75 Op. Att'y Gen. 14 (1986)

75 Op. Att'y Gen. 14, 24 (1986)
  (a)(1)   Any provider of services... shall be qualified to participate under this subchapter... if it files with the Secretary an agreement --

75 Op. Att'y Gen. 14, 24 (1986)
  (A)   not to charge, except as provided in paragraph (2), any individual or any other person for items or services for which such individual is entitled to have payment made under this subchapter (or for which he would be so entitled if such provider of services had complied with the procedural and other requirements under or pursuant to the subchapter or for which such provider is paid pursuant to the provisions of sec. 1395f(e) of this title), and

75 Op. Att'y Gen. 14, 24 (1986)
  ....

75 Op. Att'y Gen. 14, 24 (1986)
  (b)   An agreement with the Secretary under the section may be terminated...

75 Op. Att'y Gen. 14, 24 (1986)
  ....

75 Op. Att'y Gen. 14, 24 (1986)
  (2)   by the Secretary... after the Secretary has determined (A) that such provider of services is not complying substantially with the provisions of such agreement, or with the provisions of this subchapter and regulations thereunder....

75 Op. Att'y Gen. 14, 24 (1986)
  Section HSS 106.06 of the Wisconsin Administrative Code, entitled "Involuntary termination, suspension or denial of eligibility for program participation," provides in part:

75 Op. Att'y Gen. 14, 24 (1986)
  The department may suspend or terminate the certification of any... provider... if... the department finds:

75 Op. Att'y Gen. 14, 24 (1986)
  ....

75 Op. Att'y Gen. 14, 24 (1986)
  (17)   The provider has in addition to claiming reimbursement for services provided a recipient, imposed a charge on the recipient for such services or has attempted to procure payment from the recipient in lieu of claiming reimbursement through the program contrary to provisions of HSS 106.04(2).

75 Op. Att'y Gen. 14, 24 (1986)
Therefore, it is my opinion that attempts to enforce such contract provisions when Medicaid eligibility is reached could lead to expulsion from the program.

75 Op. Att'y Gen. 14, 24 (1986)
III.

75 Op. Att'y Gen. 14, 24-25 (1986)
  The final question presented by your inquiry is whether the use of the disputed contract provisions constitutes a violation of criminal law. I conclude that in certain circumstances their continued use could subject the nursing home or its agents to criminal prosecution.

75 Op. Att'y Gen. 14, 25 (1986)
  There can be little doubt that the solicitation of such provisions in an admission agreement with a certified Medicaid recipient, or an attempt to enforce the agreement, constitutes a violation of the criminal statutes in question. The section you cite, 42 U.S.C. 1396h(d), obviously proscribes exactly this type of conduct. The corresponding state statute, section 49.49(4), was modeled after section 1396h(d) and is nearly identical:

75 Op. Att'y Gen. 14, 25 (1986)
  (4)   Prohibited charges. No person, in connection with the medical assistance program when the cost of the services provided to the patient is paid for in whole or in part by the state, may:

75 Op. Att'y Gen. 14, 25 (1986)
  (a)   Knowingly and wilfully charge, for any service provided to a patient under a medical assistance program, money or other consideration at a rate in excess of the rates established by the state.

75 Op. Att'y Gen. 14, 25 (1986)
  (b)   Knowingly and wilfully charge, solicit, accept or receive, in addition to any amount otherwise required to be paid under a medical assistance program, any gift, money, donation or other consideration, other than a charitable, religious or philanthropic contribution from an organization or from a person unrelated to the patient, as a precondition of admitting a patient to a hospital, skilled nursing facility, or intermediate care facility, or as a requirement for the patient's continued stay in such a facility.

75 Op. Att'y Gen. 14, 25 (1986)
  (c)   Violators of this subsection may be fined not more than $25,000 or imprisoned for not more than 5 years or both.

75 Op. Att'y Gen. 14, 25 (1986)
  Section 49.49(4) and 42 U.S.C. 1396h(d) (1977) have not been construed in any reported appellate decisions. However, their relevance here is obvious. Under section 1396h(d)(2), the instigator of the disputed contract provisions would be a person who "knowingly and wilfully... solicits... in addition to any amount otherwise required to be paid under a State plan... money... as a precondition of admitting a patient... when the cost of the services... is paid for (in whole or in part) under the State plan...." And, similarly, there would be culpability under section 49.49(4) for a person who "when the cost... is paid for in whole or in part by the state... knowingly and willfully... solicit[s]... money... as a precondition of admitting a patient...."

75 Op. Att'y Gen. 14, 26 (1986)
  A much more difficult question is presented when the prospective resident enters into the agreement and is on private pay status, or when the resident would qualify for medical assistance if application were made, but refrains from so doing under the cloud of the contract. Although whether the courts would so hold is too close a question for me to venture a conclusive opinion, providers put on notice by the July 26, 1985, Department of Health and Social Services memo, and this opinion, run a high risk of jeopardy by the continued use of such contract provisions. An argument can be made that the phrase in the state statute (and its counterpart in the federal statute) that "when the cost of services provided to the patient is paid for in whole or in part by the state" can be interpreted as including services that could have been paid for by Medicaid if application had been made.

75 Op. Att'y Gen. 14, 26 (1986)
  "Although we recognize the general rule... that penal statutes are to be strictly construed in favor of the accused, it is equally true that this rule of construction does not mean that only the narrowest possible construction must be adopted in disregard of the purpose of the statute." State v. Tronka, 84 Wis. 2d 68, 80, 267 N.W.2d 216 (1978) (citations omitted). "[T]he rule of strict construction is not violated by taking the common-sense view of the statute as a whole and giving effect to the object of the legislature, if a reasonable construction of the words permits it." Zarnott v. Timken-Detroit Axle Co., 244 Wis. 2d 596, 600, 13 N.W.2d 53 (1944). The meaning of a statutory phrase must be considered in light of the entire statute. State v. Fouse, 120 Wis. 2d 471, 355 N.W.2d 366 (Ct. App. 1984). In Boyce Motorlines v. United States, 342 U.S. 337 (1952), the Supreme Court stated that it is not "unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line." 342 U.S. at 340 (citations omitted).

75 Op. Att'y Gen. 14, 26-27 (1986)
  Our supreme court and court of appeals have had occasion to construe both penal and remedial statutes more broadly than a literal interpretation would allow. In Wisconsin Granite Co. v. Industrial Comm., 208 Wis. 270, 242 N.W.2d 191 (1932), one section of the Worker's Compensation Act that significantly restricted the scope of another was disregarded in order to effectuate legislative intent. In McLeod v. State, 85 Wis. 2d 787, 271 N.W.2d 157 (Ct. App. 1978), one of two contradictory provisions of the battery-to-a-witness statute was disregarded in order to expand its protection to persons who had not yet testified as witnesses. In State v. S&S Meats, Inc., 92 Wis. 2d 64, 284 N.W.2d 712 (Ct. App. 1979), section 161.55, entitled "Forfeitures," was construed to avoid a literal reading that would have severely curtailed the statute's applicability.

75 Op. Att'y Gen. 14, 27 (1986)
  It is my opinion, therefore, that continued use of these contract provisions, after having been put on notice by this office and the Department of Health and Social Services of their suspect nature, could well be the impetus for the courts to interpret the criminal statute in a manner designed to effect its purpose and find a knowing and willful violation of law.

75 Op. Att'y Gen. 14, 27 (1986)
BCL:MJL

75 Op. Att'y Gen. 14, 14 (1986) - Footnote

Destination-85   1 "MEDICAID MEMO" to All Hospital and Nursing Homes Participating in the Virginia Medical Assistance Program, dated April 21, 1980, from Robert Treibley, Acting Director of the Virginia Medicaid Assistance Program, p. 1.

75 Op. Att'y Gen. 14, 14 (1986) - Footnote

Destination-86   2 Letter dated August 19, 1983, from Conrad Thompson, Director of the Bureau of Nursing Home Affairs, state Department of Health and Social Services, to State of Washington nursing home providers, p. 1-2.

75 Op. Att'y Gen. 14, 14 (1986) - Footnote

Destination-87   3 Advice of Counsel letter to the state Director of the Medical Assistance Compliance Administration, Office of Medical Care Programs, dated July 7, 1982, p. 1-11.

75 Op. Att'y Gen. 14, 14 (1986) - Footnote

Destination-88   4 BQC-85-019, Memo to All Wisconsin Nursing Homes from the Director of the Bureau of Quality Compliance, dated July 26, 1985.
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