Texas: Ownership and Oversight
Strict CPOM (statute + active enforcement), delegation model. Physician-only entities with a carefully bounded PA co-ownership lane, and an oversight system built entirely around one document: the prescriptive authority agreement (PAA), with a hard 7 FTE cap.
Who the statute actually covers
- "Practice of medicine" (Occ. Code § 151.002(a)(13)): diagnosis, treatment, or offer to treat by a person who directly or indirectly charges for those services; aiding a corporation to practice is disciplinable (§ 164.052). Enforcement is active — see McCoy v. FemPartners, 484 S.W.3d 201 (Tex. App. 2015).
- PA co-ownership conditions (Bus. Orgs. Code § 301.012(a-1) to (a-6)): physicians and PAs may jointly own a PA or PLLC, but the PA may hold only a minority interest, may not serve as an officer, and may not contract with or employ a physician to act as the PA's supervising physician.
- Prescriptive authority agreement (PAA) (Occ. Code § 157.0512): the written delegation instrument for both APRNs and PAs; without it, there is no prescribing.
- 501(a) nonprofit health organization (Occ. Code § 162.001): the TMB-certified nonprofit exception through which non-physician-owned systems lawfully employ physicians.
1. Who can own what
| Entity / Path | Who may own | Key limits |
|---|---|---|
| Professional Association / PLLC | Physicians (MD/DO). Statutory combos: physicians with podiatrists and chiropractors (§ 301.012(a)); physicians with optometrists/therapeutic optometrists (§ 301.012(c)). | Organizers must be physicians; physicians control and manage the entity. |
| PA co-ownership | Permitted as minority owners with physicians (§ 301.012(a-1)); PA may not be an officer (a-2) and may not employ or contract their own supervising physician (a-3). | The (a-3) prohibition is Texas's version of the rent-a-supervisor ban. |
| NP ownership | Not permitted. APRNs may not own any interest in a Texas medical entity. | Texas is a restricted-practice state; ownership and scope are both closed. |
| 501(a) exception | TMB-certified nonprofit health organizations may employ physicians (§ 162.001). | The main lawful lane for lay-affiliated physician employment. |
| Lay / MSO | Not permitted in the professional entity; aiding corporate practice is disciplinable (§ 164.052) and contracts built on it are unenforceable (McCoy). | MSO at FMV, flat fees preferred, no clinical control. |
2. Collaborative and supervisory oversight
| Role | Agreement required | Oversight mechanics | Path to independence |
|---|---|---|---|
| PA | PAA with a delegating physician (§ 157.0512): written, signed, listing drug categories, consultation/referral plan, emergency plan, communication process, and alternate physicians; reviewed and re-signed at least annually; retained 2 years post-termination; physician registers with TMB (§ 157.0511) and updates within 30 days. | A physician may have PAAs with a combined maximum of 7 APRNs and PAs (or 7 FTE) (§ 157.0512(c)); exceptions for medically underserved populations and facility-based hospital practice (§ 157.054). QA plan required: chart review with the number of charts set by the parties, plus documented periodic meetings at least once a month. | None. Texas PAs have no independence pathway. |
| NP / APRN | Same PAA instrument and mechanics as PAs, with TBON approval of the APRN's prescriptive authority. | Same combined 7 FTE cap, same annual review, monthly-meeting, and party-determined chart review structure. Schedule II prescribing is limited to narrow settings (facility-based, hospice). | None. Texas has no APRN full practice authority. |
3. Primary authorities
- Tex. Bus. Orgs. Code § 301.012.
- Tex. Occ. Code § 151.002(a)(13); § 164.052; § 162.001.
- Tex. Occ. Code §§ 157.0511–157.0513, 157.054.
- McCoy v. FemPartners of San Antonio, 484 S.W.3d 201 (Tex. App.–Houston [14th Dist.] 2015).
Practical read: In Texas the PAA is the whole ballgame: one document carries the delegation, the QA plan, the monthly meeting record, and the annual re-signature, and TMB can pull it on 3 business days' notice. Count FTEs across every site a physician touches before adding one more clinician.
General education, not legal advice.