A-29130, FEBRUARY 3, 1930, 9 COMP. GEN. 332

A-29130: Feb 3, 1930

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MEDICAL TREATMENT - EMPLOYEES' COMPENSATION COMMISSION BENEFICIARIES - ALASKA RAILROAD HOSPITALS HOSPITALS MAINTAINED BY THE ALASKA RAILROAD FROM FUNDS APPROPRIATED FOR THE AUTHORIZED WORK OF THE RAILROAD ARE UNITED STATES HOSPITALS WITHIN THE INTENT OF SECTION 9 OF THE EMPLOYEES' COMPENSATION ACT. ARE NOT ENTITLED TO REIMBURSEMENT FOR HOSPITAL CARE FURNISHED BENEFICIARIES UNDER THE ACT. IRRESPECTIVE OF WHETHER SUCH BENEFICIARIES WERE EMPLOYEES OF THE RAILROAD OR OF OTHER GOVERNMENT ACTIVITIES. HOSPITAL CARE AND MEDICAL TREATMENT WERE FURNISHED HIM FROM FEBRUARY 6 TO MARCH 6. ALTHOUGH THE RAILROAD IS OWNED AND OPERATED BY THE UNITED STATES. THE FUNDS AVAILABLE TO THE ALASKA RAILROAD ARE APPROPRIATED FOR THE PURPOSES OF CONSTRUCTION.

A-29130, FEBRUARY 3, 1930, 9 COMP. GEN. 332

MEDICAL TREATMENT - EMPLOYEES' COMPENSATION COMMISSION BENEFICIARIES - ALASKA RAILROAD HOSPITALS HOSPITALS MAINTAINED BY THE ALASKA RAILROAD FROM FUNDS APPROPRIATED FOR THE AUTHORIZED WORK OF THE RAILROAD ARE UNITED STATES HOSPITALS WITHIN THE INTENT OF SECTION 9 OF THE EMPLOYEES' COMPENSATION ACT, AS AMENDED BY THE ACT OF JUNE 26, 1926, 44 STAT. 772, AND ARE NOT ENTITLED TO REIMBURSEMENT FOR HOSPITAL CARE FURNISHED BENEFICIARIES UNDER THE ACT, IRRESPECTIVE OF WHETHER SUCH BENEFICIARIES WERE EMPLOYEES OF THE RAILROAD OR OF OTHER GOVERNMENT ACTIVITIES, BUT MAY BE REIMBURSED FROM THE EMPLOYEES' COMPENSATION FUND FOR MEDICAL TREATMENT FURNISHED SUCH BENEFICIARIES, IN THE AMOUNT OF FEES REQUIRED TO BE PAID TO HOSPITAL SURGEONS UNDER AUTHORIZED CONTRACTS FOR RENDERING MEDICAL TREATMENT TO PERSONS OTHER THAN RAILROAD EMPLOYEES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, FEBRUARY 3, 1930:

CONSIDERATION HAS BEEN GIVEN YOUR COMMUNICATION OF OCTOBER 10, 1929, BY INDORSEMENT ON LETTER OF SEPTEMBER 23, 1929, FROM THE GENERAL MANAGER OF THE ALASKA RAILROAD, REQUESTING REVIEW OF SETTLEMENT OF AUGUST 28, 1929, DISALLOWING THE CLAIM OF THE ALASKA RAILROAD FOR $182 ON ACCOUNT OF HOSPITAL CARE AND MEDICAL TREATMENT FURNISHED WILLIAM M. LYNCH, A BENEFICIARY OF THE UNITED STATES EMPLOYEES' COMPENSATION COMMISSION.

IT APPEARS THAT LYNCH HAD BEEN IN THE EMPLOY OF THE UNITED STATES, BUT NOT OF THE ALASKA RAILROAD, AND THAT, AT THE REQUEST OF THE EMPLOYEES' COMPENSATION COMMISSION, HOSPITAL CARE AND MEDICAL TREATMENT WERE FURNISHED HIM FROM FEBRUARY 6 TO MARCH 6, 1929, AT THE HOSPITAL MAINTAINED BY THE ALASKA RAILROAD AT ANCHORAGE, ALASKA. THE GENERAL MANAGER CONTENDS THAT, ALTHOUGH THE RAILROAD IS OWNED AND OPERATED BY THE UNITED STATES, THE HOSPITAL MAINTAINED AT ANCHORAGE SHOULD NOT BE CONSIDERED A GOVERNMENT HOSPITAL WITHIN THE MEANING OF THE DECISIONS HOLDING THAT REIMBURSEMENT CAN NOT BE ALLOWED FROM EMPLOYEES' COMPENSATION COMMISSION APPROPRIATIONS FOR THE COST OF CARE AND MEDICAL ATTENTION REQUIRED TO BE FURNISHED BENEFICIARIES OF THE COMMISSION BY UNITED STATES MEDICAL OFFICERS AND HOSPITALS WHEN PRACTICABLE, UNDER THE PROVISIONS OF SECTION 9 OF THE EMPLOYEES' COMPENSATION ACT OF SEPTEMBER 7, 1916, 39 STAT. 743, AND THE AMENDATORY ACT OF JUNE 26, 1926, 44 STAT. 772. SEE 6 COMP. GEN. 78, AND DECISIONS THEREIN CITED.

THE GENERAL MANAGER OF THE RAILROAD SETS FORTH THE FOLLOWING REASONS IN SUPPORT OF THIS CONTENTION:

1. THE FUNDS AVAILABLE TO THE ALASKA RAILROAD ARE APPROPRIATED FOR THE PURPOSES OF CONSTRUCTION, MAINTENANCE, AND OPERATION OF RAILROADS IN ALASKA. THERE IS NO APPROPRIATION FOR THE SUPPORT OF HOSPITALS; MEDICAL AND HOSPITAL SERVICE IS MAINTAINED, HOWEVER, FOR ITS EMPLOYEES AND MEMBERS OF THEIR FAMILIES AS A NECESSARY INCIDENT TO THE OPERATION OF THE RAILROAD. IN THE CASE OF THE HOSPITAL AT ANCHORAGE, THE HOSPITAL BUILDING IS GOVERNMENT PROPERTY AND A SALARIED STAFF IS PROVIDED; DIFFERENT ARRANGEMENTS ARE IN EFFECT AT SEWARD AND FAIRBANKS.

THE EFFECT OF THE DECISION OF THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE WOULD BE THAT NO CHARGE WOULD BE MADE FOR THE SERVICES OF THE PHYSICIANS AND HOSPITALS AT ANCHORAGE, WHILE THE PHYSICIANS AT SEWARD AND FAIRBANKS WOULD BE FREE TO RENDER BILLS TO THE PATIENT OR THE COMPENSATION COMMISSION FOR THEIR SERVICES. IT WOULD BE UNDOUBTEDLY NECESSARY FOR THE RAILROAD TO PAY INCREASED SALARIES TO ITS PHYSICIANS AT ANCHORAGE, OUT OF FUNDS APPROPRIATED FOR THE CONSTRUCTION AND OPERATION OF RAILROADS, IN ALASKA, TO PROVIDE FREE SERVICES TO EMPLOYEES OF OTHER BRANCHES OF THE SERVICE WHO ARE BENEFICIARIES OF THE UNITED STATES COMPENSATION COMMISSION.

2. THE ALASKA RAILROAD ACT OF MARCH 12, 1914 (38 STAT. 305), PROVIDES IN SECTION 3 THEREOF THAT "THE EARNINGS OF SAID RAILROAD OR RAILROADS, TOGETHER WITH THE EARNINGS OF THE TELEGRAPH AND TELEPHONE LINES CONSTRUCTED UNDER THIS ACT, ABOVE MAINTENANCE CHARGES AND OPERATING EXPENSES, SHALL BE PAID INTO THE TREASURY OF THE UNITED STATES AS OTHER MISCELLANEOUS RECEIPTS ARE PAID, AND A SEPARATE ACCOUNT THEREOF SHALL BE KEPT AND ANNUALLY REPORTED TO CONGRESS.'

TO DIVERT FUNDS OF THE RAILROAD TO THE MAINTENANCE OF HOSPITAL SERVICE FOR BENEFICIARIES OF THE COMPENSATION ACT WHO ARE NOT EMPLOYEES OF THE RAILROAD WOULD TEND TO DEFEAT THE INTENTION OF CONGRESS THAT ALL EARNINGS IN EXCESS OF OPERATING EXPENSES BE DEPOSITED IN THE TREASURY.

3. BY ORDER OF NOVEMBER 9, 1928, THE SECRETARY OF THE INTERIOR HAS DIRECTED THAT THE ACCOUNTS OF THE RAILROAD CONCERNING OPERATING AND OTHER EXPENSES SHALL BE KEPT IN ACCORDANCE WITH THE CLASSIFICATION OF ACCOUNTS AS PRESCRIBED BY THE INTERSTATE COMMERCE COMMISSION FOR OTHER RAILROADS. THERE IS NO OPERATING EXPENSE ACCOUNT UNDER THAT CLASSIFICATION TO WHICH THE EXPENSE OF PROVIDING HOSPITAL SERVICE FOR COMPENSATION BENEFICIARIES FROM OTHER BRANCHES OF THE SERVICE COULD PROPERLY BE CHARGED.

4. THE CONTRACT OF THE ALASKA RAILROAD WITH DR. REX F. SWARTZ, CHIEF OF STAFF, DATED APRIL 1, 1927 (NO. 1-3ARR-141) AND CONTRACT WITH DR. ARTHUR D. HAVERSTOCK, RAILROAD SURGEON, DATED NOVEMBER 22, 1927 (NO. 1-3ARR-328), COVER CONDITIONS OF EMPLOYMENT OF THE SURGEONS, RESPECTIVELY, IN THE HOSPITAL SERVICE OF THE RAILROAD. EACH CONTRACT STATES THAT THE SALARY AND DIVISION OF FEES THEREIN PROVIDED SHALL NOT BE CONSTRUED TO REQUIRE THAT THE SURGEON RENDER SERVICES FREE TO BRANCHES OF THE GOVERNMENT SERVICE, OTHER THAN THE RAILROAD. IN ADDITION TO THE SALARY STIPULATED, EACH SURGEON IS ALLOWED 50 PERCENT OF THE FEES COLLECTED ON ACCOUNT OF HIS OWN SERVICES AT THE RAILROAD HOSPITAL. THE AUTHORITY OF THE MANAGEMENT OF THE RAILROAD TO ENTER INTO AGREEMENTS OF THIS NATURE WAS EXPRESSLY CONFIRMED BY JOINT RESOLUTION OF CONGRESS APPROVED MARCH 3, 1927, READING AS FOLLOWS:

"THAT THE PRESIDENT IS HEREBY AUTHORIZED TO CAUSE TO BE PAID FROM HOSPITAL RECEIPTS OR OTHER FUNDS OF THE ALASKA RAILROAD THE AMOUNTS HERETOFORE OR HEREAFTER ACCRUING TO SURGEONS OF THE RAILROAD UNDER ANY AGREEMENTS RELATING TO FEES COLLECTED IN CASES NOT ENTITLED TO FREE TREATMENT UNDER THE HOSPITAL REGULATION OF THE RAILROAD.'

AN EXECUTIVE ORDER DATED MARCH 19, 1927 (NO. 4618), AUTHORIZED THE GENERAL MANAGER OF THE RAILROAD "TO ENTER INTO AGREEMENTS WITH SURGEONS FOR THEIR SERVICES UNDER ITS HOSPITAL REGULATIONS, INCLUDING A DIVISION OF THEIR FEES EARNED AND COLLECTED IN PRIVATE CASES AND OTHER CASES NOT ENTITLED TO FREE TREATMENT, AND TO PAY FROM HOSPITAL RECEIPTS OR OTHER FUNDS OF THE RAILROAD THE AMOUNTS DUE UNDER SUCH AGREEMENTS AND ANY SIMILAR AGREEMENTS HERETOFORE EXISTING.'

THE VIEW ADOPTED BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE WOULD DEPRIVE THE SURGEONS OF THEIR EARNINGS IN CASES OF CERTAIN BENEFICIARIES OF THE COMPENSATION ACT, ALTHOUGH A SHARE OF SUCH EARNINGS IS ASSURED TO THEM UNDER CONTRACTS DULY ENTERED INTO PURSUANT TO AUTHORITY GIVEN BY LAW AND THE EXECUTIVE ORDER MENTIONED.

5. IT IS IN BETTER ACCORD WITH ACCOUNTING PRINCIPLES THAT BENEFITS GIVEN TO COMPENSATION BENEFICIARIES SHOULD BE AT THE EXPENSE OF THE COMPENSATION APPROPRIATION, UNLESS ANOTHER APPROPRIATION EXISTS EXPRESSLY FOR PROVIDING HOSPITAL BENEFITS UNDER THAT ACT OR OTHER PROVISIONS OF LAW, AND THAT THE RAILROAD FUNDS SHALL BE USED FOR RAILROAD PURPOSES ONLY, SO THAT THE AMOUNTS APPROPRIATED WILL REFLECT TRULY THE EXPENSE OF EACH BRANCH OF THE SERVICE. THE ESTIMATES FOR THE WORK OF THE ALASKA RAILROAD HAVE NOT INCLUDED ANY AMOUNTS FOR THE OBJECT OF FURNISHING HOSPITAL BENEFITS IN COMPENSATION CASES ARISING IN OTHER BRANCHES OF THE GOVERNMENT SERVICE. IT WOULD BE DIFFICULT TO PREPARE AN ESTIMATE OF SUCH EXPENSES, OR TO JUSTIFY THE SAME UNDER THE HEADING OF AN APPROPRIATION FOR PURPOSES OF THE ALASKA RAILROAD.

6. AN EXECUTIVE ORDER OF MARCH 24, 1925 (NO. 4182), ISSUED IN CONFORMITY WITH JOINT RESOLUTION APPROVED MARCH 4, 1925, AUTHORIZES THE GENERAL MANAGER OF THE RAILROAD TO PAY COMPENSATION TO EMPLOYEES OF THE RAILROAD, UNDER THE PROVISIONS OF THE EMPLOYEES' COMPENSATION ACT, INCLUDING MEDICAL, SURGICAL, AND HOSPITAL SERVICES AND SUPPLIES, OUT OF THE ALASKA RAILROAD FUND, SUCH FUND TO BE REIMBURSED FOR SUCH PAYMENTS BY TRANSFER OF FUNDS FROM THE EMPLOYEES' COMPENSATION FUND. THE RAILROAD MAY THUS BE REIMBURSED FOR HOSPITAL BENEFITS SUPPLIED TO ITS OWN EMPLOYEES. HOWEVER, IF THE ACTION OF THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE, IS SUSTAINED, THE RAILROAD WILL BE DENIED REIMBURSEMENT FOR LIKE BENEFITS AFFORDED EMPLOYEES OF OTHER BRANCHES OF THE SERVICE. IT CAN NOT BE ASSUMED THAT CONGRESS HAS INTENDED SUCH A SITUATION TO EXIST; THERE IS, RATHER, A CLEAR INTENTION THAT THE RAILROAD FUNDS SHALL BE FREE OF THE EXPENSE OF COMPENSATION PAYMENTS, IN ORDER THAT ITS APPROPRIATIONS SHALL PRESENT A TRUE SHOWING OF THE FINANCIAL RESULTS OF THE OPERATION OF THE RAILROAD.

THE REGULATIONS FOR THE HOSPITAL AND THE CONTRACTS WITH THE HOSPITAL SURGEONS HAVE BEEN EXAMINED. UNDER THE REGULATIONS EMPLOYEES OF THE RAILROAD ONLY ARE ENTITLED TO FREE CARE AND TREATMENT. ALL OTHERS MUST PAY FOR SUCH SERVICE. UNDER THE CONTRACTS THE SURGEONS ARE ENTITLED TO ONE-HALF THE FEES COLLECTED FOR RENDERING MEDICAL ATTENTION TO OTHER THAN RAILROAD EMPLOYEES, AND THE CONTRACTS EXPRESSLY PROVIDE THAT THEY SHALL NOT BE REQUIRED TO RENDER SERVICES FREE TO OTHER BRANCHES OF THE GOVERNMENT SERVICE. AS TO THE VALIDITY OF SUCH CONTRACTS, SEE THE JOINT RESOLUTION OF MARCH 3, 1927, 44 STAT. 1845, AUTHORIZING PAYMENT THEREUNDER OF SUCH ADDITIONAL FEES.

THE FACT REMAINS, HOWEVER, THAT THE HOSPITAL IS OPERATED AS A NECESSARY INCIDENT TO AN AUTHORIZED GOVERNMENT ACTIVITY, AND IS MAINTAINED UNDER APPROPRIATIONS MADE BY THE CONGRESS TO PROVIDE FOR THE EXPENSES OF THAT ACTIVITY. SEE THE ACT OF MARCH 7, 1928, 45 STAT. 200, 240, APPROPRIATING, FOR THE FISCAL YEAR 1929, HERE INVOLVED, $1,300,000 IN ADDITION TO THE REVENUES OF THE RAILROAD "FOR EVERY EXPENDITURE REQUISITE FOR AND INCIDENT TO THE AUTHORIZED WORK OF THE ALASKA RAILROAD.' FURNISHING MEDICAL AND HOSPITAL TREATMENT TO BENEFICIARIES OF THE EMPLOYEES' COMPENSATION COMMISSION, WHERE PRACTICABLE, BY THE USE OF AVAILABLE FACILITIES, IS A PART OF THE AUTHORIZED WORK OF THE RAILROAD, THE SAME AS IT IS THE DUTY OR PART OF THE AUTHORIZED WORK OF OTHER ESTABLISHED GOVERNMENT ACTIVITIES. IN THIS CONNECTION, IT WAS SAID IN DECISION OF DECEMBER 20, 1926, A-14820, TO THE SECRETARY OF WAR, IN ANSWER TO HIS CONTENTION THAT WAR DEPARTMENT APPROPRIATIONS DID NOT INCLUDE AMOUNTS FOR THE SUBSISTENCE OF EMPLOYEES' COMPENSATION COMMISSION BENEFICIARIES WHILE IN MILITARY HOSPITALS:

THE DECISION OF JULY 27, 1926, WAS INTENDED TO HOLD THAT THE EMPLOYEES' COMPENSATION FUND WAS NOT AVAILABLE FOR PAYMENT OF ANY SERVICES, SUPPLIES, AND APPLIANCES ORDINARILY FURNISHED INCIDENT TO MEDICAL OR HOSPITAL TREATMENT BY ARMY HOSPITALS TO BENEFICIARIES UNDER THE EMPLOYEES' COMPENSATION ACT. THIS WOULD INCLUDE SUCH SUBSISTENCE ORDINARILY FURNISHED WITH IN-PATIENT HOSPITAL TREATMENT.

THE STATUTORY REQUIREMENT FOR ALL GOVERNMENT HOSPITALS TO FURNISH BENEFICIARIES OF THE EMPLOYEES' COMPENSATION COMMISSION MEDICAL AND HOSPITAL TREATMENT, FREE OF CHARGE, IS SO CLEARLY EXPRESSED BOTH IN THE ORIGINAL AND AMENDED STATUTES AND WAS SO GENERALLY UNDERSTOOD AND IN FORCE IN THE PAST WITH RESPECT TO ALL GOVERNMENT HOSPITALS EXCEPT THOSE UNDER THE ARMY AND NAVY, THAT I DO NOT FEEL JUSTIFIED IN FURTHER EXTENDING THE UNLAWFUL PRACTICE OF THE WAR DEPARTMENT BEYOND THE DATE OF THE DECISION OF THIS OFFICE. THE LAW HAS MADE THE TREATMENT OF THE BENEFICIARIES OF EMPLOYEES' COMPENSATION ACT AS MUCH THE DUTY OF ARMY AND NAVY HOSPITALS AS IS THE TREATMENT OF MEMBERS OF THOSE SERVICES. THEREFORE, EXPENDITURES FROM ARMY APPROPRIATIONS FOR THIS PURPOSE ARE AS LEGITIMATE AND AS IMPERATIVE AS EXPENDITURES FOR THE MILITARY ESTABLISHMENT. POSSIBILITY OF A DEFICIENCY BECAUSE OF EXPENDITURES FOR THIS PURPOSE, WHICH YOU SUGGEST, WOULD APPEAR TO BE PROPER FOR BRINGING TO THE ATTENTION OF THE BUREAU OF THE BUDGET AND THE CONGRESS.

WHAT WAS SAID THERE IS APPLICABLE HERE; THAT IS, IN VIEW OF THE PROVISIONS OF THE EMPLOYEES' COMPENSATION ACTS, EXPENDITURES FROM ALASKA RAILROAD APPROPRIATIONS FOR HOSPITAL CARE OF EMPLOYEES' COMPENSATION COMMISSION BENEFICIARIES, WHERE PRACTICABLE BY USE OF AVAILABLE FACILITIES, ARE AS LEGITIMATE AND IMPERATIVE AS EXPENDITURES FOR THAT PURPOSE FOR ALASKA RAILROAD EMPLOYEES. THE OBJECTION IN PARAGRAPH "6," SUPRA, OF THE GENERAL MANAGER'S LETTER, THAT THE RAILROAD MAY BE REIMBURSED FROM THE EMPLOYEES' COMPENSATION FUND FOR LIKE EXPENDITURES MADE ON ACCOUNT OF THEIR OWN EMPLOYEES, IS FULLY ANSWERED IN DECISION OF JUNE 27, 1917, BY THE COMPTROLLER OF THE TREASURY, 23 COMP. DEC. 776, HOLDING THAT SUCH REIMBURSEMENT WAS NOT AUTHORIZED FOR HOSPITAL CARE, ETC., FURNISHED BY THE PANAMA CANAL TO ITS OWN EMPLOYEES AS COMPENSATION BENEFICIARIES UNDER AN ANALOGOUS PROVISION CONTAINED IN SECTION 42 OF THE ACT OF SEPTEMBER 7, 1916, 39 STAT. 742, 750. SUCH REIMBURSEMENT FROM THE EMPLOYEES' COMPENSATION FUND FOR HOSPITAL CARE FURNISHED ITS OWN EMPLOYEES IN ITS OWN HOSPITALS BY THE ALASKA RAILROAD IS NOT AUTHORIZED BY THE CITED JOINT RESOLUTION OF MARCH 4, 1925, 43 STAT. 1355, 1356, AMENDING SAID SECTION 42 OF THE ACT OF SEPTEMBER 7, 1916, SUPRA, AND IF SUCH REIMBURSEMENT HAS HERETOFORE BEEN CLAIMED AND ALLOWED, THE PRACTICE SHOULD BE DISCONTINUED.

SO FAR AS THE PRESENT CLAIM IS CONCERNED, IT MUST BE HELD THAT REIMBURSEMENT OF CHARGES FOR HOSPITAL CARE OF LYNCH AT THE ALASKA RAILROAD HOSPITAL IS UNAUTHORIZED, AND THE SETTLEMENT IS SUSTAINED TO THAT EXTENT. HOWEVER, THE LAW DOES NOT REQUIRE THAT GOVERNMENT HOSPITALS INCUR ADDITIONAL EXPENSES IN THE NATURE OF FEES TO PHYSICIANS FOR THE BENEFIT OF EMPLOYEES' COMPENSATION COMMISSION BENEFICIARIES, AND IN VIEW OF THE CONTRACTS OF THE HOSPITAL SURGEONS UNDER WHICH THEY ARE ENTITLED TO ONE- HALF OF THE FEES CHARGED FOR MEDICAL ATTENTION RENDERED TO PERSONS OTHER THAN RAILROAD EMPLOYEES, THERE WILL BE ALLOWED ON THE CLAIM $14, REPRESENTING ONE-HALF OF THE FEE CHARGED FOR PROFESSIONAL SERVICES RENDERED LYNCH, ACCRUING TO THE HOSPITAL SURGEON RENDERING THE SERVICES.