Court Opinion

ID: 4129802
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:56:36.112107+00
Date Added: 2024-06-11T14:31:24.354147
License: Public Domain

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                                       Wate of IEexae
DAN MORALES                               March 21, 1996
 ATTORNEYGENERAL
     David R. Smith, M.D.                           Opinion No. DM-379
     Commissioner of Health
     Texas Department of Health                     Re: Whether section 23 1.006 of the
     1100 West 49th Street                          Family Code, regarding eligibiity of child
     Austin, Texas 78756-3 199                      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     Since you submitted your request, the Seventy-fourth Legislature repealed that provision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 state-
          funded 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 OUTrequest to explain how the amendments to section 23 1.006 affect
your query. We assume you continue to be intemkd in the statementrequirementsas they apply to
Medicaid   pnwiders.

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

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