How to Open a Functional Medicine Clinic in Texas (2026)

By Tom Kashul, Founder, Moonshot EHR; clinic owner-operator

To open a functional medicine clinic in Texas, form a physician-controlled entity such as a professional association or PLLC, because diagnosing or treating a disease by any method is practicing medicine and only a physician may organize a medical PLLC. NPs and PAs prescribe under written prescriptive authority agreements; chiropractors may not prescribe, and health coaches and nutrition staff stay outside the practice of medicine only while they do not diagnose or treat. The dietitian titles are licensed. Supplements labeled as supplements or carrying a Supplement Facts panel are exempt from Texas sales tax, but you still need a sales and use tax permit if you sell anything taxable, and a supplement sold under your own label follows FDA's structure and function rules. Sending specimens to outside labs needs no CLIA certificate for the clinic. Decide how you will treat Medicare patients before the first one books. Then run memberships, intake, labs and prescribing in one system; Moonshot EHR is $1,000 per location per month with one prescriber.

What a functional medicine clinic sells

A functional practice sells time and testing more than procedures. What patients usually pay for:

• Memberships or programs built around long initial visits and scheduled follow-ups, in person or by video.
• Testing: reference lab panels and specialty tests from outside labs, reviewed in a visit.
• Supplements sold from the office or recommended through a third-party online dispensary.
• Nutrition counseling and health coaching by staff, within what non-licensed staff may do.
• Prescriptions, including compounded ones, when a licensed clinician finds them indicated.

1. Entity and ownership in Texas

A functional medicine clinic is a medical practice the moment it diagnoses or treats, whatever it calls its visits. Ownership follows from that, and so do the limits on what health coaches and nutrition staff may do.

These statutes are why most Texas cash-pay clinics are owned by a physician, not by the partner who funded them.

Only a person licensed in Texas may practice medicine in Texas. (Occ. Code 155.001)

A physician can be disciplined for aiding the practice of medicine by an unlicensed person or entity. (Occ. Code 164.052(a)(17))

An unlicensed person or entity that indicates it is entitled to practice medicine commits an offense. Read this provision before a company owned by non-physicians puts "medical" or "clinic" in its name or advertising. (Occ. Code 165.156)

Physicians may form a professional association or a professional limited liability company (PLLC). Physicians and physician assistants may form one together, but only a physician may organize it and physicians must control it. (Bus. Orgs. Code 301.012(a), (a-1), (a-4))

A physician assistant in a jointly owned entity may not serve as an officer, may hold only a minority stake that is never equal to or larger than any physician owner's, and may not employ the supervising physician. (Bus. Orgs. Code 301.012(a-2), (a-3), (a-6))

A nonprofit health organization certified by the Texas Medical Board, organized solely by licensees and with licensed, active directors, may employ physicians. (Occ. Code 162.001)

Texas defines practicing medicine as diagnosing, treating or offering to treat a disease or disorder by any system or method, by a person who claims to be a physician or charges for the service. Coaches and nutrition staff stay outside it only if they do not diagnose or treat. (Occ. Code 151.002(a)(13))

Chiropractic practice in Texas does not include prescribing any prescription drug or controlled substance, so a functional clinic that prescribes needs a physician, APRN or PA. (Occ. Code 201.002(c))

Open questions on this topic: see things to confirm.

Background: the MSO and corporate practice guide.

2. Prescribers: physician, NP and PA rules

Functional practices often build around one physician or NP doing long visits, with coaches or nutrition staff doing the follow-up. Only the licensed clinicians diagnose and prescribe, and NPs and PAs prescribe under the agreement below.

The delegation rules decide how many NPs and PAs you can staff, what the paperwork says and how often the physician is involved.

22 TAC Chapter 193, the old standing delegation order chapter, was repealed effective January 9, 2025, so templates that cite it are out of date. Delegation now lives in 22 TAC Chapter 169, physician assistant rules in Chapter 183, advertising in Chapter 164, business organizations in Chapter 174 and telemedicine in Chapter 175. (22 TAC Chapter 169)

An NP or PA may prescribe under delegation only through a written prescriptive authority agreement with adequate supervision. (Occ. Code 157.0512(a))

According to the Texas Medical Board, adequate supervision does not require the physician's constant physical presence. (TMB FAQ on delegation)

A physician may delegate to no more than seven APRNs and PAs, or seven full-time equivalents, with exceptions for medically underserved populations and facility-based hospital practice. (Occ. Code 157.0512(c), (d))

The agreement must at minimum be signed and dated and list license numbers, practice settings, delegated drug categories, a consultation and referral plan, an emergency plan, a communication process, alternate physicians and a quality assurance plan. (Occ. Code 157.0512(e))

The agreement sets how many charts the physician reviews, and the two must hold a documented meeting at least monthly. The circulating figure of a 10 percent chart review and an on-site visit every 10 business days comes from a 2007 bill draft, not current law. (Occ. Code 157.0512(e)(9), (f); 22 TAC 222.5(c)(9), (d))

The agreement is reviewed, dated and signed every year, kept for two years after it ends, and produced to the board by the third business day after a request. (22 TAC 222.5(h), (k))

The physician registers each delegation with the Texas Medical Board within 30 days (name, license, start date and locations) and reports a termination within 30 days. (22 TAC 169.5)

An APRN also needs prescriptive authority approval and an authorization number from the Texas Board of Nursing. (22 TAC Chapter 222)

Since September 1, 2025, agreements for elective IV therapy count toward the seven-person cap, and the underserved exception does not apply to them. (HB 3749; Occ. Code 172.051(d))

Open questions on this topic: see things to confirm.

3. Controlled substances: when a functional clinic needs DEA

Many functional clinics never prescribe a controlled substance. The ones that add testosterone or another scheduled drug take on DEA registration and every rule below for those prescriptions.

Testosterone is a Schedule III controlled substance because it is an anabolic steroid. (21 CFR 1308.13(f))

DEA requires a separate registration for each principal place of business where controlled substances are dispensed. (21 CFR 1301.12)

Each prescriber registers with DEA individually. (21 CFR 1301.11(a))

A Schedule III or IV prescription may not be refilled more than six months after it was written or more than five times without a new prescription. (21 CFR 1306.22(a))

Texas adds its own rules on top of the federal ones:

Texas allows anabolic steroids to be prescribed only for a valid medical purpose, and bodybuilding or muscle enhancement in a healthy person is expressly not one. (HSC 481.071(b), (c))

A federal DEA registration is required to prescribe, possess or dispense controlled substances in Texas. The separate Texas DPS controlled substance registration was repealed effective September 1, 2016. (HSC 481.061)

Checking the Texas Prescription Monitoring Program is mandatory only before prescribing opioids, benzodiazepines, barbiturates or carisoprodol. For testosterone it is permitted, not required; many clinics check anyway as a written policy. (HSC 481.0764(a), (b), (d))

Texas law carries the same Schedule III and IV refill limit as federal law. (HSC 481.074(g))

When an NP or PA prescribes a Schedule III, IV or V drug under delegation, the prescription including refills may not cover more than 90 days; going past that requires a documented consultation with the delegating physician. Schedule II delegation is limited to hospital and hospice settings. This is the rule that shapes an NP-staffed clinic's refill calendar. (Occ. Code 157.0511(b); 22 TAC 222.8(b), (c))

The Texas Medical Board says controlled substance prescriptions must be sent electronically, with limited exceptions, and that NPs and PAs consult the delegating physician for controlled substance refills after the first 90-day supply. (TMB, prescribing and supervision)

Telemedicine

Long intake visits, lab reviews and follow-ups all fit video; keep first visits and any controlled substance start inside these rules.

A valid telemedicine prescription requires an established practitioner and patient relationship and compliance with the Medical Practice Act and Health and Safety Code Chapters 481 and 483. Only chronic pain carries an extra telemedicine-specific condition. (22 TAC 175.3(a))

The relationship can come from a preexisting relationship, call coverage, or a synchronous audio and video visit (or qualifying store-and-forward). The practitioner gives follow-up guidance and, with consent, sends records to the patient's primary care physician within 72 hours. (Occ. Code 111.005)

Telemedicine must follow Chapter 111 and the Medical Practice Act, including the delegation rules and the complaint-notice posting requirement. (22 TAC 175.2)

DEA's Fourth Temporary Extension, published December 31, 2025, lets an audio and video telemedicine visit start a Schedule II through V prescription without a prior in-person visit through December 31, 2026, unless extended or replaced. Re-check before you rely on it. (90 FR 61301)

Open questions on this topic: see things to confirm.

4. Sourcing: supplements, compounded prescriptions and office stock

A functional clinic sells two different kinds of product: supplements, which are regulated as foods, and prescriptions, including compounded ones, which are drugs. Keep them apart in your menu, your claims and your books. Compounded prescriptions follow the pharmacy rules below.

FDA says compounded drugs are not FDA-approved and that FDA does not review their safety, effectiveness or quality before they are marketed. (FDA, compounding questions and answers)

A 503A compounding pharmacy is exempt from the new-drug rules only when it compounds for an identified patient on a valid prescription. (21 U.S.C. 353a(a))

A 503A pharmacy may compound only with bulk substances that have a USP or NF monograph, are components of FDA-approved drugs, or are on FDA's 503A bulks list, each with a certificate of analysis from an FDA-registered manufacturer. (FDA 503A bulks page; 21 U.S.C. 353a(b)(1)(A))

Under FDA's guidance, a 503A pharmacy may not ship office stock without patient-specific prescriptions; a 503B outsourcing facility may. (FDA, Prescription Requirement Under Section 503A)

In Texas, office stock and take-home dispensing are where state and federal rules diverge.

The State Board of Pharmacy says Texas law allows office-use distribution of compounded preparations, but "such action may not be allowed by federal law", and non-compounded drugs cannot be dispensed for office use. (TSBP Rules FAQ, February 2025)

A Class A, C or E pharmacy may supply a reasonable quantity of non-sterile compounded preparations for office use under a written agreement, for administration in the clinic only, never for dispensing or resale. (22 TAC 291.131)

A physician may supply any drug, remedy or clinical supply necessary for a patient's immediate needs. That permission is not a license to run a pharmacy. (Occ. Code 158.001)

Open questions on this topic: see things to confirm.

If you add GLP-1 weight loss later

If you add GLP-1 weight loss, the compounding picture changed when the shortages ended; pharmacies and processors ask about these dates.

FDA has declared the GLP-1 shortages resolved: tirzepatide on December 19, 2024 (enforcement discretion ended February 18, 2025 for 503A and March 19, 2025 for 503B) and semaglutide on February 21, 2025 (April 22, 2025 for 503A and May 22, 2025 for 503B). Neither is on the 503B bulks list. (FDA GLP-1 compounding policy page)

5. Labs: reference, specialty and outside tests

Functional medicine runs on testing, often from specialty labs as well as reference labs. Sending specimens out keeps the clinic outside CLIA; the lab that runs the test holds the certificate.

Collecting and preparing specimens, with all testing sent to an outside lab, does not make a clinic a laboratory under CLIA. (42 CFR 493.2)

Any test performed on site, including a waived test, requires a CLIA certificate. (42 CFR 493.3(a))

A lab that runs only waived tests files a certificate of waiver for each location. (42 CFR 493.35(a))

FDA's 2024 rule on laboratory developed tests was vacated by a federal court in Texas on March 31, 2025, and FDA restored the prior regulation text in a final rule effective September 19, 2025. (90 FR 45134)

This research found no Texas license an office lab must hold beyond CLIA; that absence is on the confirm list.

Open questions on this topic: see things to confirm.

6. Patient texting and reminders

Text is how a functional medicine clinic talks to patients: visit reminders, lab-draw reminders, refill and renewal nudges. Clinic texting rules are federal, and the business number must be registered before carriers will deliver at volume.

Marketing texts need prior express written consent, health care messages from HIPAA covered entities have their own carve-out, and a reply of "stop", "quit", "end", "revoke", "opt out", "cancel" or "unsubscribe" revokes consent by itself. (47 CFR 64.1200)

The Campaign Registry charges $4.50 per brand ($4.00 for a sole proprietor), $41.50 for a standard vet and $101.50 for an enhanced vet, and $10 a month per Marketing, Mixed, Customer Care or Account campaign ($1.50 Low Volume Mixed, $2.00 Sole Proprietor). Vendors add their own fees. (TCR fees and pricing, August 13, 2026)

HIPAA's minimum necessary standard applies to what you put in a message. (45 CFR 164.502(b))

A practical rule, not a quoted regulation: keep diagnoses and drug names out of reminders.

Open questions on this topic: see things to confirm.

7. Getting paid: processors, underwriting, memberships

Processors usually see a functional clinic as an ordinary medical practice until the product mix says otherwise. What changes the picture:

• Recurring card-not-present charges for memberships and programs.
• Compounded prescriptions or peptides in the mix, which some processors exclude.
• Supplement sales, which some processors underwrite as retail rather than medical.

Processors commonly ask for licenses, any DEA registrations, the pharmacy partners and their 503A or 503B status, what you sell at retail, supervision agreements, a written refund policy and prior processing history. Have the package ready before you apply.

Memberships match how a functional practice works: long relationships, scheduled testing. Common structures:

• Annual or multi-month program, paid up front or monthly, covering visits, messaging and a set of reviews.
• Monthly membership with testing billed separately at your price.
• Prepaid packages of visits or coaching sessions.
• A la carte initial visit, often the on-ramp to a program.

Put cancellation and refund terms in a signed agreement at enrollment, and price outside lab tests separately so a dispute over one test does not unwind a program.

Physicians and practitioners, including nurse practitioners and physician assistants, may opt out of Medicare and treat Medicare patients under private contracts. An opt-out or contract that does not meet the rules is void. (42 CFR 405.400, 405.405)

The first two-year opt-out period starts on the date the affidavit is signed if it is filed within 10 days after the first private contract. It renews by default; cancelling takes written notice to each Medicare contractor at least 30 days before the period ends. (42 CFR 405.410(c), 405.445(a))

The private contract is signed by both parties before services, not during urgent or emergency care, and says the patient pays in full, Medicare limits do not apply, no claim will be filed, Medicare and Medigap will not pay, and the dates of the opt-out period. A new contract is signed for each two-year period. (42 CFR 405.415)

For months after December 31, 2025, a direct primary care arrangement does not stop HSA contributions if it covers only primary care for a fixed fee of no more than $150 a month ($300 for more than one person). Prescription drugs other than vaccines are excluded, and an arrangement that includes other services does not qualify, whatever the member uses. (IRS Notice 2026-5)

Open questions on this topic: see things to confirm.

8. Texas filings, taxes and fees

What a new Texas clinic files and pays in its first year.

Open questions on this topic: see things to confirm.

9. Advertising rules

Functional medicine marketing talks about root causes, protocols and supplements. Any claim about what a supplement or test does needs substantiation, and a supplement label follows FDA's structure and function rules.

Texas holds the physician responsible for what the clinic's marketing says.

Ads may not be false, deceptive or misleading. Testimonials need a credentials disclaimer and a compensation disclosure, models must be identified, and medical directorship or supervision must be disclosed at non-primary locations run under protocols. (22 TAC 164.3)

The physician is responsible for all of the practice's advertising, must have a patient's consent before the patient's photos appear in an ad, and must keep copies of ads for two years. (22 TAC 164.2)

The FTC's Consumer Reviews and Testimonials Rule, effective October 21, 2024, bans fake reviews and undisclosed insider reviews. (16 CFR Part 465)

Under the FTC Endorsement Guides, claims in an endorsement need substantiation, and when the endorser's result is not typical you disclose the results people can generally expect. (16 CFR 255.2)

FTC health products guidance requires competent and reliable scientific evidence for health benefit claims, and for most such claims that generally means randomized, controlled human clinical testing. (FTC Health Products Compliance Guidance)

A supplement label with a structure or function statement must carry FDA's disclaimer that the statement has not been evaluated and the product is not intended to diagnose, treat, cure or prevent any disease, and the marketer notifies FDA within 30 days of first marketing. (21 CFR 101.93(a), (c))

A supplement claim that the product treats, cures, prevents or mitigates a disease makes it subject to regulation as a drug, unless it is an authorized health claim. (21 CFR 101.93(f), (g))

10. The software stack and what it costs

You need these pieces whichever vendor you choose. The right column is what Moonshot EHR includes and charges.

At list price that is 1 prescriber: $1,000; 2 prescribers: $1,200; 3 prescribers: $1,400 per location per month, before the optional packages and your processor's fees.

11. A 30-item opening checklist

1. Decide who owns the practice; if a non-physician is investing, take the structure to health care counsel first.
2. Form the practice entity with the Secretary of State.
3. File an assumed name if you market under a different brand.
4. Get an EIN, a business bank account and bookkeeping before the first charge.
5. Register for state business taxes, including a sales tax permit if you sell taxable products, and calendar the annual filings.
6. Sign a supervising physician agreement with a physician who will do the work.
7. Sign a written prescriptive authority agreement for each NP and PA.
8. Register each delegation with the medical board.In Texas, register each delegation with the Medical Board within 30 days.
9. Confirm each APRN's prescriptive authority.Texas APRNs need Board of Nursing prescriptive authority approval and an authorization number.
10. Calendar the required supervision meetings and chart reviews and keep minutes.
11. Carry malpractice coverage for every prescriber.
12. List the services only a licensed clinician performs, and keep diagnosis and treatment out of coaching scripts.Texas defines practicing medicine as diagnosing or treating a disease by any method when the person charges for it or claims to be a physician.
13. Set the titles each staff member may use; dietitian titles are licensed.In Texas, licensed dietitian and LD require a license, and registered dietitian and RD require CDR credentials.
14. Decide in writing whether the clinic will prescribe testosterone or any other controlled substance; if it will, register each prescriber and dispensing location with DEA and complete EPCS identity proofing.
15. Get a sales and use tax permit if you sell taxable products.The Texas sales and use tax permit has no fee.
16. Mark each product's sales tax status before the first sale.Texas exempts supplements labeled as supplements or carrying a Supplement Facts panel; products with CBD do not qualify.
17. If you sell a supplement under your own label, check its structure and function wording and the FDA notice requirement.
18. Choose pharmacies for any compounded prescriptions and confirm each one's license and 503A or 503B status.
19. Open a reference lab account and set up draws or patient service center routing.
20. Get a CLIA certificate before running any test on site.
21. Open accounts with the specialty labs you use and confirm each is CLIA certified for the tests you order.
22. Decide how outside lab results come back and who reviews them.
23. Register the texting brand and campaign for your clinic number.
24. Add texting consent to intake, with marketing consent as a separate choice.
25. Write reminder templates with no diagnosis or drug name.
26. Apply for a merchant account with the underwriting package ready.
27. Publish programs with signed cancellation and refund terms, and decide whether you will see Medicare patients and on what terms.Seeing Medicare patients cash-pay requires a Medicare opt-out and a signed private contract.
28. Have the physician review every ad and supplement claim, collect photo consent and keep copies.
29. Configure appointment types, intake, consents, programs, products, e-prescribing and lab ordering.
30. Work the confirm list below, then run a test patient from intake to first follow-up.

12. Things to confirm before you open

Questions this guide could not settle from a primary source, each with who can answer it. Ask in writing and keep the answers.

• Confirm with Texas health care counsel whether a management services organization (MSO) fits your plan, where a non-physician company provides non-clinical services to the physician-owned practice for a fair-market-value fee. No Texas statute, Medical Board rule or Medical Board FAQ found for this guide expressly approves it, and the status of 2023 HB 2982 is unconfirmed.
• Confirm with the Board of Nursing and your counsel whether a nurse practitioner may own a Texas practice entity; the statute is silent.
• Confirm with the Texas Medical Board that Occ. Code 157.0511 and 157.0512, HSC 481.074 and 481.0764, and 22 TAC Chapters 169 and 183 read as cited here after the 2025 session; this guide used statute and rule mirrors, not the official sites.
• Confirm with the Texas Medical Board how large an immediate-needs supply may be under Occ. Code 158.001; no primary source found for this guide gives a number.
• Confirm with the State Board of Pharmacy the current text of 22 TAC 291.133, the sterile office-use rule, reportedly amended in February 2026.
• Confirm with the Texas Medical Board whether in-office IV drips at your clinic fall under Occ. Code Chapter 172, which turns on whether the clinic counts as a physician's office.
• Confirm with the Texas Health and Human Services Commission, which handles CLIA applications for CMS in Texas, the current form and whether any state license applies to an office lab; none was found.
• Confirm with the Texas Comptroller how sales tax applies to prescription drugs the clinic dispenses and to the services and memberships it sells.
• Confirm the Form 206 (PLLC) filing fee with the Secretary of State.
• Confirm with the State Board of Pharmacy the exemptions in Occ. Code 560.004 before you use an out-of-state pharmacy that ships to Texas patients without a Class E license.
• Confirm with the Texas Comptroller how a meal replacement or protein shake sold by the clinic is taxed when it carries a Supplement Facts panel but is marketed as a meal.
• Confirm with the Texas Medical Board whether any rule governs a physician selling supplements or retail products from the office or an online dispensary, including disclosure of a financial interest; the old Chapter 190 rules are repealed and no replacement was found.
• Confirm with the Texas Medical Board where the line sits between health coaching or nutrition education by non-licensed staff and the practice of medicine in your clinic.
• Confirm with Texas health care counsel what title and services a naturopathic doctor may offer in your clinic; Texas has no naturopathic license.
• Confirm with the Department of State Health Services and the Medical Board whether any Texas rule applies to patient-requested or direct-to-consumer lab testing through your clinic.
• Confirm with FDA or your counsel whether a clinic that sells a supplement under its own label is the firm that files the 21 CFR 101.93 notification and meets the supplement manufacturing rules.
• Confirm with the State Board of Pharmacy the exemptions in Occ. Code 560.004 before you use an out-of-state pharmacy that ships to Texas patients without a Class E license.
• Confirm with the Texas Comptroller how a meal replacement or protein shake sold by the clinic is taxed when it carries a Supplement Facts panel but is marketed as a meal.
• Confirm with the Texas Medical Board whether any rule governs a physician selling supplements or retail products from the office or an online dispensary, including disclosure of a financial interest; the old Chapter 190 rules are repealed and no replacement was found.
• Confirm with the Texas Medical Board where the line sits between health coaching or nutrition education by non-licensed staff and the practice of medicine in your clinic.
• Confirm with Texas health care counsel what title and services a naturopathic doctor may offer in your clinic; Texas has no naturopathic license.
• Confirm with the Department of State Health Services and the Medical Board whether any Texas rule applies to patient-requested or direct-to-consumer lab testing through your clinic.
• Confirm with FDA or your counsel whether a clinic that sells a supplement under its own label is the firm that files the 21 CFR 101.93 notification and meets the supplement manufacturing rules.
• Confirm with DEA whether the telemedicine flexibilities were extended past December 31, 2026 or replaced by a special registration rule before you build a remote-start model.
• Confirm with your counsel how the FCC treats appointment-reminder texts from a covered entity to wireless numbers.
• Confirm with your texting vendor how long brand and campaign review take and what each submission needs, such as privacy policy and terms URLs.
• Confirm with your processor, in writing, which of your products and services they accept, including any controlled substances and compounded preparations, and what reserve they hold and for how long. No card-brand rule found for these guides names a clinic type.
• Confirm with your Medicare Administrative Contractor the current opt-out affidavit form and filing address before you see a Medicare patient under a private contract.

Related

• All Texas opening guides
• How to Open a GLP-1 Weight Loss Clinic in Texas (2026)
• How to Open a Hormone and Menopause Clinic in Texas (2026)
• How to Open a Longevity Clinic in Texas (2026)
• How to Open a TRT Clinic in Texas (2026)
• Functional medicine EHR
• Does Moonshot EHR have intake forms and e-signed consents?
• Does Moonshot EHR order labs from Quest electronically?
• Does Moonshot EHR do membership billing?
• Does Moonshot EHR sell prepaid packages and bundles?
• Cash-pay vs insurance
• Moonshot EHR pricing

This guide is operating information, not legal advice. Confirm the current rules with the Texas Medical Board, the Board of Nursing, the State Board of Pharmacy and your counsel before you open. Each statement above is tied to the source beside it as read on the date shown; statutes and rules change, and some sources are statute mirrors, not the official text. Moonshot prices are current as of October 19, 2026.