STATE SUPPORT OF COUNTY HOSPITALS -- PUBLIC ASSISTANCE MEDICAL CARE FUNDS -- LIMITATIONS OF APPROPRIATIONS

STATE SUPPORT OF COUNTY HOSPITALS -- PUBLIC ASSISTANCE MEDICAL CARE FUNDS -- LIMITATIONS OF APPROPRIATIONS

Appropriation, with express limitations, for administration of Medical Care Act during 1955-1957 biennium is independent of and not to be deemed increased or decreased by advances made to county hospitals and infirmaries during previous biennium.

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                                                               November 27, 1956

Honorable Paul W. Ellis
Legislative Auditor
Legislative Budget Committee
Legislative Building
Olympia, Washington                                                                                                              Cite as:  AGO 55-57 No. 346

Dear Mr. Ellis:

            You have requested an opinion from this office concerning the accounting treatment to be accorded a transfer of medical care funds in the sum of $917,091.76 by the department of health in January and February of 1955, to eight county hospitals and infirmaries in the state of Washington.  It appears from your request that the problem arises primarily by reason of the transfer of the administration of the medical care program from the department of health to the department of public assistance as of July 1, 1955, and you have requested answers to the following specific questions:

            1. Are the transfers of health department advances to county hospitals and infirmaries to the department of public assistance to be considered as an increase in the funds available for the medical care program above the amounts stated in the appropriation?  In other words, can the department of public assistance incur costs of $38,296,799 plus $917,091.76 for medical services during the 1955-1957 biennium?

            2. If so, are these advances to be considered as additions to the amounts which may not be exceeded as expenditures for the support of the county hospitals and infirmaries named in the appropriation?

            3. Or, must the costs of the King County Hospital System, for example, be limited to $6,500,000, including those financed by the advances made by the department of health?

            4. If the answer to question three is yes, may the department of public assistance make advances to the King County Hospital System, for example, in addition to the $6,500,000?

             [[Orig. Op. Page 2]]

            5. Or, must the sum of all costs of the King County Hospital for this biennium, including those financed from both health department advances and the subject appropriation, plus the advances to be made in January and February, 1957, be contained within the $6,500,000 limitation?

            In our opinion, question number one must be answered in the negative.  Our answer to question number one renders unnecessary any answer to number two.  Question number three must be answered in the negative.  Our answer to question number three renders unnecessary any answer to question number 4.  Question number five must also be answered in the negative.

                                                                     ANALYSIS

            Statutory authority for the establishment, operation and maintenance of county hospitals has been codified under chapter 36.62 RCW.  One of the sections thereof provides for the establishment of a county hospital fund and reads as follows:

            "Every county which maintains a county hospital shall establish a 'county hospital fund' into which fund shall be deposited moneys received from any source for hospital care including funds from the state department of health to cover the total cost of providing medical care to recipients of public assistance and other persons without income and resources sufficient to secure them who are assigned to county hospital for treatment.  Obligations incurred from such hospitalization shall be paid from the fund by the county treasurer in the same manner as general county obligations are paid.  The county auditor shall furnish to the board of county commissioners and the state department of health a monthly report of receipts and disbursements in the county hospital fund which report shall also show balance of cash on hand."  (RCW 36.62.252, § 1, chapter 256, Laws of 1951.)

            RCW 36.62.280 (§ 4, chapter 256, Laws of 1951) provides the method of payment by the state to such counties for deposit in the county hospital fund to cover the total cost of providing medical care to recipients of public assistance and medical indigents.  This section reads as follows:

            "Payments from the state department of health shall be made by warrant of the state auditor to the individual counties upon vouchers of the state department of health and shall be paid into the county hospital fund.  At the beginning of the fiscal year the state department of health shall advance to the counties an amount equal to two months'  [[Orig. Op. Page 3]] operation based upon the average monthly cost of the last quarter of operation, which amount may be used to defray costs in the first months' operation.  Reimbursements for the actual cost of operation shall be made monthly by the state department of health to the counties until the eleventh month of the fiscal year when the money advanced shall be used for the final two months' operational costs."

            During the period beginning December 7, 1950, and ending July 1, 1955, the department of health was charged with the administrative responsibility for providing for needed medical, dental and allied services to recipients of public assistance and medical indigents.  (Section 7, chapter 1, Laws of 1951, § 1, chapter 5, Laws of 1953, 1st Ex. Sess., and § 4, chapter 273, Laws of 1955.)  Prior to July 1, 1955, the department of health was authorized to utilize county hospitals and infirmaries in conjunction with their responsibility for providing the above mentioned services as they deem necessary.  (Section 4, chapter 5, Laws of 1953, Ex. Sess.)  Similar authority was given the department of public assistance in conjunction with the transfer of the same responsibilities to this department as of July 1, 1955.  (RCW 74.09.090, § 10, chapter 273, Laws of 1955.)

            It is clear that the provisions of the law relating to the establishment of a county hospital fund and the method of payment into that fund for the care of public assistance recipients and medical indigents, in so far as they refer expressly to the state department of health, would be deemed amended by implication to refer to the department of public assistance subsequent to the effective date of the act transferring administrative responsibilities for the administration of the medical care program from the department of health to the department of public assistance.

            It can be assumed, therefore, that both the $917,091.76 advance made by the department of health early in 1955 and the January, 1956, advance in the sum of $880,439.54 made by the department of public assistance, both of which are referred to in your letter, were made pursuant to and in accordance with the provisions of RCW 36.62.280, hereinbefore quoted in full.

            Chapter 16, Laws of 1955, Ex. Sess., provides an appropriation to the department of public assistance for the purpose of carrying out the provisions of chapter 273, Laws of 1955 (Medical Care Act) for the fiscal biennium beginning July 1, 1955, and ending June 30, 1957.  This chapter further limits the expenditures to be made from the  [[Orig. Op. Page 4]] appropriation for the support of county hospitals and infirmaries during said biennium.  The appropriation is in the sum of $38,296,799 and the limitations on expenditures for the support of the King County Hospital System is $6,500,000.

            An analysis of the statutes herein quoted and discussed results in our conclusion that the advances made to the county hospitals and infirmaries by the department of health in January and February of 1955, constituted completed expenditures as of that date; that the appropriation for medical care for the 1955-1957 biennium, limiting the expenditures to be made therefrom for services rendered by county hospitals and infirmaries, is neither to be considered as increased or decreased by reason of the advances made during the previous biennium; and that the department of public assistance is required to limit its expenditures to county hospitals and infirmaries to the extent required by chapter 16, Laws of 1955, such expenditures to be made strictly in accordance with the procedure outlined in RCW 36.62.280.  (Section 4, chapter 256, Laws of 1951.)  Applying these conclusions to your specific questions which require answering, we find as follows:

            1. The department of public assistance cannot incur costs for medical services in excess of the appropriation provided for in chapter 16, Laws of 1953.  Advances made by the department of health in January and February of 1955, do not constitute costs incurred by the department of public assistance subsequent to July 1, 1955.

            3. Costs incurred by the department of public assistance for services rendered by the King County Hospital System during the 1955-1957 biennium must be limited to $6,500,000 exclusive of advances made by the department of health.

            5. Costs incurred by the department of public assistance for services rendered by the King County Hospital System, which must be limited to $6,500,000 during the subject biennium, will include and be confined to advances and reimbursements made by the department of public assistance in strict accordance with the provisions of RCW 36.62.280 during the period beginning July 1, 1955, and ending June 30, 1957.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

DON EASTVOLD
Attorney General

MOKSHA W. SMITH
Assistant Attorney General