TEXAS - PROFESSIONAL PRACTICE STRUCTURE

January 1, 2008

State laws and regulations that affect your medical practice

1. Under what business structures are physicians permitted to practice?

Physicians may practice in the following manner:

A. Solo

B. Partnership, Professional Association or Limited Liability Company

A physician may practice in a partnership, professional association or professional limited liability company, but such entity shall be composed solely of licensed health care professionals. A physician who is a member of a limited liability company shall remain personally responsible for his own negligence, wrongful acts, etc., and that of any person under his or her direct supervision and control.

A professional association may provide a professional service in Texas only through owners, managerial officials, employees, or agents, each of whom:

(1) is a professional individual; and

(2) is licensed in Texas to provide the same professional service provided by the entity.

(TX CIV ST Art. 1528e; TX CIV ST Art. 1528f; TX BUS ORG § 301.012 )

C. Associational Relationship with Other Physician or Professional Entity.

1. A physician may be employed within the scope of the physician's licensed practice and in circumstances where the quality control of the employee's professional practice can be and is lawfully supervised and evaluated by the employing physician.

2. Persons licensed as doctors of medicine and persons licensed as doctors of osteopathy by the TSBME and persons licensed as podiatrists by the Texas State Board of Podiatric Medical Examiners may jointly form and own a professional association or a professional limited liability company to perform professional services that fall within the scope of practice of those practitioners.

3. Persons licensed as doctors of medicine and persons licensed as doctors of osteopathy by the TSBME and persons licensed as optometrists or therapeutic optometrists by the Texas Optometry Board may jointly form and own a professional association or a professional limited liability company to perform professional services that fall within the scope of practice of those practitioners provided that only a physician, optometrist, or therapeutic optometrist may have an ownership interest in a professional association or professional limited liability company.

4. When doctors of medicine, osteopathy, and podiatry, or doctors of medicine, osteopathy, and optometry or therapeutic optometry, or mental health professionals form a professional entity, the authority of each of the practitioners is limited by the scope of practice of the respective practitioners and none can exercise control over the other's clinical authority granted by their respective licenses, either through agreements, bylaws, directives, financial incentives, or other arrangements that would assert control over treatment decisions made by the practitioner.

TX BUS ORG § 301.012; TX OCC § 162.051

D. Managed Health Care Plans

A physician may participate in organized managed health care plans including, but not limited to, those involving wholly or partially pre-paid medical services. This includes health maintenance organizations, preferred provider organizations, competitive medical plans, individual practice associations, or other similar designations. A physician may participate in any such plan which complies with the following requirements:

1. The physician retains authority at all times to exercise professional judgment within accepted standards of practice regarding care, skill and diligence in examinations, diagnosis and treatment of each patient.

2. The physician retains authority at all times to inform the patient of appropriate referrals to any other health care providers -- whether or not those persons are provider-members of the plan and whether or not the plan covers the cost of service by such non-member providers to the patient.

TX INS § 843.305; TX INS § 843.301

2. What requirements must be met for a practitioner to engage in professional practice in Texas?

The TSBME requires the following:

A. A practitioner may engage in professional practice only when in possession of a current biennial registration issued by the TSBME.

B. The name of the professional practice entity shall be composed of the actual last names of one or more of the owning licensees, partners or shareholders or composed of a phrase or words reasonably descriptive of the type of professional practice.

TX OCC § 156.008; 22 TX ADC § 169.1

Copyright Kern Augustine Conroy and Schoppmann, P.C. Used with permission.