Could the Texas Department of Health lower income eligibility for a children's health program without the Board of Health adopting a rule?

Texas AG Opinion JM-1169: Who Could Set Eligibility Rules for a State Children's Health Program?

Plain-English summary

The chairman of the Senate Health and Human Services Committee asked about a November 1989 letter from the Texas Commissioner of Health to providers in the Chronically Ill and Disabled Children's (CIDC) Program. Citing budget shortfalls, the letter announced that, effective November 1, 1989, income eligibility for the program would drop from 200% to 160% of the federal poverty level, without the Board of Health adopting any new rule. The chairman asked whether that reduction, done administratively rather than by board rule, violated section 35.005(a)(1) of the Health and Safety Code, which says the board "by rule shall... define medical, financial, and other criteria for eligibility to receive services." He also asked whether a related proposed rule amendment, which would let "the program" limit or restrict services and set service priorities for budgetary reasons, was itself a valid exercise of the board's authority or an improper delegation of the board's rule-making duty to agency staff.

The Attorney General concluded that the statute's language was clear: only the Board of Health, acting by rule, could define eligibility criteria, and only the board, by rule, could establish a system of priorities when budget limits required rationing services. The board had already adopted a rule tying eligibility to a percentage of the federal poverty level, but that rule also included language letting "the program" adjust income guidelines with the consent of the commissioner to meet budgetary limits, language the department and commissioner apparently treated as authorizing the November 1989 change. The opinion found the legislature had expressly barred the board from delegating its rule-making duties, so the board could not, through its own rule, hand that duty to program staff. The opinion also reviewed a newly proposed amendment using similar "the program may" language and concluded that, if "the program" meant department staff rather than the board itself, that proposed rule would likewise be an invalid delegation of a responsibility the legislature assigned to the board alone.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG 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 mentioned here.

Who this opinion affected (as of 1990)

CIDC program families and providers: The opinion meant that an income-eligibility cut made by the department without a board-adopted rule was, in the Attorney General's view, invalid, since the statute required the Board of Health itself to set eligibility criteria by rule rather than let the department adjust the income cutoff administratively.

The Texas Board of Health and Department of Health: The opinion told the board it could not lawfully delegate its rule-making duty over CIDC eligibility criteria and service priorities to agency staff, even through language in its own rule, and flagged that a pending proposed rule amendment using similar delegation language would face the same problem if adopted as written.

Common questions

Why couldn't the Texas Department of Health just lower the income cutoff for the CIDC program on its own?
Because the Health and Safety Code specifically assigned that decision to the Board of Health, requiring it to act "by rule." The opinion found the department's November 1989 administrative change bypassed that requirement.

Did the Board of Health's existing rule already let the program adjust eligibility for budget reasons?
The board's rule at 25 T.A.C. § 37.83(2)(A)(iii) contained language letting income guidelines "be adjusted by the program with the consent of the commissioner to meet budgetary limitations," but the opinion concluded the legislature had barred the board from delegating its rule-making duty, so that language could not validly hand the decision to program staff.

What did the opinion say about the proposed amendment to 25 T.A.C. § 37.86?
The proposed amendment used similar language letting "the program" limit services or set priorities for budgetary reasons. The opinion assumed "the program" meant department staff rather than the board, and on that assumption concluded the proposed rule would attempt to delegate a responsibility the legislature had assigned to the board alone, making it invalid.

Background and statutory framework

The Chronically Ill and Disabled Children's Program had been governed by article 4419c, V.T.C.S., recodified as chapter 35 of the newly enacted Health and Safety Code. Section 35.005(a)(1) directed that the Board of Health "by rule shall... define medical, financial, and other criteria for eligibility to receive services." Section 35.003(c) separately directed that, where budget limitations existed, "the board by rule shall establish a system of priorities relating to the types of services or the classes of persons eligible for the services." A general delegation provision, section 11.013(b), authorized the board to delegate its powers and duties, "except that the board may not delegate the power or duty to adopt rules."

The board had adopted a rule at 25 T.A.C. § 37.83(2)(A)(iii) tying CIDC income eligibility to a percentage of the federal poverty guidelines, but that rule also stated the income guidelines "may be adjusted by the program with the consent of the commissioner to meet budgetary limitations." The commissioner's November 15, 1989 letter, reducing eligibility from 200% to 160% of the federal poverty level and changing how overpayments and dual-coverage recoupments were handled, appeared to rely on that language as authorization. Citing the case law on non-delegable duties, the opinion concluded that where the legislature directs a board to enact rules and expressly forbids delegating that duty, the board cannot use its own rule to contravene that prohibition, so the redesignation of eligibility standards could only be accomplished through rules the board itself adopted. The opinion applied the same reasoning to a then-pending proposed amendment to 25 T.A.C. § 37.86, which would have let "the program" limit or restrict services and establish budget-driven service priorities, concluding that, if "the program" meant department staff, the proposed rule was an overly broad delegation of the board's statutory rule-making authority.

Citations

Statutes and rules:

• Health & Safety Code § 35.005(a)(1)
• Health & Safety Code § 35.003(c)
• Health & Safety Code § 11.013(b)
• 25 Tex. Admin. Code § 37.83(2)(A)(iii)
• 25 Tex. Admin. Code § 37.86 (as proposed, 15 Tex. Reg. 16 (1990))

Cases:

• Teacher Retirement Sys. v. Duckworth, 260 S.W.2d 632, 636 (Tex. Civ. App.-Fort Worth 1953), aff'd, 264 S.W.2d 98 (Tex. 1954)
• Carp v. Texas State Bd. of Examiners in Optometry, 401 S.W.2d 639 (Tex. Civ. App.-Dallas 1966), rev'd on other grounds, 412 S.W.2d 307 (Tex. 1967)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1169
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1169.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

April 26, 1990

Honorable Chet Brooks
Chairman
Health and Human Services Committee
Texas State Senate
P. O. Box 12068
Austin, Texas 78711

Opinion No. JM-1169

Re: Authority of the Texas Department of Health to reduce the financial eligibility criteria for the Chronically Ill and Disabled Children's Program (RQ-1914)

Dear Senator Brooks:

You ask about and enclose a copy of a letter from the Texas Commissioner of Health to providers of health care services to children under the Chronically Ill and Disabled Children's (CIDC) Program. The letter, dated November 15, 1989, cited budget deficiencies and explained:

In an effort to decrease expenditures without changing coverable conditions and amending program rules and policies extensively, the CIDC program has implemented the following administrative procedures which were effective November 1, 1989:

• Income eligibility reduced from 200% to 160% of federal poverty income; and

• overpayments and unauthorized payments will be recouped as payer of last resort for dual coverage by insurance, Medicaid or other third-party payers.

The effect of the income eligibility reduction is to decrease the number of persons eligible for the program.

Your first question is:

In the absence of adoption of a rule by the Texas Board of Health, does the Texas Department of Health's reduction of the financial eligibility criteria for the CIDC program from 200 percent to 160 percent of the federal poverty income level violate § 35.005(a)(1) of the Health and Safety Code which provides that the Board by rule shall define medical, financial and other criteria for eligibility to receive services?

The CIDC program has been governed by article 4419c, V.T.C.S., which has been recodified as chapter 35 of the newly enacted Health and Safety Code. Section 35.005(a)(1) of the code provides:

(a) The board [of Health] by rule shall:
(1) define medical, financial, and other criteria for eligibility to receive services. (Emphasis added.)

The language of that provision is clear: criteria for eligibility are to be defined by rule of the board. See Health & Safety Code § 11.013 (Board of Health shall adopt policies and rules).

Also, the legislature has foreseen the possibility of budget limitations and directed that "the board by rule shall establish a system of priorities relating to the types of services or the classes of persons eligible for the services." Health & Safety Code § 35.003(c).

Priority levels based on the federally defined poverty income level have been adopted by the board in accordance with sections 35.005(a)(1) and 35.003(c) as a rule, which is currently found at 25 T.A.C. § 37.83(2)(A)(iii). The board, in the adoption of that rule, attempted to delegate the adjustment of priority levels through the following language:

Income guidelines are based on percentages of the current federal poverty guidelines and may be adjusted by the program with the consent of the commissioner to meet budgetary limitations.

25 T.A.C. § 37.83(2)(A)(iii). Apparently, this provision in the rules was viewed by the commissioner and the program as authorization for the actions indicated in the commissioner's letter.

The legislature has granted the board the authority to delegate any of its powers or duties, "except that the board may not delegate the power or duty to adopt rules." Health & Safety Code § 11.013(b). Where the legislature has generally directed the board to enact rules for the performance of its duties and expressly prohibited the delegation of that duty, the board may not, by means of its own rule, attempt to contravene that legislative prohibition. See, e.g., Teacher Retirement Sys. v. Duckworth, 260 S.W.2d 632, 636 (Tex. Civ. App.-Fort Worth 1953), aff'd, 264 S.W.2d 98 (Tex. 1954); see also Carp v. Texas State Bd. of Examiners in Optometry, 401 S.W.2d 639 (Tex. Civ. App.-Dallas 1966), rev'd on other grounds, 412 S.W.2d 307 (Tex. 1967). Thus, we believe that the redesignation of eligibility standards based on the federally defined poverty level may only be accomplished through rules enacted by the board.

In your second question, you ask:

Does the language of the proposed amendments to 25 T.A.C. § 37.86 conform to the requirements of § 35.003(c) of the Health and Safety Code which provide that if budgetary limitations exist, the Board by rule shall establish a system of priorities relating to the types of services or classes of persons eligible for the services? In the alternative, do the proposed amendments to 25 T.A.C. § 37.86 constitute an overly broad delegation of statutory authority by the Texas Board of Health to agency staff?

As noted above and in your question, section 35.003(c) of the Health and Safety Code requires that where budgetary limitations exist, it is the duty of the board by rule to establish a system of priorities based on the types of services and the classes of persons eligible for services. The proposed rule reads in part as follows:

(c) Limitations. The program may limit or restrict services to remain within available funding and to provide effective and efficient administration. The program may establish priorities by type of service for budgetary reasons. (Emphasis added.)

15 Tex. Reg. 16 (1990) (prop. amend. to be codified at 25 T.A.C. § 37.86). We assume that "the program" denotes department staff rather than the board. If so, the proposed rule attempts to delegate a statutory responsibility that has been assigned to the board alone and is therefore invalid.

SUMMARY

It is the duty of the Board of Health to enact rules for the Chronically Ill and Disabled Children's program. The board must by rule define eligibility criteria for the program and, in case of budgetary limitations, establish by rule a system of priorities both for the types of services available and the classes of persons eligible for those services. Any attempt by the board to delegate these rule-making responsibilities is invalid.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General