### 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 ofHealth to issue to a non-physician a permit todispense synthetic narcotics (RQ-1621)

DearMr. Ferguson:

You askwhether the Department ofHealth is authorized to issuepermits forprescribing 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 toperform the medical services rendered to the corporations' clients. We conclude that the Department ofHealth does nothave 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 theunlawful practice of medicine by the corporation and aviolation by the employee physician of the prohibitions in section 3.08(12) of the Medical Practice Act,V.T.C.S. article 4495b, onaphysician's "permitting or

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allowing another to use his license or certificate to practice medicine inthis state," and in section 3.08(15) on "aiding or abetting, directly or indirectly, the practice of medicine by anyperson, partnership, association, or corporation not duly licensed topractice 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. FirstMedical 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, 356U.S. 912 (1958);F.W. B.Rockett. M.D. v. Texas State Bd. ofMedical 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 andwhat criteria govern the selection of medical and paramedical staffmembers? Towhom does the doctor owehis first duty -- thepatient or corporation? Who is to preserve the confidential nature of the doctor-patient relationship? What isto prevent orwho is to control a private corporation from engaging in mass media advertising in the exaggerated fashion so familiar to every American? Who isto dictate themedical and administrative procedures to be followed?

1. Section 3.08 makes such conduct grounds for the board's refusal to admit aperson 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 findno indication that the board has exempted the activities of such corporations as you refer to inyour request.

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Where do.budget considerations end and patient care begin?
Garcia, at 440. See also thediscussion inFlvn Brothers quoting with approval the above language fromnGarcia, a; 785.

A letter-brief submitted inresponse toyour request suggests that the above-quoted language of article 4476-11 "provides aclear indication of the Legislature's intent to provide the Health Department with this authority, provisions of theMedical Practice Act of Texas notwithstanding." We disagree. Acts 

### &IDarimaterig are tobe read together
as though theywere parts ofone and the same law, and their provisions harmonized if possible soas togive effect to both. a 53Tex. Jur. 2dStatutes S 186, and authorities cited there. See 1s Gov't (providing for the ta:onisation, Code §!j311.025, 311.026 ifpossible, of different statutory provisions). We think that the provisions of section 4(a) of article 4476-11 for the issuance by the Department ofHealth ofapermit to "any institution, public
orprivate, organized and operated under the laws of this state forthepurpose ofproviding health services," must be read together with the restrictions intheMedical Practice Act on the provision ofhealth services by corporations. An institution not incompliance with theMedical Practice Act, because it is formed by non-physicians and employs physicians to render medical services to itsclients, isnot "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 tobe issued a permit under that article by the Department ofHealth.

The letter-brief submitted inresponse toyour 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 theUnited States Code, volume 21, section 823(g), which requires "practitioners who dispense narcotic drugs to individuals formaintenance treatment ordetoxification treatment" to obtain separate registration from theU.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:

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An individual listed as program sponsor for atreatment program using methadone need not personally be a licensed practitioner but shall employ a licensed physician for the position ofmedical director.

Section 291.505 was Hadopted by reference" in rules promulgated by the Department ofHealth 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 aTexas 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, ofwhich the above referenced section 823(g) isapart, 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 apositive 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 21C.F.R. § 310.505. That regulation was redesignated as 21C.F.R. 5 291.505 in 1977. &g 42 Fed. Reg. 46698.

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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 ofarticle 4476-11 as limited by the provisions of theMedical Practice Act. We think that section 9.03 indicates that the federal standard for federal registration of applicants would notpreempt or otherwise invalidate more restrictive state lawgoverning a state's issuance of a separately required statepermit. See Nichols v. Board of Phrm 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" forconducting suchprograms).

SUMMARY

The Department ofHealth has no authority to issuepermits toprescribe and administer synthetic narcotic drugs to drug dependent persons under V.T.C.S. article 4476-11, to corporations formed bynon-physicians which employ physicians to render the medical services inquestion.

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 byWilliam Walker Assistant Attorney General

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