               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 of Health to is-
                                    sue to a non-physician     a
                                    permit to dispense synthetic
                                    narcotics   (RQ-1621)

Dear Mr. Ferguson:

     You ask whether the Department of Health is authorized
to issue permits for prescribing 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   to perform the medical    services
rendered to the corporations' clients. We conclude that the
Department of Health does not have 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 institu-
           tion, 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 the unlawful practice of medicine by the
corporation and a violation by the employee physician of the
prohibitions in section 3.08(12) of the Medical      Practice
Act, V.T.C.S. article 4495b, on a physician's "permitting or




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Honorable William L. Ferguson - Page 2     (JM-1042)




allowing another to use his license or certificate          to
practice medicine in this state," and in section 3.08(15) on
"aiding or abetting, directly or indirectly, the practice of
medicine by any person, partnership, association, or corpo-
ration not duly licensed to practice 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. First Medical  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, 356 U.S. 912 (1958); F. W.
B. Rockett. M.D. v. Texas State Bd. of Medical     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 and what criteria
        govern    the   selection    of    medical    and
        paramedical staff members?     To whom does the
        doctor owe his first duty -- the patient       or
        corporation?    Who   is    to    preserve    the
        confidential   nature of the doctor-patient
        relationship?   What is to prevent or who      is
        to control     a private     corporation     from
        engaging in mass media advertising        in the
        exaggerated   fashion so familiar to every
        American?   Who is to dictate the medical     and
        administrative   procedures    to be followed?




     1.  Section 3.08 makes such conduct grounds     for the
board's refusal to admit a person 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 un-
lawful.

     2. We note that section 3.06(12) authorizes the board
to exempt certain activities  from the application of the
Medical Practice Act. We find no indication that the board
has exempted the activities  of such corporations   as you
refer to in your request.




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Honorable William L. Ferguson - Page 3    (JM-1042)




        Where do. budget    considerations   end      and
        patient care begin?

Garcia, at 440. See also the discussion in Flvn   Brothers
quoting with approval the above language   fromnGarcia,  a;
785.

     A letter-brief submitted   in response to your request
suggests that the above-quoted   language of article   4476-11
"provides a clear indication of the Legislature's intent to
provide the Health   Department with this authority,    provi-
sions of the Medical Practice Act of Texas notwithstanding."
We disagree.   Acts &I Dari materig are to be read together
as though they were parts of one and the same law, and their
provisions harmonized if possible so as to give effect to
both. a     53 Tex. Jur. 2d Statutes S 186, and authorities
cited there. See 1s        Gov't Code §!j 311.025,     311.026
(providing for the ta:onisation,   if possible, of different
statutory provisions).    We think that the provisions      of
section 4(a) of article 4476-11 for the issuance by the
Department of Health of a permit to "any institution, public
or private, organized   and operated under the laws of this
state for the purpose of providing health services," must be
read together with the restrictions in the Medical    Practice
Act on the provision of health services by corporations.    An
institution not in compliance with the Medical Practice Act,
because   it is    formed by    non-physicians  and    employs
physicians to render medical services to its clients, is not
"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 to be issued a permit under that article by the
Department of Health.

     The letter-brief submitted in response to your 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
the United   States Code, volume 21, section 823(g), which
requires "practitioners who dispense narcotic drugs to indi-
viduals for maintenance   treatment or detoxification  treat-
ment" to obtain separate registration from the U.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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Honorable William L. Ferguson - Page 4    (JM-1042)




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

Section 291.505 was Hadopted      by reference"      in   rules
promulgated by the Department of Health 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 a Texas 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, of which the above
referenced section 823(g) is a part, 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 a positive    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 21 C.F.R. § 310.505. That
regulation was redesignated as 21 C.F.R. 5 291.505 in 1977.
&g 42 Fed. Reg. 46698.




                             p. 5411
Honorable William L. Ferguson - Page 5       (JM-1042)




     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 of article 4476-11 as
limited by the provisions of the Medical Practice Act.      We
think that section 9.03 indicates that the federal standard
for federal registration of applicants would not preempt    or
otherwise invalidate more restrictive state law governing    a
state's issuance of a separately required state permit.    See
Nichols v. Board of Ph rm y     657 P.2d 216   (Or. Ct. App.
1983, pet. denied), (se%iEz '9.03 "expressly permits     addi-
tional 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" for conducting such programs).

                       SUMMARY
           The Department of Health has no authority
        to issue permits to prescribe and administer
        synthetic narcotic drugs to drug dependent
        persons under V.T.C.S. article 4476-11, to
        corporations formed by non-physicians   which
        employ physicians   to render the     medical
        services in question.




                                        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 by William Walker
Assistant Attorney General




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