HBA-MPM H.B. 3285 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 3285 By: Van de Putte Public Health 7/19/1999 Enrolled BACKGROUND AND PURPOSE In the current medical practice environment, many physicians have grouped together to form multispecialty clinics, leaving fewer solo practitioners. When a physician leaves a group to enter his or her own practice or another group practice, the ability of the departing physician to treat his or her patients may be hindered due to a covenant not to compete, a contractual clause in the physician's work contract. This clause may make it difficult for patients to have their records transferred to the departing physician's new office and to receive continuing care from that physician. H.B. 3285 provides a "buy-out" clause in a covenant not to compete, as well as other provisions designed to allow a departing physician to provide his or her patients with continued care. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 15.50, Business and Commerce Code, as follows: Sec. 15.50. CRITERIA FOR ENFORCEABILITY OF COVENANTS NOT TO COMPETE. (a) Provides that a covenant not to compete under this section is subject to any applicable provision of Subsection (b). (b) Provides that a covenant not to compete is enforceable against a person licensed as a physician by the Texas State Board of Medical Examiners (board) if the covenant also complies with the following requirements: (1) the covenant must: (A) not deny the physician access to a list of the physician's patients whom the physician had seen or treated within one year of termination of the contract or employment; (B) provide access to medical records of the physician's patients upon authorization of the patient and any copies of medical records for a reasonable fee as established by the board under Section 5.08(o), Article 4495b, V.T.C.S. (Medical Practice Act), which authorizes a physician to charge a reasonable fee for copying medical records and provides that the physician is not required to permit examination or copying until the fee is paid unless there is a medical emergency; and authorizes the board, by rule, to prescribe what constitutes reasonable fees; and (C) provide that any access to a list of patients or to a patient's medical records after termination of the contract or employment shall not require such list or records to be provided in a format different than that by which such records are maintained except by mutual consent of the parties to the contract; (2) the covenant must provide for a buyout of the covenant by the physician at a reasonable price or, at the option of either party, as determined by a mutually agreed upon arbitrator or, in the case of an inability to agree, an arbitrator of the court whose decision shall be binding on the parties; and (3) the covenant must provide that the physician will not be prohibited from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated. SECTION 2. Makes application of this Act prospective to a covenant entered into on or after the effective date. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.