1. (a) A hospital, institution, or program that is licensed by the state, is operated by the state or a political subdivision of the state, or directly or indirectly receives state financial assistance may not differentiate in regard to a person licensed under this subtitle solely on the basis of the academic medical degree held by the person. The hospital, institution, program, state agency, or political subdivision may adopt rules and requirements relating to qualifications for medical staff appointments, including reappointments and the termination of appointments, the delineation of clinical privileges, or the curtailment of clinical privileges of persons who are appointed to that medical staff or permitted to participate in educational programs if those rules and requirements do not differentiate solely on the basis of the academic medical degree held by the affected physician and are:

   1. (1) determined on a reasonable basis, such as the professional and ethical qualifications of the physician;
   2. (2) based on reasonable standards;
   3. (3) applied without irrelevant considerations;
   4. (4) supported by sufficient evidence; and
   5. (5) not arbitrary or capricious.

2. (b) The limitations imposed under this section relating to discrimination based on the academic medical degree of a physician do not apply to practice limitations adopted by:

   1. (1) a medical school or college, including a program of a medical school or college; or
   2. (2) any office or offices of physicians, singularly or in groups, in the conduct of their profession.

3. (c) This subtitle may not be construed in a manner that:

   1. (1) discriminates against a school or system of medical practice; or
   2. (2) affects the use of the principles or teachings of any church in ministering to the sick or suffering by prayer or pastoral counseling without the use of a drug or other material substance represented as medically effective.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.