SECTION 177.4. Applications for Certification as a 162.001(b) Health Organization

A health organization seeking certification under §162.001(b) of the Act shall submit an application to the board, to the attention of the Non-Profits department, on a form approved by the board. The application shall include:

(1) Initial Identification Statement. A statement signed and verified by the chief executive officer:

(A) indicating the name and mailing address of the health organization;

(B) indicating the names and mailing addresses of all members or that there are no members;

(C) indicating the names and mailing addresses of all officers; and

(D) indicating the names and mailing addresses of all directors.

(2) Initial Document Statement. A statement signed and verified by the chief executive officer attaching a copy of the current certificate of incorporation of the health organization and attaching a copy of the current by-laws of the health organization including provisions that:

(A) the health organization is organized for any or all of the following purposes:

(i) the carrying out of scientific research and research projects in the public interest in the fields of medical sciences, medical economics, public health, sociology, or related areas;

(ii) the supporting of medical education in medical schools through grants and scholarships;

(iii) the improving and developing of the abilities of individuals and institutions studying, teaching, and practicing medicine;

(iv) the delivery of health care to the public;

(v) the engaging in the instruction of the general public in the area of medical science, public health, and hygiene and related instruction useful to the individual and beneficial to the community.

(B) the physician(s) organizing and incorporating the health organization shall select the initial board of directors consistent with the mission, goals, and purposes of the health organization;

(C) the by-laws of the health organization shall be interpreted in a manner that reserves to the health organization through its retained physicians the sole authority to engage in the practice of medicine and reserves to the health organization through its board of directors the sole authority to direct the medical, professional, and ethical aspects of the practice of medicine;

(D) each director is required to immediately report to the board any action or event which such director reasonably and in good faith believes constitutes a violation or attempted violation of the Act or the Rules;

(E) each director is required to individually disclose to the member(s), if any, and to the board of directors (at the times of nomination and appointment) and to the board (at the times of initial application and biennial reports) the identity of each financial relationship known to such director, if any, which such director has with any member, any other director, any supplier of the health organization or any affiliate of any member, other director, or supplier of the health organization, and to provide a concise explanation of the nature of each such financial relationship; and

(F) the termination of the retention of any physician to provide medical services on behalf of the health organization during such physician's term of retention may be accomplished only by the board of directors or its physician designee(s) and such termination shall be subject to due process procedures adopted by the board of directors or its physician designee(s) or provided by the retention agreement between the health organization and the subject physician.

(3) Initial Director Statements. Statements signed and verified by each current director indicating that:

(A) such director is licensed by the board;

(B) such director is actively engaged in the practice of medicine and has no restrictions on his or her Texas medical license;

(C) such director will, as a director, exercise independent judgment in all matters and, specifically, matters relating to credentialing, quality assurance, utilization review, peer review, and the practice of medicine;

(D) such director will, as a director, exercise best efforts to cause the health organization to comply with all relevant provisions of the Act and the Rules;

(E) such director will, as a director, immediately report to the board any action or event which such director reasonably and in good faith believes constitutes a violation or attempted violation of the Act or the Rules; and

(F) such director has disclosed within such director's statement the identity of all of such director's financial relationships, if any, of the type described in paragraph (2)(E) of this subsection and provided a concise explanation of the nature of each such financial relationship within such director's statement.

(4) Initial Compliance Statement. A statement signed and verified by the chief executive officer indicating that the health organization is in compliance with the requirements for certification and continued certification as required by the provisions of the Act and the Rules.

(5) Initial Fee Payment. A fee in the amount and form specified by §175.1 of this title (relating to Application Fees).

Source Note: The provisions of this §177.4 adopted to be effective January 12, 1996, 21 TexReg 107; amended to be effective March 8, 2001, 26 TexReg 1864; amended to be effective July 4, 2004, 29 TexReg 6089; amended to be effective March 16, 2008, 33 TexReg 2025