THE ATTORNEY GENERAL
0F TEXAS
April 24, 1989
Honorable William L. Ferguson Opinion No. JM-1042
County and District Attorney
Rusk County Courthouse Re: Authority of the Texas
Henderson, Texas 75652 Department of Health to is-
sue to a non-physician a
permit to dispense synthetic
narcotics (RQ-1621)
Dear Mr. Ferguson:
You ask whether the Department of Health is authorized
to issue permits for prescribing and administering synthetic
narcotic drugs to drug dependent persons under V.T.C.S.
article 4476-11 to corporations formed by non-physicians
which employ physicians to perform the medical services
rendered to the corporations' clients. We conclude that the
Department of Health does not have such authority.
Section 4(a) of article 4476-11 provides in relevant
part:
Any physician licensed by the Texas State
Board of Medical Examiners or any institu-
tion, public or private, organized and
operated under the laws of this state for the
purpose of providing health services may
apply to the department on forms approved by
the department for a permit to prescribe
and administer synthetic narcotic drugs to
drug-dependent persons. The department shall
issue a permit to applicants qualified
according to its rules, regulations, and
standards.
Arrangements by which a corporation formed by
non-physicians employs physicians to render~medical services
to the corporation's clients consistently have been held to
constitute both the unlawful practice of medicine by the
corporation and a violation by the employee physician of the
prohibitions in section 3.08(12) of the Medical Practice
Act, V.T.C.S. article 4495b, on a physician's "permitting or
p. 5408
Honorable William L. Ferguson - Page 2 (JM-1042)
allowing another to use his license or certificate to
practice medicine in this state," and in section 3.08(15) on
"aiding or abetting, directly or indirectly, the practice of
medicine by any person, partnership, association, or corpo-
ration not duly licensed to practice medicine."1 Snn. Garc'
v.~Texas State Bd. of Medical Em 384 F.Supp. 4::
(W.D. Tex. 1974), aff'd, 421 U.S. 995 (1675); Flvnn Bros.,
Jnc, v. First Medical Assoc., 715 S.W.2d 782 (Tex. App. -
Dallas 1986, writ ref'd n.r.e.); Watt v. Texas State Bd. of
Medical Examiners, 303 S.W.2d.884 (Tex. Civ. App. - Dallas
1957, error ref'd), cert. denied, 356 U.S. 912 (1958); F. W.
B. Rockett. M.D. v. Texas State Bd. of Medical Exm
287 S.W.2d 190 (Tex. Civ. App. - San Antonio 1956, wri;
ref'd n.r.e.); Attorney General Opinion WW-278 (1957).2
The Garcia court articulated the policy considerations
underlying these restrictions on the "corporate practice of
medicine" as follows:
Without licensed, professional doctors on
Boards of Directors, who and what criteria
govern the selection of medical and
paramedical staff members? To whom does the
doctor owe his first duty -- the patient or
corporation? Who is to preserve the
confidential nature of the doctor-patient
relationship? What is to prevent or who is
to control a private corporation from
engaging in mass media advertising in the
exaggerated fashion so familiar to every
American? Who is to dictate the medical and
administrative procedures to be followed?
1. Section 3.08 makes such conduct grounds for the
board's refusal to admit a person to its examinations or to
issue a license or renewal license to practice medicine.
Section 3.07(f) provides that conduct described in
inter alia subsections (12) and (15) of section 3.08 is un-
lawful.
2. We note that section 3.06(12) authorizes the board
to exempt certain activities from the application of the
Medical Practice Act. We find no indication that the board
has exempted the activities of such corporations as you
refer to in your request.
p. 5409
Honorable William L. Ferguson - Page 3 (JM-1042)
Where do. budget considerations end and
patient care begin?
Garcia, at 440. See also the discussion in Flvn Brothers
quoting with approval the above language fromnGarcia, a;
785.
A letter-brief submitted in response to your request
suggests that the above-quoted language of article 4476-11
"provides a clear indication of the Legislature's intent to
provide the Health Department with this authority, provi-
sions of the Medical Practice Act of Texas notwithstanding."
We disagree. Acts &I Dari materig are to be read together
as though they were parts of one and the same law, and their
provisions harmonized if possible so as to give effect to
both. a 53 Tex. Jur. 2d Statutes S 186, and authorities
cited there. See 1s Gov't Code §!j 311.025, 311.026
(providing for the ta:onisation, if possible, of different
statutory provisions). We think that the provisions of
section 4(a) of article 4476-11 for the issuance by the
Department of Health of a permit to "any institution, public
or private, organized and operated under the laws of this
state for the purpose of providing health services," must be
read together with the restrictions in the Medical Practice
Act on the provision of health services by corporations. An
institution not in compliance with the Medical Practice Act,
because it is formed by non-physicians and employs
physicians to render medical services to its clients, is not
"an institution organized and operated under the laws of
this state for the purpose of providing health ServicesI'
within the meaning of article 4476-11 and is thus not
eligible to be issued a permit under that article by the
Department of Health.
The letter-brief submitted in response to your request
also points to rules adopted by the Federal Food and Drug
Administration and Drug Enforcement Administration. &g 21
C.F.R. 5 291.505. Those rules implement the provisions of
the United States Code, volume 21, section 823(g), which
requires "practitioners who dispense narcotic drugs to indi-
viduals for maintenance treatment or detoxification treat-
ment" to obtain separate registration from the U.S. Attorney
General under standards established by the Secretary of the
Department of Health and Human Services and the Attorney
General. Subsections (c) of section 291.505 of the Code
of Federal Regulations provides in part with regard to
applicants for registration that:
p. 5410
Honorable William L. Ferguson - Page 4 (JM-1042)
An individual listed as program sponsor
for a treatment program using methadone need
not personally be a licensed practitioner but
shall employ a licensed physician for the
position of medical director.
Section 291.505 was Hadopted by reference" in rules
promulgated by the Department of Health at 25 T.A.C. section
229.141 among rules adopted to implement article 4476-113,
V.T.C.S.
The letter-brief suggests that
even if it were determined that the
prohibition of the corporate practice of
medicine under state law must be applied to
physicians who are employed by nonphysician
permit-holders under Article 4476-11, the
Supremacy Clause of the U. S. Constitution
would seem to require that a Texas statute
which frustrates or conflicts with the lawful
objective of a federal statute may not be
enforced.
Again, we disagree. The United States Code, volume 21,
section 903, provides with respect to the provisions of
subchapter I, chapter 13, title 21, of which the above
referenced section 823(g) is a part, as follows:
No provision of this subchapter shall be
construed as indicating an intent on the part
of the Congress to occupy the field in which
that provision operates, including criminal
penalties, to the exclusion of any State law
on the same subject matter which would
otherwise be within the authority of the
State, unless there is a positive conflict
between that provision of this subchapter and
that State law so that the two cannot
consistently stand together.
3. Section 229.141 refers to 21 C.F.R. § 310.505. That
regulation was redesignated as 21 C.F.R. 5 291.505 in 1977.
&g 42 Fed. Reg. 46698.
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Honorable William L. Ferguson - Page 5 (JM-1042)
We find no "positive conflict" between the federal
registration requirement of section 823(g) as implemented
by, inter alig 21 C.F.R. section 291.505(c), and the
separate state permitting requirements of article 4476-11 as
limited by the provisions of the Medical Practice Act. We
think that section 9.03 indicates that the federal standard
for federal registration of applicants would not preempt or
otherwise invalidate more restrictive state law governing a
state's issuance of a separately required state permit. See
Nichols v. Board of Ph rm y 657 P.2d 216 (Or. Ct. App.
1983, pet. denied), (se%iEz '9.03 "expressly permits addi-
tional state regulation," at 219). See also 21 C.F.R.
5 291.505(c)(5) (providing that treatment programs to be
approved for federal purposes "must conform to all State
requirements" for conducting such programs).
SUMMARY
The Department of Health has no authority
to issue permits to prescribe and administer
synthetic narcotic drugs to drug dependent
persons under V.T.C.S. article 4476-11, to
corporations formed by non-physicians which
employ physicians to render the medical
services in question.
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, opinion Committee
Prepared by William Walker
Assistant Attorney General
p. 5412
Untitled Texas Attorney General Opinion
Combined Opinion