The “Corporate Practice of Medicine” (CPM) is a legal doctrine that generally prohibits corporations, entities, or individual non-physicians from practicing medicine. It also prohibits a business corporation from employing a physician to provide professional medical services. The Corporate Practice of Medicine in prohibited in Texas. However, beginning in 2011, the Texas Legislature enacted laws authorizing certain types of hospitals and specific hospital districts to directly hire physicians.
The CPM prohibition is rooted in public policy aimed at protecting the public. Only licensed health care practitioners are legally allowed to practice medicine. The patient-physician relationship requires trust and a bedrock of that relationship is a physician’s ability to use uninhibited medical judgment. Essentially, the CMP is prohibiting corporations from exerting control over the health care provided by licensed providers. Doctors are to have autonomy in their practice of medicine to ensure they provide effective health care and are able to meet their patients’ needs.
Summary of the Texas Ban on the Corporate Practice of Medicine
The following is a summary of the Corporate Practice of Medicine prohibition under Texas law. There are a number of state laws that address CPM. If you are a physician contemplating a business arrangement with a non-physician, corporation, or other business entity, we encourage you to consult with an attorney well-versed in Texas CPM laws.
- The Texas CPM doctrine prohibits physicians from entering into partnerships, employee relationships, fee splitting, or other situations with non-physicians where the physician’s practice of medicine is in any way controlled or directed by, or fees shared with a non-physician.
- Generally speaking, physicians may enter into independent contractor arrangements with non-physicians. Note that whether an independent contractor situation or an employer/employee relationship exists is a question of law and attendant facts. Simply calling a work arrangement an “independent contractor” relationship does not necessarily make it so.
- A person may not practice medicine in Texas unless that person holds a license issued by TMB.
- The Medical Practices Act makes it unlawful for any individual, partnership, trust, association, or corporation by use of any letters, words, or terms, as an affix on stationery or advertisements or in any other manner, to indicate the individual, partnership, trust, association or corporation is entitled to practice medicine if the individual or entity is not licensed to do so. Tex Occ. Code §165.156.
- The Medical Practices Act authorizes disciplinary action against a practitioner for aiding or abetting, directly or indirectly, the practice of medicine by non-licensed individuals or entities. Occ. Code §164.052(a)(17).
If you are a licensed practitioner by the Texas Medical Board and you run afoul on the Corporate Practice of Medicine prohibition, you are opening yourself up to possible disciplinary action by the Board. Your license, career, and reputation could be at stake.
Hire the Experienced License Defense Attorneys of BERTOLINO LLP
If you have been notified of a complaint filed against you with the Texas Medical Board, BERTOLINO LLP can help. We are experienced medical license defense attorneys and we know how to navigate the TMB’s complaint process. We are prepared to represent you at any legal hearing or proceeding regarding your professional license, including:
- Temporary Suspension Hearings
- Informal Settlement Conferences (ISC)
- Show Compliance Proceedings
- State Office of Administrative Hearings (SOAH) Proceedings
Our Firm believes that immediately consulting an experienced medical license defense attorney to review allegations of misconduct helps ensure the most favorable outcome in your case. Our results speak for themselves.
BERTOLINO LLP represents licensed professionals across the entire State of Texas. If you are facing disciplinary action from a professional licensing board, contact us today or call (512) 717-5432 and schedule a case evaluation.