Must Texas Medicaid pay the Medicare ambulance deductibles for people on both Medicare and Medicaid?

Plain-English summary

State Senator John Carona asked the Attorney General whether a Medicaid reimbursement rule adopted by the Health and Human Services Commission (HHSC), rule 354.1143, conflicts with section 32.050(c) of the Human Resources Code. The provision deals with "dual eligibles," people who qualify for both Medicaid and Medicare. Section 32.050(c) states that "[f]or an ambulance service provided to a [dual eligible, Medicaid] shall pay the Medicare deductibles and coinsurance." The statute also directs HHSC to make sure payment is sought first under Medicare to the extent allowed by law.

HHSC's rule 354.1143 set up a payment methodology for the Medicare Part B deductible and coinsurance on "crossover claims." Under it, if the Medicare payment equals or exceeds the Medicaid payment rate, HHSC does not pay the Medicare deductible and coinsurance; if Medicare pays less than the Medicaid rate, HHSC pays the deductible and coinsurance, but only up to the lesser of the deductible and coinsurance or the amount left after subtracting the Medicare payment from the Medicaid rate. So the rule lets HHSC decline to pay the Medicare deductibles and coinsurance in some cases.

The opinion explained that an agency rule is presumed valid, but an agency may not adopt a rule contrary to its governing statutes, and a court determining whether a rule exceeds statutory authority looks first to the statute's plain meaning. Because section 32.050(c) requires Medicaid to pay the Medicare deductibles and coinsurance for ambulance service to a dual eligible, and rule 354.1143 permits HHSC to decline payment in some of those cases, the rule conflicts with the statute. HHSC had indicated the amendment was prompted by a cost-containment provision in the 2012-2013 Appropriations Act. The opinion responded that the Appropriations Act provision, which appears in tabular form listing estimated savings, does not purport to change HHSC's obligation under section 32.050(c), and that in any event a rider in an appropriations act cannot amend substantive law under the Texas Constitution. So HHSC remained bound by section 32.050(c) regardless of the cost-containment rider. To the extent rule 354.1143(b) limits HHSC's obligation to pay Medicare deductibles and coinsurance for ambulance service to a dual eligible, a court would likely conclude the rule conflicts with section 32.050(c).

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

HHSC and state health agencies (as the opinion described it): The opinion concluded that to the extent rule 354.1143(b) limited the obligation to pay Medicare deductibles and coinsurance for ambulance service to a dual eligible, a court would likely find the rule conflicts with section 32.050(c), and that an appropriations rider could not relieve HHSC of that statutory obligation.

Ambulance providers serving dual eligibles (as the opinion described it): The opinion described section 32.050(c) as requiring Medicaid to pay the Medicare deductibles and coinsurance for ambulance service to a dual eligible, and the rule's methodology as conflicting with that requirement to the extent it limits payment.

Senator Carona and legislators (as the opinion described it): The opinion identified the conflict between the rule and the statute and reiterated that a rider in an appropriations act cannot amend substantive law.

Common questions

Does Texas Medicaid have to pay the Medicare ambulance deductibles for dual eligibles?
The opinion read section 32.050(c) as requiring Medicaid to pay the Medicare deductibles and coinsurance for an ambulance service provided to a dual eligible.

Why is the HHSC rule a problem?
The opinion explained that rule 354.1143 lets HHSC decline to pay the Medicare deductibles and coinsurance in some cases, which conflicts with the statute's payment requirement, and that an agency may not adopt a rule contrary to its governing statute.

Didn't the budget bill authorize the cost savings?
The opinion said the appropriations-act provision listed estimated savings in tabular form and did not purport to change HHSC's obligation under section 32.050(c). It added that a rider in an appropriations act cannot amend substantive law.

What is a "dual eligible"?
The opinion described dual eligibles as individuals who receive medical assistance under Medicaid and are also eligible for similar assistance under Medicare.

Background and statutory framework

Section 32.050 of the Human Resources Code governs benefits for individuals with both Medicaid and Medicare coverage. Subsection (a) frames the dual-coverage situation, subsection (b) directs HHSC to ensure payment is sought first under Medicare to the extent allowed by law, and subsection (c) requires that for an ambulance service to a dual eligible, Medicaid "shall pay the Medicare deductibles and coinsurance." HHSC rules refer to these individuals as "dual eligibles" (1 Tex. Admin. Code § 353.2(26)).

Rule 354.1143 provides HHSC's payment methodology for the Medicare deductible and coinsurance, including the crossover-claim rules in subsection (b) and a provision in subsection (d) allowing higher cost-sharing payments where HHSC determines they are needed for access or are more cost-effective. The opinion applied the principles that an agency rule is presumed valid (Vista Healthcare, Inc. v. Tex. Mut. Ins. Co.) but cannot conflict with governing statutes (State v. Pub. Util. Comm'n), with courts giving some deference to an agency's interpretation unless plainly erroneous or inconsistent with the statute (TGS-NOPEC Geophysical Co. v. Combs) and looking first to plain meaning (Fulton v. Assoc. Indem. Corp.). On the appropriations rider, it cited Strake v. Ct. App. for First Sup. Jud. Dist. for the rule that a rider cannot amend substantive law, and it cited Hawkins v. Dallas Cnty. Hosp. Dist. for the general descriptions of Medicaid and Medicare. The rule's amendment appeared at 36 Tex. Reg. 7057-58 and 9282-84 (2011), and the cited budget provision was article II, section 17 of the General Appropriations Act, 82d Leg., R.S., ch. 1355.

Citations

Cases:

• Hawkins v. Dallas Cnty. Hosp. Dist., 150 S.W.3d 535, 537 (Tex. App.—Austin 2004, no pet.)
• Vista Healthcare, Inc. v. Tex. Mut. Ins. Co., 324 S.W.3d 264, 273 (Tex. App.—Austin 2010, pet. denied)
• State v. Pub. Util. Comm'n, 131 S.W.3d 314, 321 (Tex. App.—Austin 2004, pet. denied)
• TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011)
• Fulton v. Assoc. Indem. Corp., 46 S.W.3d 364, 369-70 (Tex. App.—Austin 2001, pet. denied)
• Strake v. Ct. App. for First Sup. Jud. Dist., 704 S.W.2d 746, 748-49 (Tex. 1986)

Statutes and rules:

• Tex. Hum. Res. Code Ann. § 32.050(a), (b), (c) (West Supp. 2012)
• 1 Tex. Admin. Code §§ 353.2(26), 354.1143 (2012)
• General Appropriations Act, 82d Leg., R.S., ch. 1355, art. II, § 17, 2011 Tex. Gen. Laws 4025, 4242

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0983
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2013/ga0983.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

January 29, 2013

The Honorable John J. Carona Opinion No. GA-0983
Chair, Committee on Business and Commerce
Texas State Senate Re: Whether the Medicaid reimbursement
Post Office Box 12068 methodology imposed by rule 354.1143 of the
Austin, Texas 78711-2068 Health and Human Services Commission
impermissibly conflicts with section 32.050(c)
of the Human Resources Code (RQ-1075-GA)

Dear Senator Carona:

You ask whether the Medicaid reimbursement methodology established by administrative rule 354.1143 of the Health and Human Services Commission ("HHSC") impermissibly conflicts with section 32.050(c) of the Human Resources Code.[1]

Section 32.050 of the Human Resources Code governs benefits provided to individuals who receive medical assistance under Medicaid who are also "eligible to receive similar assistance under the Medicare program." TEX. HUM. RES. CODE ANN. § 32.050(a) (West Supp. 2012) (entitled "Dual Medicaid and Medicare Coverage").[2] HHSC's administrative rules refer to such individuals as "dual eligibles." 1 TEX. ADMIN. CODE § 353.2(26) (2012). Subsection 32.050(b) of the Human Resources Code directs HHSC to examine claims submitted for payment under Medicaid for services rendered to dual eligibles "to ensure that payment is sought first under the Medicare program to the extent allowed by law." TEX. HUM. RES. CODE ANN. § 32.050(b) (West Supp. 2012). Subsection 32.050(c), the subject of your question, states that "[f]or an ambulance service provided to a [dual eligible, Medicaid] shall pay the Medicare deductibles and coinsurance." Id. § 32.050(c).

Section 354.1143 of HHSC's rules provides that HHSC will pay a dual eligible's "Medicare deductible and coinsurance as specified in this section." 1 TEX. ADMIN. CODE § 354.1143(a) (2012). Section 354.1143(b) provides the methodology for paying certain deductible and coinsurance:

(b) Except as otherwise specified in subsections (c) and (d) of this section, the payment of the Medicare ... Part B ... deductible and coinsurance is based on the following.

(1) If the Medicare payment amount equals or exceeds the Medicaid payment rate, HHSC does not pay the Medicare deductible and coinsurance on a crossover claim.

(2) If the Medicare payment amount is less than the Medicaid payment rate, HHSC pays the Medicare deductible and coinsurance on a crossover claim, but the amount of payment is limited to the lesser of the deductible and coinsurance or the amount remaining after the Medicare payment amount is subtracted from the Medicaid payment rate.

Id. § 354.1143(b). Subsection 354.1143(d) allows higher cost-sharing payments to providers of certain services to dual eligibles if HHSC determines the higher payment "is necessary to ensure adequate access to care or is more cost-effective to the state." Id. § 354.1143(d).

An agency's rule is presumed to be valid. Vista Healthcare, Inc. v. Tex. Mut. Ins. Co., 324 S.W.3d 264, 273 (Tex. App.—Austin 2010, pet. denied). However, an agency may not adopt a rule that is contrary to relevant governing statutes. State v. Pub. Util. Comm'n, 131 S.W.3d 314, 321 (Tex. App.—Austin 2004, pet. denied). Courts give some deference to an agency's interpretation of its rules "unless it is plainly erroneous or inconsistent with the language of the statute, regulation, or rule." TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011). To determine whether an agency rule exceeds statutory authority, courts generally look first to the statute's plain and common meaning. Fulton v. Assoc. Indem. Corp., 46 S.W.3d 364, 369-70 (Tex. App.—Austin 2001, pet. denied).

Section 32.050(c) of the Human Resources Code requires Medicaid to pay the Medicare deductibles and coinsurance for an ambulance service provided to a dual eligible. TEX. HUM. RES. CODE ANN. § 32.050(c) (West Supp. 2012). Rule 354.1143, by contrast, purports to permit HHSC to decline to pay the Medicare deductibles and coinsurance in some cases for ambulance services provided to a dual eligible. See 1 TEX. ADMIN. CODE § 354.1143(b) (2012). The rule therefore conflicts with the statute. HHSC has indicated that article II, section 17 of the 2012-2013 Appropriations Act prompted its amendment to rule 354.1143. See 36 Tex. Reg. 7057-58 (2011) (stating the rule was amended "pursuant to the 2012-2013 General Appropriations Act"), adopted 36 Tex. Reg. 9282-84 (2011) (codified at 1 TEX. ADMIN. CODE § 354.1143) (Tex. Dep't of Human Servs.); see also General Appropriations Act, 82d Leg., R.S., ch. 1355, art. II, § 17, 2011 Tex. Gen. Laws 4025, 4242 (the "Appropriations Act"). Article II, section 17 of the Appropriations Act, however, merely provides in tabular form: "Sec. 17. Additional Cost Containment Initiatives. Included in appropriations above to the health and human services agencies in Article II of the Act are reductions for anticipated savings for the following cost containment initiatives ... Health and Human Services Commission ... Medicare Equalization ... $295,750,000 [estimated general revenue savings] ... $704,166,667 [estimated savings for all funds]." Appropriations Act at 4242. The Appropriations Act does not purport to alter HHSC's obligation to comply with section 32.050(c) of the Human Resources Code or authorize HHSC to depart from the statute's requirements. In any event, under the Texas Constitution, a rider in an appropriations act cannot amend substantive law. Strake v. Ct. App. for First Sup. Jud. Dist., 704 S.W.2d 746, 748-49 (Tex. 1986). HHSC remains bound by the requirements of section 32.050(c) regardless of the contents of an appropriations rider regarding cost containment.

By enacting section 32.050(c) of the Texas Health and Safety Code, the Legislature chose to obligate HHSC to pay deductibles and coinsurance for ambulance services provided to dual eligibles. Section 354.1143 of HHSC's rules, however, provides for the payment of deductibles and coinsurance for dual eligibles in some circumstances but not in others, and gives HHSC discretion in some circumstances to pay an amount higher than the statutory methodology would produce. 1 TEX. ADMIN. CODE § 354.1143(b) (2012). To the extent that section 354.1143(b) of HHSC's rules limits HHSC's obligation to pay Medicare deductibles and coinsurance for an ambulance service provided to a dual eligible, a court would likely conclude that the rule conflicts with section 32.050(c) of the Texas Human Resources Code.

SUMMARY

To the extent that section 354.1143(b) of the Health and Human Services Commission's rules limits the Health and Human Services Commission's obligation to pay Medicare deductibles and coinsurance for an ambulance service provided to a person eligible for both Medicare and Medicaid benefits, the rule conflicts with section 32.050(c) of the Texas Human Resources Code.

Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chairman, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable John J. Carona, Chair, Senate Bus. & Commerce Comm., to Honorable Greg Abbott, Tex. Att'y Gen. at 1 (Aug. 1, 2012), http://www.texasattorneygeneral.gov/opin ("Request Letter").

[2] As one court has explained, "Medicaid is a federal-state assistance program, run by state governments within federal guidelines, that pays for health care services provided to eligible recipients-low-income people of any age-from federal, state, and local tax funds." Hawkins v. Dallas Cnty. Hosp. Dist., 150 S.W.3d 535, 537 (Tex. App.—Austin 2004, no pet.). "Medicare is a distinct medical insurance program run by the federal government that pays for health care services provided to covered beneficiaries-primarily people over the age of 65, regardless of income, and younger disabled and dialysis patients." Id. at 537 n.2.