The corporate practice of medicine is a legal doctrine, which generally prohibits corporations, entities or individuals (i.e. non-physicians) from practicing medicine.

A general summary of the corporate practice of medicine doctrine is that it prohibits physicians from entering into partnerships, employee relationships, fee splitting, or other situations with non-physicians where the physician's practice of medicine is in any way controlled or directed by, or fees shared with a non-physician. Generally, physicians may enter into independent contractor arrangements with non-physicians. However, whether an independent contractor situation exists is a question of law and attendant facts.

Section 165.156 of the Medical Practice Act makes it unlawful for any individual, partnership, trust, association or corporation by use of any letters, words, or terms, as an affix on stationery or advertisements or in any other manner, to indicate the individual, partnership, trust, association or corporation is entitled to practice medicine if the individual or entity is not licensed to do so.

Section 164.052(a)(13) of the Medical Practice Act authorizes disciplinary action against any licensee for impersonation of a licensed practitioner or permitting another to use his license to practice medicine. Section 164.052(a)(17) authorizes disciplinary action against a practitioner for aiding or abetting, directly or indirectly, the practice of medicine by non-licensed individuals or entities.

Beginning in 2011, the Texas Legislature enacted laws authorizing certain types of hospitals and specific hospital districts to directly hire physicians.

Because of the highly technical aspects of this doctrine, a physician should consult with private counsel regarding any actual or contemplated arrangement. Please be advised that the Board staff is not authorized to provide private legal advice.

The following case law/legal authority may be helpful in the analysis and are available from any local law library or private counsel:

a. Garcia v. Texas State Board of Medical Examiners, 384 F.Supp. 434 (W.D. Texas 1974);

b. F.W.B. Rockett v. Texas State Board of Medical Examiners, 287 S.W.2d 190 (Tex. Civ.App.- San Antonio 1956, writ ref'd n.r.e.);

c. Watt v. Texas State Board of Medical Examiners, 303 S.W.2d 884 (Tex. Civ. App.- Dallas 1957, writ ref'd n.r.e.);

d. Flynn Brothers, Inc. v. First Medical Associates, 715 S.W.2d 782 (Tex. Civ. App.- Dallas 1986, writ ref'd n.r.e.)

e. Woodson v. Scott & White Hospital, 186 S.W.2d 720 (Tex. App. 1945, writ ref'd w.o.m.)

f. Tex. Atty. Gen. Op. JM-1042 (1989)

g. Tex. Atty. Gen. Op. WW-278 (1957).

h. Tex. Atty. Gen. Op. JM 369 (1985)

i. Tex. Atty. Gen. Op. DM-138 (1992)

j. Tex. Atty. Gen. Op. M-551 (1970)

k. The Medical Practice Act, Texas Occupations Code Annotated, Title 3, Subtitle B as amended, section 162.001.

l. The Medical Practice Act, Texas Occupations Code Annotated, Title 3, Subtitle B as amended, section 162.001.

m. The Medical Practice Act, Texas Occupations Code Annotated, Title 3, Subtitle B as amended, 151.055.

n. Occupations Code, section 102.001.

Yes. Prior to and each and every time a physician or advanced practice professional (such as a physician assistant or advanced practice registered nurse acting under a physician’s delegated authority) prescribes opioids, benzodiazepines, barbiturates, or carisoprodol, the patient’s prescribing history must be reviewed by the physician or advanced practice professional issuing the prescription.  For providers seeking information on how to access the PMP, please review Pharmacy Board PMP information at https://www.pharmacy.texas.gov/pmp/.

The authority to delegate is found in Chapter 157 of the Texas Occupations Code, and Title 22 of the Texas Administrative Code, Section 193. A physician is allowed to delegate certain duties to a qualified and properly trained person acting under the physician’s supervision:

1) if in the opinion of the delegating physician the act can be properly and safely performed by the person to whom the medical act is delegated;
2) the act is performed in its customary manner; and
3) the performance of the act by the delegate is not in violation of any other statute.

It is clear that AAs can be delegated certain tasks under Chapter 157. The question is the extent allowable of such delegation. The key provision that needs to be examined is likely “not in violation of any other statute.”

Although the Nursing Act describes what a CRNA can do in regard to anesthesia, there is overlap of regulation of CRNAs between the Medical Board and Nursing Board. CRNAs are subject to physician delegation under the Medical Practice Act. The delegating physician can limit what a CRNA is allowed to provide under a Prescriptive Authority Agreement (PAA) or Standing Order, despite what may be allowed under Nursing Board rules and regulations.

The level of supervision required for any AA (or any delegated provider) is determined based on training, knowledge, and experience, as determined by the physician. For CRNAs, whether any level of physician supervision is required will depend upon those same factors, in addition to applicable federal and state statutes, regulations, bylaws, and ethical standards, if any. However, AAs and CRNAs cannot practice independently and require physician delegation. A hospital or facility can set their own standards, policies, etc., related to delegation and supervision as long as it does not violate Chapter 157, board rules, or other applicable federal and state statutes and regulations. Although AAs most commonly work under an anesthesiologist physician, any physician may supervise and delegate to AAs; however, the standard of care must be met and the delegating physician remains responsible for the AA’s actions.

One difference between an AA and CRNA is the ability to order and prescribe dangerous and controlled substances to patients for anesthesia and anesthesia-related services. Under section 157.058, a CRNA pursuant to the physician’s order and in accordance with facility policies or bylaws may select, obtain, and administer those drugs appropriate to accomplish the order. The physician’s order for anesthesia or anesthesia-related services is not required to specify a drug, dose, or administration technique.

As previously stated, the Nursing Act describes what a CRNA can do in regard to anesthesia. However, the delegating physician or facility can limit what a CRNA is allowed to provide under a PAA or Standing Order, despite what may be allowed under Nursing Board rules and regulations.

While AAs are not allowed to select drugs, determine dose, or administration technique for anesthesia or anesthesia-related services without specification by the supervising physician through an order, they perform many of the other same key duties performed by CRNAs. These duties include conducting preoperative physical exams, administering medications, evaluating and responding to life-threatening situations, setting up external and internal monitors, and implementing general and site-specific anesthetic techniques.

Another area of concern relates to handing-off patient care from CRNAs to AAs. RNs have the authority to delegate certain nursing tasks to unlicensed individuals; however, a CRNA and AA do not have any specific delegation authority concerning anesthesia tasks. A physician has the authority to delegate the process of anesthesia-related patient care, including the transfer or hand-off of care from a CRNA to an AA through an order (standing or patient-specific) or protocol. A CRNA or AA cannot set-up or independently delegate a hand-off or step-down process.

While the Nursing Act places responsibility for patient hand-off on a CRNA, if the physician orders a hand-off process from CRNA to AA, and this is memorialized in orders, protocols, etc., then the CRNA does not have the authority to determine the AA is not competent. The reason is that the physician has already made the determination of competency under Chapter 157.001.

Because the CRNA’s authority also arises through the delegating physician, and is not independent of that physician, a CRNA cannot override a physician Order related to this hand-off scenario. If this hand-off became an issue, the CRNA would have a defense (absolute) because the physician has already determined the competency of the AA to accept this patient. 

Yes, the PAs supervising physician must delegate prescriptive authority allowing a PA to sign prescriptions for controlled substances, also called scheduled drugs, as well as Dangerous Drugs. However, PA's are generally limited to Schedules III – V (Schedule IIs are allowed in very limited circumstances). All prescription drugs that are not controlled substances fall into the category of "dangerous drugs." Physician assistants with prescriptive authority must have their own DEA numbers to prescribe controlled substances. In addition, physician assistants must have the name of their current delegating physician authorizing prescriptive authority on file with DEA.

Please note: Under Senate Bill 195, the requirement for controlled substances registration (CSR) with the Texas Department of Public Safety (DPS) was eliminated as of September 1, 2016.

Effective 1/31/2010, registration by physicians of delegated prescriptive authority to PAs or APNs is required.

There is no limitation to the number of PAs or APNs a physician may supervise. However, a physician may only delegate prescriptive authority to a maximum of seven PA's or APN's, or their full-time equivalent.  The only exception relates to supervision and prescriptive delegation to a medically underserved population or in facility based practice.

A physician may delegate prescriptive authority to a maximum of seven PA's or APN's, or their full-time equivalent. There are some statutory exceptions for prescriptive delegation to a medically underserved population or in facility based practice. Refer to Board rule 169.

Yes, a PA can call in a prescription to a pharmacy. However, the PA can only do so at the direction of a physician.

A pain management clinic is defined in statute and rule as a publicly or privately owned facility for which a majority of patients are issued on a monthly basis, a prescription for opioids, benzodiazepines, barbiturates, or carisoprodol, but not including suboxone.

Regulations regarding the registration and operation of pain management clinics do not apply to the following settings:

• a medical or dental school or an outpatient clinics associated with a medical or dental school;
• a hospital, including any outpatient facility or clinic of a hospital;
• a hospice established under 40 TAC §97.403 (relating to Standards Specific to Agencies Licensed to Provide Hospice Services) or defined by 42 CFR §418.3;
• a facility maintained or operated by this state;
• a clinic maintained or operated by the United States;
• a nonprofit health organization certified by the board under Chapter 177 of this title (relating to Certification of Non-Profit Health Organizations);
• a clinic owned or operated by a physician who treats patients within the physician's area of specialty who personally uses other forms of treatment, including surgery, with the issuance of a prescription for a majority of the patients.

Note: The TMB cannot give legal advice. Please consult an attorney if you have questions regarding whether or not your clinic meets one of the exemptions listed above. However, the Board does have inspection authority, and owners of clinics that have not been properly registered can be investigated.

A pain management clinic may not operate in Texas unless the clinic is owned and operated by a medical director who: • is a physician who practices in Texas • has an unrestricted medical license • holds a certificate of registration for that pain management clinic   In addition, the owner/operator of a pain management clinic, an employee of the clinic, or a person with whom a clinic contracts for services may not: • have been denied, by any jurisdiction, a license issued by the Drug Enforcement Agency or a state public safety agency under which the person may prescribe, dispense, administer, supply, or sell a controlled substance; • have held a license issued by the Drug Enforcement Agency or a state public safety agency in any jurisdiction, under which the person may prescribe, dispense, administer, supply, or sell a controlled substance, that has been restricted; or • have been subject to disciplinary action by any licensing entity for conduct that was a result of inappropriately prescribing, dispensing, administering, supplying, or selling a controlled substance   A pain management clinic may not be owned wholly or partly by a person who has been convicted of, pled nolo contendere to, or received deferred adjudication for: • an offense that constitutes a felony; or • an offense that constitutes a misdemeanor, the facts of which relate to the distribution of illegal prescription drugs or a controlled substance as defined by Texas Occupations Code Annotated §551.003(11)   The medical director of a pain management clinic must operate the clinic in compliance with Drug Prevention and Control Act, 21 U.S.C.A. 801 et.seq. and the Texas Controlled Substances Act, Chapter 481 of the Texas Health and Safety Code, relating to the prescribing and dispensing of controlled substances. The medical director of a pain management clinic must, on an annual basis, ensure that all personnel: • are properly licensed, if applicable, • are trained including 10 hours of continuing medical education related to pain management, and • are qualified for employment.

Per Board Rule 172.3(d), the medical director or owner/operator of the pain management clinic, must on annual basis, ensure all personnel are properly licensed and, if applicable, have the requisite training to include 10 hours of continuing medical education (CME) annually in the area of pain management. This CME requirement applies to all personnel providing medical services to the patients (including, but not limited to: PAs, x-ray techs, phlebotomists, RNs, MAs, etc.). Office staff, such as managers, janitors, etc. who do not provide medical services, would not be required to meet the CME requirement, but would need to be listed in response to a pain clinic audit which requires listing all clinic personnel for that clinic. Documentation of the completed CME course shall be required to be made available upon request by Board Staff, including, but not limited to, during an on-site audit of the clinic, or during the certificate renewal process. The Board does have the authority to conduct audits and inspections at clinics to ensure compliance with all requirements and regulations pertaining to registered pain clinics, including audits of CME training as required.

Yes, the physician’s name, address and telephone number are required to be included on the prescription drug order.  If the prescription is for a controlled substance, the physician’s DEA number is also required to be included on the prescription.  SB 406 did not change the requirements for what needs to be included on a prescription drug order.   

The answer to the question depends on the practice setting.  In facility-based hospital practices and in practices that serve medically underserved populations, there are no limitations.  In all other practice settings, one physician may delegate to no more than seven full time equivalent APRNs and PAs (1:7 FTEs).  

No, the waiver process no longer exists.  A physician may only delegate prescriptive authority to more than seven full time equivalent APRNs and PAs in facility based hospital practices and in practices that serve medically underserved populations.  In all other settings and practice scenarios, the 1:7 FTE ratios applies.