State Health Services manages and retains blood spots from newborn screenings after the initial screens. Now, families will have to opt into the program to have their child's blood spots retained for research purposes. However, the Newborn Screening program was protected as "opt out" and even improved in regards to statewide coverage and the requirement that midwives have to assist in patient referral for these services in nonhospital and birthing facility births.  

Finally, HB 300 was a significant piece of patient privacy legislation due to the combined work of Representative Kolkhorst, chair of the House Public Health Committee, and Senator Nelson. They worked on similar efforts to better protect the sensitive health information of patients and providers. A number of health care fiscal entities should be more accountable and better monitored as a result of this legislation. Physicians already were covered for the bulk of this bill by federal law. The final version of HB 300:  

  • Increases civil penalties the attorney general may assess for violations of the Texas Medical Privacy Act and tiers the penalties based on a violator's intent (e.g., negligent, intentionally, or for financial gain);  
  • Requires covered entities to train staff on sharing or exchanging protected health information;  
  • Requires all health care providers and entities to supply a person's health record in electronic form within 15 days of request (Texas physicians were already required to meet this standard);  
  • Requires the attorney general to maintain a website providing information on consumer privacy rights and complaint procedures; and
  • Requires the attorney general to report annually to the legislature on the number and types of complaints received from the website.  

Texas Medicine Senior Editor Ken Ortolon prepared this issue of Political Prognosis.


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