DAN MORALES 

AlTORNEY GENERAL 

QBffice of tip !Zlttornep @enerat 

&ate of QLexas 

July 8,1992 

Honorable Rene Guerra 

Criminal District Attorney 

Opinion No. DM-138 

Hidalgo County Courthouse 

Edinburg, Texas 78539 

Re: Whether the Edinburg Hospital 

Authority may pay physicians a flat fee or 

per diem to be on call to admit 

emergency room patients to the hospital 

without violating section 161.091 of the 

Health and Safety Code, which prohibits 

remuneration for securing or soliciting 

patients (RQ-301) 

Dear Mr. Guerra: 

You ask whether the Rdinburg Hospital Authority (the “hospital”) may pay 

physicians on a flat fee or per diem basis to be on call to admit emergency room 

patients to the hospital without violating section 161.091 of the Health and Safety 

Code which prohibits health care professionals from accepting remuneration for 

securing or soliciting patients or patronage. You explain that the hospital has 

contracted with a local medical firm to provide physicians to staff the emergency 

room. These physicians are not on the hospital’s active medical staff and are 

therefore unable to admit patients to the hospital. Although some emergency room 

patients have an ongoing relationship with a member of the active medical staff who 

can admit them to the hospital, other patients do not. As a result, the hospital must 

recruit physicians from its active medical staff to be available at the emergency 

room for the sole purpose of admitting those patients who have no ongoing 

relationship with a member of the medical staff. 

Section 161.091 of the Health and Safety Code provides in pertinent part: 

(a) A person’ licensed, certified, or registered by a health 

care regulatory agency of this state commits an offense if the 

‘TIIC Code t3nst~etion Act defmes the term “person” to include a ‘corporation, organization, 

government or governmental subdivision or agency, business trust, estate, trust, partnership, 

associdon, and any other legal entity.” Gov’t Code 0 311.005(2). 

p. 713 
Honorable Rene Guerra - Page 2 (DM-138) 

person intentionally or knowingly offers to pay or agrees to 

accept any remuneration directly or indirectly, overtly or 

covertly, in cash or in kind to or from any person, firm. 

association of persons, partnership, or corporation for securiq 

or soliciting patients or patronage. 

. . . . 

(e) This section shall not be construed to prohibit 

remuneration for adverbsing, marketing, or other services that 

are provided for the purpose of securiq or soliciting patients 

provided the remuneration is set in advance, is consistent with 

the fair market value of the services, and is not based on the 

volume or value of any patient referrals or business otherwise 

generated between the parties. 

(f) This section shag not be construed to prohibit any 

payment, business arrangements, or payments practice not 

prohibited by 42 U.S.C. Section 132Oa-7b(b) or any regulations 

promulgated pursuant theretof [Footnotes added.] 

Section 1320a-7b(b) of title 42 of the United States Code generally 

. . . 

cnmmahs kickbacks in Medicare and federally-funded state health care programs. 

Pursuant to its statutory authority, the Office of the Inspector General of the United 

States Department of Health (the “OK?“) has issued regulations which exempt 

certain payment practices from those criminal penalties. See 42 C.F.R. 00 1001.951, 

1001.952. Those regulations provide that remuneration made by a principal to an 

agent as compensation for services of the agent is not subject to aiminal liability, as 

p. 714 
Honorable Rene Guerra - Page 3 (DM-138) 

long as the foIhnving six standards are met: (1) The agreement must be written and 

signed by the parties; (2) the agreement must specify the services to be provided by 

the agent; (3) the agreement must specify the enact schedule of the time intervals 

for which services are to be provided and the charges therefor; (4) the term of the 

agreement must be for not less than one year; (5) the aggregate compensation paid 

to the agent over the term of the agreement must be set in advance, be consistent 

with fair market value in arms-length tmmactions, and not be determined in a 

manner which takes into account the volume or value of any referrals or business 

otherwise generated between the parties for which payment may be made in whole 

or in part under Medicare or a federa&-funded state health care program; and 

(6) the services performed under the agreement must not involve the counseling or 

promotion of a business arrangement or other activity that violates any state or 

federal law. Id. 0 1001.952(d). 

You state that the hospital’s personal service contracts with the physicians 

willbesetoutinmitingandsignedbytheparties;willspecifytheservicestobe 

provided by the physician; wiil specify the schedule for delivery of such services; and 

will cover a period of not less than one year. You also state that the physicians wili 

be paid on a flat fee or per diem basis that wili reflect the fair market value for the 

services to he performed. Presumably, therefore, the contract wili not take into 

account the volume or value of the patients admitted to the hospital. 

It is beyond the purview of the opinion process to review particular contracts 

and to determine whether they satisfy speciSc statutory requirements. Assuming, 

however, that the contracts are as you describe them, and that they do not “involve 

the counseling or promotion of a business arrangement or other activity that violates 

any state or federal law,” 42 C.F.R. 0 1001.952(d)(6). then persons making payments 

under such contracts are exempted from crimimd liability under section 132&+7b(b) 

of title 42 of the United States Code by the regulations promulgated by the OIG. 

Therefore, the payments made pursuant to such contracts are also exempted from 

section 161.091 of the Health and Safety Code by virtue of subsection (f) which 

provides that section 161.091 “shall not bc construed to prohibit any payment.. . not 

prohibited by 42 U.S.C. Section 132Oa-7b(b) or any regulations promulgated 

pursuant thereto.” We also conclude that such payments would be exempted from 

section 161.091 by virtue of subsection (e) which provides that “[t]his section shah 

not be construed to prohibit remuneration for.. . services that are provided for the 

purpose of seeming or soliciting patients provided the remuneration is set in 

adance, is consistent with the fair market value of the services, and is not based on 

p. 715 
Honorable Rene Guerra - Page 4 (DM-138) 

the volume or value of any patient referrals or business otherwise generated 

between the parties.” 

SUMMARY 

Assumhg that the Edinburg Hospital Authority’s contracts 

with physicians for the purposes of admitting emergency room 

patients to the hospital confomt with the criteria set forth in 

section 1001.952(d) of title 42 of the Code of Federal Regulations, payments made under such contracts would not be 

prohibited by section 161.091 of the Health and Safety Code. 

DAN MORALES 

Attorney General of Texas 

WILL PRYOR 

First Assistant Attorney General 

MARY KELLER 

Deputy Assistant Attorney General 

RENEAHIcKs 

Special Assistant Attorney General 

MADELEINE B. JOHNSON 

Chair, Opinion Committee 

Prepared by Mary R. Grouter 

Assistant Attorney General 

p. 716