Non-Profit Health Corporations (NPHC) 


Physicians are making decisions about what practice models are best for them as medicine goes through major health care delivery changes. Understanding nonprofit healthcare organizations/corporations is important during this decision making process. A NPHC is a nonprofit corporation that is certified by the Texas Medical Board (TMB)The Texas Occupations Code and Texas Medical Board (TMB) rules authorize the TMB to approve and certify the types of health corporations/organizations. TMB rules concerning non-profit certification are found in Chapter 177, Business Organizations. For info on licensing and the types of NPHCs overseen by the TMB, please refer to the TMB's licensing section and renewals section

According to the Internal Revenue Service (IRS) corporations that meet the requirements of Internal Revenue Code 501(a) section are exempt from federal income taxation. In addition, charitable contributions made to some section 501(a) organizations by individuals and corporations are deductible under Code section 170.There are two types of NPHCs:  


162.001(b) Non-Profit Health Corporations/Organizations

  • Is organized as nonprofit corporation. 
  • Is organized for a purpose in the public interest, such as research, education or public health.
  • Must be incorporated and directed by physicians licensed by the TMB.
  • Have as its directors and trustees, persons who are licensed by the TMB and actively engaged in the practice of medicine, without restrictions on their Texas medical license. 
  • The administrative side of the corporation may be handled by non-physician officers, but all medical decisions and the overall medical policies of the organization must be made by physicians.
  • Is organized as nonprofit corporation.
  • Be a 501(c)3* and a Federally Qualified Health Center (FQHC)/homeless, migrant community center, or
  • Be a hospital district.
  • May employ physicians as an exception to the general rule against corporate practice of medicine.
*Application for 501(c)3 status requires Form 1023 through the IRS be completed. 


Initial Certification & Recertification

Both types of NPHCs must keep the TMB informed of changes in their by-laws and boards of directors and must file detailed reports every two years to maintain their certification. 


Filing a Complaint

If you feel there are violations or other concerns within a nonprofit health care organization, you may file a complaint through the IRS or the TMB. Complaints against a non-profit health organization would be directed to the TMB Complaints Department since these organizations must be incorporated and directed by physicians licensed by the TMB.  Section 177.13 of the TMB rules explain the method by which the the public is advised of how to file a complaint. The "Notice Concerning Complaints Regarding Non-Profit Health Organizations" must be posted, in English and Spanish, in a prominent location at each site of health-care delivery and readily visible to patients or potential patients.


For NPHCs in Harris County, visit our Physician Career Center.