DAN MORALES

ATTORNEYGENERAL 

# QBffice ofttJek!lttornep@eneral Wate ofIEexae

David R. Smith,M.D. Commissioner ofHealth Texas Department ofHealth 1100West 49th Street Austin, Texas 78756-3 199 March 21, 1996 Opinion No. DM-379
Re: Whether section 231.006 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, 92.01, 1993 Tex. Gen. Laws 3251, 3255, applied to Medicaid providers. Since you submitted your request, the Seventy-fourth Legislature repealed that provision and remodifiedit as section 231.006 of the Family Code, see Act of April 6, 1995, 74th Leg., R.S., ch. 20, §2, 1995 Tex.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 14.52provided asfollows: (a) A child support obligor who is 30 or more days delinquent inpaying child support isnot eligibleto: (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 isa delinquent obligor who isineligible to bid on a state contract under Subsection (a)(1)ofthis section may not bid on a state contract asprovided bythis 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) ofthis section until:David R Smith,M.D. - Page 2 (DM-379)

(1) allarrearages have been paid; or (2) the obligor is in compliance with a written repayment agreement or court order asto anyexisting delinquency. (d) Each bidder for a state contract or applicant for a statefunded loan or grant under Subsection (a) ofthis section shag submit a signed, sworn statement accompanying anybid or application for a grant or loan atlirming that the bidder or applicant isnot 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 231.006provides inpertinent part asfollows:

(a) Achild support obligor who ismore than 30 days delinquent inpaying child support and abusiness entity in which the obligor isa sole proprietor, partner, shareholder, or owner with an ownership interest ofat least 25percent isnot eligibleto: (1) receive payments from state tbnds under a contract to provide property, materials, or services; or (2) receive a state-funded grant orloan. (b) A child support obligor or business entity ineligible to receive payments under Subsection (a)remains ineligibleuntil: (1) ah arrearages have been paid; or (2) the obhgor is in comphance with a written repayment agreement or court order asto 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 bidor application. (d) Acontract, bid, or application subject to the requirements of this section must include the following statement:

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“‘UnderSection 231.006, Family Code, the vendor or applicant certities that the individual or business entity named in this contract, bid, or application isnot ineligibleto receive the specified grant, loan, or payment and acknowledges that this contract may be terminated andpayment maybewithheld ifthis certification isinaccurate.” 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] isnot 30 or more days delinquent inproviding child support under acourt 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 231.006 as amended, which requires each contract, bid, or application subject to section 231.006to include the statement that “the vendor or applicant certifies that the individual or business entity named inthis contract, bid,or application isnot 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

“‘ProviderAgreement 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 allcontracts, 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 notjust delinquent individuals but also any business entity inwhich a delinquent individual is “a sole proprietor, partner, shareholder, or owner with an ownership interest ofat least 25percent” ofthe business entity. Clearly,

. . the subsection (a) inehgtbrhty requirements apply to allkinds ofbusiness 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 231.006 affect yourquery. We assumeyoucontinuetobeintemkd in thestatement requirements

astheyapplyto Medicaidpnwiders.

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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 231.006(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 231.006(d) applies to all individuals and business entities who enter into contracts to provide property, materials, or services paid from state funds.
Asnoted above, it appears that allMedicaid 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 asprovided by section 231.006(d).
SUMMARY
Providers that contract to participate in the Texas Medicaid program must submit a statement regarding child support payments pursuant to section 231.006ofthe Family Code.

DAN MORALES Attorney General ofTexas
JORGE VEGA Fist Assistant Attorney General
SARAHJ. SHIRLEY Chair, Gpiion Committee Prepared byMary R. Crouter Assistant Attorney General

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