(a) Nothing in this part shall authorize any person, partnership, association, corporation, or any state, county, or local governmental unit, or any division, department, board or agency of the governmental unit, to engage, in any manner, in the practice of the healing arts, or the practice of medicine, as defined by law; provided, that nothing in this section shall prohibit a person, corporation, organization, or other entity from employing a physician to treat only its own employees, the entity’s retirees, or dependents of the entity’s employees or retirees, in accordance with § 63-6-204.
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Terms Used In Tennessee Code 68-11-205

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Department: means the department of health. See Tennessee Code 68-11-201
  • Facility: means any institution, place or building providing health care services that is required to be licensed under this chapter. See Tennessee Code 68-11-201
  • Hospital: means any institution, place, building or agency represented and held out to the general public as ready, willing and able to furnish care, accommodations, facilities and equipment for the use, in connection with the services of a physician or dentist, of one (1) or more nonrelated persons who may be suffering from deformity, injury or disease or from any other condition for which nursing, medical or surgical services would be appropriate for care, diagnosis or treatment. See Tennessee Code 68-11-201
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Nursing home: means any institution, place, building or agency represented and held out to the general public for the express or implied purpose of providing care for one (1) or more nonrelated persons who are not acutely ill, but who do require skilled nursing care and related medical services. See Tennessee Code 68-11-201
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Patient: includes , but is not limited to, any person who is suffering from an acute or chronic illness or injury or who is crippled, convalescent or infirm, or who is in need of obstetrical, surgical, medical, nursing or supervisory care. See Tennessee Code 68-11-201
  • Person: means any individual, partnership, association, corporation, other business entity, state or local governmental agencies and entities, and federal agencies and entities to the extent permitted by federal law. See Tennessee Code 68-11-201
  • physician: includes a podiatrist licensed under title 63, chapter 3. See Tennessee Code 68-11-201
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Renal dialysis clinic: means any institution, facility, place or building devoted to the provision of renal dialysis on an outpatient basis to persons diagnosed with end stage renal disease. See Tennessee Code 68-11-201
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b)

(1) Notwithstanding this section, nothing shall prohibit a hospital licensed under this chapter or an affiliate of a hospital from employing physicians, other than radiologists, anesthesiologists, pathologists, or emergency physicians, licensed under title 63, chapter 6 or 9, subject to the following conditions:

(A) Employing entities shall not restrict or interfere with medically appropriate diagnostic or treatment decisions;
(B) Employing entities shall not restrict or interfere with physician referral decisions, unless:

(i) The physician so employed has agreed in writing to the specific restrictions at the time that the contract is executed;
(ii) The restriction does not, in the reasonable medical judgment of the physician, adversely affect the health or welfare of the patient; and
(iii) The employing entity discloses any such restrictions to the patient; and
(C) In the event that there is any dispute relating to subdivision (b)(1)(A) or (B), the employing entity shall have the burden of proof.
(2) Employing entities shall not restrict the employed physician’s right to practice medicine upon the termination or conclusion of the employment relationship, except as allowed by § 63-6-204(f)(2).
(3) Notwithstanding subdivision (b)(2), in the event that the employment contract with a physician employed independently of a bona fide practice purchase is terminated by the employing entity for reasons other than breach by the employee, any such restrictions shall be void.
(4) In any event, nothing in this section shall prohibit a licensed physician, group of licensed physicians, including, but not limited to, a physicians’ professional corporation registered under title 48, chapter 101, from employing physicians.
(5) A hospital affiliate that employs physicians shall not engage in any business other than the employment of physicians, the management of physicians and health care facilities or the ownership of property and facilities used in the provision of health care services. An affiliate of a hospital that employs physicians pursuant to this part shall be subject to the authority of the applicable licensing board under this chapter or title 33, chapter 2, in connection with employment of physicians. Any violation of this subdivision (b)(5) by an affiliate shall subject any hospital, at which the physician has staff privileges, and that controls or is under common control with the affiliate, to the penalties and sanctions applied to hospitals that employ physicians.
(6) No radiologist, anesthesiologist, pathologist, or emergency physician may be employed by a hospital or an affiliate of a hospital and no hospital or an affiliate of a hospital may employ any physician to provide medical services provided by radiologists, anesthesiologists, pathologists, or emergency physicians; provided, that a physician may be employed to provide emergency medical services if the physician is employed to provide other medical services.
(7) Employing entities shall not require, by contract or policy, that as a condition or consequence of employment, written or otherwise, employed physicians relinquish medical staff privileges, or the rights related to medical staff privileges, upon the commencement of, upon any event during the pendency of, or at the termination or conclusion of, the employment relationship. In any event, nothing in this section shall be construed as affecting or negating the ability of an employing hospital to revoke or suspend a physician’s staff privileges in accordance with the procedures set forth in the medical staff bylaws. Hospitals shall not substitute physician employment contracts for medical staff privileges. Nonemployed and employed physicians holding staff privileges at a hospital that is an employing entity, or hospitals on which employed physicians hold staff privileges that are affiliates of employing entities, shall enjoy the same privileges, rights and protections with respect to medical staff membership. Employment of a physician shall not affect any other physician’s medical staff privileges. Physicians who hold membership on medical staffs at a hospital which is an employing entity, or a hospital on which employed physicians hold staff privileges that are affiliates of employing entities, shall be provided with the rights and protections, including rights of self-governance, afforded by the applicable state licensing board, and, when accredited, the accrediting entity or agency.
(8) If a physician, in connection with a claim for breach of contract or other dispute related to § 63-6-204, establishes in a court of competent jurisdiction, or other forum, including in a peer review action or arbitration proceeding, that the conditions of § 63-6-204 have been violated by the employing entity, the physician shall be entitled to recover the physician’s cost of litigation, arbitration, or peer review defense, and a reasonable attorney’s fee.
(9)

(A) No radiologist, anesthesiologist, pathologist, or emergency physician may be employed by a hospital or an affiliate of a hospital, and no hospital or an affiliate of a hospital may employ any physician to provide services provided by radiologists, anesthesiologists, pathologists, or emergency physicians; provided, that a physician may be employed to provide emergency medical services, if the physician is employed to provide other medical services.
(B) Notwithstanding subdivisions (b)(6) and (9)(A), a radiologist, anesthesiologist or pathologist may be employed by a research hospital, as defined in subdivision (e)(9). The radiologist, anesthesiologist or pathologist shall be employed by the research hospital under the same terms and conditions as other physicians.
(10) Notwithstanding this subsection (b) to the contrary, the general assembly finds that it is unreasonable per se to require a racial minority physician who practices in a county with a racial minority population in excess of twenty percent (20%) to move more than two (2) miles from the physician’s primary practice site. Because such a requirement is also harmful to and will adversely affect the public interest and health, nothing in this subsection (b) shall operate to require the physician to move more than two (2) miles from the primary practice site.
(11) Employing entities shall not restrict or interfere with patient referral decisions in a manner that unnecessarily increases the cost to the patient of the medical services provided.
(c)

(1) Notwithstanding this section, nothing shall prohibit a renal dialysis clinic licensed under this chapter or an affiliate of a renal dialysis clinic from employing physicians, other than radiologists, anesthesiologists, pathologists or emergency physicians licensed under title 63, chapter 6 or 9, subject to the following conditions:

(A) Employing entities shall not restrict or interfere with medically appropriate diagnostic or treatment decisions;
(B) Employing entities shall not restrict or interfere with physician referral decisions, unless:

(i) The physician so employed has agreed in writing to the specific restrictions at the time that the contract is executed;
(ii) The restriction does not, in the reasonable medical judgment of the physician, adversely affect the health or welfare of the patient; and
(iii) The employing entity discloses the restrictions to the patient; and
(C) In the event that there is any dispute relating to subdivision (c)(1)(A) or (c)(1)(B), the employing entity shall have the burden of proof.
(2) Employing entities shall not restrict the employed physician’s right to practice medicine upon the termination or conclusion of the employment relationship, except as allowed by § 63-1-148 or any successor section.
(3) Notwithstanding § 63-1-148 or any successor section, in the event that the employment contract with a physician employed independently of a bona fide practice purchase is terminated by the employing entity for reasons other than breach by employee, the restrictions shall be void.
(4) In any event, nothing in this section shall prohibit a licensed physician, group of licensed physicians, including, but not limited to, a physicians’ professional corporation registered under title 48, chapter 101 from employing physicians.
(5) An affiliate of a renal dialysis clinic that employs physicians shall not engage in any business other than the employment of physicians, the management of physicians and health care facilities, the ownership of property and facilities used in the provision of health care services or a tissue bank or organ procurement agency. An affiliate of a renal dialysis clinic that employs physicians pursuant to this part shall be subject to the authority of the applicable licensing board under this chapter in connection with employment of physicians. Any violation of this subdivision (c)(5) by an affiliate shall subject any renal dialysis clinic at which the physician has staff privileges and that controls or is under common control with the affiliate to the penalties and sanctions applied to renal dialysis clinics that employ physicians.
(6) No radiologist, anesthesiologist, pathologist or emergency physician may be employed by a renal dialysis clinic or an affiliate of a renal dialysis clinic and no renal dialysis clinic or an affiliate of a renal dialysis clinic may employ any physician to provide medical services provided by radiologists, anesthesiologists, pathologists or emergency physicians; provided, that a physician may be employed to provide emergency medical services if the physician is employed to provide other medical services.
(7) Employing entities shall not require, by contract or policy, that as a condition or consequence of employment, written or otherwise, employed physicians relinquish staff privileges or the rights related to staff privileges upon the commencement of, upon any event during the pendency of or at the termination or conclusion of the employment relationship. In any event, nothing in this section shall be construed as affecting or negating the ability of an employing renal dialysis clinic to revoke or suspend a physician’s staff privileges in accordance with the procedures set forth in the staff bylaws. Renal dialysis clinics shall not substitute physician employment contracts for staff privileges. Nonemployed and employed physicians holding staff privileges at a renal dialysis clinic that is an employing entity or renal dialysis clinics at which employed physicians hold staff privileges that are affiliates of employing entities shall enjoy the same privileges, rights and protections with respect to staff membership. Employment of a physician shall not affect any other physician’s staff privileges. Physicians who hold membership on staff at a renal dialysis clinic that is an employing entity or a renal dialysis clinic at which employed physicians hold staff privileges that are affiliates of employing entities shall be provided with the rights and protections, including rights of self-governance, afforded by the applicable state licensing board and, when accredited, the accrediting entity or agency.
(8) If a physician, in connection with a claim for breach of contract or other dispute related to § 63-6-204, establishes in a court of competent jurisdiction or other forum, including in a peer review action or arbitration proceeding, that the conditions of § 63-6-204 have been violated by the employing entity, the physician shall be entitled to recover the physician’s cost of litigation, arbitration or peer review defense and a reasonable attorney’s fee.
(9) Employing entities shall not restrict or interfere with patient referral decisions in a manner that unnecessarily increases the cost to the patient of the medical services provided.
(d) No teaching institution shall be held vicariously liable for any act or omission of an intern, resident or fellow in the course of a training program of a medical school owned or operated by the state of Tennessee, under a legal theory of implied or apparent agency, ostensible agency, or any other theory of vicarious liability except actual agency. In determining whether the intern, resident or fellow was an actual agent of the teaching institution, the fact that the intern, resident or fellow was in the teaching institution and providing treatment or services or otherwise caring for patients and was following the institution’s bylaws, rules and regulations, policies, procedures, and protocols is insufficient, standing alone, to prove that the intern, resident or fellow was acting as the institution’s actual agent.
(e) For purposes of this section, unless the context otherwise requires:

(1)

(A) “Affiliate” of a hospital means an entity that directly or indirectly is controlled by, or is under common control with, a hospital licensed under this chapter or title 33, chapter 2. “Affiliate” does not mean, however, a health maintenance organization licensed under the Health Maintenance Organization Act of 1986, compiled in title 56, chapter 32;
(B) “Affiliate” of a renal dialysis clinic means an entity that directly or indirectly is controlled by or is under common control with a renal dialysis clinic licensed under this chapter. “Affiliate” does not mean, however, a health maintenance organization licensed under the Health Maintenance Organization Act of 1986;
(2) “Anesthesiologist” is defined as a physician who has completed a residency in anesthesiology and whose practice is primarily limited to anesthesiology, including, but not limited to, nerve block, pain management, cardiac and respiratory resuscitation, respiratory therapy, management of fluids, electrolyte and metabolic disturbances;
(3) “Emergency physician” is defined as a physician who has completed a residency in emergency medicine, or practiced emergency medicine full time for a three-year period, and whose practice is limited to emergency medicine. “Emergency physician” does not include, however, a physician who has been previously employed to provide non-emergent medical services who, over a period of twelve (12) months or more, becomes a full-time emergency physician and who remains employed by mutual agreement;
(4)

(A) “Employing entity” means a hospital licensed under this chapter or title 33, chapter 2, or an affiliate of such an entity that employs one (1) or more physicians. “Employing entity” does not mean, however, a health maintenance organization licensed under the Health Maintenance Organization Act of 1986;
(B) “Employing entity” for purposes of subsection (c) means a renal dialysis clinic licensed under this chapter or an affiliate of such an entity that employs one (1) or more physicians. “Employing entity” does not mean, however, a health maintenance organization licensed under the Health Maintenance Organization Act of 1986;
(5) “Intern”, “resident” or “fellow” means any person receiving instruction through, and acting within the scope of, a training program of a medical school owned or operated by the state of Tennessee and who, in such capacity, receives compensation payable by the state of Tennessee and is entitled to individual immunity as an employee of the state of Tennessee pursuant to § 9-8-307(h).
(6) “Pathologist” is defined as a physician who has completed a residency in pathology and whose practice is primarily limited to pathology, including, but not limited to, anatomic and clinical pathology;
(7) “Physician” means a person licensed pursuant to title 63, chapter 6 or 9;
(8) “Radiologist” is defined as a physician who has completed a residency in radiology and whose practice is primarily limited to radiology, including, but not limited to, diagnostic radiology, radiation therapy, and radiation oncology;
(9) “Research hospital” means a hospital at which fifty percent (50%) or more of the inpatients treated during the previous calendar year were treated pursuant to research protocols; and
(10) “Teaching institution” means a hospital or mental health hospital, operating within the scope of an affiliation agreement with any medical school owned or operated by the state of Tennessee, and shall further include, but not be limited to, any sole proprietorship, partnership, corporation, limited liability company, or other public or private entity that owns, controls, or is affiliated with any such institution.
(f)

(1) Notwithstanding this section or any other law, nothing shall prohibit an employing entity from employing a physician; provided, however, that the employment relationship between the physician and the employing entity is evidenced by a written contract, job description or documentation, containing language which does not restrict the physician from exercising independent medical judgment in diagnosing, referring or treating patients. The employment of physicians authorized by this subsection (f) is subject to the following conditions:

(A) The employed physician must have completed residency training in internal medicine, family medicine, primary care, geriatric medicine or gerontology, or a related medical specialty area, or have become board certified in one (1) of those medical specialties;
(B) An employing entity shall not restrict or interfere with medically appropriate diagnostic, referral or treatment decisions. In the event that there is any dispute relating to this subdivision (f)(1)(B), the employing entity shall have the burden of proof;
(C) An affiliate of a nursing home that employs physicians shall not engage in any business other than the employment of physicians, the management of physicians and healthcare facilities, the ownership of property and facilities used in the provision of healthcare services;
(D) If a physician, in connection with a claim for breach of contract or other dispute related to § 63-6-204, establishes in a court of competent jurisdiction or other forum, including in a peer review action or arbitration proceeding, that the conditions of § 63-6-204 have been violated by the employing entity, the physician shall be entitled to recover the physician’s cost of litigation, arbitration or peer review defense and a reasonable attorney’s fee;
(E) An employing entity shall not restrict or interfere with patient referral decisions in a manner that unnecessarily increases the cost to the patient of the medical services provided; and
(F) The written contract between an employing entity and the physician, in addition to the other items required by this subsection (f), shall include the name and location of each site where the physician may see patients.
(2) Employing entities shall not restrict the employed physician’s right to practice medicine upon the termination or conclusion of the employment relationship, except an employing entity may only restrict the employed physician from entering into another employment relationship with another employing entity; provided, such restriction complies with § 63-1-148.
(3) For purposes of this subsection (f):

(A) “Affiliate” of a nursing home means an entity that, through ownership or management relationship, is directly or indirectly controlled by, or is under common control with, a nursing home;
(B) “Employing entity” means a nursing home, or an affiliate of such a nursing home, that employs one (1) or more physicians. “Employing entity” does not mean, however, a health maintenance organization licensed under the Health Maintenance Organization Act of 1986;
(C) “Nursing home” means a nursing home licensed as such under this chapter; and
(D) “Referral” or “referring” means a decision by the employed physician to send a patient to another practitioner or specialty program for consultation, service or procedures that the employed physician cannot provide. Referral shall not include sending a patient for consultation, service or procedures that are available within the facility, unless, in the medical judgment of the employed physician, the patient would be better served by a practitioner or specialty program not employed by or contracted to the employing entity.
(g)

(1) Notwithstanding this section or another law, a hospital or an affiliated entity may employ an emergency physician to treat patients at a satellite emergency department, or a physician to treat patients at a primary care clinic or urgent care clinic, which are located in this state and owned or controlled by the hospital or affiliated entity, if:

(A) The hospital:

(i) Is located in a neighboring state in a county contiguous to this state;
(ii) Is licensed by the appropriate healthcare facility licensing authority in that state; and
(iii) Holds a valid certificate of need for a satellite emergency department in this state;
(B) The satellite emergency department, primary care clinic, or urgent care clinic is located:

(i) In a county that:

(a) Borders the neighboring state and contiguous county in which the hospital is located;
(b) Is designated as an economically distressed or at-risk county by the department of economic and community development, as updated annually;
(c) Has a population of less than twenty-seven thousand (27,000), according to the 2020 federal census or a subsequent federal census; and
(d) Had a hospital in the county close within eight (8) years before the date healthcare services are initiated at the satellite emergency department, primary care clinic, or urgent care clinic; and
(ii) Less than twenty (20) miles from a hospital designated as a Level I, II, or III trauma center in the neighboring state, but more than fifty (50) miles from a hospital designated as a Level I, II, or III trauma center in this state;
(C) The physician is:

(i) Licensed to practice medicine in this state; and
(ii) Employed at the hospital in the neighboring state; and
(D) The employment relationship with the physician is evidenced by a written contract, job description, or other documentation containing language that does not restrict the physician from exercising independent medical judgment in diagnosing and treating patients.
(2) A hospital or affiliated entity that employs a physician pursuant to subdivision (g)(1) is not deemed to be engaged in the practice of medicine.
(3) As used in this subsection (g), “affiliated entity” means an entity that is directly or indirectly controlled by, or is under common control with, the hospital.
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