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Opinion No. 5469

March 15, 1979


Art 4, Sec. 25 (sections of an act reenacted and published at length)


Reduction of pharmaceutical dispensing fee


Reduction of pharmaceutical dispensing fee


Legislative power to impose conditions on appropriations

The Director of Social Services may not alter the pharmaceutical dispensing fee of $2.75 established by a legislative appropriation act.

Honorable Thaddeus C. Stopczynski

State Representative

State Capitol

Lansing, Michigan 48909

You have requested my opinion as to the authority of the Director of the Michigan Department of Social Services to reduce to $2.50, the pharmaceutical dispensing fee paid on behalf of medical assistance (medicaid) recipients to pharmacists participating in the medicaid program. Section 44 of the act appropriating money to the Department of Social Services, 1978 PA 401, Sec. 44, provides:

'The pharmaceutical dispensing fee shall be $2.75.'

The appropriation for pharmaceutical services to which the above provision applies, 1978 PA 401, Sec. 1, was vetoed by the Governor on August 3, 1978 and was not subsequently reenacted over the Governor's veto. Instead, the Legislature enacted the current appropriation for pharmaceutical services provided under the medical assistance program by 1978 PA 561, Sec. 2, which was signed by the Governor on December 27, 1978. 1978 PA 561, Sec. 4(2), provides:

'The appropriations in this act shall be predicted on activities, programs, or projects for which appropriations or funds were made available and in conformance with the directives and provisions contained in Act No. 401 of the Public Acts of 1978.'

The condition contained in 1978 PA 401, Sec. 44, is, therefore, incorporated by reference into 1978 PA 561.

Thus, the answer to your question necessarily involves consideration of Legislative power to impose the foregoing condition upon the use of a particular appropriation. In this regard, the Supreme Court of Michigan, in State Board of Agriculture v Auditor General, 226 Mich 417, 425; 197 NW 160 (1924), stated:

'. . . an appropriation may be upon condition that the money shall be used for a specific purpose, or upon any other condition that the legislature can lawfully impose . . .' See also, Weinberger v Regents of University, 97 Mich 246, 254; 56 NW 605 (1893).

It is also necessary to consider the effect of Const 1963, art 4, Sec. 25, which provides:

'No law shall be revised, altered or amended by reference to its title only.' See Alan v Wayne County, 388 Mich 210, 269-286; 200 NW2d 628 (1972)

It will be noted that, although the Social Welfare Act, 1939 PA 280, Sec. 109; MCLA 400.109; MSA 16.490(19), grants specific authority to Social Services to set physicians' payments, no such authority is provided with respect to pharmaceutical services. 1939 PA 280, supra, Sec. 109(b) states, in pertinent part:

'Reasonable charges shall be determined by the state department and shall not be more than those paid in this state for services rendered under title 18 of the social security act.'

Thus, there is no conflict between the substantive act and the subsequently enacted appropriation act.

A situation similar to that posed in your question was examined by this office in OAG 1967-68, No 4576, p 17, February 3, 1967. That opinion dealt with the power of the Governor to withhold full implementation of the medicaid program, because of an inadequate appropriation, by reducing the level of some statutorily mandated medical services and eliminating other such services altogether. It concluded as follows:

'It is my opinion and I advise you that Act 321, P.A. 1966, establishes a program for categorical assistance clients and for the medically indigent, which program includes physicians' services, pharmaceutical services, dental services, and other services as set forth in the statute, which are thereby directed to be made available to those who qualify. The obligation of the Department of Social Services to carry out the mandate of the legislature as set forth in Act 321 PA 1966, is in no way altered or affected by the Governor's direction, which is without legal effect as beyond his authority and because it violates Article III, Section 2 of the Michigan Constitution of 1963.'

It is therefore my opinion that the Director of Social Services, may not alter the pharmaceutical dispensing fee of $2.75 established by 1978 PA 401, Sec. 44.

Frank J. Kelley

Attorney General