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                       The Attorney                   General of Texas
                                        September       4,     1980
MARK WHITE
Attorney General

                   Dr. Lauro F. Cavazcs, President                    Opinion No. MW- 2 3 1
                   Texas Tech University
                   Texas Tech University Health                       Re: Whether      a state     medical
                     Sciences Center                                  school is required to obtain a
                   P. 0. Box 4349                                     certificate of need or an exemption
                   Lubbock, Texas 79409                               certificate  from the Texas Health
                                                                      Facilities Commission

                   Dear President Cavazca:

                         You have requested our opinion regarding whether a state medical
                   school is required to obtain a certificate of need or an exemption certificate
                   from the Texas Health Facilities Commission.         Section 3.01(a) of article
                   4418h, V.T.C.S., provides:

                                    Each person must obtain from the commission a
                               certificate  of need or an exemption certificate    in
                               accordance with this Act for a.propcsed project to:

                                  (1) expand or substantially        expand a service
                                  currently   offered  or provide a service        not
                                  currently offered by the facility;

                                  (2) construct a new facility or change                the bed
                                  capacity of an existing facility;

                                  (3) modify an existing facility;

                                  (4) convert a structure          into a health-care   facility;

                                  or

                                  (5) organize an HMO.

                   “Person” is &fined    by   the statute    as:

                                  an individual, sole proprietorship, charity, trust,
                              estate, institution,  group, association,   firm, joint
                              venture, partnership, joint stock company, coopera-
                              tive, corporation, the state or a political subdivision




                                                        P.     733
Dr. Lauro F. Cavazos     - Page Two       (MW-231)




            or instrumentality   of the state, the federal government or a
            political subdivision or instrumentality   of the federal govern-
            ment, any receiver,       trustee,  assignee, or other similar
            representative or any other legal entity.

Section 1.03(14). As to the scope of “facility”           for purposes of section         3.01(a), the
statute states:

                 (9) ‘Health-care facility,’ referred to as ‘facility,’ includes,
            regardless of ownership, but is not limited to, a public or
            private hospital, institution,       extended care facility, skilled
            nursing facility, intermediate care facility, home health agency,
            outpatient     care facility,      outpatient     surgical      and single
            procedure     facility,    ambulatory    healthcare      facility,   health
            center,    family planning clinic, ki&ey             disease treatment
            facility, radiation therapy facility, alcoholism and drug treat-
            ment facility,       health maintenance       organization,      and other
            specialized facilities where inpatient or outpatient health-care
            services for observation, diagnosis, active treatment, or over-
            night care for patients with obstetrical,           medical, mental or
            psychiatric, surgical, tubercular, alcoholic, chronic, or rehabili-
            tative conditions are provided requiring daily direct supervision
            by a physician or a practitioner of the healing arts, but does not
            include the office of those physicians or practitioners singly or
            in groups in the conduct of their profession.

Section 1.03(g).

        On its face, article 4418h clearly embraces a state medical school within its
definition of “person,” as an “instrumentality of the state.” In the definition of “health
care facility,” no exception is provided for a state medical school, although the offices
of physicians and practitioners are specifically excluded. Although you contend that
the application of article 4418h to a state medical school would subject such an
institution to regulation by the Health Facilities Commission, in addition to regulation
by its board of regents and by the Coordinating Board of the Texas College and
University System, we do not believe that such a result is either unreasonable or
without precedent. In Attorney General Opinion H-464 (1974), for example, this office
held that the University of Texas might hold a mixed beverage permit from the Texas
Alcoholic Beverage Commission.

        Inclusion of a state medical school within the ambit of article 4418h, however,
does not mean that all, or even most, of its activities are subject to regulation by the
Health Facilities Commission. A certificate      of need or an exemption certificate     is
required only when an entity proposes a project within the meaning of s&divisions l-5
of s&section (a) of section 3.01(d). Furthermore, a state medical school is not a
“facility” per se. Only where such an institution proposes the construction, expansion
or modification of a “facility” within the terms of section 1.03(9) does the requirement




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   Dr. Lauro F. Cavazos   - Page Three      (NW-2311




   arise. The “facility” which is the subject of the proposal must, in accordance     with the
   statute, provide:

                  inpatient or outpatient health-care services for observation,
              diagnosis, active treatment, or overnight care for patients with
              obstetrical, medical, mental or psychiatric, surgical, tubercular,
              alcoholic, chronic, or rehabilitative   conditions. . . requiring
              daily direct supervision by a physician or a practitioner of the
              healing arts.

       Within these limits, we believe that any entity, including a state medical school,
must obtain a certificate of need or an exemption certificate from the Health Facilities
Commission for any proposed project covered by s&divisions (l)-(5) of subsection (a) of
section 3.01. Of course, whether any particular project is included within the scope of the
Commission’s regulatory power is a fact question to be determined in the first instance by
the Commission itself.

                                         SUMMARY

                   A state medical school is required to obtain a certificate of
               need or an exemption certificate       from the Health Facilities
               Commission before commencing any project included within
               subdivisions (l)-(5) of subsection (a), section 3.01, article 4418h,
               V.T.C.S.    Whether any particular project is included within
               those provisions is a fact question to be determined in the first
               instance by the Health Facilities Commission.
                                                                              A
                                                 km.e?wh.e?~

                                                  MARK      WHITE
                                                  Attorney General of Texas

   JOHN W. FAINTER, JR.
   First Assistant Attorney General

   Prepared by Rick Gilpin
   Assistant Attorney General
   APPROVED:
   OPINION COMMITTEE
   C. Robert Heath, Chairmen
   Jon Bible
   Jerry Cain
   Susan Garrison
   Rick Gilpin




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