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JIMMAlTOX Attorney

General

714Jack6on. SUItO700 oallas, TX. 75zozm 2lu742-8944

4824Alberta Ave..Suite 160 El**Paec..**

TX. 799052793 OlY53334M

1001ma* swa 700 l4oueton.TX. 77002-311t 71-

808Emadw*y, Suite312 LubtJcck, TX.70401447Q emf747-5235
Uoo N.Tsnth. Sulle B McAllsn, TX. 78501-1485 51-7

200 MaIn Ptua, wte uw) SanAntonlo. TX. 752052797 512n2n101 

# ‘TheAttorney General ofTexas

March 27. 1985

CarlosD. Godinez.M.D. OpinionNo.JM-304 President Texas State Board oE Medical Examiner8 **Re: Whether**  section 5.09(a) of article 4495b. V.T.C.S., P. 0. Box 13562,CapLtol Station Austin,Texas 78711 authorizes a physician to collect reimbursement for drugs supplied topatients
Dear Dr. Godinez:
You ask whether a physician may be reimbursed for the coat of dangerous drugs or controlled substances supplied a patient under the authority of sectton 5.09(a) of article 4495b, V.T.C.S., of the Medical Practice **Act.** Article 5.09 reads in Its entirety:

Sec. 5.09. (a) **A** person licensed to practice medicine under this Act is authorized to supply the needs of his patients with any drugs or remedies as are necessary to meet the patients’ immediate:needs; provided, howwer, this section doesaotpem&tthepttpaMantonperatea retaW pharmacy vithout first complying with the Texas Phermacy Act. cb) A licensed physician vho practices uidlcinc in **a** rural area in which there is no pharmacy may maintain **a** supply of dangerous drugs ,ln**the** o:E:Mceof the physician to be dispensed in the course **of** treating the physician’s patients and may be reimbursed for the cost of supplying those dtqs without obtaining a license under the Texae~ Pharmacy **Act** (Article 4542a-1, Vernon’s Texas Civil Statutes). Such physicians shall comply with all appropriate labeling sections applicable to this class of drugs under the Texas Pharmacy **Act,** and oversee compliance with packaging and recordkeeping sectionsapplicable to this elms of drugs. For the purposes of this subsectimn: (1) t’hcterm ‘rural area’ means an area in which there is nopharmacywithin a 15-mileradius of thephysician’s office. and iswithin:

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- (A) a county with a total population of 5,000 or less according to the most recent federal census;or @) a city or town, incorporated or unincorporated, with s population of less than 2,500, according to the most recent federal census, but shall not include a city or town. incorporated or unincorporated, whose boundaries arc adjacent to ar,incorporated city or town with an equal or greaterpopulation. (2) the term 'reimbursed for cost' shallmean an additional cha,rSeseparate from thatmade for the physician's professional services which includethe cost af thedrug product and all other actual costs to the physician incidental to providing thedispensing servicebut not including a separate fee for the act of dispensing the drug product itself. The Sixty-eighth Legislature added section 5.09(b) to the Medical Practice Act and an identlc.alprovision to the Texas Pharmacy Act. Acts 1983, 68th Leg., ch. S90, 551, 2 (codified as V.T.C.S. srts. 4542a-1, 033(c); 4495b. i5.09). The ssme enactment placed the word "retail" before "pharmacy" in section 5.09(a), originally enacted in 1981as section5.09 of the Yledical PracticeAct. SeeActs 1981. 67th

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You firstask:

1. May a phys::cian who, under the authority of section 5.09(a) of the Medical Practice Act, suppl.ies

dangerow drugs or controlled substances to a patient tc meet the patient's Imediate needs. be reimbursed for the cost of the drug product supplied :Lf [certainconditionsaremet]. The Medical Practice Act does not define "supply." Rowever, section 3.06(d), authorizing:a physician to delegate to others the administrationorprovision of dangerousdrugs,defines "provision" as follows: 'provision'means 'cosupply one ormore unit doses

of a drug, medicf&, or dangerous drug. The drug or medicine shal~lbe supplied in a suitable containerthathasbeen labeled in compliancewith theapplicabledru:glaws. (Emphasisadded). V.T.C.S. art. 4495b, 13.06:~1)(3)(4).When the patient is "supplied" medicine. he is given one or more doses to take with him and to use

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according to the physician's instructions. See alsoV.T.C.S. art. 4542a-1. 119(f); Attorney General Opinion MI-410 (1981) (under Pharmacy Act physician may administer medication to patients without being licensedas a pharmacist). Section 5.09(a) does not expressly permit reimbursement for the cost of drugs supplied under its authority. It does not pennit a physician to operate a reta:tl. pharmacy without first complying with the Texas Pharmacy Act. The Texas Pharmacy Act, article 4542a-1. V.T.C.S., includes In sectiorl19an exemption forphysicians expressed in language similar to that in.section 5.09(a):

(c) This Act does not apply to a practitioner licensed by the npproprlate state board who supplies his patients with dNgS in a manner authorized by stale or federal law and vho does not operate a plumnacy for the retailing of prescriptiondrugs.,
Texas Pharmacy Act, Acts 15181,67th Leg., ch. 255, 519(c), at 650 ("retailing" is incorrectly codified at V.T.C.S. art. 4542a-1. 119(c)). Section 19(c) and section 5.09(a) are provisions In par1 materia which should be CoriE~trued together. Calvert v. Fort Worth National Bank, 356 S.W.Zd 918 (Tex. 1962); State Board of Dental ExaminersV, Fenlav. 357 S.W.Zd 185 (Tex. Civ. App. -Dallas 1962,no VI-it). The Pharmacy Act does not prevent a physician from charging a aeparllce ree tar adnU.niSteY~ii~~~ \r.T.ti;.S. art. 4~--s-l~~ "Admlnlster"

means the direct application of a prescription drug by **injection,,** inhalation, ingestion, or any othermeans to thebody of a patientby: 0 a practiM&ner or an authorized agent underhis supervIsion;or (W the pat:lent at the direction of a practitioner. Id. 15(2). Nor Is a physicl.an barred from dispensing **or** distributing ~scriptioa drugs tohis ownpatients. Id. 119(a),(c). The relevant terms are defined as follows: 7

(16) 'Dispense' means preparing, packaging, compounding, or labeling for delivery a prescription drug or device in the course of nrofessional nractice io an ultimate user or his

. agent by or pursJ;mt to the lawful order of a oractltioner.

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(17) ‘Distribute’ means the delivery of a prescription dNg or device other than by administeringor dispensing. (Emphasisadded). Id. 55(16), (171. However. he may not ?6&iling of prescription drugs.” “operate e pharmacy for the Id. 119(c): see also V.T.C.S. art. 4495b. 55.09(s). If a physician se% drugs to individual patients, even at cost, the pharmacy,act considers him to be operating a pharmacy for the retailing of drugs. See Attorney General Opinion - MW-410 (1981). AttorneyGeneral OpinionMW-410 (1981)construed section 19(c)of the Texas Pharmacy Act to prohibit the physician from charging a separate fee for drugs provided to the patient for self-medication. The opinion statesas follow:

We believe a physlc:Lan who charges a separate fee for dispensing dNgS t0 a patient for self-medicationengages in the retailingof drugs. When a physician retails drugs, he is engaging in the practice of pharmacy within the statutory definition. A physician may. however, administer drugsdirectly to IXLS patients, see sections 5(g), 19(d). and we believe he maymake a separate charge for so d’o:Lng without engaging in the practice ofpharmayf. ~ectio~~~~e~e~ca~~~a~tice Act. ConstNed in pari materis with section 19(c) of the Pharmacy Act, prohibits a physician from charginga fee to cover the costof drugs supplied to a patient for self-medication. unless such physician practices in “a ruralares” as defined In article 5.09(b).
You also ask:

2. If a physician may not be reimbursed for the cost of a drug product supplied to a patient under the clrcumutances described in the first question, are thaw **any** circumstancesunder which aphysicianmay be reimbursed for the actual costs to the physician of a drug product supplied to a patient to meet the patfent’s immedfate needs, other than the*cfccumstances described in the new Section 5.09(b) oi’theMedical PracticeAct.which addresses the authority of rural physicians to dispensedangerous drugs? Section 5.09(b) and an identical provision codified as section 33(c) of article 4542a-1, V.T.C.S.. authorize a physician vho practices in a “rural area” to dispense dangerous drugs to his patients and be reimbursed for the cost of supplying the drugs.<’ ’ Dr. CerlosD. Godinex - Page 5 (JM-304)

“Rural *reel’ is defined rer;trictlvely. This narrow exception wes enacted to exempt rural physicians from the prohibition against charging a separate fee For prescription medicine supplied to patients. See Bill Anslys~ili to House Bill No. 1474, prepared for House Committeeon Public Realth, filed inBill File toRouse Bill No. 1474. Legislative Reference 'LLbrary(billwhich included 85.09(b) of article 4495b.V.T.C.S.. end 133(c) of article 4542a-1,V.T.C.S.). Section 5.09(b). as an exception to e generalprohibition, should be strictly construed. liunslqer v. Boyd, 26 S.W.2d 905 (Tex. 1930). -- Corpus Christi v. McClaugher~r, 284 S.W.2d 927 (Tex.Civ. App. - San Antonio 1955. writ ref'd). Unless he complies with the various requirements of section 5.OS(b), a physician who is not a licensed pharmacist may not be reimbursed for the cost of drugs supplied to meet a patient's immediate needs.

SUMMARY
A physician who supplies dangerous drugs or controlled substances to a patientunder authority of section 5.09(a). article 4495b. V.T.C.S.. may not be reimbursed Eor the cost of the product supplied. Section 15.09(b)provides sn exception permitting rural physicians who come vithin its terms to charge o fee for the cost of drugs supplied topatients.

Attorney General of Texas TOMGREBN FirstAssistantAttorney General
DAVID R. RICEAXDS ExecutiveAssistant Attorney General RICX GILPIN Chairman,Opinion Committee Prepared by SusanL. Garrison Assistant Attorney General

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APPROVED: OPINION COMMITTEE Rick Cilpin. Chairman SusanGarrison JimMoellinger JenniferRiggs

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