                        Aue-mn   II.   TrxM



                        October 16, 1957

Dr. M. Ii.Crabb, M.D.            Opinion No. W&278.
Bearetary,
Texas State Board of             ::e: Corporationpraotlce In
  Me&ml Examlners,                    medicine,
Fort Worth 2, Texas
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 employmentby a
         corporationon a salary or commission basis,
         and the corporationcharges 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 prac-
tice medicine in this State,ln which he states:
               “I would speclflcaliylike 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~,
                                     iryan accredited
          hbspltal In which the hnyplcal collects the
          fees for the personal service8 cf i;hlsphysician.”
            Subdivision 12 of Artlcle’4505,Vernon’s Civil Statutes,
prohibits the “permittingor allowing anothr,rto use Ns license
or certificate to practice medlclne in this State for tne purpose
of treating   or offering to treat sick, lnjtrrcdor afflicted human
beings”, and such conduct is made a &round 1’orthe suspension
and revocation or cancellationof hi,sl.lcenseto practice medl-
clne 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 6tipUlatlon6of 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 affiliatedhuman 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 racticc mdblne     by the prw585ons
          of hrt. 4 5d , Vernon16 Ann. Clv. Statr.  See
          Section 5, Art, 4505,"
                                  Tex.      303 S.W. 2d 376, the
Supreme Court
          In -0    8x88 a b?%?e It t&validity of a corpo-
rate praatice rule adopted by the Board of Examiner6 in Optoac-
try, which rule state6 "that an optometristwho prcicfioeaopknae-
tFy On the prem56eb of a tnercant5leestabl56~6nt 6hOUld observe
6ertain spacilied  conditions regarding the 6eparatlon of his
practice from the business operations of the uercantile estab-
lirhment, and that proof of noncmplianoe   with any of there
conditionswill be considered prima facie e,yldenoethat the       1
optefaetz%st has placed his license at the disposal or In the
service of 8.nUnlicensed 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--'theoorporate
         praotloe rule'--has for its stated purpose
         among other things the safeguardingof the
         optometrist-patientrelatlonshlpand the
         efieotive Implementationof 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.spacefrom a business or
         .meroantile   'establishment',but seeks to con-
          trol the relatIonshIpsbetween the optometrist
          and his lessor to the extent that confusion on
          the part of the public will not arise and the
          optometrist-patientrelationshipswill not be
          endangered. This end Is sought to be aocomp-
          llshed by means of a presumption which an
          optometristmay 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 Exam-
          Anera, Tex. Civ. App., 287 S.W. 2d 190, wr. ref.
          n.r.e.   . . .I'
          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 Exam-
iners, supra, It was held:
                "The practice of medlclne in the District
         of Columbia Is subject to licensing and regula-
         tion and, we think, may not lawfully be sub-
         jected ‘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 condl-
         tlons, speaking generally,   that where a corpo-
         ration   operates a clinic or hospital, employs
Dr. M. H. Crabb, Page 4 (~~-278).




           ;he relationshipof doctor and patient,
           well recognized In the law, would,,be
           destroyed by such an arrangement.
           (Emphasisours).
          In view of the foregoing, you are advised that when-
'evera corporationemploys a licensed physician to treat
patients and itself receives the fee, the corporationIs
unlawfully engaged In the practice of medicine and the licensed
physician 80 employed la violating the provisions of Subdlvl-
sion 12, of Article 4505, Vernon's Civil Statutes, and Is sub-
ject 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 Subdivl-
           sion 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.
