Number 8. September 27, 1976

Number 8. September 27, 1976 The Honorable Kevin B. Harrington Office of the Senate President State House Boston, Massachusetts Edward B. O'Neill, Senate Clerk Office of the Clerk of the Senate State House Boston, Massachusetts Dear Senate President Harrington and Mr. 0"Neill: I respectfully render the following opinion in response to the Order of the Senate which provides: Ordered, That the attorney general of the commonwealth be forthwith requested by the senate to render an opinion to be delivered to the president and clerk of the senate at the earliest possible date, on the following question: — Whereas item 4402-5000, of chapter six hundred and eighty-four of the acts and resolves of nineteen hundred and seventy-five, [ l ] for a medical assistance program, provides that all federal funds received for the purpose of this item shall be credited to the General Fund; and further provides that no expenditure or com- mitment made pursuant to this item or to any agreements author- ized by chapter eight hundred of the acts of nineteen hundred and sixty-nine, [-] for the purpose of complying with the provisions of Public Law 89-97, Title XIX, [ 3 ] shall be incurred in excess 'Acts of 1975, c. 684, Item 4402-5000, appropriated $410,000,000 for a "medical assistance program" for fiscal year 1976, conditioned on the provisos described in the Order of the Senate. -Acts of 1969, c. 800 amended the General Laws by inserting Chapter 118E, entitled "Medical Care and Assistance." :'42 U.S.C. §§1396, et seq. 92 P.D. 12 of available funds which have been appropriated therefor; and further provides that all judgments, appeals and rate changes for services provided in a prior year but finally determined dur- ing the current fiscal year may be paid from this account, subject to the approval of the house and senate committees on ways and means; and further provides that optional services allowed under this item may be phased out at the discretion of the commissioner of public welfare consistent with the funding level of this item; and further provides that the medical needy program so-called in this item shall cease effective January thirty-first, nineteen hundred and seventy-six unless a certification is made by the commissioner of administration that sufficient funds are available from either state or federal sources to warrant the continuation of the program and that this item is increased by appropriation to properly fund said continuation: Does the commissioner of administration have the statutory authority to certify the expenditure of funds by the commissioner of public welfare for said medical assistance program, and the commissioner of public welfare to expend funds or to incur expenditures or obligations for said medical assistance program, in excess of the amounts appropriated therefor, in chapter six hundred and eighty-four of the acts and resolves of nineteen hundred and seventy-five and therefor must the commissioner of administration and the commissioner of public welfare cease to incur expenses or obligations until such time as further funds have been appropriated for this item This opinion addresses two questions posed by the Order of Senate. 4 Those questions are restated below and answered as indicated. 1. Q: Does the Commissioner of Public Welfare have authority to expend funds or incur obligations for the medical assistance program established bv G.L. c. 118E in excess of the amount appropriated in St. 1975, c. 684, Item 4402-5000? A: No. 2. Q: If and when the total appropriated amount is expended and committed, must any further expenditure of funds, or in- curring of obligations for the medical assistance program cease until additional funds have been appropriated by the Legislature for the program? A: Yes. 4The Order of the Senate also asks a third question: Does the Commissioner of Administration (the Secretary of Administration and Finance) have authority to certify the expenditure of funds by the Commissioner of the Department of Public Welfare for the medical assistance program established bv G.L. c. 118E exceeding the amount appropriated in St. 1975, c. 684. Item 4402-5000? As I read this question, the Secretary's "authority to certify the expenditure of funds" refers to something other than the certification that sufficient funds are available to warrant continuation of the medical needy program, referred to in the first paragraph of the Order. The statutory source of the Secretary's "authority to certify the expenditure of funds" is not, however, set forth in the Order; nor is it otherwise apparent. It may be that this "authority to certify" refers to the allotments made by the Governor or the Secretary of Administration and Finance pursuant to G.L. c. 29, §9B. But since the statutory' language actually conferring such authority would be material to an attempt to define its limits. I prefer not to speculate and decline to answer this question in its present form. P.D. 12 93 The Constitution of the Commonwealth evidences a fitting concern for the commitment, expenditure and control of public funds. It vests exclu- sive power in the Legislature to appropriate funds for maintaining state government. Const.. Part 1. art. 23: Part 2. c. 1. §1. art. 4. and §3, art. 7. and expressly provides for legislative control and supervision of all state expenditures. Const., art. LXIII of the Amendments. In addition, the pay- ments of monies from the treasury - can be made only by warrant of the Governor with the advice and consent of the Council, and "'agreeably to the acts and resolves of the general court." Const.. Part 2. c. 2. ^2. art. 11. Pursuant to its constitutional grants of power, the Legislature has en- acted various statutes which limit the commitment and expenditure of state funds. Notable among these are §?9B. 12. IS. 26. 27. 63 and 66 of Chapter 29 of the General Laws. In particular. Section 26 provides that expenses of state offices and departments shall not exceed legislative appropriations or executive allotments, and that no obligation incurred in excess of either shall impose any liability on the Commonwealth. These provisions, and specifically Section 26. are designed to require an official or department to keep expenditures within the amount appropriated and to protect the public credit by prevent- ing the incurring of any indebtedness against the Commonwealth for the payment of which no provision had been made by the Legislature. Baker v. Commonwealth, 312 Mass. 490. 493 (1942). See United States Trust Co. v. Commonwealth, 348 Mass. 378, 380-81 (1965): Opinion of the Justices, 323 Mass. 764. 767 (1948). In accordance with this interpretation, opinions of my predecessors in office have consistently maintained that a state officer or department may not expend funds or incur obligations in excess of appropriations. E.g., 1970-71 Op. A.G.. p. 119 (June 17, 1971): 1966-67 Op. A.G.. p. 181 (Mar. 22. 1967): id. p. 154 (Feb. 14. 1967): 1965-66 Op. A.G.. p. 145 (Oct. 7. 1965); 1961-62 Op. A.G.. p. "6 (Sept. 11. 1961): 1959-60 Op. A.G.. p. 76 (Jan. 21. 1960): id., p. 73 (Jan. 19. 1960): 1959-60 Op. A.G., p. 63 (Nov. 25. 1959): 1949-50 Op. A.G.. p. 15 (Aug. 9, 1949): III Op. A.G.. p. 226 (Apr. 26. 1909). Given the consistent history of legislative limitation on administrative spending power."' it is apparent that a grant of authority to the Commis- sioner or the Department of Public Welfare to expend funds or incur obligations in excess of appropriations (assuming such a grant were con- stitutional) would be both novel and extraordinarv. r'The Acts of 1975. c. 684. evidences the same legislative concern for control of expenditures as that expressed in G.L. c. 29 and other previously enacted statutes. Thus, for example, c. 6S4. §1 provides that the enumerated appropriations are made "subject to the provisions of law regulating the disburse- ment of public funds and the approval thereof;" §23 subjects a secretary who incurs total commitments in excess of available funds to a fine or removal from office: turning specifically to the Department of Public Welfare. Item 4400-1000 requires the Commissioner of that Department to "report in writing to the governor the total expenditures of his department for each month within thirty days after the end of each month." 94 P.D. 12 An examination of the statutes establishing and funding the medical assistance program, however, reveals no attempt by the Legislature to grant such authority. In fact, the opposite is true: the Legislature has explicitly restated the well-established limitation on Department of Public Welfare expenditures in Chapter 118E. For example, §3 provides that the Department shall cooperate with federal authorities in the administration of the medical assistance program "within the limits of the funds which have been appropriated for the purpose of this chapter;'* §4 provides that the Department shall take such action as is necessary to conform with the requirements of Title XIX, but must do so "within the limits of avail- able funds appropriated for this chapter;'* and finally, as noted in the Senate's Order, the specific Fiscal 1976 appropriation for the medical assistance program operated under G.L. c. 118E, Item 4402-5000, pro- vides "that no expenditure or commitment made pursuant to this item . . . shall be incurred in excess of available funds which have been appropri- ated therefor."' To conclude, I am of the opinion that under Massachusetts law the Commissioner of the Department of Public Welfare could not expend funds or incur obligations in Fiscal 1976 for the medical assistance pro- gram in excess of the amount appropriated by Item 4402-5000. Cf. Opinion of the Justices, Mass. Adv. Sh. (1975) 2521. 2528. The only remaining question is whether federal law requires a different result. The Commonwealth's existing medical assistance program was estab- lished pursuant to and in conformance with Title XIX of the Social Secur- ity Act. 42 U.S.C. §§1396 et seq. Title XIX, known as "Medicaid"*, provides for grants to states which have submitted to, and had approved by. the Secretary of Health, Education and Welfare state plans for medical assistance. 42 L.S.C. £1396. The stated purpose of the Medicaid program is to enable each state "as far as practicable"' to provide assistance to its needy citizens. Id.; Opinion of the Justices, Mass. Adv. Sh. (1975) 2521. 2532. The approved medical assistance programs operated under it are administered by the state (42 U.S.C. 5 1396a), but are jointly funded by the states and the federal government. Id. U396b. States are not required to operate such programs but if they elect to do so, they must comply with the requirements of Title XIX. Id. .5 H 396a and c. If the Secretary of Health. Education and Welfare determines that an approved state plan has been altered or is being administered in a manner that fails substan- tially to comply with federal law. he may terminate or reduce further pay- ments to the state. Id. § 1 396c. Title XIX does not set forth a specific amount of money which a state must expend for its medical assistance program. Nor does it explicitly require a state to make an open-ended appropriation 6 for its program or prohibit a state from lirritine: the amount of money that it will expend on the program during one fiscal year. The question, then, is whether Title 5 I use the term "open-ended appropriation" to mean "without a specific dollar limitation", and not in the more limited sense, referred to in Massachusetts General Hospital v. Sargent. 397 F.Supp. 1056. 1060 (T). Mass. 1975). that a current year's Medicaid appropriations could be used to pay both current and prior years' obligations. P.D. 12 95 XIX imposes an implicit requirement on a state to spend a specific amount for its medical assistance program, or. stated conversely, whether the law impliedly prohibits a limitation on expenditures for one fiscal year. Based on a review of Title XIX and its accompanying regulations, my answer to this question (as stated in either form ) is '"No"". Title XIX provides that a state plan must make medical assistance available to all persons who qualify for categorical federal programs of cash assistance. 42 U.S.C. §1396a(10>; in addition to these mandatory groups, a state plan may include several other classes of individuals. Id. Title XIX also provides that a state must, at a minimum, provide certain categories of medical services, id. §§1396a(13 B . 1396diai (1) — (5 ): but a state may decide to provide additional categories as well §1396d(a). Nevertheless, the amount, scope, and duration of even the mandatory services are to be determined by the state. 45 C.F.R. § 249. 10 (5) (i). Although federal regulations require that items of medical care and services must be sufficient in amount, duration and scope reasonably to achieve their purposes, there is no requirement that they be provided for a specific period of time. Nor is there any federal requirement that a state plan be in effect for a full calendar or fiscal year. In sum. Title XIX describes a group of persons who must be covered under a state medical assistance program as well as a minimum level of services which they must receive, but it does nor mandate the length of time during which a state plan must be operated. Consequently, it cannot be said that federal law implicitly requires a reasonably foreseeable or specific amount of state expenditures on such a plan or. conversely, pro- hibits a limitation upon the expenditure of state funds. 7 This conclusion is in accord with the view that the states must have the necessary flexibility to deal with their fiscal crises. This view was adopted by Congress in 1972 when it repealed 42 U.S.C. §1396a(d),s which had provided that a state could not reduce its expenditures for the state's share af Medicaid funds from one year to the next. The same principle has also seen consistently recognized by the United Stares Supreme Court in cases :oncerning other programs of cooperative federalism under the Social Security Act. See, e.g., Dandridge v. Williams. 39" U.S. 471, 48--^" (1970): Rosado v. Wyman, 39" U.S. 39". 408 I 1970); King v. Smith. 392 U.S. 309. 318-19 (1968 See Morris v. Williams, 67 Cal. 2d 733, 433 P. Id 697, 708-09 [1967); Caafom v. Brian. 30 Cal. App. 3d 6?". 106 Cal. Rptr. 555. 568 1973); Briarctiff Haven. Inc. v. 1 of Human Resources, 403 F.Supp. 1355. 1363 (NJJ. Ga. 1975). 42 U.S ( beginning of each quarter the Secretary shall estimate and pay to a state matching federal funds b upon anticipated state expenditure for the ensuing quarter. This estimate is based on a re - state containing its estimate of the total sum to be expended in the quarter, stating the an appropriated or made available by the state for such expenditures and. "if such amount is less than the State's proportionate share of the total sum of such estimated expenditures, [identifying] the source or sources from which the difference is expected to be derived." I do not read this provision as requiring operation of a state plan for at least one quarter of a year. 'See 3 U.S. Cong. Admn. News 50S6-S" 1973 96 P.D. 12 It is therefore my opinion that the provisions of Massachusetts law which prohibit the Commissioner of the Department of Public Welfare from expending funds or incurring obligations for the medical assistance program in excess of appropriated amounts do not conflict with any re- quirements of federal law. Accordingly, I have answered the first ques- tion posed above "no" and the second "yes." Very truly yours, FRANCIS X. BELLOTTI Attorney General