According to the Legislative Budget Board (LBB), SB 1373 is not expected to have a significant fiscal impact on the state. The LBB determined that any costs related to the implementation of the bill could be absorbed using existing resources, which indicates that state agencies—primarily the Health and Human Services Commission—are not projected to require new appropriations or staffing adjustments to comply with the legislation.

Similarly, the bill is anticipated to have no significant fiscal implications for units of local government. Since the legislation deals strictly with internal hospital processes regarding how medical staff privileges are evaluated and applied, it does not mandate any direct expenditure or impose administrative burdens on counties, cities, or other local government entities.

In summary, SB 1373 presents a low-cost regulatory adjustment that enhances procedural fairness without introducing significant new duties or enforcement mechanisms. This fiscal neutrality likely contributed to the bill’s favorable reception in committee and helps reduce the likelihood of budget-related opposition during floor debates.

While the underlying concern behind SB 1373—ensuring fairness in medical staff privileging decisions—is understandable, the legislation represents an overreach of government authority into the operational discretion of private hospitals and healthcare institutions. It imposes a statutory requirement on how private or locally governed hospitals carry out internal credentialing functions, which are complex, specialized, and already governed by a host of federal regulations, accreditation standards, and liability considerations.

This bill crosses a line by requiring private entities to adhere to a state-defined procedural standard in credentialing, even if minimal. Hospitals must already comply with standards set by accrediting bodies, and their privileging practices are often shaped by complex combinations of clinical quality data, legal risk assessments, and institutional needs. Mandating “consistent application” of criteria, without context or flexibility, may unintentionally force hospitals to restructure internal policies, increase legal exposure, or defend against claims that might not rise to the level of illegal discrimination but could still result in litigation or compliance burdens.

Though the bill contains no explicit enforcement mechanism, its statutory language could invite lawsuits or regulatory complaints, creating a chilling effect on hospital staffing decisions. Medical privileging is not a one-size-fits-all process—it requires a nuanced evaluation of qualifications, experience, institutional needs, and risk management. By codifying this process, even in a limited form, the bill inserts the legislature into professional decisions that are best left to hospital administrators and medical credentialing committees.

Concerns about discrimination or arbitrary decision-making are already addressed through existing legal channels, including federal anti-discrimination laws, licensing boards, peer review protections, and civil litigation options. There is no demonstrated pattern of systemic abuse or widespread denial of hospital privileges that would justify adding another layer of regulation. Moreover, Texas is a right-to-work and employment-at-will state, with strong cultural and legal norms favoring minimal interference in private enterprise. This bill undermines those principles by applying additional procedural mandates under the guise of fairness.

Requiring strict procedural consistency across all credentialing decisions could limit a hospital’s ability to tailor its staff to its unique patient population, infrastructure, or service model. For instance, rural hospitals may prioritize certain skill sets or limit specialties based on patient volume, liability exposure, or available facilities. SB 1373, while seemingly narrow, could undermine the discretion hospitals need to balance quality care, legal compliance, and fiscal sustainability.

Even if the current bill is limited in scope, it sets a precedent for further government involvement in hospital staffing or credentialing. Today it’s privileging criteria; tomorrow i,t could be mandates on which specialties must be hired, minimum quotas, or further limits on hospitals’ discretion to select and manage staff. SB 1373 opens the door to incremental regulatory expansion in an already highly regulated industry.

While fairness in hospital credentialing is a worthwhile goal, SB 1373 oversteps by codifying procedural requirements on private and nonprofit hospitals, risking unintended consequences that could affect operational flexibility, legal exposure, and economic efficiency. Hospitals are best positioned to make professional staffing decisions, not the state legislature. Texas has long upheld the values of limited government, free enterprise, and private sector autonomy—this bill runs counter to those core principles. Accordingly, Texas Policy Research recommends that lawmakers vote NO on SB 1373.

• Individual Liberty: The bill promotes individual liberty for medical professionals by ensuring they are treated equitably in the hospital privileging process. This can help prevent arbitrary exclusion based on degree type or institutional politics, allowing qualified practitioners to compete fairly. However, it restricts the liberty of hospitals, especially private ones, to make independent, nuanced judgments about staffing decisions. Thus, it protects liberty for individuals at the expense of some institutional autonomy.
• Personal Responsibility: The bill does not directly influence personal responsibility. It neither reduces nor enhances the obligation of individuals to meet professional standards, nor does it affect consequences tied to personal conduct. However, by reinforcing a process where criteria must be applied consistently, it arguably supports a system where merit and responsibility are more likely to be recognized, assuming hospitals are required to base decisions on actual qualifications rather than titles or politics.
• Free Enterprise: This bill imposes a uniform procedural requirement on private hospitals, which could interfere with their ability to operate freely in the healthcare marketplace. Credentialing decisions often reflect a hospital's unique business model, patient demographics, liability concerns, or strategic goals. Even though the bill does not mandate what those criteria must be, requiring consistent application may discourage innovation, introduce legal risk, and reduce the flexibility that competitive healthcare institutions need to thrive.
• Private Property Rights: Private hospitals, as property-owning entities, have traditionally held broad discretion over how they use their facilities and whom they authorize to practice within them. By compelling hospitals to apply privileging standards in a uniform way—regardless of local, contextual, or strategic concerns—this bill infringes on the control hospitals have over their own operations and physical infrastructure. It places the rights of credential-seeking individuals above the autonomy of property-owning institutions, creating tension with this core liberty principle.
• Limited Government: Although the bill is relatively narrow in scope, it expands state involvement into an area historically governed by private policy, accreditation standards, and professional norms. It does not authorize new enforcement powers or agencies, but it does codify a mandate that hospitals must comply with, which introduces new potential for legal challenges or regulatory interpretation. This move runs counter to the limited government principle by extending legislative authority into a sector that is already heavily regulated and complex.

• HB 3435 (Same As)