     G. Valter Brindley, Jr., M.D.               Opinion No. JM-752
     Texas Stats Board of Medical Examiners
     P. 0. Box 13562                             Re: Legality of a contract
     Austin, Texas   78711                       between a physician and a
                                                 referral service

     Dear Dr. Brindley:

          You have submitted a sample of a contract that a medical referral
     service uses to contract with physicians. You ask whether a physician
     would violate article 4495b. section 3.07(c), V.T.C.S., if he entered
     into such a contract.

          Section 3.07(c) of article 4495b provides:
P
                 A physician or surgeon may not employ or agree
              to employ, pay or promise to pay, or reward or
              promise to reward any person, firm, association of
              persons, partnership, or corporation for securing,
              soliciting, or drunrmingpatients or patronage. A
              physician or surgeon may not accept or agree to
              accept any payment, fee, reward, or anything of
              value for securing, soliciting, or drumming for
              patients or patronage for any physician or
              surgeon. Whoever violates any provision of this
              section commits a Class A misdemeanor.        Each
              payment, reward, or fee or agreement to pay or
              accept a reward or fee is a separate offense. The
              preceding shall not be construed to prohibit
              advertising   except   that   which    is   false,
              misleading, or deceptive or that which advertises
              professional superiority or the performance of
              professional service in a superior manner and that
              is not readily subject to verification.

     See generally Bolton v. Kansas State Board of Healing Arts, 473 F.
     Supp. 728, 735 (D. Kan. 1979) (total ban on advertising by health care
     professionals would violate the First Amendment); Ohralik v. Ohio
     State Bar Assn., 436 U.S. 447 (1978) (ban on one-to-one solicitation
     by licensed professionals does not violate the First Amendment).
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Dr. G. Valter Brindley, Jr. - Page 2      (JM-752)




     The contract you submitted states that the purpose of the
referral service is to "generate and administer new patient
appointments for health care professionals" and "to match the right
patient with the right practitioner." Under the terms of the
contract. the referral service has the right to "[ilnvoice
Practitioner on a monthly basis for all patients generated during the
previous month." The contract also provides that the service shall
not charge the practitioner "for Medicaid or Medicare patients, repeat
appointments or patients (such as family members or patient referrals)
not directly generated by the Service." We do not construe contracts
in the opinion process. If, however, the contract means, as it
appears to, that a doctor must pay the referral serv1ce.a fee for each
patient that the service refers to the doctor, a doctor who entered
into the contract would violate the plain language of article 4495b,
section 3.07(c), by promising to pay a corporation for securing
patients.

     You also ask whether a hospital may enter into a contract with
the referral service in question. Section 3.07(c) of article 4495b
applies to physicians and surgeons, not to hospitals. Because you
have not described the terms under which a hospital would enter into
such a contract, we cannot consider whether such a contract would
violate statutes other than article 4495b, section 3.07(c).
Furthermore, we caution that a physician or surgeon could not avoid
the application of article 4495b. section 3.07(b), simply by paying a    -.
hospital to pay a referral service.

                              SUMMARY

            A physician or surgeon would violate article
         4495b. section 3.07(c), by paying or promising to
         pay a fee to a referral service for each patient
         generated by the referral service.




                                        JIM     MATTOX
                                        Attorney General of Texas

WARY KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk                                                  -.
Assistant Attorney General



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