DAN MORALES 

ATTORNEYGENERAL 

QBffice of ttJe k!lttornep @eneral 

Wate of IEexae 

David R. Smith, M.D. 

Commissioner of Health 

Texas Department of Health 

1100 West 49th Street 

Austin, Texas 78756-3 199 

March 21, 1996 

Opinion No. DM-379 

Re: Whether section 23 1.006 of the 

Family Code, regarding eligibiity of child 

support obligors to enter into contracts paid 

with state fimds, applies to Medicaid 

providers (RQ-792) 

Dear Commissioner Smith: 

On behalf of the Texas Department of Health (the “department”), you asked 

whether former section 14.52(d) of the Family Code, Act of May 27, 1993, 73d Leg., 

R.S., ch. 816, 9 2.01, 1993 Tex. Gen. Laws 3251, 3255, applied to Medicaid providers. 

Since you submitted your request, the Seventy-fourth Legislature repealed that provision 

and remodified it as section 231.006 of the Family Code, see Act of April 6, 1995, 74th 

Leg., R.S., ch. 20, § 2, 1995 Tex. Sess. Law Serv. 113, 282, which the same legislature 

then substantially amended, see Act ofMay 27, 1995,74th Leg., R.S., ch. 751, $82, 1995 

Tex. Sess. Law Serv. 3888,3915-16. 

Former section 14.52 provided as follows: 

(a) A child support obligor who is 30 or more days delinquent 

in paying child support is not eligible to: 

(1) submit a bid or enter into a contract to provide 

property, materials, or services under a contract with the state; 

or 

(2) receive a state-funded grant or loan. 

(b) A sole proprietorship, partnership, corporation, or other 

entity in which a sole proprietor, partner, majority shareholder, or 

substantial owner is a delinquent obligor who is ineligible to bid on a 

state contract under Subsection (a)( 1) of this section may not bid on 

a state contract as provided by this section. 

(c) A child support obligor remains ineligible to submit a bid on 

or enter into a state contract or apply for a state-fimded grant or loan 

under Subsection (a) of this section until: 
David R Smith, M.D. - Page 2 (DM-379) 

(1) all arrearages have been paid; or 

(2) the obligor is in compliance with a written repayment 

agreement or court order as to any existing delinquency. 

(d) Each bidder for a state contract or applicant for a statefunded loan or grant under Subsection (a) of this section shag submit 

a signed, sworn statement accompanying any bid or application for a 

grant or loan atlirming that the bidder or applicant is not 30 or more 

days delinquent in providing child support under a court order or a 

written repayment agreement. 

(e) The attorney general and the General Services Commission 

may adopt rules or prescribe forms to implement any provision of 

this section. 

Newly enacted and amended section 23 1.006 provides in pertinent part as follows: 

(a) A child support obligor who is more than 30 days delinquent 

in paying child support and a business entity in which the obligor is a 

sole proprietor, partner, shareholder, or owner with an ownership 

interest of at least 25 percent is not eligible to: 

(1) receive payments from state tbnds under a contract to 

provide property, materials, or services; or 

(2) receive a state-funded grant or loan. 

(b) A child support obligor or business entity ineligible to 

receive payments under Subsection (a) remains ineligible until: 

(1) ah arrearages have been paid; or 

(2) the obhgor is in comphance with a written repayment 

agreement or court order as to any existing delinquency. 

(c) A bid or an application for a contract, grant, or loan paid 

from state funds must include the name and social security number of 

the individual or sole proprietor and each partner, shareholder, or 

owner with an ownership interest of at least 25 percent of the 

business entity submitting the bid or application. 

(d) A contract, bid, or application subject to the requirements of 

this section must include the following statement: 

p. 2061 
David R Smith, M.D. - Page 3 (DM-379) 

“‘Under Section 23 1.006, Family Code, the vendor or applicant 

certities that the individual or business entity named in this contract, 

bid, or application is not ineligible to receive the specified grant, loan, 

or payment and acknowledges that this contract may be terminated 

and payment may be withheld if this certification is inaccurate.” 

You were interested in former subsection (d) which required “[elach bidder for a 

state contract or applicant for a state-funded loan or grant” to submit “a signed, sworn 

statement accompanying any bid or application for a grant or loan atlirming that [he or 

she] is not 30 or more days delinquent in providing child support under a court order or a 

written repayment agreement.” You asked whether former subsection (d) applied to 

health care providers who apply to participate in the Texas Medicaid program. We 

assume that you are now interested in subsection (d) of section 23 1.006 as amended, 

which requires each contract, bid, or application subject to section 23 1.006 to include the 

statement that “the vendor or applicant certifies that the individual or business entity 

named in this contract, bid, or application is not ineligible.” We address whether Medicaid 

providers must submit such statements.* 

You explain that the department has delegated the administration of the federal 

Title XIX Medicaid program by contract to a private company. The private company 

solicits health care providers, including individual physicians and other health care 

professionals and entities, to participate in the program voluntarily. Providers do not 

submit bids. You state that “[tlhose wishing to participate must complete a provider 

enrollment application, meet provider criteria and sign a provider agreement.” The 

“‘Provider Agreement with the Texas Department of Health for Participation in the Texas 

Medicaid Program” submitted with your request states that health care providers who 

enter into the contract are paid with federal and state funds. We assume that this is the 

case. 

Former subsection (d) on its face required only a bidder for a state contract or an 

applicant for a state grant or loan to submit a sworn statement. By contrast, subsection 

(d) of section 231.006 as amended, requiring the submission of a statement, is broadly 

written to apply to all contracts, bids, or applications subject to the section. We believe it 

applies to all individuals and business entities that enter into contracts paid from state 

funds. Fist, subsection (a) makes ineligible not just delinquent individuals but also any 

business entity in which a delinquent individual is “a sole proprietor, partner, shareholder, 

or owner with an ownership interest of at least 25 percent” of the business entity. Clearly, 

. . the subsection (a) inehgtbrhty requirements apply to all kinds of business entities, whether 

they are owned as sole proprietorships, partnerships, corporations or any other kind of 

‘You did not respond to OUT request to explain how the amendments to section 23 1.006 affect 

your query. We assume you continue to be intemkd in the statement requirements as they apply to 

Medicaid pnwiders. 

p. 2062 
David R. Smith, M.D. - Page 4 (DM-379) 

ownership arrangements. Second, it is apparent from subsection (a)(l) and (2) that the 

eligibility requirements of section 231.006 apply to all contracts to provide property, 

materials, or services paid 6om state tknds and all state-funded grants and loans. We 

believe that section 23 1.006(d) is intended to apply to all individuals and business entities 

that would be potentially ineligible under subsection (a). For this reason, we conclude that 

section 23 1.006(d) applies to all individuals and business entities who enter into contracts 

to provide property, materials, or services paid from state funds. 

As noted above, it appears that all Medicaid providers are paid with at least some 

state funds. Therefore, we conclude that all providers that contract to participate in the 

Texas Medicaid program are required to submit statements regarding child support 

payments as provided by section 23 1.006(d). 

SUMMARY 

Providers that contract to participate in the Texas Medicaid 

program must submit a statement regarding child support payments 

pursuant to section 23 1.006 of the Family Code. 

DAN MORALES 

Attorney General of Texas 

JORGE VEGA 

Fist Assistant Attorney General 

SARAH J. SHIRLEY 

Chair, Gpiion Committee 

Prepared by Mary R. Crouter 

Assistant Attorney General 

p. 2063