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For lawmakers and their staff

TPIPPA is a working draft prepared by a Texas emergency physician for consideration by members of the 90th Texas Legislature. We are looking for a sponsor to carry it.

Download the full draft (PDF)Download the plain-English explainer (PDF)

Loopholes closed

  • Hidden ownership (166.001(3)): control now counts any interest, including nonvoting, convertible, and synthetic equity and security or default rights, presumed at 10 percent; regulated lenders get a safe harbor.
  • Staffing workarounds (166.001(2), 166.351(a)(5), 166.352(b)(5)): flat-fee placement agencies are excluded from "staffing company"; locums allowed up to 180 days a year; the owner of a contracting practice may not be a facility employee or officer.
  • Disguised noncompetes (166.001, 166.151(a)): repayment clauses, forfeitures, tail-coverage liability, notice periods over 90 days, and automatic loss of privileges are restrictive covenants and void, with a two-year amortized signing-bonus exception.
  • Sale-of-practice exception decided: kept and tightened (166.151(c)): the only noncompete still allowed is a seller’s covenant when a physician sells more than a 10 percent stake in a physician-owned practice to another physician or physician-owned practice, limited to one year and five miles and never outlasting the sale. It is never available to an MSO, investor, staffing company, or facility buyer, or to an employment deal dressed up as a sale.
  • Out-of-state dodges (166.002(d), 166.001(17), 166.106): choice-of-law, forum, and arbitration clauses cannot avoid the chapter; physician-owned entities may include out-of-state physicians if Texas physicians hold the majority.
  • MSO money routes (166.103(14)-(16), 166.104(c), 166.107(b)(3)): no liens on fees, receivables, or records; no default triggers tied to clinical decisions; physician-owner admin pay capped at disclosed FMV and 25 percent of income; no insurer, HMO, or PBM affiliation; total MSO payments above 40 percent of net collections presumed not FMV; non-bank loans unsecured and capped. MSO-employed physicians may not treat the managed practice's patients.
  • Soft control (166.051(b), 166.053, 166.356(g), 166.056(g)): physician-committee protocols and co-management are safe-harbored; coding scorecards and repeated queries are control, not assistance; system-level CMOs fall outside the medical-director rules.
  • ER specialty rules (166.058): job titles or tiers that track certification are evidence of pay discrimination; trauma rules stay but may not exclude by specialty alone. New finding: Texas licenses physicians, not specialties.
  • Privileges and retaliation (166.059(g), 166.153(c)): privileges continue 180 days after a contract ends and may not be conditioned on joining the successor; one-year retaliation presumption throughout.
  • Enforcement (166.252(f), 166.253, 166.257(c-1), (j)): qui tam suits with a 25-30 percent relator share; claims are not Chapter 74 health care liability claims; medical staffs and physician associations have standing; $25,000 statutory damages per violation; fees escrowed during suit; criminal section defines harm terms and the knowledge the state must prove, and prosecutor inaction is published.
  • Coverage and administration (166.301(3), 166.201(c), 166.202, Sec. 7(b)(2)): hospital districts and governmental hospitals covered, with immunity waived for equitable relief, reinstatement, and back pay; TMB fees scaled and dedicated; patient notice limited to factual ownership statements; the grandfather ends on any 10 percent transfer or any refinancing, amendment, or renewal.

No hiding behind a nonprofit

  • Sec. 166.302, nonprofit health organizations (501(a)s): the Subchapter G exemption now covers only the organization's own employment relationship. Every agreement between a 501(a) and an MSO, staffing company, or investor is subject to Subchapter C. A 501(a) that serves a facility or is funded or managed by anyone other than its physicians must have a physician board majority-elected by its employed physicians, hold its own professional fees (Sec. 166.107), adopt pay and productivity standards only by physician vote, file its agreements with TMB, and submit any executive incentive plan to physician ratification (Sec. 166.356(d)). The de facto control test applies regardless of certification; using any entity as a conduit is a violation; TMB must suspend or revoke certification on evasion, after which a facility staffing through it violates Sec. 166.351. Facility and 501(a) officers are subject to Sec. 166.257.
  • Sec. 166.301 and Section 4 (Sec. 162.001): exemption narrowed to match; certified organizations are subject to Subchapters B, D, H and Secs. 166.107, 166.302, 166.356; TMB reviews compliance at least every two years.

Emergency rooms, administrators, and executive pay

  • Sec. 166.058, ER staffing: any Texas-licensed physician may staff an ER, subject to individual credentialing. Requiring emergency-medicine board certification, or paying less for the same ER work because of specialty, is barred. The medical-director rule in Sec. 166.056(b) was amended so that five years of ER practice in any specialty qualifies someone to direct an ER.
  • Sec. 166.257, criminal offense: an executive who knowingly adopts or enforces a policy that controls a decision reserved to physicians is practicing medicine without a license under existing Sec. 165.152. That is a third-degree felony, second-degree if the policy is a proximate cause of bodily injury, and first-degree if it causes a death. The organization is criminally responsible too and is barred for 10 years. The local district or county attorney prosecutes, with AG assistance.
  • The drafter's notes say the "knowingly" standard and the proximate-cause element are load-bearing and should not be softened into strict liability. They also say Sec. 166.058 is expected to divide emergency-medicine specialty groups and to draw support from family medicine and rural hospitals.

Built on existing models

  • HB 2982 (88R, 2023): a Texas-drafted MSO bill whose permitted-services and prohibited-acts lists are reused because they already follow Texas Legislative Council drafting style.
  • Oregon SB 951 (2025), now law: ownership, equity-control, dual-role, and restrictive-covenant provisions, plus the tiered transition period.
  • Texas SB 613 (89R, 2025): the veterinary private-equity bill, for Texas-style "void contract" language.

What a sponsor's office will need to do before filing

  1. Run it through Texas Legislative Council for a bill number, drafting-style conformance, and a check of every cross-reference.
  2. Decide the exemption list (Subchapter G). The draft exempts licensed hospitals and hospital-owned clinics; the appendix of the draft discusses the tradeoff.
  3. Pick the transition dates. The draft uses September 1, 2027 for new arrangements and September 1, 2030 for existing ones, mirroring Oregon's three-year runway.
  4. File: pre-filing opens November 9, 2026; session convenes January 12, 2027; bill-filing deadline is March 12, 2027.

Where it fits

Texas has no section headed "corporate practice of medicine." The doctrine is assembled from the Medical Practice Act, the Business Organizations Code, and a thin line of case law. This bill adds Chapter 166 to Subtitle B, Title 3, Occupations Code, so the rules sit next to the Medical Practice Act under the Texas Medical Board's existing enforcement machinery.

Contact the drafter

Working draft prepared by a physician; not legal advice; not a Texas Legislative Council document. Where any summary and the bill text differ, the bill text controls.