HBA-MPM H.B. 3285 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3285
By: Van de Putte
Public Health
3/25/1999
Introduced



BACKGROUND AND PURPOSE 

In today's 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 the patient to have his or her 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 certain requirements
regarding access to copies of patients' medical records after a termination
of contract or employment, a buy-out provision, termination of contract
under bad faith, and continued treatment after the termination of a
contract.   

SECTION 2.  Provides that this Act applies to a covenant entered into
before, on, or after the effective date of this Act. 

SECTION 3.  Effective date:  September 1, 1999.

SECTION 4.  Emergency clause.