If you’re considering owning a medical practice in Texas but are not a licensed physician, you might be surprised by the legal hurdles. Texas has specific laws that govern the ownership and operation of medical practices. These laws are primarily designed to protect patient care standards and ensure ethical practices.
According to the Texas Medical Association, non-physician ownership is a complex issue, with strict laws aimed at preventing the corporate practice of medicine. This is to make sure medical decisions remain in the hands of professionals, not investors or corporations with no medical expertise.
In this blog, we’ll explore the six legal aspects you should know before owning a medical practice in Texas.
6 Legal Aspects You Should Know Before Planning On Owning A Medical Practice In Texas
1. Corporate Practice of Medicine
One of the first things non-physicians must understand is the corporate practice of medicine doctrine. Texas law prohibits non-licensed individuals or entities from owning or controlling a medical practice.
The primary purpose of this rule is to ensure that medical professionals, not business interests, make decisions about patient care. This law is in place to protect the integrity of the medical profession and prevent unethical practices, such as prioritizing profits over patient care.
This means you cannot directly own a medical practice in Texas as a non-physician. However, there are exceptions and ways around this restriction, which we’ll cover later in this article.
2. Non-Physician Ownership Restrictions
The non-physician ownership restrictions in Texas are strict and must be followed carefully. In simple terms, the law states that only licensed physicians can own or control a medical practice.
However, this doesn’t mean there are no options for non-physicians. Certain legal structures allow non-physicians to be involved in medical practices. A non-physician may be able to own a medical practice indirectly through a management services organization, which handles the business and administrative aspects of the practice, while physicians maintain control over the medical side.
Understanding these structures can be critical for those looking to enter the medical field without a medical license.
3. Legal Exceptions in Texas
While the corporate practice of medicine law restricts non-physician ownership, some legal exceptions exist in Texas. These exceptions allow non-physicians to be involved in medical practices, but are limited and highly specific.
Some of the key exceptions include:
- Non-Profit Organizations: Certain non-profit entities certified by the Texas Medical Board can employ physicians and own medical practices.
- Hospital Districts and Counties: In specific cases, hospitals in rural areas, counties, and local government entities can operate medical practices.
- Incarceration Facilities: Texas counties providing healthcare to incarcerated individuals can also legally employ physicians and operate medical practices within the correctional system.
These exceptions are narrow, and the specific conditions for each must be met. Non-physicians seeking these exceptions should seek professional legal assistance.
4. Penalties for Violations
Failing to comply with the corporate practice of medicine restrictions can lead to severe penalties for violations. Non-physicians who attempt to own or control a medical practice in Texas may face significant legal and financial consequences.
Some potential penalties include:
- Fines: Violations of the corporate practice of medicine law can lead to hefty fines for non-physician owners.
- Loss of Medical License: Physicians who violate these laws may face disciplinary action, including suspension or revocation of their medical license.
- Unenforceable Agreements: Contracts that violate the corporate practice of medicine doctrine will likely be declared unenforceable, leaving both parties without legal recourse.
It’s essential to ensure that your business arrangements comply with Texas law to avoid these penalties.
5. Navigating Medical Practice Laws
Dealing with medical practice laws in Texas requires a deep understanding of state and federal regulations. Texas has unique laws that govern healthcare, and non-physicians need to be aware of these regulations when planning to own a medical practice. The rules governing medical practices are complex, and the penalties for non-compliance are steep.
To successfully know the system, non-physicians should consider working with a medical practice brokerage or a specialized legal professional who guides them through the process.
6. Texas Medical Board Regulations
The Texas Medical Board is responsible for licensing physicians and setting standards of practice. It ensures that medical professionals adhere to ethical guidelines. Understanding the board’s regulations is essential for any non-physician considering ownership of a medical practice.
For non-physicians, complying with these regulations is vital. It ensures that the practice remains legally compliant and that patient care is never compromised.
Final Thoughts
Owning a medical practice in Texas as a non-physician presents challenges. With the right knowledge and guidance, dealing with the complex legal side is possible. Understanding the corporate practice of medicine, the restrictions on non-physician ownership, and the legal exceptions available are crucial for anyone considering this direction.
If you’re ready to explore the opportunities available to non-physicians interested in medical practice ownership, consider working with a medical practice brokerage like Strategic Medical Brokers, who can help guide you through the legal complexities.
