Could Kentucky's legislature create a health-care oversight office under the LRC?

Plain-English summary

In 1994, Kentucky's Attorney General concluded that proposed House Bill 102 was constitutional as described in the request. It would create an Office of Health Care Accountability under the Legislative Research Commission to investigate waste, mismanagement, abuse, and fraud in publicly funded health-care programs; study and audit those programs; and report findings to lawmakers and the Governor. The AG characterized those duties as fact finding and research in aid of the General Assembly.

The opinion applied the Kentucky Supreme Court's distinction in LRC v. Brown between permissible legislative assistance and impermissible delegation of lawmaking or another branch's powers. The AG said the proposed office could perform the described oversight work without taking authority from other agencies. The conclusion addressed the bill before the AG; the opinion did not say the bill became law.

Currency note

This opinion was issued in 1994. 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, deadline, or remedy mentioned here.

Historical summary

Legislators and the LRC

The AG said the LRC was a service and oversight arm of the General Assembly under KRS 7.090 and KRS 7.100. House Bill 102's proposed health-care office would gather information, investigate programs, run a complaint line, conduct studies and audits, and send reports. The office viewed those tasks as supporting legislative work, within the role recognized in LRC v. Brown.

State agencies and publicly funded programs

The proposed bill required agencies and health-care programs receiving public funds to cooperate with the office. The AG said other agencies might already perform similar functions, but the bill as described did not give the new office their powers or responsibilities.

Constitutional boundary

The AG read LRC v. Brown as allowing the legislature to assign the LRC fact-finding and service functions but forbidding delegation of legislative lawmaking discretion or powers traditionally held by another branch. It found neither forbidden delegation in the proposed office's stated responsibilities.

Common questions

Could the proposed LRC office investigate public health-care spending?

The AG said yes under House Bill 102 as described. It treated investigations, audits, and reports as legislative fact finding and research.

Did the proposal let the LRC make law for health-care programs?

No. The AG said the proposed duties did not delegate lawmaking discretion, which LRC v. Brown would prohibit.

Did overlapping work with an executive agency make the bill unconstitutional?

The AG said no on the bill's terms. It acknowledged that agencies in other branches might perform similar functions but said the new office would not take over their authority.

Did the opinion establish that the office was actually created?

No. It evaluated a copy of a proposed House Bill 102 and gave a constitutional opinion about that proposal.

Background and statutory framework

The chair of a House committee asked whether House Bill 102 would violate Kentucky's separation-of-powers provisions by putting a health-care accountability office under the LRC. The AG reviewed the LRC's duties under KRS 7.090 and KRS 7.100 and the Kentucky Supreme Court's limits in LRC v. Brown, Ky., 664 S.W.2d 907 (1984). It concluded that the proposed office's investigations and reports were within a legislative fact-finding role, rather than an exercise of lawmaking or another branch's authority.

Citations and references

• KRS 7.090: establishment and authorized duties of the LRC.
• KRS 7.100: LRC duties discussed through LRC v. Brown.
• LRC v. Brown, Ky., 664 S.W.2d 907 (1984): Supreme Court decision defining limits on LRC authority.
• House Bill 102: the proposed legislation reviewed in the opinion.

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG94-018.htm

Original opinion text

OAG 94-18

March 16, 1994

Hon. Tom Burch, Chairman

House Standing Committee on Health and Welfare

State Capitol Building

Frankfort, Kentucky 40601

Dear Rep. Burch:

By way of a recent letter, you requested an opinion from this office regarding the constitutionality of House Bill 102. Briefly, that bill proposes an amendment to Chapter 7 of the Kentucky Revised Statutes in order to create an Office of Health Care Accountability (hereafter referred to as "Office of Health Care") which is to be under the direction of the Legislative Research Commission (hereafter referred to as "LRC"). According to the proposed bill, the Office of Health Care is to:

(a) Receive and investigate complaints of waste, mismanagement, abuse, and fraud involving publicly funded health care programs and services;

(b) Review at its discretion the administration of any publicly funded health care program to ensure the program is meeting its statutory and regulatory intent and report quarterly the findings of any review to the Legislative Research Commission and Interim Joint Committees on Appropriations and Revenue and Health and Welfare;

(c) Operate a 24 hour toll-free health care fraud and abuse reporting hot line for the purpose of receiving complaints of alleged waste, abuse, or fraud;

(d) Conduct special studies and audits of publicly funded health care programs and services expenditures;

(e) Cooperate with criminal justice agencies in the detection and prevention of fraud and abuse in publicly funded health care pro- grams and services; and

(f) Investigate and submit to the Legislative Research Commission, Interim Joint Committees on Appropriations and Revenue and Health and Welfare, and the Governor on a quarterly basis any findings and recommendations regarding policies and practices contributing to fraud, abuse, waste, and mismanagement in publicly funded health care programs and services.

Under the provisions of the bill, in order to fulfill its duties the Office of Health Care is required to use "...existing state resources and personnel whenever practicable for carrying out the purposes of this section." The bill would also allow the Office of Health Care to enter into contracts with public and private agencies to fulfill its duties. Finally, the bill requires every state agency and health care program and service receiving public funds to cooperate with the Office of Health Care.

As set forth in your letter, you are concerned that this bill may violate Sections 27, 28, 29, 61 and 69 of the Kentucky Constitution. In essence, you suggested that the bill may amount to one branch of government exercising a power belonging to another branch of government. Finally, you indicated that the case of LRC v. Brown, Ky., 664 S.W.2d 907 (1984), would seem to prohibit the LRC from engaging in the functions set forth in the proposed bill.

The starting point in responding to your question is to review the present version of KRS Chapter 7 which created the LRC. KRS 7.090 establishes the LRC and states that the duties, responsibilities and powers assigned to it shall be those as authorized by the General Assembly. KRS 7.100 lists a number of duties and responsibilities given to the LRC by the General Assembly. As described by the Kentucky Supreme Court in LRC v. Brown, supra:

KRS 7.100 (1982) sets out all the basic duties and authority of the LRC. Basically, the statute provides that the agency has those duties that involve fact finding, investigation, information gathering, record keeping, publishing, research and education. It is a service organization of the General Assembly.

Id., at 916.

The Supreme Court went on to state:

As we have said, it is clear that the LRC is totally an agent of the General Assembly and may aid and assist that branch of government. As we have also said, the LRC cannot do anything the General Assembly cannot do.

Id.

Finally, the Court noted:

The LRC was created by, is controlled by, and is a service type agency of the General Assembly. It is independent of the governor; it is not subject to reorganization by the governor, it is subject to the control of its creator, the General Assembly. It is an 'oversight' and service organization for and on behalf of the General Assembly. As such, it is a part, albeit an important part, of the General Assembly, the legislative branch of government

Id. at 917.

In LRC v. Brown, supra, the Supreme Court did not dispute the authority of the General Assembly to create the LRC for purposes of assisting the General Assembly with its legislative duties. However, the Supreme Court stated:

The General Assembly may allow the LRC to act--as its agent--in matters where it has established adequate standards, guidelines, criteria, findings of fact, tests and other safeguards which will assure that the delegatee is acting within the framework of a legislative plan, and does not exercise such discretion as would constitute law-making by such agency.

Id. at 929.

In other words, while the General Assembly was acting totally within its authority when it created the LRC, the General Assembly may not delegate to the LRC any discretion or power which would in fact constitute lawmaking by the LRC.

LRC v. Brown, supra, also prohibited the LRC from exercising powers and responsibilities typically assigned to another branch of government. Examples of the unconstitutional exercise of authority by LRC under the legislation reviewed in LRC v. Brown, supra, included prohibiting any state agency from submitting a block grant application to a federal administrative agency unless the request was approved by the LRC and the ability of the LRC to disapprove a proposed administrative regulation which would in fact delay the implementation of the regulation until the next session of the General Assembly. Therefore, the Supreme Court in LRC v. Brown, supra, was not concerned with the creation or operation of the LRC as a fact-finding and informational gathering arm of the General Assembly. Instead, the court ruled that any attempt by the General Assembly to delegate to the LRC any of the General Assembly's lawmaking capability or any powers or responsibilities traditionally granted to another branch of state government was unconstitutional.

Applying the above-stated principles to House Bill 102, it is the opinion of this office that the creation of the Office of Health Care and the assignment of its powers and responsibilities by the General Assembly is not an unconstitutional delegation by the General Assembly of its lawmaking function nor is it an unconstitutional usurpation of power by the LRC of powers or responsibilities already performed by another branch of state government. While there may be other

state agencies in other branches of state government already performing the same functions or duties, House Bill 102 does not authorize the Office of Health Care to usurp the powers or responsibilities of those other state agencies. Instead, the Office of Health Care would be carrying out the main function and responsibility of the LRC as set forth by the Supreme Court in LRC v. Brown, supra, which is to serve as a fact-finder and research source for the General Assembly.

Therefore, it is the opinion of this office that the copy of House Bill 102 attached to your letter is constitutional.

Yours truly,

CHRIS GORMAN

ATTORNEY GENERAL

Richard C. Carroll

Assistant Attorney General