Now Texas Law!
Texas Governor Rick Perry signed into law [May
12, 2011] the physician employment bill for rural hospitals. The law takes
The new law, brought about by the
efforts of TORCH, will allow all Critical Access Hospitals, all Sole
Community Hospitals, and all other hospitals in counties of 50,000 and
less population to directly employ physicians. The final version of the bill
passed into law does contain some requirements that hospitals will need to
THE IMPORTANCE OF THE NEW TEXAS PHYSICIAN EMPLOYMENT
· A 100 year plus law
has prohibited physicians from being an employee in Texas with few limited
exceptions. Physicians have always been independent and their medical practices
are independent small businesses for the most part.
· The law has been a barrier in the
recruitment of new physicians to many areas of rural Texas as more and more
physicians want the guarantee of a paycheck, as well as insurance and
retirement, which comes with being an employee.
· Many rural physicians no longer want
to take the financial risk that goes with running their own medical practice,
especially in a rural area where there are usually less
· Surveys show that 75% of the new
physicians coming out of Texas medical schools in the areas of Family and
Internal Medicine want the option to be an employed physician.
· The new law (Senate Bill 894) will
give rural hospitals in Texas the authority to make a physician an employee if
the physician desires that option.
· The new law applies to Critical Access
Hospitals, Sole Community Hospitals, and all other hospitals in counties of
50,000 or less population – approximately 160 of the 580 hospitals in
· The new law contains a number of
provisions to protect the physician’s independent medical judgment as well as
the doctor-patient relationship even when they are an
· The effort to change the law was
spearheaded by the Texas Organization of Rural & Community Hospitals and was
supported by the Texas Hospital Association and the Texas Medical
· The bill changing the law was
sponsored by Senator Robert Duncan of Lubbock and Representative Garnet Coleman
· The new law takes effect immediately
but the results will be over time. This one change will not open the door to new
physicians pouring into rural Texas, but it will remove a barrier that has
caused some doctors to look to urban areas to practice where there is less