Legislative Priority #6: Physician Autonomy, Corporate Practice Protections
By Emma Freer Texas Medicine January 2023

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Goal: Protect physicians from being criminalized for the practice of medicine and keep nonmedical entities from interfering with patient care 

Impact: As government and corporate interference with patient care grows more common, the Texas Medical Association is committed to ensuring physicians can exercise their independent medical judgment to do what’s best for their patients and practices.  

On the patient care side, that means allowing physicians to follow the standard of care and use their medical judgment to help their patients make informed decisions, without fear of criminal penalties.  

On the economic side, with physician practices increasingly getting bought out by larger entities, TMA continues to work to preserve corporate practice of medicine protections. This session, there’s an interest from the Texas Legislature to look at noncompete agreements, and TMA will work with state lawmakers to ensure a fair balance for employed and employer physicians alike. 

The heavily negotiated, physician-specific provisions of Texas’ current law have been in place since 1999 and were last amended 2009. The current compromise allows noncompetes if certain statutory requirements are met, which, among other things, require including a buy-out provision.  

Over the past decade, however, a growing number of Texas physicians have opted for employment – and with it, noncompetes, which some say have grown onerous.  

Sen. Charles Schwertner, MD (R-Georgetown), has heard these complaints – citing noncompetes extending as far as 50 miles and as long as five years – and hopes to address them this session. 

“Hospital systems as well as large physician practices put in place various, essentially, handcuffs that restrict the provision of health care in Texas as well as the freedom of that independent practitioner to … leave and start a practice or join another group,” he said.  

In light of these issues, TMA’s House of Delegates considered a Council on Socioeconomics report on noncompetes in 2021, and TMA’s Board of Councilors, the association’s ethical policymaking body, updated its opinion on noncompetes in 2022. 

Such agreements “are unethical and should not be used in the practice of medicine,” according to the opinion. “These types of restrictive covenants disrupt continuity of care, deprive the public of medical services, interfere with the patient’s choice of physicians, and unfairly restrict competition.” 

As the Board of Councilors acknowledges, however, state law allows noncompetes to be applied to physicians practicing in Texas if certain criteria are met. The Council on Socioeconomics also noted in its recent report that some physicians benefit from noncompetes.  

Keller family physician Greg Fuller, MD, fits into this group.  

“Why we have a noncompete primarily has to do with the time and the cost of bringing in a new physician, both from a standpoint of training them within our system but also credentialing [them with] all the payers,” he said. “There’s a cost in doing that.”   

Dr. Fuller understands the concerns of employed physicians. Still, he argues it’s important to ensure noncompete agreements are fair rather than to ban them altogether, which would leave independently practicing physicians like himself in the lurch.  

Sen. Schwertner says he’ll consider legislation that strikes this balance.  

“I’m certainly open to discussions of other avenues, including guardrails or limitations regarding mileage and length of the noncompete,” he said.  “But, strictly from a policy standpoint, I don’t believe they’re justified in the health care setting.”

Last Updated On

January 06, 2023

Originally Published On

December 20, 2022

Emma Freer

Reporter

(512) 370-1383
 

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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