Can a Texas hospital include facilities at separate locations under one license, or must each site be licensed separately?

Plain-English summary

Texas hospitals must be licensed by the state under the Texas Hospital Licensing Law (Health and Safety Code chapter 241). The Commissioner of the Texas Department of Health asked the Attorney General a focused question: when a hospital operates facilities at more than one location, can the department issue a single license that covers the offsite facilities, or does the law require each location to be licensed on its own?

The doubt came from one sentence in the statute. Section 241.023(c) says the department "may issue a license only for the premises and person or governmental unit named in the application." The Commissioner read the word "premises" to mean a single place, which would imply a hospital could be licensed only at one location.

The Attorney General did not read it that way. The office concluded that "premises" can refer to multiple locations as well as a single one. The word is technically the plural of "premise," and there is no separate form used to signal one location versus several. Read ordinarily, "premises and person ... named in the application" can mean several locations named in a single application. (The office contrasted the Alcoholic Beverage Code, where "premises" clearly means one place.) So the office concluded the statute does not stop the department from issuing one hospital a license that includes facilities away from its main premises.

The office then reframed where the real question lies. The law requires each "hospital" to be licensed. So the issue is not really about the word "premises"; it is whether the separate facilities should be considered part of the same hospital or a different one. The statute and its definitions do not say when physically separated facilities count as one hospital. Because of that gap, the office turned to the department's rulemaking power. Section 241.026(a) gives the department broad authority to adopt rules to further the purposes of the act, so the department may adopt rules that further define "hospital" (and may define "premises"), and may make the proximity of facilities to each other a factor in deciding whether they are one hospital for licensing. Any such rules, though, have to stay within the statute: they may not add burdens or restrictions beyond what the law authorizes, and they must be reasonable.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Texas Hospital Licensing Law and the Department of Health's rules have changed since 1995, and the department's hospital-licensing functions have since been reorganized within the state's health agencies. Read this page for the office's 1995 reading of the statute, and check the current Health and Safety Code chapter 241 and the current licensing rules before relying on any specific section or definition here.

What the opinion meant at the time

For the Department of Health (the regulator): The opinion told the department it was not barred by the "premises" language from licensing a multi-site hospital under one license, and that it had the rulemaking authority to define "hospital" and "premises" and to use the proximity of facilities as a factor, so long as its rules stayed consistent with the statute and were reasonable. The opinion noted the department had proposed (and then withdrawn) rules that would have tied a license to a single contiguous location.

For hospital operators with facilities at more than one location: At the time, the opinion meant the licensing statute itself did not force each separated facility to carry its own license; whether a multi-site operation was one licensed hospital or several would turn on the department's rules and on whether the facilities were part of the same hospital.

For health-law practitioners: The opinion is a statutory-construction and administrative-law holding. It read "premises" to permit multiple locations, located the operative question in the definition of "hospital," and confirmed the department could fill the statutory gap by rule within the usual limits on agency rulemaking.

Common questions

Does the Texas hospital licensing law require a separate license for every building?
Not according to this opinion. The office read the statute's reference to the "premises" named in the application to allow multiple locations, so the law did not, by itself, require each separate facility to be licensed on its own.

What actually determines whether two sites need one license or two?
Whether they are part of the same "hospital." The law requires each hospital to be separately licensed, but it does not spell out when physically separated facilities count as one hospital. The office said the department could address that by rule.

Can the Department of Health define "premises" and "hospital" by rule?
Yes. The office concluded the department's broad rulemaking authority lets it adopt reasonable rules, consistent with the statute, that define those terms and that make the proximity of facilities a factor in deciding whether they are one hospital.

Are there limits on those rules?
Yes. The office noted that agency rules may not impose burdens, conditions, or restrictions beyond or inconsistent with the statute, and that they must be reasonable.

Background and statutory framework

Under the Texas Hospital Licensing Law, no person or governmental unit may establish, conduct, or maintain a hospital without a license (Health and Safety Code § 241.021), the department requires specified information from each hospital on the license application (§ 241.022(c)), and each hospital pays an annual license fee (§ 241.025). The office cited an earlier opinion, WW-794 (1960), for the proposition that all hospitals must be individually licensed. Section 241.023(c), the provision at issue, lets the department issue a license "only for the premises and person or governmental unit named in the application."

The office's construction rested on the ordinary meaning of "premises." It observed that "premises" is technically the plural of "premise" and that no distinct form is used to mark one location versus several, so the word can encompass multiple locations named in a single application. It contrasted the Alcoholic Beverage Code (for example, § 11.06), where "premises" plainly refers to a single permitted location. Noting that the application provision (§ 241.022) does not refer to "premises" and that the definitions of "hospital" (§ 241.003) do not address multiple locations, the office concluded the licensing question really turns on whether separated facilities are part of the same "hospital."

To fill that gap, the office relied on the department's general rulemaking authority under § 241.026(a) to adopt and enforce rules to further the purposes of the act. It concluded the department may adopt rules further defining "hospital" for licensure (and defining "premises"), and may treat the location of facilities relative to each other as a factor. It cautioned, however, that such rules "may not impose additional burdens, conditions or restrictions in excess of or inconsistent with the statutory provisions," quoting Kelly v. Industrial Accident Bd., 358 S.W.2d 874, 876 (Tex. Civ. App.-Austin 1962, writ ref'd n.r.e.), and that agency rules must be reasonable, citing Allstate Insurance Co. v. State Board of Insurance, 401 S.W.2d 131 (Tex. Civ. App.-Austin 1966, writ ref'd n.r.e.).

Citations

Statutes and authorities discussed:

• Health and Safety Code § 241.023(c) (license issued for the premises and person or governmental unit named in the application)
• Health and Safety Code § 241.021 (license required); § 241.022 (license application); § 241.025 (annual license fee); § 241.003 (definitions of "hospital," "general hospital," "special hospital"); § 241.026(a) (rulemaking authority)
• Alcoholic Beverage Code § 11.06 (cited for contrast: "premises" as a single permitted location)
• Attorney General Opinion WW-794 (1960) (all hospitals must be individually licensed)

Cases cited:

• Kelly v. Industrial Accident Bd., 358 S.W.2d 874 (Tex. Civ. App.-Austin 1962, writ ref'd n.r.e.) (agency rules may not exceed or conflict with the statute)
• Allstate Insurance Co. v. State Board of Insurance, 401 S.W.2d 131 (Tex. Civ. App.-Austin 1966, writ ref'd n.r.e.) (agency rules must be reasonable)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0369
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1995/dm0369.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain (including footnote numbering) — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

December 18, 1995

David R. Smith, M.D.
Commissioner
Texas Department of Health
1100 West 49th Street
Austin, Texas 78756-3199

Opinion No. DM-369

Re: Whether hospital facilities located at separate premises must be separately licensed (RQ-822)

Dear Dr. Smith:

You ask about licensure of hospitals by the Texas Department of Health ("TDH") under chapter 241 of the Health and Safety Code, the Texas Hospital Licensing Law (the "act"). Specifically, you ask:

1. Does TDH have authority, under Tex. Health and Safety Code Ann. § 241.023(c), to issue a license to a hospital for additional facilities operated as a part of a hospital that are located apart from the main premises?
2. Does TDH have authority under this statute to define "premises"?

Health and Safety Code section 241.023(c), about which you ask, provides that TDH "may issue a [hospital] license only for the premises and person or governmental unit named in the application." (Emphasis added.) You suggest that subsection (c) indicates that the legislature contemplated that a "hospital" licensed under the act must operate from a single "premises," and that therefore TDH may not issue a hospital a license for additional facilities at separate premises.

The term "premises" as used in subsection (c) could refer to multiple as well as single locations.[1] It would not necessarily be inconsistent with the section 241.023(c) provisions, or any other statutory provisions, for a license application to name as the hospital's "premises" more than one location, and for TDH to license the hospital at such multiple "premises." Section 241.022, providing for the license application, does not refer to "premises," nor do the act's definitions of "hospital."[2] We do not believe that the reference to "premises" in subsection (c) precludes TDH from issuing a hospital a license which includes facilities located apart from the main premises.

We note that the act requires licensure of each "hospital." See Health & Safety Code §§ 241.021 ("A person or governmental unit . . . may not establish, conduct, or maintain a hospital in this state without a license issued under this chapter."), .022(c) (TDH "shall require that each hospital show" indicated information on license application), .025 (TDH "shall charge each hospital an annual license fee") (emphasis added); see also Attorney General Opinion WW-794 (1960) at 3 ("All hospitals . . . must be individually licensed."). It would appear that the concern with the licensure of additional facilities at separate premises, which you ask about, should be whether the additional facilities should in fact be considered part of the same "hospital." Again, neither the act's definitions of "hospital" nor its other provisions indicate whether or under what circumstances separately located facilities should be considered to be part of the same hospital.

Under these circumstances, we believe that section 241.026(a) of the act, which grants TDH broad authority to "adopt and enforce rules . . . to further the purposes" of the act, empowers TDH to adopt rules further defining "hospital" as the term is used in the act for purposes of the requirement that each "hospital" be licensed. We believe that such rules may make location of facilities with respect to each other a factor in determining whether the facilities should be considered part of the same hospital for licensure purposes. Such rules may also define the term "premises" as used in the act. Any such rules, however, "may not impose additional burdens, conditions or restrictions in excess of or inconsistent with the statutory provisions." Kelly v. Industrial Accident Bd., 358 S.W.2d 874, 876 (Tex. Civ. App.-Austin 1962, writ ref'd n.r.e.). Also, agency rules must be "reasonable." See, e.g., Allstate Ins. v. State Bd. of Ins., 401 S.W.2d 131 (Tex. Civ. App.-Austin 1966, writ ref'd n.r.e.).[3]

SUMMARY

Under the Texas Hospital Licensing Law, Health and Safety Code chapter 241, separate hospitals must be separately licensed. The Department of Health may adopt reasonable rules consistent with the Hospital Licensing Law which define the term "hospital" for purposes of the requirement that each hospital be licensed, and may make the proximity of facilities a factor in determining whether such facilities should be considered one "hospital."

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General

Footnotes:

[1] The term "premises" as used to mean "a tract of land with the buildings thereon" is technically the plural form of the noun "premise." See WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 928 (1983). However, we are aware of no form of the word consistently used for referring to a plurality of "premises" as distinct from one "premises." Thus, under an ordinary reading of subsection (c), section 241.023—which, again, provides that TDH "may issue a license only for the premises and person or governmental unit named in the application"—the term "premises" could indicate a plurality of "premises," that is, multiple locations, named in an application. Compare the provisions of the Alcoholic Beverage Code regarding "premises" permitted to sell alcohol, where it is clear that "premises" refers to a single location. For example, section 11.06 provides that "[n]o person may use a permit . . . except at the place, address, premises, or location for which the permit is issued . . . ."

[2] The term "hospital," under the definition in section 241.003, subsection (6), "includes a general hospital and a special hospital." "General Hospital," under subsection (4), means an establishment that

(A) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals requiring diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy; and
(B) regularly maintains, at a minimum, clinical laboratory services, diagnostic X-ray services, treatment facilities including surgery or obstetrical care or both, and other definitive medical or surgical treatment of similar extent.
"Special Hospital," under subsection (11), means an establishment that
(A) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated, and discharged and who require services more intensive than room, board, personal services, and general nursing care;
(B) has clinical laboratory facilities, diagnostic X-ray facilities, treatment facilities, or other definitive medical treatment;
(C) has a medical staff in regular attendance; and
(D) maintains records of the clinical work performed for each patient.

[3] You indicate that TDH had proposed rules which (1) provided that a "license shall be issued only for the . . . premises named in the application," (2) defined the term "premises" as "contiguous buildings at the same location and street address and under common direction," and (3) declared that a "license shall not be extended to other locations for inpatient services, outpatient services, or any other activities." We understand that the proposed rules have now been withdrawn.