Untitled Texas Attorney General Opinion ( 1957 )

Aue-mn II. TrxM
October 16, 1957
Dr. M. Ii.Crabb, M.D. Opinion No. W&278.
Bearetary,
Texas State Board of ::e: Corporationpraotlce In
Me&ml Examlners, medicine,
Fort Worth 2, Texas
Dear Dr. Crabb:
You have requested an opinion on the following
questions:
“1. Is a physician subject to having
his license forfeited under Article 4505,
Section 12, If he accepts employmentby a
corporationon a salary or commission basis,
and the corporationcharges for the services
that he performs?
“2. In a situation such as is described
above, would the corpora.tion
be considered as
being engaged in the unlawful practice of
medicine?”
These questions have arlsen by virtue of a letter
received by your office from an indlvldual licensed to prac-
tice medicine in this State,ln which he states:
“I would speclflcaliylike to know If
there Is a Texas law und+r which a doctor
forfeits hla license if he is cmplcyed, either
on a salary.or commlss:lot~,
iryan accredited
hbspltal In which the hnyplcal collects the
fees for the personal service8 cf i;hlsphysician.”
Subdivision 12 of Artlcle’4505,Vernon’s Civil Statutes,
prohibits the “permittingor allowing anothr,rto use Ns license
or certificate to practice medlclne in this State for tne purpose
of treating or offering to treat sick, lnjtrrcdor afflicted human
beings”, and such conduct is made a &round 1’orthe suspension
and revocation or cancellationof hi,sl.lcenseto practice medl-
clne by the provisions of Article 4!506,Vernon’s Civil Statutes.
DF. Pl,X, Crabb, Page 2 (UW-278 ).
I)
, . . Bp the pleadings of appellant,
N8 tert5mOny, and the 6tipUlatlon6of the
pUrtie6, it Via6 cOnClU65iWl~ e6tsbl56hed
mats Appellant Y86
Clinic for a 6alary of "s $iiZe&Zy``ti
he received nb Seer; the Cl5nic Was owned
by Ralph C, Thom&ll,who wa6 not a medloal
doctor and no mediual doctor owned any
5nterest In the clinic) appellant performed
medical services for the clinic and th6 fee6
for such cervices were collected by the
clinic. Such conduct on the part 6f appellant
was In effect ‘permitting, or allowing, Mother
to U6e h56 license or certificate to praotioe
medlclne In th58 state, Sor the purpO66 of
treating, or offering to treat, sItIt,injured,
or affiliatedhuman beings’, wh5ch conduat is
prohfblfad by the grovfslcrns oi Section 12
of Art. 4505, Vernonld Ann. Div. Stats., and
is made a ground for the forfeiture of 6
license to racticc mdblne by the prw585ons
of hrt. 4 5d , Vernon16 Ann. Clv. Statr. See
Section 5, Art, 4505,"
Tex. 303 S.W.2d 376, the
Supreme Court
In -0 8x88 a b?%?e It t&validity of a corpo-
rate praatice rule adopted by the Board of Examiner6 in Optoac-
try, which rule state6 "that an optometristwho prcicfioeaopknae-
tFy On the prem56eb of a tnercant5leestabl56~6nt 6hOUld observe
6ertain spacilied conditions regarding the 6eparatlon of his
practice from the business operations of the uercantile estab-
lirhment, and that proof of noncmplianoe with any of there
conditionswill be considered prima facie e,yldenoethat the 1
optefaetz%st has placed his license at the disposal or In the
service of 8.nUnlicensed person In vlolation of.Article 4563(i)".
Subdiv56lon (5) of Article 4563, Vernon’s Civil
Statutes, referred to In the aorporate practice r~lq 6bove
quoted, pI’oVide6:
"'(1) That said licensee lends, lea6es,
rents or In any manner places his llaehse at
the dl6posal or in the service of any per6On
not licensed to Qraet5Oe optometry In th56
stats,'"
Dr. H. H. Crabb, Page 3 (WW-278).
In sustaining the corporate practloe rule, It was
held:
"The third rule attaoked--'theoorporate
praotloe rule'--has for its stated purpose
among other things the safeguardingof the
optometrist-patientrelatlonshlpand the
efieotive Implementationof the Legislature's
prohibition against placing an optometrist'8
license 'In the service or at the dlapoaal
of unlicensed persons. . . .I
,I
. . .
"The rule does not say that an optometrist
cannot lease ofiloe.spacefrom a business or
.meroantile 'establishment',but seeks to con-
trol the relatIonshIpsbetween the optometrist
and his lessor to the extent that confusion on
the part of the public will not arise and the
optometrist-patientrelationshipswill not be
endangered. This end Is sought to be aocomp-
llshed by means of a presumption which an
optometristmay rebut If despite his violation
of the rule, he can show that he has not placed
his license 'at the disposal or In the service
of any person not licensed to practice optometry.'
Cr. Rookett v. Texas State Board of Medlcal Exam-
Anera, Tex. Civ. App., 287 S.W.2d 190, wr. ref.
n.r.e. . . .I'
In United States vs. American Medical Association,
110 F.2d 703, 714 (D.C.CIr. 1940, cert. den.) relied on by
the Court In F.W.B. Rockett vs. State Board of Medical Exam-
iners, supra, It was held:
"The practice of medlclne in the District
of Columbia Is subject to licensing and regula-
tion and, we think, may not lawfully be sub-
jected ‘to commerolallzatlon or exploItatlon't
As was well said In People v. United Medloal
Service, 362 Ill. 442, 200 N.E. 157, 163, 103
A.L.R. 1229, the praotlce of medicine requires
something more than the financial ability to
hire oompetent persons to do the actual work.
And 80 It has been held under varying condl-
tlons, speaking generally, that where a corpo-
ration operates a clinic or hospital, employs
Dr. M. H. Crabb, Page 4 (``-278).
;he relationshipof doctor and patient,
well recognized In the law, would,,be
destroyed by such an arrangement.
(Emphasisours).
In view of the foregoing, you are advised that when-
'evera corporationemploys a licensed physician to treat
patients and itself receives the fee, the corporationIs
unlawfully engaged In the practice of medicine and the licensed
physician 80 employed la violating the provisions of Subdlvl-
sion 12, of Article 4505, Vernon's Civil Statutes, and Is sub-
ject to having his license to practice medicine in this State
canceled, revoked, or suspended by the Texas State Board of
Medical Examiners.
SUMMARY
Whenever a corporation employs
a licensed physician to treat patients
and itself receives the fee, the
corporation is unlawfully engaged in
the practice of medicine and the
licensed physlclan so employed Is
violating the provisions of Subdivl-
sion 12, of Article 4505, Vernon's
Dr. M. Ii.Crabb, Page 5 (WW-278).
Civil Statutes, and Is subject
to having his license to practice
medicine In this State canceled,
revoked, or suspended by the
Texas State Board of Medical
Examiners.
Yours very truly,
WILL WILSON
Attorney General of Texas
John Reeves
JR:wam:pf
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chairman
J. C. Davis, Jr.
Ralph R. Rash
:' Morgan Nesbltt
Houghton Brownlee, Jr.
E. M. DeGeurln
REVIEWED FOR THE ATTORNEY GENERAL
By: James N. Ludlum.