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 issue 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 institution, 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 corporation 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 unlawful. 

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, provisions 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 

(providing for the ta:onisation, 

Code §!j 311.025, 311.026 

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 individuals for maintenance treatment or detoxification treatment" 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. 

p. 5411 
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 additional 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