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Q: Ownership of Medical Clinic in Texas by a Doctor Licensed in a different State ( Answered 4 out of 5 stars,   1 Comment )
Subject: Ownership of Medical Clinic in Texas by a Doctor Licensed in a different State
Category: Business and Money
Asked by: netreddy-ga
List Price: $50.00
Posted: 31 May 2005 13:41 PDT
Expires: 30 Jun 2005 13:41 PDT
Question ID: 527843
Can a Doctor not licensed to Practice in Texas (but licensed to
Practice in New York) own (Sole ownership) a Medical Clinic in Texas? 
She may not practice in Texas herself, but will hire doctors who are
licensed to Practice in Texas to treat patients.

Clarification of Question by netreddy-ga on 01 Jun 2005 21:38 PDT
Thanks for your reply.  It is not exactly commen sense: According to
most state laws in that only Doctors can Own Medical Clinics and
Hospitals and any similar entities - one of the reasons high
healthcare costs in this country.

The website you referred to does not give any clarification regarding ownership.

Request for Question Clarification by cynthia-ga on 02 Jun 2005 13:08 PDT
I was unaware that most states have that requirement, thanks for
enlightening me! I wonder how the larger institutions manage that,
aren't they corporations?  In any event, I was thinking a phone call
to one of the regulatory agencies listed on the page would have your

Clarification of Question by netreddy-ga on 02 Jun 2005 17:44 PDT
I did talk to them before posting this question. Unfortunately they
are not willing to give me a straight answer.

Clarification of Question by netreddy-ga on 02 Jun 2005 17:47 PDT
The larger institutions are often Non-Profit organizations or
Organizations run by a Board of Doctors (or controlled by Doctors).

Request for Question Clarification by pafalafa-ga on 02 Jun 2005 18:30 PDT

You have asked about a very messy area of law, and I don't pretend to
fully (or even half-ly) understand it.  However, in a nutshell, I
don't believe you can set up a for-profit clinic in Texas, though a
non-profit might be possible.

The reason for this is that Texas subscribes to restrictions on what
is called the "corporate practice of medicine", whereby only doctors
can run medical facilities, and by 'doctors', I'm pretty sure they
mean doctors licensed in the state of Texas.

Here are some links that will give you some more insight (OR...cause
more confusion) on this:

Overview of corporate practice of medicine issues:

FAQs from Texas, which are only mildly helpful

Actual Texas law, which is even less helpful:
see especially Section 164.052(a)(13)

Corporate practice of law as applied to non-profits, allowing some
exceptions to overall restrictions:

I haven't posted this information as an answer to your question,
because there is nothing here that definitively answers
haven't been charged for any of this information (other than the 50
cent listing fee).

However, my overall impression is as I said earlier...the law would
prohibit you from operating a for-profit clinic without a Texas

To get a definitive answer, you would probably need to consult with a
knowledgable lawyer in Texas.

Let me know if there's anything else I can do for you this one...

Subject: Re: Ownership of Medical Clinic in Texas by a Doctor Licensed in a different State
Answered By: richard-ga on 03 Jun 2005 14:55 PDT
Rated:4 out of 5 stars
Hello and thank you for your question.

A physician not licensed in Texas for sure can't own a Texas
professional corporation.
"A professional corporation, other than a professional legal
corporation, may only issue shares to natural persons duly licensed in
Texas to render the professional service for which the corporation is
organized. In addition, the officers, as well as the directors, must
be duly licensed to perform the professional service."

I'm having a harder time absolutely proving that an out-of-state
licensed physician can't own an unincorporated medical office, but
surely the answer is the same.  Mainly, you'd be "maintaining" a
medical office in Texas, and you can't do that without a Texas

 155.001.  LICENSE REQUIRED.  A person may not practice 
medicine in this state unless the person holds a license issued 
under this subtitle.

Here's where "maintaining" an office is relevent:
  151.052. Exemptions 
 (a) This subtitle does not apply to:
  (11) a legally qualified physician of another state who is in this
state for consultation with a physician licensed in this state but who
does not:
   (A) maintain an office in this state;  or 
   (B) appoint a place in this state for seeing, examining, or treating a patient"

You'd also be in effect delegating responsibility to your
Texas-licensed employee, which would still leave you responsible for
the outcome.
"  157.001. General Authority of Physician to Delegate 
 (a) A physician may delegate to a qualified and properly trained
person acting under the physician's supervision any medical act that a
reasonable and prudent physician would find within the scope of sound
medical judgment to delegate if, in the opinion of the delegating
  (1) the act: 
   (A) can be properly and safely performed by the person to whom the
medical act is delegated;
   (B) is performed in its customary manner;  and 
   (C) is not in violation of any other statute;  and 
  (2) the person to whom the delegation is made does not represent to
the public that the person is authorized to practice medicine.
 (b) The delegating physician remains responsible for the medical acts
of the person performing the delegated medical acts.
 (c) The board may determine whether: 
  (1) an act constitutes the practice of medicine, not inconsistent
with this chapter;  and
  (2) a medical act may be properly or safely delegated by physicians."

And don't forget, you would need Texas malpractice insurance, since
without the protection of a corporation you would be liable for
whatever your medical employees commit, and you won't get that without
having a Texas license.

If nothing else, the malpractice issue will stand in the way of your
owning the office.

Search terms used:
stock corporation services physician licensed 
texas board unlicensed medicine
texas "practice medicine" license owner

Thanks again for bringing us your question.

Google Answers Researcher
netreddy-ga rated this answer:4 out of 5 stars
Thanks! This answer along with the Clarification from from pafalafa-ga
answered a major part of my question.  I was also looking for any
legal precedent for or against unlicensed practitioner in Texas owning
a clinic.

Thanks again!

Subject: Re: Ownership of Medical Clinic in Texas by a Doctor Licensed in a different Sta
From: cynthia-ga on 31 May 2005 13:59 PDT
Just a common sense Comment:  YES, anyone may OWN the business, but
the person that enters the examinination room to diagnose and treat
the patients must be licensed to practice medicine in the state the
business resides in.

I once worked for a plumber, technically, I worked for his wife, as
she owned the business in her name alone. He is certified and licensed
by the state to provide plumbing services, however his WIFE could hire
ANY certified plumber to provide these services.

You might be able to get confirmation at one of the links at the State
of Texas web site:

State Of Texas - Licenses, Permits and Registrations : Health Care :
Medical - Primary Care


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