Aue-mn II. TrxM 

October 16, 1957 

Dr. M. Ii. Crabb, M.D. 

Bearetary, 

Texas State Board of 

Me&ml Examlners, 

Fort Worth 2, Texas 

Opinion No. W&278. 

::e: Corporation praotlce In 

medicine, 

Dear Dr. Crabb: 

You have requested an opinion on the following 

questions : 

“1. Is a physician subject to having 

his license forfeited under Article 4505, 

Section 12, If he accepts employment by a 

corporation on a salary or commission basis, 

and the corporation charges for the services 

that he performs? 

“2. In a situation such as is described 

above, would the corpora.tion be considered as 

being engaged in the unlawful practice of 

medicine?” 

These questions have arlsen by virtue of a letter 

received by your office from an indlvldual licensed to practice medicine in this State,ln which he states: 

prohibits 

“I would speclflcaliy like to know If 

there Is a Texas law und+r which a doctor 

forfeits hla license if he is cmplcyed, either 

on a salary.or commlss:lot~, iry an accredited 

hbspltal In which the hnyplcal collects the 

fees for the personal service8 cf i;hls physician.” 

Subdivision 12 of Artlcle’4505, Vernon’s Civil Statutes, 

the “permitting or allowing anothr,r to use Ns license 

or certificate to practice medlclne in this State for tne purpose 

of treating or offering to treat sick, lnjtrrcd or afflicted human 

beings”, and such conduct is made a &round 1’or the suspension 

and revocation or cancellation of hi,s l.lcense to practice medlclne by the provisions of Article 4!506, Vernon’s Civil Statutes. 
DF. Pl, X, Crabb, Page 2 (UW-278 ). 

I) , . . Bp the pleadings of appellant, 

N8 tert5mOny, and the 6tipUlatlon6 of the 

pUrtie6, it Via6 cOnClU65iWl~ e6tsbl56hed 

mats Appellant Y86 

Clinic for a 6alary of "s $iiZe&Zy~~ti 

he received nb Seer; the Cl5nic Was owned 

by Ralph C, Thom&ll, who wa6 not a medloal 

doctor and no mediual doctor owned any 

5nterest In the clinic) appellant performed 

medical services for the clinic and th6 fee6 

for such cervices were collected by the 

clinic. Such conduct on the part 6f appellant 

was In effect ‘permitting, or allowing, Mother 

to U6e h56 license or certificate to praotioe 

medlclne In th58 state, Sor the purpO66 of 

treating, or offering to treat, sItIt, injured, 

or affiliated human beings’, wh5ch conduat is 

prohfblfad by the grovfslcrns oi Section 12 

of Art. 4505, Vernonld Ann. Div. Stats., and 

is made a ground for the forfeiture of 6 

license to 

of hrt. 4 5d 

racticc mdblne by the prw585ons 

, Vernon16 Ann. Clv. Statr. See 

Section 5, Art, 4505," 

In - 

Tex. 

Supreme Court 0 

303 S.W. 2d 376, the 

8x88 a b?%?e It t&validity of a corporate praatice rule adopted by the Board of Examiner6 in Optoactry, which rule state6 "that an optometrist who prcicfioea opknaetFy On the prem56eb of a tnercant5le establ56~6nt 6hOUld observe 

6ertain spacilied conditions regarding the 6eparatlon of his 

practice from the business operations of the uercantile establirhment, and that proof of noncmplianoe with any of there 

conditions will be considered prima facie e,yldenoe that the 

optefaetz%st has placed his license at the disposal or In the 

1 

service of 8.n Unlicensed person In vlolation of. Article 4563(i)". 

Subdiv56lon (5) of Article 4563, Vernon’s Civil 

Statutes, referred to In the aorporate practice r~lq 6bove 

quoted, pI’oVide6: 

"'(1) That said licensee lends, lea6es, 

rents or In any manner places his llaehse at 

the dl6posal or in the service of any per6On 

not licensed to Qraet5Oe optometry In th56 

stats, ' " 
Dr. H. H. Crabb, Page 3 (WW-278). 

In sustaining the corporate practloe rule, It was 

held: 

"The third rule attaoked--'the oorporate 

praotloe rule' --has for its stated purpose 

among other things the safeguarding of the 

optometrist-patient relatlonshlp and the 

efieotive Implementation of the Legislature's 

prohibition against placing an optometrist'8 

license 'In the service or at the dlapoaal 

of unlicensed persons. . . .I 

,I 

. . . 

"The rule does not say that an optometrist 

cannot lease ofiloe.space from a business or 

.meroantile 'establishment', but seeks to control the relatIonshIps between the optometrist 

and his lessor to the extent that confusion on 

the part of the public will not arise and the 

optometrist-patient relationships will not be 

endangered. This end Is sought to be aocompllshed by means of a presumption which an 

optometrist may rebut If despite his violation 

of the rule, he can show that he has not placed 

his license 'at the disposal or In the service 

of any person not licensed to practice optometry.' 

Cr. Rookett v. Texas State Board of Medlcal ExamAnera, Tex. Civ. App., 

n.r.e. . . .I' 

287 S.W. 2d 190, wr. ref. 

In United States vs. American Medical Association, 

110 F. 2d 703, 714 (D.C.CIr. 1940, cert. den.) relied on by 

the Court In F.W.B. Rockett vs. State Board of Medical Examiners, supra, It was held: 

"The practice of medlclne in the District 

of Columbia Is subject to licensing and regulation and, we think, may not lawfully be subjected ‘to commerolallzatlon or exploItatlon't 

As was well said In People v. United Medloal 

Service, 362 Ill. 442, 200 N.E. 157, 163, 103 

A.L.R. 1229, the praotlce of medicine requires 

something more than the financial ability to 

hire oompetent persons to do the actual work. 

And 80 It has been held under varying condltlons, speaking generally, that where a corporation operates a clinic or hospital, employs 
Dr. M. H. Crabb, Page 4 (~~-278). 

;he relationship of doctor and patient, 

well recognized In the law, would,,be 

destroyed by such an arrangement. 

(Emphasis ours). 

In view of the foregoing, you are advised that when- 

'ever a corporation employs a licensed physician to treat 

patients and itself receives the fee, the corporation Is 

unlawfully engaged In the practice of medicine and the licensed 

physician 80 employed la violating the provisions of Subdlvlsion 12, of Article 4505, Vernon's Civil Statutes, and Is subject to having his license to practice medicine in this State 

canceled, revoked, or suspended by the Texas State Board of 

Medical Examiners. 

SUMMARY 

Whenever a corporation employs 

a licensed physician to treat patients 

and itself receives the fee, the 

corporation is unlawfully engaged in 

the practice of medicine and the 

licensed physlclan so employed Is 

violating the provisions of Subdivlsion 12, of Article 4505, Vernon's 
Dr. M. Ii. Crabb, Page 5 (WW-278). 

Civil Statutes, and Is subject 

to having his license to practice 

medicine In this State canceled, 

revoked, or suspended by the 

Texas State Board of Medical 

Examiners. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

John Reeves 

:' 

JR:wam:pf 

APPROVED: 

OPINION COMMITTEE 

Geo. P. Blackburn, Chairman 

J. C. Davis, Jr. 

Ralph R. Rash 

Morgan Nesbltt 

Houghton Brownlee, Jr. 

E. M. DeGeurln 

REVIEWED FOR THE ATTORNEY GENERAL 

By: James N. Ludlum.