Cotter v. Blue Cross and Blue Shield of Michigan

• Decision Date: 05 December 1979
• Docket Number: Docket No. 78-1957
• Citation: 94 Mich.App. 129,288 N.W.2d 594
• Parties: Robert COTTER, Nancy Cotter and Shirley Vasileff, Plaintiffs-Appellants, v. BLUE CROSS AND BLUE SHIELD OF MICHIGAN and Thomas Jones, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 594

288 N.W.2d 594

94 Mich.App. 129

Robert COTTER, Nancy Cotter and Shirley Vasileff Plaintiffs-Appellants, v. BLUE CROSS AND BLUE SHIELD OF MICHIGAN and Thomas Jones Defendants-Appellees.

Docket No. 78-1957.

Court of Appeals of Michigan.

Dec. 5, 1979.

Rehearing Denied Jan. 17, 1980.

Released for Publication Feb. 28, 1980.

Richard Durant, Detroit, for plaintiffs-appellants.

Theodore W. Swift, Lansing, for Blue Cross and Blue Shield of Mich.

Harry G. Iwasko, Jr., Lansing, for Insurance Commissioner.

Before GILLIS, P. J., and V. J. BRENNAN and MacKENZIE, JJ.

V. J. BRENNAN, Judge.

On July 1, 1977, the plaintiffs, representing all Blue Cross and Blue Shield of Michigan (BC/BS) subscribers, filed a class action in Wayne County Circuit Court. An Ex parte restraining order to show cause was issued on July 1, 1977. The order enjoined BC/BS from excluding certain services rendered by chiropractors from insurance coverage. A show cause hearing was held on July 8, 1977. An order was entered on August 30, 1977, referring the matter to the defendant Thomas Jones, in his capacity as Insurance Commissioner.

The Commissioner held a full hearing on the matter on October 12, 1977, as ordered. The plaintiffs and BC/BS were present and were allowed to present evidence. On January 31, 1978, Jones issued an order prohibiting BC/BS from reimbursing subscribers for the services in question.

The defendants brought motions for summary judgment in Wayne County Circuit Court. On March 21, 1978, the defendants' motions for summary judgment were granted and the temporary injunction was dissolved. A judgment to that effect was entered on April 20, 1978. The plaintiffs now appeal this judgment.

Under the terms of the plaintiffs' contract with BC/BS, services rendered by physicians are reimbursable under certain conditions. The contract defines the term "physician" as follows:

"A 'Physician' is a doctor of medicine or osteopathy legally qualified and licensed to practice medicine and perform surgery at the time and place surgeries are performed. For the purposes hereof, a podiatrist, as defined in Act 115 Public Acts Michigan 1915 as amended and licensed thereunder, or licensed under similar Acts of other States wherein services are performed, or a doctor of chiropractic as defined in Act 145 Public Acts Michigan 1933 as amended and licensed thereunder, or licensed under similar Acts of other States wherein services are performed, will be deemed to be a physician If and to the extent that he shall render services hereunder which he is legally qualified to perform under said Act." (Emphasis added.)

Section 6 of the Chiropractic Act establishes the lawful scope of chiropractic practice in Michigan:

"Sec. 6 * * * for the purpose of this act chiropractic is defined as 'the locating of misaligned or displaced vertebrae of the human spine, the procedure preparatory to and the adjustment by hand of such misaligned or displaced vertebrae and surrounding bones or tissues, for the restoration and maintenance of health.' A licensed doctor of chiropractic under this act may use x-ray and such analytical instruments as are approved by the Michigan board of chiropractic examiners in the examination of patients solely for the purpose of locating misaligned or displaced vertebrae of the human spine and for the procedures preparatory thereto." M.C.L. § 338.156; M.S.A. § 14.596. ¹ The basis for the complaint is that the defendants BC/BS sent a notice to the plaintiffs and all other subscribers stating that the following services performed by chiropractors would be excluded from coverage commencing July 1, 1977:

"1. Emergency first-aid services for non-spinal injuries.

"2. Diagnostic x-rays of other than the spine ordered and/or performed by a chiropractor.

"3. Medical emergencies (non-traumatic) of any type.

"4. Blood handling charges.

"5. Diagnostic laboratory services ordered and/or performed by a chiropractor."

The complaint alleges that exclusion of these benefits would reduce the choice of medical care available to the plaintiffs in violation of the statute regulating medical care insurance corporations, M.C.L. § 550.301, Et seq.; M.S.A. § 24.591, Et seq. The plaintiffs also allege in the complaint that these changes unilaterally changed the conditions of their contract with BC/BS, thereby raising the rates that plaintiffs paid for the services which are covered.

The key issue is whether or not chiropractors are authorized under the Chiropractic Act to perform the services that BC/BS wishes to exclude from coverage. If a chiropractor may legally perform those services outlined in the statement of facts, BC/BS is obligated under the contract to reimburse its subscribers for those services. If chiropractors are not authorized to perform those services, a chiropractor performing those services does not fall within the contract definition of "physician". In that case, BC/BS is not obligated under the contract to pay for those services.

The lower court granted summary judgment based upon the failure to state a claim upon which relief could be granted. Therefore, GCR 1963, 117.2(1) is the controlling court rule. The plaintiffs allege that the lower court considered the wrong information when granting summary judgment under GCR 1963, 117.2(3), which allows for summary judgment where there is no genuine issue of a material fact. As the judgment was granted under the other subrule, these allegations of error are without merit.

The plaintiffs also allege that the lower court did not have primary jurisdiction to decide the case. They assert that the Michigan State Board of Chiropractic Examiners has primary jurisdiction to interpret the Chiropractic Act and define the parameters of the profession. The doctrine of primary jurisdiction is invoked where the regulatory agency has been authorized by statute to determine factual issues raised in the pleadings. Far East Conference v. United States, 342 U.S. 570, 574, 575, 72 S.Ct. 492, 494, 495, 96 L.Ed. 576 (1952), cited with approval in Attorney General v. Raguckas, 84 Mich.App. 618, 621-622, 270 N.W.2d 665 (1978). The Board is not authorized under the statute to define the scope of chiropractic. The same issue was addressed in Attorney General v. Recorder's Court Judge, 92 Mich.App. 42, 57, 285 N.W.2d 53 (1979), where the Court said,

"The scope of chiropractic was defined by statute, and the board was without authority to expand that definition by resolution."

See also, Attorney General v. Raguckas, at 622, 285 N.W.2d at 60.

Finally, the plaintiffs allege that the trial court erred in making its own determination of the scope of chiropractic. The...