Rural hospitals are one step closer to being able to directly hire doctors — something they say is necessary to attract new doctors to rural areas, but is currently not allowed by Texas law. The Senate State Affairs committee today unanimously approved SB 894, which would give hospitals in counties with populations of less than 50,000, or those that are the only community hospital in the area, an exemption from the "corporate practice of medicine" law.

Currently, the corporate practice law does not allow doctors to work directly for a hospital or any other corporation, a measure designed to ensure that doctors make medical decisions based on what is best for the patient, not necessarily the hospital. 

The Texas Medical Association has had reservations about changing the corporate practice law, saying it could lead to doctors losing their independent medical judgment.

But Dr. Doug Curran, a TMA board member, told the committee he supported the bill because it would protect physicians and ensure they are the ones making decisions about patient care. He said the bill would also protect doctors by requiring hospitals to have a chief medical officer, to adopt policies that ensure physician independence and to treat employed doctors equally with independent physicians.  

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Corporate practice of medicine laws have been around since the 1800s in Texas, which is now one of five states that continues to enforce them. Some hospitals have found ways to carve out exemptions to the law, though, and Curran said SB 894 would help level the playing field.

Don McBeath, director of advocacy for the Texas Organization of Rural and Community Hospitals, said the bill would lead to more efficient health care and would allow doctors and hospitals to work closely together.

After approval in committee today, the bill moves on to the full Senate for consideration.

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