WV 2015-17946 April 24, 2015

Can the West Virginia Health Information Network (a public-private health-data-exchange partnership) charge fees to participating organizations and spend the money it collects?

Short answer: It can charge and collect fees, but it cannot spend the money it collects unless the Legislature appropriates it. W. Va. Code § 16-29G-3(C) gives WVHIN two distinct powers: (a) receive and dispense funds appropriated by the Legislature, and (b) solicit and receive funds from other sources. Only (a) includes a 'dispense' authority. § 16-29G-4 reinforces this: 'Expenditures from the fund . . . are not authorized from collections but are to be made only in accordance with appropriation by the Legislature.' Combined with the across-the-board prohibition in W. Va. Code § 12-3-14 against spending without appropriation, the answer is clear: collect now, spend only after the Legislature appropriates.

Disclaimer: This is an official West Virginia Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed West Virginia attorney for advice on your specific situation.

Plain-English summary

The West Virginia Health Information Network (WVHIN) was set up by W. Va. Code § 16-29G-1 as a public-private partnership under the WV HealthCare Authority. Its job is to design, implement, and maintain a statewide health-information exchange so providers can share patient data securely. The Network's board planned to roll out a fee structure to participating organizations to fund operations. The Chairman asked the AG: do we have authority to assess and collect those fees, and what can we do with the money?

The AG split the answer.

Authority to assess and collect: yes. § 16-29G-3 gives WVHIN broad incidental powers, including authority to "[r]eceive and dispense funds appropriated for its use by the Legislature or other funding sources or solicit, apply for and receive any funds, property or services from any person, governmental agency or organization to carry out its statutory duties." That second clause expressly authorizes soliciting and receiving funds from "any person, governmental agency or organization." A fee structure paid by participating organizations falls within "soliciting and receiving funds."

Authority to spend the collected fees: no, not without an appropriation. Look closely at § 16-29G-3(C). It separates two powers:

Power 1: "[r]eceive and dispense funds appropriated for its use by the Legislature or other funding sources." This includes both receipt and disbursement, but the source is funds "appropriated."
Power 2: "solicit, apply for and receive any funds, property or services from any person, governmental agency or organization to carry out its statutory duties." This power covers solicitation and receipt, but conspicuously omits any "dispense" authority.

The AG read this asymmetry as deliberate. The Legislature said "receive and dispense" for appropriated funds. It said only "receive" for solicited funds. The conclusion: collected fees can sit in WVHIN's account, but they cannot be spent absent legislative appropriation.

Confirmation in § 16-29G-4. This separate provision governs the West Virginia Health Information Network Account. It states: "Expenditures from the fund shall be for the purposes set forth in this article and are not authorized from collections but are to be made only in accordance with appropriation by the Legislature." There was a one-year exception for fiscal year 2007, but otherwise the rule is clear: spend only what the Legislature appropriates, even from money the Network itself collected.

Cross-reference to the spending-authority backstop. § 12-3-14 broadly bars anyone from spending state funds in excess of legislative appropriation absent a specific statutory exception. WVHIN has no such exception for collected fees.

Practical implication. WVHIN can roll out a fee structure and collect from participants. Those collections become deposits into the Network Account. To use any of that money for operations, WVHIN must wait for the Legislature to appropriate funds (typically through the regular budget cycle) and then spend within the appropriation. The fact that the money came from the Network's own collections does not change the appropriation requirement.

Currency note

This opinion was issued in 2015. 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.

The Health Information Network statutes have been amended in subsequent legislative sessions, and the appropriation requirement could have changed. Anyone working a present-day WVHIN fee or expenditure question should pull current W. Va. Code § 16-29G-1 et seq. and § 12-3-14, plus the latest budget bill.

Common questions

Q: Why can WVHIN charge fees but not freely spend them?
A: Because the Legislature drafted the statute to separate authority. § 16-29G-3(C) explicitly gives WVHIN the power to dispense only funds that have been appropriated by the Legislature. The fact that some funds came from WVHIN's own fee collections is irrelevant: § 16-29G-4 says expenditures "are not authorized from collections but are to be made only in accordance with appropriation by the Legislature." This pattern, called dedicated-fund-with-appropriation, is common in West Virginia public finance.

Q: What is the practical workflow?
A: WVHIN sets fees and bills participating organizations. The fees are deposited into the WVHIN Account. WVHIN's annual budget request to the Legislature includes a proposed appropriation from the Account. After the budget is enacted, WVHIN can spend up to the appropriated amount on the purposes set forth in the Network statute.

Q: What is the cross-reference to W. Va. Code § 12-3-14?
A: § 12-3-14 is a general prohibition on spending state money in excess of appropriations. It bars "any person to expend money on behalf of a state institution in excess of the amount appropriated by the Legislature." § 16-29G-4 tracks this requirement. Together they create overlapping safeguards.

Q: Was there a one-year exception?
A: Yes. § 16-29G-4 included a proviso for fiscal year ending June 30, 2007, allowing expenditures from collections rather than pursuant to appropriations. That was a one-time bridge during the Network's startup. The general rule, applicable now, requires appropriation.

Q: Can WVHIN use collected fees for operations through any other route?
A: The opinion does not identify one. The combination of § 16-29G-3(C) (no dispense authority for solicited funds), § 16-29G-4 (no expenditures from collections), and § 12-3-14 (general appropriation requirement) closes off ad hoc spending. The route to making collected fees usable is appropriation.

Q: What about emergency expenditures, can WVHIN tap collected funds for an unforeseen need?
A: Not without legislative action. The general rule has no emergency carve-out in this statute. The Network would have to seek a supplemental appropriation if a need arose mid-year.

Q: Could the Legislature simplify this by amending § 16-29G-4 to allow direct expenditure of collected fees?
A: Yes. The Legislature could amend the statute to authorize expenditures from collections, similar to how some other state accounts are structured. That is a legislative policy question, not a legal one.

Background and statutory framework

Creation and purpose. W. Va. Code § 16-29G-1 establishes WVHIN to "promote the design, implementation, operation and maintenance of a fully interoperable statewide network to facilitate public and private use of health care information in the state." § 16-29G-2(a) places WVHIN under the oversight of the HealthCare Authority.

Powers. W. Va. Code § 16-29G-3 lists WVHIN powers and duties. § 16-29G-3(C) is the key provision for this opinion: "[r]eceive and dispense funds appropriated for its use by the Legislature or other funding sources or solicit, apply for and receive any funds, property or services from any person, governmental agency or organization to carry out its statutory duties."

Account and expenditure rules. W. Va. Code § 16-29G-4: "Expenditures from the fund shall be for the purposes set forth in this article and are not authorized from collections but are to be made only in accordance with appropriation by the Legislature and in accordance with the provisions of article three, chapter twelve of this code and upon fulfillment of the provisions of article two, chapter eleven-b of this code." (One-time fiscal year 2007 exception.)

Appropriation backstop. W. Va. Code § 12-3-14: it is "unlawful for anyone to spend funds on behalf of a state institution in excess of the amount appropriated by the Legislature absent a specific statutory exception."

Citations

W. Va. Code §§ 5-3-1; 16-29G-1; 16-29G-2(a); 16-29G-3; 16-29G-3(C); 16-29G-4; 12-3-14
W. Va. Code ch. 12, art. 3 (account-administration); ch. 11B, art. 2 (budget process)

Source

Landing page: https://ago.wv.gov/media/17946/download?inline
Original PDF: https://ago.wv.gov/media/17946/download?inline

Original opinion text

State of West Virginia
Office of the Attorney General
Patrick Morrisey
Attorney General

April 24, 2015

(304) 558-2021
Fax (304) 558-0140

The Honorable James L. Pitrolo, Jr.
Chairman
West Virginia HealthCare Authority
100 Dee Drive
Charleston, WV 25311

Dear Chairman Pitrolo:

You have asked for an Opinion of the Attorney General regarding whether the West Virginia Health Information Network (the "WVHIN"), a network "created under the Health Care Authority," W. Va. Code § 16-29G-2(a), has the power to assess and collect fees. This Opinion is being issued pursuant to West Virginia Code § 5-3-1, which provides that the Attorney General "shall give written opinions and advice upon questions of law . . . whenever required to do so, in writing, by . . . any other state officer, board or commission." To the extent this Opinion relies on facts, it is based solely upon the factual assertions set forth in your correspondence with the Attorney General's Office.

In your letter, you explain that the WVHIN is seeking to create a fee structure for participating organizations. As you note, the WVHIN was established by West Virginia Code § 16-29G-1 as a public-private partnership to design, implement, and maintain a statewide health information exchange. You state that when the partnership was created, it was anticipated that a fee structure would be established to maintain the partnership's sustainability. Now, you explain, the WVHIN board is working with participating organizations to create a fair fee structure.

Your letter raises the following legal question:

Does the West Virginia Health Information Network have the authority to assess and collect fees?

The relevant statutory provisions are found at West Virginia Code § 16-29G-1 et seq. These provisions establish "the West Virginia Health Information Network under the oversight of the Health Care Authority to promote the design, implementation, operation and maintenance of a fully interoperable statewide network to facilitate public and private use of health care information in the state." W. Va. Code § 16-29G-1. Furthermore, the WVHIN is granted certain powers and duties in order to carry out this purpose. Those powers include:

all other incidental powers, including, but not limited to, the following: ... (C) Receive and dispense funds appropriated for its use by the Legislature or other funding sources or solicit, apply for and receive any funds, property or services from any person, governmental agency or organization to carry out its statutory duties.

W. Va. Code § 16-29G-3.

We conclude that the WVHIN may assess and collect fees but may only disburse funds appropriated to it by the Legislature. West Virginia Code § 16-29G-3(C) grants the WVHIN two separate powers. First, the WVHIN is authorized to receive and dispense funds appropriated to it by the Legislature. Second, the WVHIN may solicit and receive funds from other sources, including individuals and organizations. As compared to the first grant of power, the second grant of power conspicuously fails to authorize the WVHIN to expend any funds. Under the statute's plain language, the WVHIN may only expend funds specifically appropriated to it by the Legislature.

This reading of West Virginia Code § 16-29G-3(C) is confirmed by the separate statutory provision governing the West Virginia Health Information Network Account and expenditures from that account. West Virginia Code § 16-29G-4 provides:

Expenditures from the fund shall be for the purposes set forth in this article and are not authorized from collections but are to be made only in accordance with appropriation by the Legislature and in accordance with the provisions of article three, chapter twelve of this code and upon fulfillment of the provisions of article two, chapter eleven-b of this code: Provided, That for the fiscal year ending the thirtieth day of June, two thousand seven, expenditures are authorized from collections rather than pursuant to appropriations by the Legislature.

W. Va. Code § 16-29G-4 (emphasis added). The highlighted text makes clear that the WVHIN may expend funds from the account only when those funds have been appropriated to it by the Legislature. Moreover, the statute cross-references West Virginia Code § 12-3-14, which declares broadly that it is unlawful for anyone to spend funds on behalf of a state institution in excess of the amount appropriated by the Legislature absent a specific statutory exception.

Sincerely,

Patrick Morrisey
Attorney General

Elbert Lin
Solicitor General