Request By:
David H. Jernigan, Esq.
P.O. Box 569
Greenville, Kentucky 42345
Opinion
Opinion By: Robert F. Stephens, Esq., Attorney General; Mark F. Armstrong, Esq., Assistant Attorney General
We are in receipt of your letter in which you ask our opinion of whether a professional service corporation ("P.S.C.") incorporated under KRS Chapter 274, may lawfully provide physicians to staff emergency rooms of hospitals. The legally significant facts are set forth in your letter and are as follows:
"a) [A duly licensed physician is] . . . the sole shareholder, officer and director of [the] P.S.C.;
"b) the P.S.C. would contract with several hospitals to provide duly licensed physicians to staff the emergency rooms;
"c) the P.S.C. would contract with duly licensed physicians (giving the [physicians] independent contractor status) to provide that such physicians would staff the emergency rooms at designated times;
"d) the P.S.C. would not supervise the [physicians] or their activities, nor exercise control over them, nor operate the emergency rooms, but the business of the P.S.C. (besides its practice of medicine) would be the scheduling of licensed physicians so as to insure the several hospitals that the emergency rooms would be staffed. "
We are of the opinion that a P.S.C. cannot lawfully engage in this activity. The P.S.C. is limited in the type of activities in which it may engage, "No professional service corporation . . . shall engage in any business other than the rendering of the professional service for which it was specifically incorporated. . . ." KRS 274.115. We believe that the activity described here does not constitute the practice of medicine, see KRS 311.550(8). Rather, the activity appears to be more in the nature of hospital management. Indeed, its role, as you point out, is quite limited, ". . . [T]he business of the P.S.C. . . . would be scheduling of licensed physicians so as to insure the several hospitals that the emergency rooms would be staffed. " Parenthetically, we also point out that this activity does not partake of the character of the investments which a P.S.C. is permitted to make under the remaining portion of KRS 274.115.
We are of the opinion that a business activity consisting of making arrangements whereby hospital emergency rooms are supplied with physicians who provide the necessary medical services and who are independent contractors vis-a-vis the P.S.C., does not constitute the practice of medicine; and accordingly, a P.S.C. specifically incorporated to render the medical services of a physician may not lawfully engage in such activity.