The Texas Medical Association has filed a second amicus brief urging the Texas Supreme Court to keep lay entities, including contracted staffing companies, from directing physicians’ medical decisions in a case that could reshape the state’s corporate practice of medicine ban.
According to an Oct. 20 news release, Hospital Internists of Texas, Hospital Internists of Austin and Texas APN won a $10.2 million trial court judgment against staffing companies Quantum Plus and Lonestar Hospital Medical Associates. The jury found the companies violated Texas’ prohibition on the corporate practice of medicine, which dates to 1956 caselaw.
The dispute traces back to 2014. That year, Quantum contracted with St. David’s HealthCare to manage emergency medicine and hospitalist staffing at five St. David’s hospitals in the Austin area. Quantum then subcontracted with Hospital Internists of Austin to supply the hospitalists.
The physician groups say the staffing companies pressured hospitalists to discharge patients early, run emergency codes they felt unqualified to lead and accept transfers before a needed specialist was confirmed. They also say the companies ignored objections when the hospital billing department pushed physicians to add diagnoses they had not made.
The staffing companies argue they could not have violated the ban because they never controlled the physicians the way an employer controls employees.
TMA rejects that test. “To limit the [corporate practice of medicine] doctrine to employer-employee relationships would not only be inconsistent with the law, it would also permit the placement of corporate profit motives over the best interests of patients,” the association wrote in its brief.
TMA, which filed its first amicus brief in the case in December 2024, said a ruling for the staffing companies could weaken protections for physicians’ independent judgment. No timeline for a decision has been set.
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