Idaho Cardiology Associates v. Idaho Physicians Network, Inc.

• Decision Date: 22 February 2005
• Docket Number: No. 30365.,30365.
• Citation: 108 P.3d 370,141 Idaho 223
• Parties: IDAHO CARDIOLOGY ASSOCIATES, P.A., an Idaho corporation, Plaintiff-Appellant, v. IDAHO PHYSICIANS NETWORK, INC., an Idaho corporation, Defendant-Respondent.
• Court: Idaho Supreme Court

108 P.3d 370

141 Idaho 223

IDAHO CARDIOLOGY ASSOCIATES, P.A., an Idaho corporation, Plaintiff-Appellant, v. IDAHO PHYSICIANS NETWORK, INC., an Idaho corporation, Defendant-Respondent.

No. 30365.

Supreme Court of Idaho, Boise, January 2005 Term.

February 22, 2005.

Eberle, Berlin, Kading, Turnbow and McKlveen, Chtd., Boise, for appellant. Warren E. Jones argued.

Jones, Gledhill, Hess, Andrews, Fuhrman, Bradbury & Eiden, PA., Boise, for respondent. Kimball D. Gourley argued.

BURDICK, Justice.

This case arises from a dispute between Idaho Cardiology Associates (Cardiology) and Idaho Physicians Network (Physicians Network), wherein Physicians Network refused to admit Cardiology into its network. Cardiology sued Physicians Network arguing Physicians Network was subject to the "any willing provider" statute, I.C. § 41-3927, and therefore Physicians Network must enter into provider service agreements with Cardiology and its physicians. The district court granted summary judgment in Physicians Network's favor, finding it was not subject to the statute. Cardiology timely appealed. We hold the district court erred in granting summary judgment. We reverse the order granting summary judgment, vacate the judgment in favor of the respondent, and remand this case for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

Cardiology is a professional medical corporation comprised of seventeen physicians practicing cardiology medicine. Physicians Network is a marketing and administrative entity that markets the services of health care providers to insurance companies and self-insured employers. In 2003, Physicians Network provided a list of physicians to 52 providers (insurance companies). Physicians Network affiliated with Primary Health, Inc. (Primary Health) in 1998; Primary Health is Physicians Network's majority shareholder owning 60% of the company.

Primary Health is the umbrella corporation for Primary Health Network. Primary Health Network is the insurance arm of Primary Health and one of Physicians Network's 52 providers. Physicians Network and Primary Health Network are subsidiary corporations of Primary Health. Physicians Network is the only company providing physician names to Primary Health Network.

In 1996, Cardiology contracted with Primary Health to provide cardiology services to persons enrolled in certain benefit plans. In 1998, the contract was assigned to Physicians Network. In 1999, Physicians Network admitted it was subject to the any willing provider statute and could not negotiate different contract terms with its providers. In a letter written to Cardiology in response to an earlier complaint which arose before the instant dispute, Physicians Network informed Cardiology that the "Any Willing Provider law essentially makes it impossible for [Physicians Network] to cut special deals with providers since all other providers are then entitled to contract on the same terms." Subsequently Cardiology voluntarily withdrew from Physicians Network.

In 2001, Cardiology applied for readmission to Physicians Network, but Physicians Network denied the request. The stationary used contained Idaho Physicians Network's name at the top and at the bottom it stated: "Administered by Primary Health, Inc." Physicians Network has panels for particular specialty practices; each panel has only a limited number of physicians. Physicians Network denied admission to Cardiology because the cardiology panel was "closed." Cardiology filed suit, seeking to invoke the any willing provider statute in order to compel Physicians Network to accept Cardiology as a qualified provider.

Both Physicians Network and Cardiology moved for summary judgment. The district court granted judgment in Physicians Network's favor finding the any willing provider statute inapplicable to Physicians Network. Therefore, Physicians Network did not have to admit Cardiology as a qualified willing provider into the network.

Cardiology asks this Court to determine if the district court erred in granting summary judgment.

ISSUES

I. Did the district court err in granting summary judgment because Physicians Network must comply with the any willing provider statute I.C. § 41-3927?

II. Should either party be awarded attorney fees and should the district court's award of costs to Physicians Network be reversed on appeal?

STANDARD OF REVIEW

The issue presented on appeal involves the interpretation and application of the any willing provider statute I.C. § 41-3927. "The determination of the meaning of a statute and its application is a matter of law over which this Court exercises free review." Woodburn v. Manco, 137 Idaho 502, 504, 50 P.3d 997, 999 (2002). The words must be given their plain, usual, and ordinary meaning, and the statute must be construed as a whole. State v. Hart, 135 Idaho 827, 829, 25 P.3d 850, 852 (2001). The Court's primary duty in interpreting a statute is to give effect to the legislative intent and purpose of the statute. Adamson v. Blanchard, 133 Idaho 602, 605, 990 P.2d 1213, 1216 (1999); Bannock County v. City of Pocatello, 110 Idaho 292, 294, 715 P.2d 962, 964 (1986). The legislature's intent is ascertained from the statutory language and the Court may seek edification from the statute's legislative history and historical content at enactment. Adamson, 133 Idaho at 605, 990 P.2d at 1216.

ANALYSIS

I. THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT BECAUSE PHYSICIANS NETWORK IS PART OF A MANAGED CARE ORGANIZATION AND MUST COMPLY WITH THE ANY WILLING PROVIDER STATUTE.

Cardiology appeals the district court's decision granting summary judgment to Physicians Network. Cardiology argues the district court erred in finding the any willing provider statute inapplicable to Physicians Network. Cardiology contends that Physicians Network is part of a "managed care organization" and thus, by its plain language, the any willing provider statute is applicable to Physicians Network. Alternatively, Cardiology argues the any willing provider statute is applicable to Physicians Network by virtue of I.C. § 41-3904.

In 1994, the legislature adopted the any willing provider statute, I.C. § 41-3927. The statute provides in pertinent part:

Any managed care organization issuing benefits pursuant to the provisions of this chapter shall be ready and willing at all times to enter into care provider service agreements with all qualified providers of the category or categories which are necessary to provide the health care services covered by an organization if the health care providers: are qualified under the laws of the state of Idaho, desire to become participant providers of the organization, meet the requirements of the organization, and practice within the general area served by the organization.

I.C. § 41-3927 (emphasis added).

"Managed care organization" means a public or private person or organization which offers a managed care plan. Unless otherwise specifically stated, the provisions of this chapter shall apply to any person or organization offering a managed care plan, whether or not a certificate of authority to offer the plan is required under this chapter.

I.C. § 41-3903(14) (emphasis added). A person is defined as "any natural or artificial person including, but not limited to, individuals, partnerships, associations, corporations or other legally recognized entities." I.C. § 41-3903(17). Notably, the word "organization" is not defined.

"Managed care plan" means a contract of coverage given to an individual, family or group of covered individuals pursuant to which a member is entitled to receive a defined set of health care benefits through an organized system of health care providers in exchange for defined consideration and which requires the member to use, or creates financial incentives for the member to use, health care providers owned, managed, employed by or under contract with the managed care organization. A person holding a license to transact disability insurance offering a health plan that creates financial incentives to use contracting providers may elect to file the plan as a nonmanaged care plan not subject to the provisions of this chapter if the health plan reimburses providers solely on a fee for service basis and does not require the selection of a primary care provider. The election to file a health plan as a nonmanaged care plan shall be made in writing at the time the plan is filed with the director pursuant to chapter 18, title 41, Idaho Code.

I.C. § 41-3903(15).

"In construing a statute, the Supreme Court may examine the language used, reasonableness of the proposed interpretations, and the policy behind the statutes." Sweitzer v. Dean, 118 Idaho 568, 571-572, 798 P.2d 27, 30-31 (1990). "It is a cardinal rule of statutory construction that all parts of a statute should be given meaning." Robbins v. County of Blaine, 134 Idaho 113, 120, 996 P.2d 813, 820 (2000). We will construe a statute "so that effect is given to its provisions, and no part is rendered superfluous or insignificant." Petersen v. Franklin County, 130 Idaho 176, 181, 938 P.2d 1214, 1219 (1997).

Our legislature defined managed care organization to mean either a "person" or an "organization." I.C. § 41-3903(14). The legislature did define "person," but failed to define "organization." The legislature defined person as "individuals, partnerships, associations, corporations or other legally recognized entities." I.C. § 41-3903(17). Contrary to Primary Health's assertion, "organization" must mean something other than a business entity already embraced by the term "person." To construe the statute otherwise would render the term "organization" superfluous, which we will not do.

BLACKS LAW DICTIONARY 1133 (8th ed.2004) defines an organization as "1. A body of persons (such as a union or corporation) formed for a...