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Licensing of Physicians

The practice of medicine is regulated by the state and the power to grant licensing is often delegated to medical licensing boards, which are subject to state administrative procedure acts.  Most state statutes prescribe a fee for granting a license and such fee is considered compensation for meeting the expenses incurred by the licensing board in granting licenses.  It is to be noted that a license is not an absolute privilege and immunity.  A licensed physician will be subject to further regulations under the police power of the state and a state can suspend or revoke a physician’s license in the interest of the public[i].

An unlicensed person cannot legally perform acts which are medical or surgical in character, and supervision does not relieve an unauthorized person from penal liability for violation of statutes prohibiting the unlicensed practice of medicine.  A licensed practitioner who aids and abets performance of medical or surgical acts by an unauthorized person is guilty of unprofessional conduct even though acts are done under his immediate direction and supervision.

There are a plethora of medical disciplines and subdivisions and it is virtually impossible to restrict all healing to any one school of thought or practice.  However, a reasonable classification of all practitioners is permissible for licensing purposes.  Hence, the exception of certain designated classes of practitioners in a general medical practice statute prescribing the qualifications for registration and licensing, does not amount to unreasonable and arbitrary discrimination.  Applying this logic, courts have held that a statute forbidding the practice of naturopathy by any person, whether previously licensed or not, unless the person meets prescribed qualifications, is constitutional.

The concept of practicing medicine has been defined broadly under certain statutes and may include any customary activity such as diagnosis, treatment, or prescription of medication.  Whereas some statutes consider persons who appends or prefixes M.D., Dr., Doctor, or similar abbreviations in a medical sense as medical practitioners.  The discretion to regulate a particular practice as a medical practice is left to the states.

License provisions are strictly construed by state authorities.  Hence, licenses are not granted to persons who incidentally and gratuitously suggest some method of treatment.  A single error may endanger precious human life and hence courts have held that a single isolated act may constitute the unlicensed practice of medicine.

Similarly, licenses were not initially granted to corporations and the common law prohibited the corporate practice of medicine.  However, some statutes expressly authorize authorized practitioners to organize a professional service corporation for pecuniary profit.  This is often done to enable professionals to avail themselves of tax exemptions available to corporations and its employees.

As an additional protection, some statutes stipulate that both the person providing the services and the professional corporation must be licensed to practice medicine.

A physician associated with such a corporation is considered an agent of his/her corporation in the event of a medical malpractice suit, especially if the physician is the corporation’s president and sole shareholder and the corporation pays all expenses of the physician’s practice.

Malpractice insurance coverage is yet another prerequisite for license.  The applicant must show proof of malpractice insurance coverage for the specified amount and this is done in the interest of patients’ health interests.

The state has power to fix standards for obtaining a license to practice medicine and is empowered to delegate such powers to a Board of Examiners.  For instance, the state may require a person to have graduated from an accredited school and to appear for the required licensing examination.  The state can make alterations in the standards and a statute fixing the standards is not invalidated merely by the fact that the standards may vary from time to time or may be fixed by the standards of schools teaching a particular system of medicine.  Similarly, a state may lawfully discriminate between graduates of foreign colleges of medicine and those of local colleges.  Some of the states specify special examinations for foreign graduates as a precondition for granting a license.

The state laws pertaining to licensing are applicable to practitioners within that particular state and are not generally applicable to licensed practitioners from outside the state while those practitioners are in consultation with a licensed practitioner of the state, or an invited guest of a medical association or medical school, engaged in the promotion of professional education.

Certain statutes contain specific clauses called “grandfather clauses” that extend certain prerogatives to persons who are already established in the practice of such professions when such statutes were enacted.  Such practitioners are entitled to the benefit of grandfather clauses and are exempted from the license requirement.  Such persons are entitled to a license without an examination on submission of valid proof as to the existence of the practice at that time.

A license to practice medicine is often granted on the basis of reciprocity and a state licensing board has discretion to grant licenses to licensees of other states with which it maintains reciprocal relations, provided that such licensees have complied with the applicable rules and regulations and have lawfully practiced for a prescribed period in the other state.

The licensing board has a due process obligation to provide an applicant with a notice of the proceeding and an opportunity for hearing as part of an applicant’s license request.

State licensing boards are administrative agencies which are governed by state administrative procedure acts and the decisions of the Board are subject to judicial review.

[i] Bland v. Commission on Medical Competency, 557 N.W.2d 379 (N.D. 1996).

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