Massengale v. BOARD OF EXAMINERS IN OPTOMETRY

• Decision Date: 03 July 2001
• Docket Number: No. 92,854.,92,854.
• Citation: 29 P.3d 558,2001 OK 55
• Parties: Curt MASSENGALE, O.D., Appellant, v. OKLAHOMA BOARD OF EXAMINERS IN OPTOMETRY, Appellee.
• Court: Oklahoma Supreme Court

29 P.3d 558

2001 OK 55

Curt MASSENGALE, O.D., Appellant, v. OKLAHOMA BOARD OF EXAMINERS IN OPTOMETRY, Appellee.

No. 92,854.

Supreme Court of Oklahoma.

July 3, 2001.

Graydon Dean Luthey, Jr., Mark K. Blongewicz, Ronald A. White, Tulsa, Oklahoma, for Appellant.

Daniel J. Gamino, Todd Markum, Oklahoma City, Oklahoma, for Appellee.

KAUGER, J.:

¶ 1 Certiorari was granted to address two issues:¹ 1) whether an agreement to allow LensCrafters to negotiate third-party provider contracts² constitutes a prohibited referral agreement under 59 O.S.1991 § 595³ or OAC 505:10-5-4;⁴ and 2) whether the appellant's, Curt Massengale (Massengale/optometrist), relationship with the optical supplier, LensCrafters, has degraded or reduced the quality of visual care in violation of 59 O.S.1991 § 593.⁵ We determine that an optometrist's agreement to allow an optical supplier to negotiate a third-party provider agreement, not intended to govern the doctor's professional judgment, and merely providing a list of approved physicians contained within the insurer's network, is not prohibited under 59 O.S.1991 § 595 or OAC 505:10-5-4. The Court of Civil Appeals applied the clear and convincing standard of proof required by Johnson v. Board of Governors of Registered Dentists, 1996 OK 41, ¶ 19, 913 P.2d 1339 in professional licensure causes. Further, a record devoid of any evidence of substandard clinical practices, unsatisfied patients, or testimony indicating that any of the optometrist's employees actually participated in an incentive program sponsored by the optical supplier, will not support professional discipline.

FACTS

¶ 2 In 1991, the appellee, Oklahoma Board of Examiners in Optometry (Board), sought an opinion from the Attorney General of Oklahoma addressing the issue of whether a licensed optometrist could lease or sublease office space from a retail optical supplier or seller. On December 5, 1991, the Attorney General issued an opinion⁶ finding that, under 59 O.S.1981 § 596⁷ and 59 O.S.1981 § 944,⁸ a licensed optometrist was prohibited from leasing or subleasing office space from a retail merchandiser, including a retail optical supplier or seller. The Board issued a memorandum to all licensed optometrists on February 27, 1992, advising the practitioners of the opinion and giving all licensees until May 14, 1992, to remove themselves from any situation which could be perceived to violate the Attorney General's findings.⁹

¶ 3 Having given notice of the Attorney General's opinion, the Board voted in May of 1992 to conduct disciplinary hearings against the appellant, Curt Massengale (Massengale/optometrist) and three other optometrists.¹⁰ All of the optometrists subleased offices in shopping malls from LensCrafters or a similar optical supplier. Massengale challenged the Board's authority in federal court. On January 21, 1993, the cause was dismissed for failure to exhaust administrative remedies.¹¹ However, LensCrafters was successful in challenging the Attorney General's opinion in state court — in March of 1995, the district court ruled that the opinion did not correctly reflect Oklahoma law and that it should be considered null and void. Although no longer bound by the opinion,¹² the Board did not issue notice of the district court's ruling to Oklahoma optometrists. Rather, on January 13, 1997, a disciplinary hearing commenced against the four optometrists.

¶ 4 Following a hearing and a review of the hearing examiner's recommendations, the Board found that Massengale's agreements with LensCrafters had so integrated his practice with the optical company as to exhibit the appearance of commercialism in a manner which might degrade or reduce the quality of patient care in violation of 59 O.S. 1991 § 593. Further, the Board determined that by allowing LensCrafters to negotiate third-party provider agreements, the optometrist had entered into a referral agreement prohibited by 59 O.S.1991 § 595 and OAC 505:10-5-4. The Board suspended the optometrist's license for one year with a proviso that ten months of the suspension be deferred during a three-year probationary period if Massengale severed all contractual arrangements with LensCrafters. The trial judge, Honorable Daniel L. Owens, affirmed. The Court of Civil Appeals upheld the Board's determination that patients had received substandard care under the doctor's arrangements with LensCrafters. Nevertheless, it reversed on the issues of commercialism and unlawful referral arrangements for lack of sufficient evidence and remanded with instructions. We granted certiorari to petitions filed by Massengale and by the Board on March 27, 2001.

I.

¶ 5 AN OPTOMETRIST'S AGREEMENT TO ALLOW AN OPTICAL SUPPLIER TO NEGOTIATE THIRD-PARTY PROVIDER CONTRACTS SUBJECT TO MUTUALLY AGREED UPON TERMS IN WHICH THE OPTOMETRIST APPEARS AS ONE OF AN APPROVED LIST OF SERVICE PROVIDERS AND IN WHICH THERE IS NO INTERFERENCE WITH THE OPTOMETRISTS PROFESSIONAL JUDGMENT DOES NOT CONSTITUTE A PROHIBITED REFERRAL AGREEMENT UNDER 59 O.S.1991 § 595 OR OAC 505:10-5-4.

¶ 6 The Board does not challenge the Court of Civil Appeals determination that there is insufficient evidence in the record to support a finding that Massengale violated the prohibition in 59 O.S.1991 § 593¹³ against the appearance of commercialism. Although the Board asserts in the conclusion to its petition for certiorari that there is clear and convincing evidence in the record sufficient to support discipline under the statute and that the language of the statute does not suffer from constitutional infirmity, it does not argue in either its petition for certiorari or in its objection to Massengale's certiorari plea that the doctor should be disciplined for having allowed his practice to have the "appearance of commercialism". Nevertheless, we note that courts have had difficulty in reducing the term "commercialism" to a finite definition or a simple formula. It may be equated with: the solicitation of money or business;¹⁴ location;¹⁵ advertising;¹⁶ or connotations of profit.¹⁷

¶ 7 The sole issue upon which the Board seeks certiorari concerns prohibited referral agreements under 59 O.S.1991 § 595 and OAC 505:10-5-4. It argues that the statute and the rule prohibit all agreements for referrals between an optical supplier and an optometrist — including third-party provider agreements negotiated by an optical supplier on behalf of an optometrist. Massengale contends that there is nothing either in the plain language of the statute or the rule prohibiting LensCrafters from negotiating an agreement resulting in a patient being provided with a list of optometrists approved to provide services under an insurance plan. We agree.

¶ 8 Section 595 prohibits any agreement, contract, arrangement, practice or understanding with an optical supplier which provides for referrals between optometrists and optical suppliers.¹⁸ OAC 505:10-5-4 restricts optometrists from using a commercial business as a "feeder".¹⁹ Neither provision specifically addresses third-party provider agreements nor their negotiation. The Board does not assert that optometrists are prohibited by either the statute or the rule from allowing themselves to be listed as service providers if the third-party provider agreements are negotiated by an entity other than an optical supplier²⁰ or that all referrals — even those from an optical supplier to an optometrist — are prohibited. Rather, the clear language of § 595 prohibits only "agreement[s], contract[s], arrangement[s], practice[s], or understanding[s]" that the referrals will be made.

¶ 9 Research reveals no case in which the issue of whether allowing an optical supplier or some other entity to negotiate a third-party provider agreement equates to an agreement for the referral of a particular physician or service provider. However, an examination of the nature of third-party provider agreements renders the Board's assertion that allowing an optical supplier to act as an optometrist's agent in negotiating such contracts equates to an agreement to make referrals unconvincing.

¶ 10 Third-party provider agreements are agreements between an insurer and a provider of goods or services such as a hospital, doctor, optometrist or dentist. The third-party provider is not a party to the insurance contract but agrees to provide, through the third-party provider agreement, a good or service to a policyholder of the insurance company for a set fee with reimbursement to come from the insurer.²¹ Some type of a provider agreement is necessary for insurance companies to provide insureds with a service benefit plan. Policyholders are basically unconcerned with the contract between the provider and the insurer except to the extent that these agreements ultimately inure to the policyholders benefit in the form of lower premiums.²²

¶ 11 A referral is the act of directing attention to something or someone.²³ If a referral exists in the third-party provider context, it is through the listing of the provider on the insurance company's approved list. Here, although LensCrafters may have negotiated the contract or administered its provisions, the agreement was between the insurance company and Massengale. It is the insurer rather than LensCrafters which ultimately contracted with the optometrist for the listing. The Board does not contend that a referral by the insurance company of the optometrist is prohibited under either 59 O.S. 1991 § 595 or OAC 505:10-5-4.

¶ 12 Massengale did not compromise, through his agreement with the optical supplier, the overriding goal of the Legislature in regulating optometrists — to assure and protect the personal and professional relationship between an optometrist and a patient with the individual's visual care being the prime consideration.²⁴ Pursuant to the operating agreement between Massengale and LensCrafters, the optometrist agreed to cooperate in third-party programs arranged by the optical supplier provided...