           THE     ATTORNEY           GEXERLIL
                       OF     TEXAS

                       June 18, 1987




Eonorable Charles D. Penick              Opinion No. JM-723
Criminal District Attorney
Bastrop County Courthouse                Re:   Funding responsibilities
Bastrop, Texas 78602                     of the city of Bastrop under
                                         the Indigent Health Care Act

Dear Mr. Penick:

     You ask about the responsibility for the funding of health care
services for indigent persons who are residents of the city of
Bastrop. Your inquiry’is whether the county is obligated to provide
health care services to indigent residents of the city under Title 2
of the Indigent Bealth Care and Treatment Act, article 4438f.
V.T.C.S., or whether the city is obligated to fund such services under
Title 3 of that act.

     You advise us that the Bastrop Hospital Authority was created by
the city of Bastrop in 1965 to finance the construction of the Bastrop
Memorial Hospital. The hospital was opened in 1966 .and was operated
by the hospital authority until July, 1983. Since that date, the
hospital has been leased to private entities who operate the hospital.
It is our opinion that the Bastrop Memorial Hospital is a “public
hospital.”under Title 3 of the Indigent Health Care Act and that the
city which created the hospital authority is liable for sufficient
funding to the public hospital or to the hospital authority to provide
the health care assistance required by the act.

     Section 1.02(10) of the Indigent Health Care Act expressly
defines a public hospital as a “hospital owned, operated, s leased by
a governmental entity.” According to section 1.02(6), a governmental
entity “includes a county, city, town, hospital authority, or other
political subdivision of the state, but does not include a hospital
district.” Since a hospital authority is a governmental entity as the
term is defined by section 1.02 and the Bastrop hospital is owned by
the hospital authority, we conclude that it is owned by a governmental
entity and Is a public hospital within the meaning of the Indigent
Health Care Act. As a public hospital, the hospital has a duty to
provide health care assistance to eligible residents of the city under
Tide 3 of the act. Since the city created the hospital authority,
the city is liable for providing sufficient funding to the public
hospital or to the hospital authority to provide the health care




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Honorable Charles Do.Penick - Page 2    (JM-723)




assistance.required by the act. See V.T.C.S. art. 4438f. 5510.02.
12.03. See also Attorney General opinion JM-603 (1986) (County with
public hospital owned by a county hospital authority and leased by It
to a corporation that operates the hospital).

     A county is obligated to provide health care assistance only to
eligible residents of the county who do not reside within the area
that a public hospital or hospital district has a legal obligation to
serve. See V.T.C.S. art. 4438f. 12.02. Hence, the county is not
obligatedto provide health care to indigent residents of the city of
Bastrop. See Attorney General Opinion Nos. JM-637, JM-626 (1987);
JM-603 (198x

     We pointed out in Attorney General Opinion JM-626 that, in our
opinion, the term "public hospital" as used in section 10.02(a)
includes both the owner and operator of such a hospital. We concluded
in that opinion that, when a hospital is owned by one entity and
operated by another, the legislature intends "sufficient funding" to
be a matter to be negotiated between the entities and to be a decision
of both, with the operator of the hospital presenting information
necessary for the decision. It is our opinion that the legislature
does not intend the governmental entity chat owns a hospital to simply
reimburse the operator for all services rendered to indigents.

     It has been suggested that section 14.01 of the Indigent Bealth
Care Act impliedly exempts the city of Bastrop from the funding
requirement of section 12.03 because the Bastrop Memorial Hospital has
been leased to a private entity since 1983. We do not agree with that
interpretation of section 14.01.

     Section 14.01 provides that:

             Notwithstanding any other provision of law, if
          a public hospital owned, operated. or leased by a
          governmental entity is sold or leased to another
          person OIL or after January 1, 1985, the sale or
          lease of the public hospital does not affect the
          governmental entity's obligation to continue to
          serve residents who were eligible for assistance
          during the hospital's last full operating year
          that ended before January 1. 1985, or the
          obligation to provide the health care services the
          public hospital provided during that period.

V.T.C.S. art. 4438f. 914.01. The provision merely relates to the
effect that a transfer of the ownership or operation of a public
hospital after January 1, 1985 will have on eligibility standards for
health care assistance and on the health care services that are
provided.


                              p. 3365
Honorable Charles D. Penick - Page 3    fJM-723)




     In Attorney General Opinion 313-603,we discussed standards for
determining eligibility for health care assistance under Title 3 of
the act. Section 10.02(b) provides that a person is eligible for
assistance under Title 3 if the person resides in an area served by a
public hospital and the person meets the basic income and resources
requirements established by the Texas Department of Human Services or
meets a less restrictive income and resources standard adopted by the
public hospital serving the area. Under section 10.02(f), a public
hospital may adopt a less restrictive standard at any time, and under
section 10.02(c), a public hospital that used a less restrictive
standard during the operating year that ended before January 1, 1985,
must adopt that less restrictive standard for the purpose of
determining eligibility. In addition, under section 10.02(d), a
public hospital that had a Hill-Burton obligation during part of the
operating year that ended before January ~1. 1985, and did not use an
income and resources standard during that year. is required to adopt
the standard the hospital used to meet its Hill-Burton obligation.
Section 14.01 establishes that a sale or lease of a public hospital on
or after January 1, 1985, does not affect the governmental entity’s
obligation to continue to serve residents who were eligible for
assistance during the hospital’s last full operating year that ended
before January 1, 1985.

     Section 11.01 of the act provides, in part, that:

             (a) Each public hospital shall provide the
          Inpatient and outpatient hospital services a
          county is required to provide under Subdivision
          (1) of Subsection (a) of Section 3.01 of this Act.

             (b) If a public hospital provided additional
          health care services to eligible residents during
          the operating year that ended before January 1,
          1985, the hospital shall continue to provide those
          services.

             (c) A public hospital may provide additional
          health care services.

V.T.C.S. art. 4438f, 511.01. Section 14.01 also provides that a sale
or lease of a public hospital ou or after January 1. 1985, does not
affect the governmental entity’s obligation to continue to provide the
health care services that a public hospital provided during the
hospital’s last full operating year that ended before January 1, 1985.

     Section 14.01 establishes that the sale or lease of a public
hospital after January 1, 1985 does not enable a governmental entity
to rid itself of its obligation to serve residents who would be
qualified for health care assistance during the operating year prior




                              p. 3366
Honorable Charles D. Penick - Page 4     (JM-723)




to January 1, 1985 or its obligation to provide the health care
services provided during that period. It does not exempt a govern-
mental entity from the funding requirements of sections 10.02(a) and
12.03 where a governmental entity owas a public hospital that it
leased to another entity prior to January 1, 1985.

                             SUMMARY

               As the city that crested the hospital
          authority which     CWllS the Bastrop Memorial
          Hospital, the city of Bastrop is liable for
          sufficient funding to the public hospital or to
          the hospital authority to provide the health care
          assistance required by Title 3 of the Indigent
          Health Care and Treatment Act. Section 14.01 of
          the act relates to the effect that a sale or lease
          of a public hospital after January 1, 1985 will
          have on eligibility standards for receiving health
          care assistance and on the health care services
          that are provided. It does not impliedly exempt
          the city from the funding requirements of Title 3
          when the hospital has been, leased to a private
          entity since 1983.




                                         Attorney General of Texas

JACK HIGHTONER
First Assistant Attorney Galloral

MARY KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STF.AlZLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Comittee

Prepared by Nancy Sutton
Assistant Attorney General




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