Connecticut Business and Industries Ass'n, Inc. v. Commission on Hospitals and Health Care, 13769

• Decision Date: 01 May 1990
• Docket Number: No. 13769,13769
• Citation: 573 A.2d 736,214 Conn. 726
• Court: Connecticut Supreme Court
• Parties: CONNECTICUT BUSINESS AND INDUSTRIES ASSOCIATION, INC., et al. v. COMMISSION ON HOSPITALS AND HEALTH CARE, et al.

Page 736

573 A.2d 736

214 Conn. 726

CONNECTICUT BUSINESS AND INDUSTRIES ASSOCIATION, INC., et al. v. COMMISSION ON HOSPITALS AND HEALTH CARE, et al.

No. 13769.

Supreme Court of Connecticut.

Argued March 1, 1990.

Decided May 1, 1990.

Brian J. Donnell, with whom was Francis J. Mootz III, Hartford, for appellants (plaintiffs).

Thomas J. Ring, Asst. Atty. Gen., and William J. Doyle, with whom were J. Michael Eisner, New Haven, Paul E. Knag, Stanford, H. Kennedy Hudner, Charles W. Peterson, Hartford, Stephen E. Ronai, New Haven, Theodore M. Space, Sally S. King, Michael Kurs, Hartford, Ellen S. Aho, Westport, and, on the brief, Clarine Nardi Riddle, Atty. Gen., Richard J. Lynch, Asst. Atty. Gen., Hartford, Mary A. Crossley, New Haven, Paul D. Sanson, Hartford, Richard A. O'Connor, Michael S. McKenna, Danbury, Jeffrey Sienkiewicz, New Milford, Elliott B. Pollack, Hartford, David R. Levett, Westport, and Frank W. Murphy, Norwalk, for appellees (defendants).

Before SHEA, GLASS, DUPONT, SPALLONE and NORCOTT, JJ.

SHEA, Associate Justice.

The plaintiffs filed thirty-two appeals from final decisions of the defendant commission on hospitals and health care (CHHC) issued on December 6, 1988, establishing the rates to be charged for the fiscal year commencing October 1, 1988 by the thirty-two hospitals named as additional defendants in the appeals. Upon a motion by the defendants, the trial court dismissed the appeals for lack of subject matter jurisdiction, concluding that the plaintiffs lacked standing under General Statutes § 19a-158, ¹ which specifically authorizes appeals from CHHC decisions by "[a]ny health care facility or institution," and that, in any event, they were not "aggrieved," as required for an appeal under both § 19a-158 and General Statutes § 4-183(a), ² the latter of which the plaintiffs had relied upon in bringing these appeals. We do not address the first ground of the decision, but agree with the trial court in regard to the second ground, the failure of the plaintiffs to establish aggrievement. Accordingly, we find no error.

The facts, which were presented to the trial court in the complaint and in affidavits and exhibits submitted in conjunction with the motions to dismiss, are not disputed. The plaintiffs are the Connecticut Business and Industries Association, Inc., which represents employers who provide health insurance to their employees; Blue Cross and Blue Shield of Connecticut, Inc., an insurer that provides health insurance to those insured under the policies it has issued; and the Insurance Association of Connecticut, a trade association whose members are domestic insurers that provide health insurance to their policy holders.

During August and September, 1988, CHHC issued the 1989 rate orders, applicable to each Connecticut hospital for the fiscal year October 1, 1988, to September 30, 1989. These rates were established in accordance with formulae set forth in the statutes and regulations as applied to the data concerning its past financial operations that each hospital is required to submit to CHHC in order to implement the prospective payment system adopted in 1984 for hospitals in this state. See General Statutes §§ 19a-165 through 19a-165v. Thirty-two of the hospitals made timely requests for reconsideration of their rate orders. Each rate order had set forth the date on which a public hearing would be scheduled if a particular hospital should request reconsideration of its rates. CHHC granted the requests for reconsideration and issued temporary stays of the rate orders. The plaintiffs sought to participate in the reconsideration proceedings, but CHHC denied them this opportunity. During October, 1988, CHHC cancelled the public hearings on reconsideration that had been previously scheduled and conducted informal negotiations with the hospitals concerning their requests for reconsideration. As a result of these negotiations, CHHC entered into an "agreed settlement" with each hospital regarding its request for reconsideration and revised the original 1989 rate orders by increasing the rates in order to allow the hospitals additional revenue. These settlements were approved in formal decisions issued by CHHC in December, 1988.

The plaintiffs filed appeals from the revisions of the original hospital rate orders effectuated by the settlements. The thirty-two appeals were consolidated for the purpose of resolving the jurisdictional issues raised by the defendants' motions to dismiss. Following the rendition of judgments dismissing each appeal for lack of subject matter jurisdiction, the plaintiffs filed a joint appeal seeking review of that determination.

It is fundamental that, in order to have standing to bring an administrative appeal, a person must be aggrieved. Zoning Board of Appeals v. Freedom of Information Commission, 198 Conn. 498, 501, 503 A.2d 1161 (1986); Hartford Distributors, Inc. v. Liquor Control Commission, 177 Conn. 616, 622, 419 A.2d 346 (1979). Both § 4-183(a), upon which the plaintiffs rely for authority to appeal, and § 19a-158, which the defendants claim is the exclusive basis for appealing from a CHHC decision, expressly require that one be "aggrieved" by a "final decision" in order to appeal. In the absence of such aggrievement, the appeal must be dismissed for lack of subject matter jurisdiction. Local 1303 & Local 1378 v. FOIC, 191 Conn. 173, 177, 463 A.2d 613 (1983).

"The fundamental test by which the status of aggrievement for purposes of qualifying to take an appeal from an administrative order or regulation is determined encompasses a well-settled twofold determination. First, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in the subject matter of the decision, as distinguished from a general interest, such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the decision." Nader v. Altermatt, 166 Conn. 43, 51, 347 A.2d 89 (1974). The trial court concluded that the plaintiffs had not passed the first part of this test "in that they failed to demonstrate a specific, personal and legal interest in the subject matter of the decision as distinguished from a general interest, such as the concern of all members of the community as a whole." The court found it unnecessary to consider the second part.

We agree with the trial court that the plaintiffs have no interest in the decisions of CHHC revising the hospital rates for the 1989 fiscal year beginning on October 1, 1988, that would satisfy the requirement of aggrievement. The fact that they are obligated contractually to pay the rates established by CHHC in these decisions gives them no more standing than their policyholders or other contractual beneficiaries would have to challenge the decision. These beneficiaries, in turn, have no greater interest than those members of the general public who have no health insurance and must pay the rates established. The financial impact of an increase in hospital rates is borne by all members of the public when they require hospitalization and are presented with bills for the services rendered. The agreements the plaintiffs have made to bear or share these hospitalization expenses with their policyholders or other contractual obligees do not create aggrievement for the purpose of an appeal unless those who pay directly for their hospitalization would be similarly aggrieved.

The plaintiffs do not contend that members of the public can be deemed aggrieved by an increase in hospital rates so that they would be entitled to appeal. The rate setting procedures designed by the legislature in establishing the prospective payment system for hospitals do not provide for public hearings before those rates are initially established by CHHC. The rates are determined entirely upon the basis of the data submitted by the hospitals. General Statutes §§ 19a-165a and 19a-165b. Such a procedure does not constitute a "contested case," which is a prerequisite for an appeal pursuant to § 4-183(a), upon which the plaintiffs rely. It is not a proceeding "in which the legal rights, duties or privileges of a party are required by statute to be determined by an agency after an opportunity for hearing or in which a hearing is in fact held ..."; (emphasis added); and thus does not satisfy the definition of a "contested case" in General Statutes § 4-166(2). ³ The statutes provided no opportunity for hearings before the initial rate orders were issued by CHHC in...