Bob Ferguson
Other LanguagesAGLO 1971 No. 35 -
Attorney General Slade Gorton
- - - - - - - - - - - - -
March 3, 1971
Honorable Martin J. Durkan, Senator
Washington State Senate
Legislative Building
Olympia, Washington 98501
Cite as: AGLO 1971 No. 35 (not official)
Dear Sir:
By a recent letter you have requested an opinion of this office as follows:
"I am advised that the Department of Social and Health Services is planning to adopt certain program changes which concern medical care for the "medical needy" not on continuing grants under Title XIX of the Social Security Act, and for the "medical only" participants who receive only State monies. These changes are set forth as the following assumptions upon which I base three questions.
1. Assuming that such a plan would not provide medical assistance to the above‑named classes of persons for the first $750.00 of expenses incurred after the date of application for assistance; and
2. Assuming that, under such a plan, complete medical coverage would be available to the "medically needy" not on continuing grants only after the deductible amount is incurred and that emergency care would be available to participants in the "medical only" after the deductible;
then
1. Would such a plan violate State law, including but not limited to RCW 74.09.500 and 74.09.510; and
2. Would such a plan violate federal law, including, but not limited to 42 U.S.C.A. 1396 et. seq.‑-especially 42 U.S.C.A. 1396a (10), (13), (14), (17), and (19); and
3. Would such a plan violate federal regulations which are binding on the State (see, for example, Handbook of Public Assistance Administration, Medical Assistance Programs, Supplement D, Sec. D-5000 et seq., and 34 Fed. Register, pp. 9784-87)?
[[Orig. Op. Page 2]]
We answer your question as set forth in the following analysis.
ANALYSIS
At the outset, we should indicate that the particular plan you have described for medical assistance (hereinafter referred to as the "assumed deductible plan") represents only one of several approaches which the Department of Social and Health Services is presently considering as a means of operating the state's medical assistance program within the confines of anticipated financial resources.
In direct answer to your questions, it is our opinion, for the reasons set forth in detail below, that this particular approach (the assumed deductible plan) would be in conflict with one of the several subparts of 42 U.S.C.A., § 1396a1/ with which, under state law, any federally aided medical assistance program must comply ‑ and thus, to this extent, must be regarded as being presently unauthorized. However, if limited to nonfederally funded assistance recipients only, this assumed deductible approach would be defensible.
(1) BACKGROUND AND SCOPE OF STATE AUTHORITY:
In 1967, a new program of federal aid assistance to be known as medical assistance was established by authority of RCW 74.09.500.2/ "Federal aid assistance" is defined in RCW 74.04.005 to include any programs of public assistance for which provision for federal funds may from time to time be made including medical care services. Title XIX of the federal Social Security Act provides federal matching funds for a medical assistance program pursuant to a plan approved by the Secretary of Health, Education and Welfare which complies with certain provisions of the federal law and regulations.
RCW 74.09.5103/ authorizes the Department of Public Assistance4/ to provide medical assistance to an applicant who meets certain conditions "* * * in accordance with eligibility requirements established by the department of public assistance. * * * " This section must be read with RCW 74.09.5305/ which gives the Department further broad authority to define "The amount and nature of medical assistance and the determination of eligibility of recipients for [[Orig. Op. Page 3]] medical assistance * * *" and, as well, to establish reasonable standards of assistance, and resource and income exemptions. However, these standards, under the terms of this statute, must "* * * be consistent with the provisions of the Social Security Act and with the regulations of the Secretary of Health, Education and Welfare." Thus, the basic conclusion to be drawn with respect to the Department's authority to adopt and implement the assumed deductible plan which you have described is that the Department has authority to establish the eligibility requirements for medical assistance under these sections, including the proposal outlined under the assumptions relating to a deductible provision, but only to the extent such requirements are consistent with valid applicable sections of the Social Security Act and appropriate regulations of the Secretary of Health, Education and Welfare.
In general terms, the federal congress has manifested a recognition of the practicalities of state funding of federally aided assistance programs. Thus, in Dandridge v. Williams, 397 U.S. 471, 25 L.Ed.2d 491, 90 Sup.Ct. 1153 (1970), the Supreme Court concluded that the states had broad authority under the Social Security Act to disburse available funds. The Court therein upheld the right of the State of Maryland to impose a monetary maximum limitation on the total amount of a grant of "Aid to Families with Dependent Children" to a family unit. As Mr. Justice Stewart (writing for the Court) stated at the outset:
"This case involves the validity of a method used by Maryland, in the administration of an aspect of its public welfare program to reconcile the demands of its needy citizens with the finite resources available to meet those demands."
Clearly, the Department of Social and Health Services in this state is presently faced with the same problem of providing medical care as appropriately as possible within the finite resources available to meet the medical needs of its citizens. Moreover, 42 U.S.C. § 1396, the federal statute which provides for the granting of federal funds to the states for their medical assistance prgrams is quite comparable in its general tenor, to 42 U.S.C. § 601 (relating to Aid to Families with Dependent Children) which was referred to by the Court in Dandridge as follows:
"Congress was itself cognizant of the limitations on state resources from the very outset of the federal welfare program. The first section of the Act, 42 U.S.C. § 601, provides that the Act is
'For the purpose of encouraging the care of dependent children in their own homes or in the homes of relatives by enabling [[Orig. Op. Page 4]] each State to furnish financial assistance and rehabilitation and other services, as far as practicable under the conditions in such State, to needy dependent children and the parents or relatives with whom they are living to help maintain and strengthen family life and to help such parents or relatives to attain or retain capability for the maximum self-support and personal independence consistent with the maintenance of continuing parental care and protection . . .' (Emphasis added)
"Thus the starting point of the statutory analysis must be a recognition that the federal law gives each State great latitude in dispensing its available funds."
The reasoning set forth above by the court would be applicable to the same provision relating to medical assistance, and this clearly establishes that the State of Washington would have great latitude in dispensing its available funds for medical assistance.
(2) SPECIFIC REQUIREMENTS OF FEDERAL STATUTES AND REGULATIONS:
The federal requirements for a state plan for medical assistance under Title XIX of the Social Security Act are set forth in 42 U.S.C.A. § 1396 (a). Your inquiry refers, particularly, to parts (10), (13), (14), (17), and (19) of this subsection.
Part (10) states that:
"A state plan for medical assistance must‑-
"****************************************************
"(10) provide for making medical assistance available to all individuals receiving aid or assistance under state plans approved under subchapters I, X, XIV, and XVI of this chapter, and part A of subchapter IV of this chapter; and‑-
"(A) provide that the medical assistance made available to individuals receiving aid or assistance under any such State plan‑-
[[Orig. Op. Page 5]] "(i) shall not be less in amount, duration, or scope than the medical assistance made available to individuals receiving aid or assistance under any other such State plan, and
"(ii) shall not be less in amount, duration, or scope than the medical or remedial care and services made available to individuals not receiving aid or assistance under any such plan; and
"(B) if medical or remedial care and services are included for any group of individuals who are not receiving aid or assistance under any such State plan and who do not meet the income and resources requirements of the one of such State plans which is appropriate, as determined in accordance with standards prescribed by the Secretary, provide‑-
"(i) for making medical or remedial care and services available to all individuals who would, if needy, be eligible for aid or assistance under any such State plan and who have insufficient (as determined in accordance with comparable standards) income and resources to meet the costs of necessary medical or remedial care and services, and
"(ii) that the medical or remedial care and services made available to all individuals not receiving aid or assistance under any such State plan shall be equal in amount, duration, and scope; * * *"
This statute thus provides that a state plan under Title XIX of the Social Security Act may, at least in its inception, provide medical assistance only to money grant recipients of federal aid assistance. Categorical money grant recipients are covered under the Title XIX plan of the State of Washington, Department of Social and Health Services, and they are not affected by the assumed deductible proposal outlined.
Part (B) of subsection a (10), supra, states that a plan under Title XIX may also include individuals who would be eligible for a federal aid money grant of assistance except that their income exceeds the level of income set for standards of assistance for these categories. The applicable state law above‑referred to authorizing the program under Title XIX of the Social Security Act does not specifically identify these two groups.
[[Orig. Op. Page 6]]
Part (B) (ii) provides that all individuals under the group shall have medical services made available to them equally in amount, duration and scope. This does not appear to require that this group of individuals receive medical care equal in amount, duration and scope to the care and services provided to the recipients of federal aid money grants. In fact, Handbook of Public Assistance Administration Supplement D 5100 referred to in your inquiry states in part in section 5143:
"Similarly, the medically needy are considered an indivisible group, and there must be equality in the amount, duration, and scope of medical and remedial care and services provided all persons within this group, with the exceptions noted above.
"There need not, however, be equality between the two groups. That is, the care and services offered the categorically needy may exceed, but may not be less than, those offered the medically needy."
Thus, although the ultimate authority for interpreting these provisions would rest with the U.S. Department of Health, Education and Welfare and its counsel, the assumed deductible proposal would not appear to this office to violate part (10) of 42 U.S.C.A. 1396a.
The next part of 42 U.S.C.A. § 1396a to which you have referred, part (13), simply relates to the scope and nature of care to be provided to eligible applicants and the assumed deductible proposal does not appear to violate this section.
Next to be noted is part (14) which requires a state plan for medical assistance to:
"* * * provide that (A) in the case of individuals receiving aid or assistance under State plans approved under subchapters I, X, XIV, XVI, and part A of subchapter IV of this chapter, no deduction, cost sharing or similar charge will be imposed under the plan on the individual with respect to inpatient hospital services furnished him under the plan, and (B) any deduction, cost sharing, or similar charge imposed under the plan with respect to inpatient hospital services or any other medical assistance furnished to an individual thereunder, and any enrollment fee, premium, or similar charge imposed under the plan, shall be reasonably related (as determined in accordance with standards approved [[Orig. Op. Page 7]] by the Secretary and included in the plan) to the recipient's income or his income and resources;
Applicable regulations of the Secretary of Health, Education and Welfare are set forth in 45 Code of Federal Regulations, § 248.21a (1) (ii) which states as follows:
"(ii) The income levels for maintenance must be, as a minimum, at the level of the most liberal money payment standard used by the State, at any time on or after January 1, 1966, as a measure of financial eligibility in any categorical money payment program in the State, or at the level for which Federal financial participation is available pursuant to paragraph (b) of this section, whichever is less. Where a State imposes any deduction cost sharing, enrollment fee, premium, or similar charge under the plan with respect to any medical assistance furnished to an individual thereunder, such charge may not be imposed to the extent that it would reduce the individual's income below the most liberal money payment standard referred to in the preceding sentence."
In addition, see 45 Code of Federal Regulations § 249.40 which provides in part as follows:
"A state plan for medical assistance under Title XIX of the Social Security Act must:
"(a) Provide that no deduction, cost sharing, enrollment fee, premium, or similar charge, with respect to any medical or remedial care and services furnished under the plan, will be imposed on any categorically needy individual.
"(b) If any deduction, cost sharing, enrollment fee, premium, or similar charge, with respect to any medical or remedial care and services furnished under the plan, is imposed on any medically needy individual, specify the amount and the method of determining it.
"(1) The cost sharing must be reasonably related to the recipient's income or his income and resources.
"(2) The cost sharing must be administratively feasible. * * *"
[[Orig. Op. Page 8]]
Since the ultimate authority for interpreting the applicable federal law and regulations must rest with the Department of Health, Education and Welfare and its counsel, great weight must be given to their interpretation. By letters of January 25, and February 12, 1971, from the Deputy Regional Commissioner for state programs, Region X, Department of Health, Education and Welfare, and letter of February 12, 1971, from the Deputy Regional Attorney of the same office, it has been stated that the above assumed medical deductible plan would not be consistent with 42 U.S.C.A. 1396a (14), and 45 C.F.R. sections 248.21 (a) (1) (ii), and section 249.40.
The primary basis for the conclusions reached in these letters is to the effect that no deductible may reduce an individual's income below the state's most liberal money payment standard, and that it must reasonably relate to the recipient's income or income and resources. There does not appear to us to be any present basis for not accepting these reasons. Thus, in regard to this part of 42 U.S.C.A., § 1396a, we must conclude that the assumed deductible plan as you have described it would be in conflict‑-and, hence, would not be in accord with the requirements of our own RCW 74.09.050, supra.
Insofar as subparts (17) and (19) of 42 U.S.C.A., § 1396a are concerned, it would not appear to us that the assumed deductible plan would conflict with these parts6/ except to the extent, again, that it would be inconsistent with the interpretations made by the previously mentioned representatives of the Region X office of the Department of Health, Education and Welfare.
Finally, our analysis involving 45 Code of Federal Regulations, sections 248 and 249 would be applicable to your inquiry concerning Handbook of Public Assistance Administration, Medical Assistance Programs, Supplement D, Sec. D-5000 et seq., and 34 Fed. Register, pp. 9784-87).
(3) VALIDITY OF ASSUMED DEDUCTIBLE PLAN IF APPLIED TO NON-FEDERALLY FUNDED STATE ASSISTANCE RECIPIENTS ONLY:
Even though the legislature expressed the intent to provide medical assistance primarily to the extent available under the Social Security Act pursuant to Chapter 30, Laws of 1967, 1st Extraordinary Session, the Department has traditionally furnished a limited program of medical care to persons not eligible for federal [[Orig. Op. Page 9]] aid assistance either through money grants or federal aid medical assistance, to the extent of available funds. Broad authority is provided to determine eligibility of medical indigents under RCW 74.09.070.
Generally speaking, applicants for the state medical only program are persons most closely connected with the work force. They are persons who do not have the disabilities related to the federal aid money grant categories such as old age, disability, blind and dependent children. They also do not qualify for the categorically related medically needy program for persons who would otherwise qualify for one of the federal aid money grants except for excess income or resources. Generally they would be in better physical condition, more able to obtain credit and to defer payments. Particularly in times of fiscal difficulty and numerous demands on limited available funds, it is reasonable to promulgate such an assumed deductible plan affecting those individuals with the least privations.
The difficulty of state officials charged with the responsibility of allocating limited public welfare funds was recognized in Dandridge v. Williams, supra. The Department has the administrative discretion to determine the extent of the medical care program in this instance and this determination is a reasonable judgment exercised by the Department in determining the scope of medical assistance to be provided. As was stated in Savage v. State of Washington, 75 Wn.2d 618:
"* * * Unless specifically prohibited by statute and subject to judicial review as to reasonableness * * * administrative agencies are free to exercise discretion and judgment."
In Steilacoom v. Thompson, 69 Wn.2d 705, it was held:
"The courts ought not substitute their judgment for that of the administrative or legislative agency charged by law with choosing the methods or means of accomplishing the public purpose."
Based upon the foregoing, we would conclude that the assumed medical deductible coverage plan, if applied only to state "medical only" programs, would not violate either state law or federal law or regulations, and would, therefore, be legally defensible.
We trust that the foregoing will be of assistance to you.
Very truly yours,
SLADE GORTON
Attorney General
DONALD J. HOROWITZ
Senior Assistant Attorney General
WALTER E. WHITE
Assistant Attorney General
*** FOOTNOTES ***
1/And regulations promulgated thereunder.
2/Sec. 3, Chapter 30, Laws of 1967, Ex. Sess.
3/Sec. 4, Chapter 30, Laws of 1967, Ex. Sess., as amended by Sec. 1, Chapter 60, Laws of 1970, Ex. Sess.
4/Now, Department of Social and Health Services in accordance with Chapter 18, Laws of 1970, Ex. Sess.
5/Sec. 6, Chapter 30, Laws of 1970, Ex. Sess.
6/Relating to standards of eligibility and safeguards, respectively.