Blue Cross Hosp. Service, Inc. of Missouri v. Frappier
| Decision Date | 18 December 1984 |
| Docket Number | No. 65881,65881 |
| Citation | 681 S.W.2d 925 |
| Parties | 5 Employee Benefits Cas. 2634 BLUE CROSS HOSPITAL SERVICE, INC. OF MISSOURI, et al., Plaintiffs- Respondents/Cross-Appellants, v. J.H. FRAPPIER, Director, Department of Consumer Affairs, et al., Defendants- Respondents, The Missouri Psychological Association, a Missouri not-for-profit corp., Intervenor-Defendant/Respondent, Missouri Pharmaceutical Association, et al., Intervenors-Defendants-Appellants/ Cross-Respondents. |
| Court | Missouri Supreme Court |
Robert F. Schlafly, Henry J. Mohrman, St. Louis, Mike Dallmeyer, Jefferson City, Max Bagby, Kansas City, for plaintiffs-respondents/cross-appellants.
John Ashcroft, Atty. Gen., Richard L. Wieler, Melodie A. Powell, Asst. Attys. Gen., Jefferson City, for defendants-respondents.
Harvey Tettlebaum, Duane Benton, Jefferson City, Daniel P. Card II, David B. Lacks, St. Louis, Thomas J. Downey, Jefferson City, for intervenor-defendant-appellant-cross-respondents.
The plaintiffs are health service corporations organized under Chapter 354, RSMo 1978. Plaintiff Blue Cross and Blue Shield of Kansas City hs 450,000 members; plaintiff Blue Cross Hospital Service, Inc. of Missouri has 780,000 members and plaintiff Missouri Medical Service has 650,000 members.
The plaintiffs provide payment for medical care incurred by subscribing members. They make payment directly to providers and maintain separate contractual agreements with subscribers and health care providers. By contrast, commercial insurers customarily reimburse policyholders directly. Plaintiffs claim that this arrangement allows them some control over the charges of health care providers.
In 1983 the General Assembly in a single bill adopted an addition to § 375.936(11)(b), RSMo 1978 and also amended Chapter 354. The amendments, among other things, forbade health service corporations to discriminate against chiropractors and psychologists, which plaintiffs had refused to pay as a matter of policy. The plaintiffs claim unconstitutionality, both as to the legislative procedures and the substantive effects of the statute.
House Bill 127 as introduced had the following title:
An Act to repeal section 375.936 RSMo 1978, relating to the definition of unfair practices in the business of insurance, and to enact in lieu thereof one new section relating to the same subject. [Plaintiffs' Exhibit 1.]
Its only effect was to add the word "psychologist" to the practitioners listed in subsection 11(b).
Section 375.936 had been in force since 1959. One of its purposes was to prohibit "unfair discrimination" by insurance companies among providers of health care. The section had not been applied to health service corporations until 1978. In the course of its journey through the General Assembly, portions of other bills were combined with House Bill 127. The bill, as finally adopted, contained 94 new sections relating to Chapter 354 corporations. The title was broadened to make express reference to the regulation of health service corporations.
The plaintiffs' petition charged that House Bill 127 was unconstitutional, asserting that: (1) the amendments during passage changed its original purpose in violation of Art. III, § 21 of the Missouri Constitution; (2) the bill deals with more than one subject, the content of which is not clearly expressed in the title, as required by Art. III, § 23; (3) the bill impairs the obligation of contracts in violation of Art. I, § 13 of the Missouri Constitution and Art. I, § 10 of the United States Constitution; (4) the bill violates the due process clauses of the federal and state Constitutions; (5) the bill deprives persons in the position of plaintiffs of equal protection of laws in violation of the Fourteenth Amendment; and (6) the provisions of the bill are preempted by ERISA, 29 U.S.C. § 1001, et seq.
The trial court found for the plaintiffs on grounds (1) and (2) specified above, and found it unnecessary to pass on the remaining grounds alleged. Both parties appeal, the plaintiffs contending that the court should have declared the statutes invalid under ERISA. We conclude that none of the reasons assigned for invalidity has merit, and so reverse the judgment and remand with directions to declare the statute valid as against the challenges tendered.
Statutes are presumed to be constitutional. State v. Newlon, 627 S.W.2d 606 (Mo. banc 1982), cert. denied 459 U.S. 884, 103 S.Ct. 185, 74 L.Ed.2d 149 (1982). In the leading recent case on the permissible scope of amendments during the course of legislation, Westin Crown Plaza Hotel Co. v. King, 664 S.W.2d 2 (Mo. banc 1984), this Court upheld the validity of a statute with a history similar to that of the statute now before us. House Bill 127, in its original form, prohibited insurance companies and health service corporations from discriminating against psychologists. Amendments were later added that provided broader anti-discriminatory measures. The amendments did not constitute a substantial departure from the original anti-discriminatory purpose. Amendments germane to the initial bill do not change its original purpose. State v. Ludwig, 322 S.W.2d 841 (Mo. banc 1959). Art. III, § 21 was not designed to inhibit the normal legislative processes, in which bills are combined and additions necessary to comply with the legislative intent are made. The plaintiffs have not met their rather substantial task of showing that the legislative history rendered the statute unconstitutional.
Plaintiff relies on Allied Mutual Ins. Co. v. Bell, 353 Mo. 891, 185 S.W.2d 4 (1945). This Court held that a statute was unconstitutional because it introduced a tax which was not within the purpose of the original bill. The Court emphasized that the original purpose of the bill was not included in the law as passed. The original House Bill 127 remained part of the final House Bill 127. The general purpose of the bill was not changed, but rather additions were made. The modification of the title to reflect the added provisions is permissible. Lincoln Credit Co. v. Peach, 636 S.W.2d 31 (Mo. banc 1982).
The title, also, is not constitutionally infirm. The title of the original House Bill 127 read as follows:
An Act to repeal section 375.936 RSMo 1978, relating to the definition of unfair practices in the business of insurance, and to enact in lieu thereof one new section relating to the same subject. [Plaintiffs' Exhibit 1.]
The title of the revised bill is as follows:
An Act to repeal sections [listing sections] relating to the regulation of certain corporations and other organizations which provide services or coverage for certain health related risks, and to enact in lieu thereof ninety-five new sections relating to the same subject. [Plaintiffs' Exhibit 4]. [Section numbers omitted].
We believe that the title fairly describes the subject matter of the adopted bill. A title need not give specific details of a bill. An announcement of the general subject matter is sufficient to give notice of the bill's content. Downey v. Schrader, 353 Mo. 40, 182 S.W.2d 320 (Mo. banc 1944); Edwards v. B.M.A., 350 Mo. 666, 168 S.W.2d 82 (1942). The purpose of the "one subject" mandate is to give interested persons notice of the area of regulation to prevent deception through use of misleading titles, and to maintain the concept of germaneness. This requirement is satisfied if the title is sufficient to alert persons interested in the subject matter. Union Electric Co. v. Kirkpatrick, 606 S.W.2d 658 (Mo. banc 1980). The original title clearly applied to plaintiffs, for Section 375.932(3) provides that § 375.936 applies to Chapter 354 corporations. Plaintiffs had the opportunity for notice, at that point, that the bill was pending. The amended title clearly refers to the regulation of health service corporations and all of the added sections are germane to this regulation. The test is whether all provisions of the bill fairly relate to the subject expressed in the title, have natural connections therewith or are incidents or means to accomplish the expressed purpose. Westin Crown Plaza Hotel Co. v. King, supra. The title gave the public adequate notice that health service corporations were to be regulated.
The plaintiffs fail to demonstrate any unconstitutional impairment of their contracts. A law which affects a contract does not necessarily violate Art. I, § 13 of the Constitution of Missouri and Art. I, § 10 of the Constitution of the United States. Private executory contracts are not immune from the valid exercise of the police power, and persons cannot oust the state of its police power by making long-term contractual arrangements. State ex rel. Kansas City v. Public Service Commission, 524 S.W.2d 855 (Mo. banc 1975). The police power exists to promote the public health, safety and welfare. Providing freedom of choice as to health care providers is clearly within the scope of this power. An exercise of the police power is valid if the objective is proper and the means adopted to accomplish that object are rationally related to the end sought. Missouri Dental Board v. Alexander, 628 S.W.2d 646 (Mo. banc 1982). Forbidding health service corporations from discriminating against certain health care providers is a rational method of ensuring freedom of choice in the health care market.
Plaintiff cites Ketcham v. King County Medical Service Corp., 81 Wash.2d 565, 502 P.2d 1197 (1972), as authority that this type of "freedom of choice" statute unconstitutionally impairs contracts. We disagree with the logic of that decision. The Washington court viewed the purpose of the statute to be one of taking benefits from one class of providers and giving them to another. The opinion also revealed a strong bias against optometrists. The primary purpose of House Bill 127, as we see it, is to provide freedom of...
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