                       December 27, 1967


Honorable Burton G. Hackney        Opinion No. M-173
Commissioner, State Dept. of
   Public Welfare                  Re:   Medical assistance payments
John Ii.Reagan Building                  for public assistance recip-
Austin, Texas                            ients by State De'partment
                                         of Public Welfare.
Dear Mr. Hackney:

          You have asked the following questions on the authority
of the State Department of Public Welfare to make certain medical
assistance payments for public assistance recipients:

         “1,  On the assumption that there is no
    Federal barrier, either in the Law or Federal:,~
    rules and regulations, in your opinion does
    Article III, Section 51-a of the Texas icon-
    stitution require the Department to make
    paymsnts for Medical Assistance on behalf
    of such recipients (CAA, AB, APTD, and AFDC)
    under Title XIX in the form of vendor payments
    payable to the providers of services, such as
    physicians?

          "If you answer question No. 1 in the
     affirmative, then this will obviate the neces-
     sity for answering questions No, 2 and 3: how-
     ever, ,ifit is answered in the negative, please
     answer the following:

          "2D If payment can be made underArticle
     III, Section 51-a of the Texas Constitution,
     then in your opinion, could the Department
     make payments under Senate Bills Nos. 2 and
     454 to the recipients for medical services
     received under Title XIX instead of making
     vendor payments to the providers of services7
                               -829-
Hon. Burton G. Hackney, page 2 (M-173)



         "3* Assuming that the Fe~deralLaw is
    amended aa proposed by Section 230 of
    Ii.R. 12080, can the State of Texas make
    Medical Assistance payments directly to the
    medically needy individuals (non-recipients)
    for services which they have received from
    the DhysicUn, or will the Constitution, as
    it is now written, require the Department to
    make vendor payments on behalf of the medi-
    cally needy as well as on behalf of 'therecip
    ients of Public Assistance?"

          Section 51-a,   Article III, Constitution of Texas, pro-
vides:

         "The Legislature shall have the power,
    by General Laws, to provide, subject to
    limitations herein contained, and such other
    limitations, restrictions and regulations as
    may by the Legislature be deemed expedient,
    for assistance to and/or medical care for,
    and for rehabilitation and pnv other services
    included in the Federal lesislation nrovidinq
    matchins funds to help such families and in-
    dividuals attain or retain caoabilitv for in-
    denendence or self-care, and for the payment
    of assistance to and/or medical care for, and     ;
    for rehabilitation and other services for:

         "(1) Needy aged persons who are citizens
    of the United States or noncitizens who shall
    have resided within the boundaries of the
    United States for at least twenty-five (25) :
    years and are over the age of sixty-five (65)
    years:

         "(2) Needy individuals who are citizens of
    the United States who shall have passed their
    aiqlsteenth(18th) birthday but have not passed
    their sixty-fifth (65th) birthday and who are
    totally and permanently.disabled by reason of
                               -830-
hon. Burton G. Hackney, page 3 (M-173)


                                                             :
     a mental or physical handicap or a combination.
                                                         .
     of physical and mental handicaps;

          "(3) Needy blind persons who are citizens       ':,,'
                                                             ~::',,
     of the United States, and who are over the age      ~.'
     of eighteen (18) years:

          "(4) Needy children who are citizens of the
    ~United States and who are under the age of           .,
     twenty-one (21) years, and to the caretakers of,
     such children.

          "The Legislature may define the residence
     requirements, if any, for participation in these    .""
     program I

         "The Lesislature shall have authority to
    enact anprooriate leoislation which will enable
    the state of Texas to coonerate with the Govern-
    ment of the United States in nrovidino ,assistance
    to and/or medical care on behalf of needy nersons,
    and in providino rehabilitation and anv other
    services included in the Federal 1esisLation oro-.
    vidins matchins funds to help such families
    and individuals attain or retain cmnability
    for independence or self-care, and to accept
    and expend funds from the Government of the
    United States for such purposes in accordance
    with the laws of the United States as they now
    are or as they may hereafter be amended, and
    to make appropriations out of State funds for
    such‘purposes; provided that the 6tuxlmm amount
    paid out of State funds to or on behalf of any
    individual recipient shall not exceed the amount
    that is matchable out of Federal funds; pro-
    vided that the total amount of such assistance
    payments and/or medical assistance payments out
    of State funds on behalf of such recipients
    shall not exceed the amount that is matchable
    out of Federal funds; provided that if the
    limitations and restrictions herein contained
                             -831-
Hon. Burton G‘.Hackney, page 4 (M-173)



    are found to be in conflict with the provisions
    of appropriate Federal statutes as they now are
    or as they may be amended, to the extent that
    Federal matching money is not available to the
    State for these purposes, then and in that event
    the Legislature is specifically authorized and
    empowered to prescribe such limitations and
    restrictions and enact such laws as may be neces-
    sary in order that such Federal matching money
    will be available for assistance and/or medical
    care for or on behalf of needy persons; and pro-
    vided further that the total amount of money to
    be expended per fiscal year out of State funds
    for assistance payments only to recipients of
    Old Age Assistance, Aid to the Permanently and
    Totally Disabled, Aid to the Blind, and Aid to
    Families v&m Dependent Children shall never
    exceed Sixty Million Dollars ($60,000,000~.

           "Nothins in this Section shall be construed
     to amend, modifv or repeal Section 31 of Article
     XVI of this Constitution; provided further, how-
     ever, that such medical care, services or assist-
     ance shall also include the employment of objective
     or subjective means, without the use of drugs, for
     the purpose of ascertaining and measuring the
     powers of vision of the human eye, and fitting
     lenses or prisms to correct or remedy any defect
     or abnormal condition of vision. Nothing herein
     shall be construed to permit optometrists to treat
     the eyes for any defect whatsoever in any manner
     nor to administer nor to prescribe any drug or
     physical treatment whatsoever, unless such OptOm-
     etrist is a regularly licensed physician or
     surgGGn under the Laws of this State." (Emphasis
     added.)

          The Federal Law as codified in 42 U.S.C.A., Section
1396b, provides:

          "For purposes   of this subchapter --
                               -832-
Hon. Burton G. Hackney, page 5 (M-173)



          “(al         "medical assistance' means
                       The     term
    payment of part or all of the cost of the fol-
    lowing care and services (if provided in or
    after the third month before the month in
    which the recipient makes application for assist-
    ance) for individuals who are --

          "(i) under the age of 21,

          "(ii) relatives specified in section
     606(b) (1) of this title with whom a child is
     living if such child, except for section 606(a)
     (2) of this title, is (or would, if needy, ba)
     a dependent child under subchapter IV of this
     chapter,

          "(iii) 65 years of ,age or older,

          "(iv) blind, or

          "(~1 18 years of age or older and per-
     manently and totally disabled, but whose income
     and resources are insufficient to meet all of
     such cost --



          "(5) phvsicians' services, whether furnished
     in the offiee, ,tbe patient's home, a hospital, or
     a skilled nursing home, or elsewhere;
          II
               D   0   r   M   [Bmphasis added.)

          It is noted that the constitutional provision refers
to Section 31, Article XVI, Constitution of Texas, stating that
nothing shall be construed to amend, modify or repeal such Article.
Physicians' services pursuant to the constitutional provision
above are found in the Texas Medical Practice Act codified as
Article 4510, V,C,S:

          "Art. 4510,                 Who regarded as practicing medicine
                                            -833-
Hon. Burton G. Hackney, page 6 (M-1739



          "Any person shall be regarded as practicing
     medicine within the meaning of this law:

          "(19 Who shall publicly profess to be a
     physician or surgeon and shall diagnose, treat,
     or offer to treat, any:disease or disorder,
     mental or physical, or any physical deformity
     or injury I . . and charge therefor . . .
     money . . e ." (Emphasis added.9


Under such practice, money charges are ordinarily made directly to
the patient.

          It should be noted that there,are three critical dates
specified in the federal law; for the State to operate and enlarge
the scope of the programs, which may be used as an indication of
the intent of the federal legislation. The last,dated require-
ment of the States provided in the federal law is July 1, 1975.
The requirements of the federal law are set out in U.S.C.A. 42,
Section 139633 (e9, which provides:

          "The Secretary shall not make payments under
     the preceding provisions of this section to any
     State unless the State makes a satisfactory showing
     that it is making efforts in the direction of
     broadening the scope of the care and services made
     available under the plan and in the direction of
     liberalizing the eligibility requirements for
     medical assistance, with a view toward furnishing
     by July 1, 1975, comprehensive care and services
     to substantially all individuals who meet the
     plan's eligibility standards with respect to in-
     come and resources, including services to enable
     such individuals to attain or retain independence
     or self-care." (Emphasis added.)


          The similarity and common use of language in the federal
act and the state constitutional provision, and our legal concept
of physicians" services lead us to the conclusion that the programs

                             -834-
      ,




Ron. Burton G. Hackney, Page 7 (M-173)



were intended to be carried out within the full scope of the
federal law, especially in regard to the retention or attainment
of individual independence and self-care., It~is noted that the
federal law qualifies the individual whose income and resources
are "insufficient," rather than "none" or "non-existant".

          In view of the underlined portion of Section 51-a of
Article III of the Constitution of Texas, the Legislature~is
specifically authorized to enact such legislation as will enable
the State of Texas to receive federal matching funds for medi-
cal assistance to needy individuals. It is noted that the pur-
pose is to help such families attain or retain capability for
,independenceor self-care. The Constitution does not prescribe
to whom payments of these funds are to be made. Therefore if
federal legislation, as it may exist or as it may hereafter be
amended, permits payments of such funds to be made directly to
the needy individuals, Article III, Section 51-a of the Consti-
tution of Texas specifically authorizes such payment. In answer
to your first question, thexefore, you are advised that Arti-
cle III, Section 51-a of the Texas Constitution does not require
the State Department of Public Welfare to make "vendor" payments
payable to providers of services such as physicians, but pay-
ments may be made directly to the needy recipient if permitted
by federal ,legislation.

          Section 2 of Senate Bill 2, Acts 60th Legislature,
Regular Session, Chapter 151, page 310, codified in Vernon's as
Article 6951-l provides in part:

          "It is the intent of the Legislature to
     make statutory provision which will enable the
     State of Texas to provide Medical Assistance on
     behalf of needy individuals of this state and to
     enable the state to obtain all benefits provided
     by the Federal Social Security Act as it now
     reads or as it may hereafter be amended, or by
     any other Federal Act now in effect or which
     may hereafter be enacted within the limits of
     funds available for such purposes. Wherever
     used in this Act the term "Medical Assistance'
     shall include all of the health care. services,
                             -835-
Hon. Burton G. Hackney, page 8   (M-173)




     assistance and benefits authorized or provided
     for in such Federal leoislation." (Emphasis
     added.)

          Section 6 of Senate Bill 2, providing for payments,
is directory in nature and provides, in part:

         "The State Department is hereby author-
    ized to determine the method of payment of
    claims . . . by establishing a direct vendor
    payment program . . . or by an insurance plan
    or hospital service plan . . . or bv anv .other
    . . . method of oavment . . . which the State
    Department finds to be the most satisfactory
    and economical method of pavinq costs and/or
    processins claims , . , .

          "If the State Department elects as Part of
    its plan and/or methods to make Ra!#msntsdirectly
    to vendors of Medical Assistance as authorized
    in this Act, then such vendor payments provided
    for under the terms of this Act shall be paid
    by vouchers or warrants  drawn by the State Comp-
    troller on the proper accounts of a 'State Depart-
    ment of Public Welfare Fund'; for the purpose of
    permitting the State Comptroller  to properly draw
    and issue such vouchers or warrants, the State
    Department of Public Welfare shall furnish the
    Comptroller with a list of or roll of those entitled
    to such vendor payments from time to time, together
    with the amount to which each vendor is entitled.
    When such vouchers or warrants have been drawn
    they shall be delivered to the Commissioner of
    the State Department of Public Welfare, who in
    turn shall supervise the delivery of same to
    the vendors entitled thereto." (Emphasis added.)

         Section 7 provides as follows:

         "Neither Medical Assistance nor amounts
    payable to vendors out of .publicassistance

                             -836-         .
Hon. Burton G. Hackney, page 9 (M-173)



    funds are transferable or assignable, at law
    or in equity, and none of the money paid or
    payable under the provisions of this Act shall
    be subject to execution, levy, attachment,
    garnishment, or other leg81 process, or to
    the operation of any insolvency law."
    (Emphasis added.)

          Section 19 of Senate Bill 2 provides:

          "It is not the intention of this Act to
     preempt or dilute or in any way infringe upon
     the health programs for which any State Agency
     or Department is or may be responsible, and it
     is the intention of this Act that the state
     plan for Medical Assistance provide for enter-
     ing into cooperative arrangements with other
     State Agencies and Departments responsible
     for administering or supervising the administra-
     tion of health services in the state lOOking
     toward maximum utilization of such ,services in
     the provision of Medical Assistance under this
     plan."

          Such a statute should be given a liberal construction to
carry out the legislative purpose and intent to make medical as-
sil;tancepayments in accordance with the best method as found by
the State Department to implement the program. That Department,is
expressly given the power of election whether to make payments
directly to vendors.

          There has been some question raised concerning the
provisions of Senate Bill 454, Acts of the 60th Legislature,
Regular Session, 1967. We dispose of that question by :@tating
that Senate Bill 454.i.san amendment to the existing law to
conform to the program of federal legislation pursuant to Article
III, Section 51-a of the Texas Constitution.

          It is again noted that under the provisions of Senate
Bill 2, the State Department of Public Welfare is not limited to
making "vendor payments" but is given authority to "elect" as 'a

                              -837-
                                                    .   .   .




Hon. Burton G. Hackney. page lo     (M-173)



part of its plan to make payments directly to vendors for medical
assistance. The Act refers to medical assistance payments and also
amounts payable to vendors out of public assistance funds. There-
fore, you are advised in answer to your questions .numbers 2 and
3 that the State Department of Public Welfare may make payments
directly to recipients for medical service received under Title
19, as well as making payments directly to vendors of medical as-
sistance, and may continue to make such payments in the event
that Section 230 of I-i.
                       R. 12080 is enacted into law by the Federal
Congress.

                      SUMMARY

           Section 51-a of Article III, Constitution
     of Texas and Senate Bill 2, Acts of the 60th
     Legislature, Regular Session, 1967, Chapter 151,
     page 310, enacted pursuant to the provisions of
     Section 51-a of Article III authorizes the State
     Department of Public Welfare to make medical as-
     sistance payments in any manner most satisfactory
     and economical, including payments directly to
     recipients'fbr medicai services received in'acl "~
     cordance with the laws of the United States as
     they now exist, or as they may hereafter be
     amended, as well as to,make medical assistance
     payments directly to vendors of medical assist-
     ance q




Prepared by Pat Cain and John Reeves
Assistant Attorneys' General

APPROVED:
OPINION COWMITTEE


                            -838-
   ,   . . .




Ron.   Burton G. Hackney, page 11 (M-173)



Hawthorne Phillips. Chairman
Kerns Taylor. Co-Chairman
W. V. Geppert
Pat Bailey
Jack Sparks
Houghton Brownlee
Sam Kelly

A. J. CARUBBI. JR.
Staff Legal Assistant




                                -839-


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