New Law Helps Patients in Rural Texas

TMA Calls on Governor Perry to Sign SB 894


For Immediate Release
May 4, 2011



Contact: Pam Udall
phone: (512) 370-1382
cell: (512) 413-6807

Pam Udall


Contact: Brent Annear
phone: (512) 370-1381
cell: (512) 656-7320

Brent Annear

The state’s largest physician organization today urged Gov. Rick Perry to sign a bill that will help rural communities recruit physicians.

“We strongly support this bill because it ensures that patients and their physicians — not hospital administrators — will be responsible for making clinical decisions,” said Texas Medical Association President Susan Rudd Bailey, MD.

The bill is Senate Bill 894 by Sen. Robert Duncan of Lubbock, sponsored in the House by Rep. Garnet Coleman of Houston. The House gave final approval to the bill today, sending it to Governor Perry for his signature.

“This bill will help bring more quality medical care to the vast underserved areas of Texas,” Dr. Bailey said.

SB 894 would allow critical access hospitals, sole community hospitals, and hospitals in counties of 50,000 or fewer to employ physicians. Most of these hospitals are run by local governments. The bill contains many features that protect the physician’s clinical autonomy against the corporate practice of medicine. It:

• Places the responsibility for all clinical matters — bylaws, credentialing, utilization review, and peer review — under the medical staff;
• Guarantees physicians’ independent medical judgment;
• States that all physicians — employed or independent — are subject to the same rights and responsibilities;
• Requires the medical staff to designate a chief medical officer (CMO) who must be approved by the hospital board. The CMO has the duty to report to the Texas Medical Board (TMB) that the hospital is hiring physicians under this bill and that the CMO is the contact for TMB. The CMO has a duty to report instances of interference to TMB; and
• Allows employed physicians to participate in the selection of their liability insurance and have the right to consent to settle in a liability action.

“Unlike other states that allow employment of physicians — Texas is different. We’re one of the first states to statutorily pass clinical protections for physicians who choose employment,” said Dr. Bailey.

Some other states have lifted the ban on corporate practice, which means a corporation such as a hospital can tell physicians how to practice medicine. TMA worked with Senator Duncan and Representative Coleman to include protections to ensure this catastrophe doesn’t happen in Texas.

“We wanted to make sure that patient care is focused on the patient’s life line, not the corporation's bottom line,” said Dr. Bailey. 

TMA is the largest state medical society in the nation, representing more than 45,000 physician and medical student members. It is located in Austin and has 120 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans. 

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Last Updated On

May 06, 2016