2007 Legislative Compendium: Responsible Ownership

In 2005, about a dozen bills were filed to limit or prohibit physician ownership of hospitals and other facilities. While no bills to restrict physician ownership passed that year, opponents of physician ownership vowed to try again in 2007.

In response, TMA organized an Ad Hoc Committee on Physician/Hospital Relations to develop TMA policy guidance on the issue. The committee outlined principles relating to "responsible ownership," focusing not on who owns a facility, but whether the facility - physician owned or not - provides high-quality, cost-effective, safe, appropriate, and patient-centered care.

Despite expectations that physician ownership would consume much of medicine's time during the session, the issue lost its 2005 momentum. Several stakeholders focused on other priorities, including ensuring greater health plan transparency, reforming Medicaid, and providing health insurance to more Texans. Only two bills directly relating to ownership were filed. Both died.

Lawmakers at the federal and state levels remain interested in physician ownership as do health plans, health policy think tanks and organized medicine.  Regardless of the venue, TMA will continue to advocate vigorously in favor of responsible ownership for all investors in the health care system.

Niche Hospital Bill
As filed, Senate Bill 290 by Sen. Jane Nelson (R-Lewisville) would have, among other provisions, expanded physician disclosure of ownership interests to include ambulatory surgical centers (ASCs) and facilities, and required general hospitals, specialty hospitals, and ASCs to report to the state regarding revenues, costs, utilization, and investors. The Texas Department of State Health Services (DSHS) would have been required to use data collected from ASCs and specialty hospitals to examine their respective impact on general community hospitals. TMA, the Texas Hospital Association, and the Texas Ambulatory Surgical Center Association raised serious concerns about the bill. The bill died without having a hearing.

Imaging Center Disclosure and Reporting Bill
Senate Bill 1101 by Sen. Robert Duncan (R-Lubbock) related to the reporting and disclosure of financial arrangements between referring health care providers and diagnostic imaging providers. As filed, the bill would have imposed costly and burdensome reporting requirements on physicians - and their immediate and extended family members. The bill required that they report to the state all referrals made to a diagnostic imaging center, facility, or office. Imaging centers also would have been required to report referrals received and the investment interest, if any, of the referring physician (or family member). Additionally, physicians with investment interests would have been required not only to disclose that interest, but also to obtain written consent from the patient before making a referral to a facility in which the physician had an ownership interest.

TMA, and most specialty societies, strongly opposed the bill, arguing that provisions within Texas insurance law and the Medical Practice Act already are sufficient to address any overutilization of imaging services. However, the Texas College of Radiologists strongly supported the bill. The bill passed out of Senate State Affairs after the author modified the bill to address some of TMA's concerns. Senator Duncan was successful in getting the bill to the Senate floor, but it died on third reading after TMA and other specialties issued an Action Alert urging members to call their Senators in opposition to the bill.

Physician Ownership TMA Staff Team:

Legislative: Greg Herzog
Policy: Helen Kent Davis, Michael Reed, and Rich Johnson
Legal: Lee Spangler

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