TMA House Prioritizes Noncompetes, Physician Payment Reform
By Emma Freer

In the wake of the Federal Trade Commission’s (FTC’s) recently announced ban on noncompete agreements, the Texas Medical Association House of Delegates directed the association to advocate for state and federal laws that “impose additional statutory limitations on the use of [such] clauses in physician employment contracts.”

During its annual policymaking session at TexMed in Dallas May 2-4, the house also voted to adopt policy regarding health plans’ problematic payment tactics, which compound economic pressure on physician practices and threaten patient access to care.

Noncompete agreements

Delegates debated the issue of noncompetes on the house floor, underscoring the necessity of “strik[ing] a balance that works for physician employers and employed physicians alike,” as the Reference Committee on Socioeconomics wrote in its final report.

Pasadena urologist Ori Hampel, MD, urged the house to wait to adopt policy until litigation related to the FTC ban is resolved.

But Emma Dishner, MD, an infectious disease specialist speaking in her capacity as chair of TMA’s Young Physician Section, supported immediate adoption, saying it’s important noncompetes are “reasonable and don’t impair people’s entire lives.” She also cited her own recent move to Fort Worth in response to such an agreement.

Ultimately, the house supported:

• Additional statutory limitations focused on the reasonable duration and geographic scope of noncompetes;
• Clear exceptions in certain circumstances, such as those in which a physician subject to a noncompete wishes to practice in a medically underserved area; and
• Increased transparency and fairness.

Mammen Sam, MD, a hospitalist in Pearland who chairs the reference committee, said the adopted policy is a step forward despite persistent dissent among member physicians.

“We don’t see this resolution as a comprehensive solution,” he said.

In the meantime, TMA is closely monitoring the new federal rule and similar efforts at the state level.

During the 2023 regular legislative session, the Texas Legislature expressed interest in looking at noncompetes. The heavily negotiated, physician-specific provisions of current state law, enacted in 1999 and last amended in 2009, allow noncompetes if certain requirements are met, such as providing a buy-out provision.

TMA’s Council on Legislation worked closely to ensure companion bills by Sen. Charles Schwertner, MD (R-Georgetown), and Rep. Greg Bonnen, MD (R-Friendswood), balanced the needs of physicians, whether employers or employees. Although neither bill passed, association lobbyists expect similar legislation in 2025.

Physician payment

Citing a sharp uptick in health plans using software, algorithms, artificial intelligence, and other automated processes to deny and downcode claims, the house also directed TMA to advocate for state and federal legislation that would prohibit such practices.

Elizabeth Torres, MD, an internist in Sugar Land speaking in her capacity as a member of  TMA’sTexas Delegation to the American Medical Association, lamented plans’ lack of transparency when downcoding claims.

“[Health plans are] always finding ways to not pay physicians,” she testified before the reference committee on May 3.

Similarly, the house directed TMA to support state and federal legislative bans on so-called convenience fees, which payers routinely charge physicians as a condition of payment via electronic funds transfer or virtual credit cards. As part of the same resolution, delegates called on the association to advocate for state and federal requirements that health plans promptly pay for claims in full or face a financial penalty.

For assistance related to insurance payment, check out TMA’s free Physician Payment Resource Center.