Untitled Texas Attorney General Opinion ( 1973 )

The Honorable R. T. Weber, D. D.S. Opinion No. H-41
Secretary-Treasurer, Texas State
Board of Dental Examiners Re: The right of a Dental
Capital National Bank Bldg. Association to regulate
Austin, Texas 78701 the relationship between
the licensed dentist, the
patient, and a third party
with whom the patient has
contracted to provide den-
tal care to members of his
Dear Dr. Weber: Group.
You have requested the opinion of this office with regard to a suggested
amendment to the Texas Non-Profit Corporation Act. Article 1396-2. OlA(l),
Vernon’s Texas Civil Statutes, currently provides in part as follows:
“Charitable corporations may be formed for the
purpose of operating a Dental Health Service Corpor-
ation which service corporat.ion will manage and
coordinate the relationships between the contracting
dentist, who will. perform the dental services, and
the patient who will. receive such services where such
patient is a member of a group which has contracted
with the Dent~al Heal.th Service Corporation to pro-
vide dental care to members of that group . . . .
A corporation formed hereunder shall maintain not
less than t.hirt.y percent: (30%) of the number of den-
tists actually engaged in the practice of dentistry
in th,is state as pa~rt:icipat,ing or contracting den.-
tists, and shal,l file with t,he Texas State Board of
Dent.al Examiners each Septem’ber the names and add-
resses of all contract.ing or participating dentists. ”
The suggested amendment would add rhe foll,owing language as Article
1396-2. OlA(2), V. T. C.S.:
p. 166
The Honorable Dr. R. T. Weber, page 2 (H-41)
“Nothing contained in Article 1396-2. 01 shall be
construed to limit the authority of any Dental Assoc-
iation with at least 70% of the dentists legally en-
gaged in the practice of Dentistry in this State from
establishing a committee or council or unincorporated
association or corporation with full authority to reg-
ulate, contract, manage, control and coordinate the
relationship between the licensed dentist, who will
perform the services, and the patient who will receive
such services, and a third party with whom the patient
has contracted to provide dental care to members of
his Group. The Dental Association may form a cor-
poration for the above purposes under this Article
or it may provide such services through the Texas
Dental Association. ”
Any Dental Health Service Corporation (DHSC) established under
Article 1396-2. OlA(1) must maintain at least thirty percent participation
of all practicing dentists. It has the authority to contract with groups
to provide dental care to members of such groups, care to be provided
by the participating dentists. Such DHSC is, therefore, a third party
given the authority to “manage and coordinate” the relationship bet-
ween the participating dentist on the one hand and the group member-
patient on the other. The two classes of parties subject to its manage-
ment enter that relationship voluntarily, by contractual agreement.
The suggested amendment would allow the creation of an organization
(a committee or council or unincorporated association or corporation)
which would have “full authority to regulate, contract, manage, control
and coordinate” relationships among the designated parties. Those parties
are of three classes rather than the two subject to DHSC management.
The first subject party is “the licensed dentist, who will perform the
services. ” Any dentist who is to perform the services to the designated
individuals, whether or not he isamember of the Dental Association, is
to be made subject t:o its full authority to regulate and control,.
p. 167
The Honorable Dr. R. T. Weber, page 3 (H-41)
The second subject party is “the patient who will receive such services. ”
There is no requirement of any relationship, contractual or otherwise,,
between the patient and the Dental Association to whose authority the patient,
in his relationship with his dentist, is to be made subject.
The third party subject to the Association’s authority is that “third party
with whom the patient has contracted to provide dental care to members
of his Group, ” that is, the party which provides the link.between the dentist
and the group member -patient, a party which, like the dentist and patient,
does not necessarily stand in any contractual or other relationship with the
Association.
One such third party would therefore be any DHSC organized under
Article 1396-2. OlA(l), V. T. C. S. The suggested amendment could con-
ceivably subject a DHSC of exactly 30% of the practicing dentists of the
State and their patients to the “full authority to regulate, contract, manage,
control and coordinate” their internal contractual relationships of a council
established by a Dental Association made up exclusively of the other 70%
of the practicing dentists of the State.. It thus appears that the effect of the
suggested amendment would be to permit a private sector of the population
to establish an organization with independent powers to regulate contrac-
tual relations among other elements of the public with whom it stands in
no contractual relationship.
The creation of an organization so empowered would be in effect an
attempted delegation of legislative powers, in violation of Art,icle 2, $1 and
Article 3, § 1 of the Constitution, to a private organization. Such an attempted
delegation would be unconstitutional and void. Trimmier v. Carlton, 296 S.W.
1070 (1927); Texas National Guard Armory Board v. McGraw, 126 S.W.2d 627
(Tex. , 1939); Davis v. City of Lubbock, 326 S.W.2d 699 (Tex., 1959); Daniel
v. Tyrrell & Garth Inv. Co., 93 S.W.2d 372 (1936); Brown v. Humble Oil
& Ref. Co., 83 S.W.2d 935 (1935), reh. den. 87 S.W.2d 1069; Calvert v.
Capital Southwest Corp., 441 S.W.2d 247 (Tex. Civ.App., Austin, 1969, writ ref.
n. r. e.), appeal dismissed, 397 U.S. 321.
Very truly yours,
JOHN L. HILL
Attorney General of Texas
p. 168
The Honorable Dr. R. T. Weber, page 4 (H-41)
APPF$$JED:
DAVID M. KENDALL, Chairman
Opinion Committee