MD. INSURANCE v. MD INDIVIDUAL PRACTICE

• Decision Date: 06 December 1999
• Docket Number: No. 160,160
• Citation: 129 Md. App. 348,742 A.2d 22
• Parties: MARYLAND INSURANCE ADMINISTRATION v. MARYLAND INDIVIDUAL PRACTICE ASSOCIATION, INC.
• Court: Court of Special Appeals of Maryland

742 A.2d 22

129 Md. App. 348

MARYLAND INSURANCE ADMINISTRATION v. MARYLAND INDIVIDUAL PRACTICE ASSOCIATION, INC.

No. 160, Sept. Term, 1999.

Court of Special Appeals of Maryland.

December 6, 1999.

Dorothy J. Wilson, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on the briefs), Baltimore, for Appellant.

M. Albert Figinski (Saul, Ewing, Weinberg & Green, on the brief), Baltimore, for Appellee.

Argued before MOYLAN, DAVIS and EYLER, JJ.

EYLER, Judge.

The two-part issue presented by this appeal, one of first impression, is whether (1) claims for payment submitted by a health care provider to a health maintenance organization ("HMO") that are subject to a pending workers' compensation claim are "payable by workers' compensation" within the meaning of an exclusion in the health plan and (2) whether, pursuant to Md.Code (1996 Repl.Vol., 1998 Cum. Supp.) §§ 19-710.1 and 19-712.1 of the Health-General II Article, they must be paid within thirty days regardless of the answer to (1). We hold that a claim comes within such an exclusion when legal liability for workers' compensation arises and payment is not required within thirty days.

On February 7, 1996, Philip J. Lunz ("Lunz"), an employee of Frederick Memorial Hospital, suffered an injury to his back while working at the hospital. On March 8, 1996, Lunz filed a workers' compensation claim with the Maryland Workers' Compensation Commission. On March 19, 1996, the compensation carrier for Frederick Memorial Hospital, Group Benefit Services, Inc., filed issues contesting Lunz's claim. On April 2, 1996, Lunz visited Orthopedic Specialists of Frederick ("Orthopedic Specialists"), a specialist physicians' group. Unaware that the compensation claim was pending, Maryland Individual Practice Association, Inc. ("MD-IPA"), appellee, Lunz's health insurer, authorized treatment by Orthopedic Specialists, a group under contract with MD-IPA. On April 3, 1996, Orthopedic Specialists performed a lumbar laminectomy and discectomy on Lunz.

After Lunz's surgery had been performed, MD-IPA learned that he had a pending workers' compensation claim. MD-IPA advised Orthopedic Specialists that it would delay payment until the issue of compensation was determined.

On May 9, 1996, Orthopedic Specialists filed a complaint with the Maryland Insurance Administration ("MIA"), appellant, concerning MD-IPA's decision to delay payment. On December 4, 1996, the Workers' Compensation Commission awarded Lunz workers' compensation benefits and directed Lunz's employer to "pay medical expenses in accordance with the medical fee guide of the Commission." On January 14, 1997, Orthopedic Specialists received payment from Lunz's employer for services rendered in accordance with the workers' compensation award.

On August 26, 1997, Orthopedic Specialists filed a second complaint with MIA, regarding what was described as MD-IPA's general practice of refusing to pay claims because of pending workers' compensation claims. On March 31, 1998, MIA issued an order directing MD-IPA to "cease and desist from its policy and practice of refusing to pay claims in which a determination needs to be made as to whether or not certain services are payable under Workers' Compensation." On July 8, 1998, MIA issued a final order upholding the cease and desist order and ordered MD-IPA to pay properly submitted claims within 30 days regardless of the pendency of a workers' compensation claim.

On July 10, 1998, MD-IPA filed a petition for judicial review of MIA's decision in the Circuit Court for Baltimore City. On February 22, 1999, the circuit court reversed MIA's order. The court construed the terms of the health plan provided by MD-IPA and concluded that claims payable by workers' compensation were not covered services and, thus, not subject to the thirty-day payment provisions of §§ 19-710.1 and 19-712.1 of the Health-General II Article.

On March 18, 1999, MIA noted this appeal.

DISCUSSION

MIA argues that the issue before us is one of statutory interpretation. It argues that, in accordance with Health-Gen. §§ 19-710.1 and 19-712.1, MD-IPA is required to pay claims submitted by health care providers for all medically necessary services rendered within thirty days after receipt of the claim, regardless of whether responsibility for payment of the claim is at issue in a pending workers' compensation case. According to MIA, §§ 19-710.1 and 19-712.1 are clear and unambiguous and contain no language expressly or impliedly creating any exclusion for workers' compensation claims. The Legislature could have and would have expressly provided such an exclusion, according to MIA, if the Legislature so desired.

Further, MIA maintains that the term "payable," as used in an exclusion contained in MD-IPA's health plan which excludes the cost of services "payable by Workers' Compensation," applies only when there is an obligation to pay as determined by an award of the Workers' Compensation Commission. MIA notes that the Workers' Compensation Commission has exclusive jurisdiction to determine when a workplace injury is compensable. Finally, MIA contends that MD-IPA's dispute concerning the identity of the proper payor of a claim is not a good faith dispute concerning the legitimacy of the claim or the appropriate amount of reimbursement and, thus, does not fall within any of the exceptions to the prompt payment requirement.

MD-IPA argues that the circuit court made the proper decision, because the relevant statutes required payment of claims only for covered services. MD-IPA maintains that any services rendered to members that are payable by workers' compensation are specifically excluded from coverage and, consequently, not subject to the statutory thirty-day payment requirement. We agree with MD-IPA and affirm the circuit court's decision.

A. Standard of Review.

Our standard of review of administrative decisions was set out at length in White v. North, 121 Md.App. 196, 708 A.2d 1093, cert. granted, 351 Md. 7, 715 A.2d 965 (1998):

Our role in reviewing an administrative decision "is precisely the same as that of the circuit court." This means we must review the administrative decision itself.

In its judicial review of an agency's action, a court may not uphold an agency decision unless it is sustainable on the agency's actual findings and for reasons advanced by the agency in support of its decision. In reviewing the decisions of administrative agencies, the court must accept the agency's findings of fact when such findings are supported by substantial evidence in the record.

In assessing whether the Board's decision is supported by substantial evidence, we apply the rule that substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." In other words, the scope of review "is limited `to whether a reasoning mind could have reached the factual conclusion the agency reached'."

We must review the agency's decision in a light most favorable to the agency, since "decisions of administrative agencies are prima facie correct." In applying the substantial evidence test, we do not substitute our judgment for the expertise of the agency, for the test is a deferential one, requiring "`restrained and disciplined judicial judgment so as not to interfere with the agency's factual conclusions.'" This deference applies not only to agency fact-finding, but to the drawing of inferences from the facts as well. "Where inconsistent inferences from the same evidence can be drawn, it is for the agency to draw the inferences." When the agency's decision is predicated solely on an error of law, however, no deference is appropriate and the reviewing court may substitute its judgment for that of the agency.

Id. at 219-21, 708 A.2d 1093 (citations omitted).

The issues before us are issues of law.

B. Statutory Interpretation.

The cardinal rule of statutory interpretation is to ascertain and give effect to the intention of the Legislature. Degren v. State, 352 Md. 400, 417, 722 A.2d 887 (1999); Wesley Chapel v. Baltimore, 347 Md. 125, 137, 699 A.2d 434(1997). "Where the statutory language is plain and free from ambiguity, and expresses a definite and simple meaning, courts do not normally look beyond the words of the statute itself to determine legislative intent." Degren, 352 Md. at 417, 722 A.2d 887. If "the words of the statute are susceptible to more than one meaning, it is necessary to consider their meaning and effect `in light of the setting, the objectives and [the] purpose of the enactment.'" Wesley Chapel, 347 Md. at 137, 699 A.2d 434 (quoting Tucker v. Fireman's Fund Ins. Co., 308 Md. 69, 75, 517 A.2d 730 (1986) (alteration in original)). Therefore, we construe the statute as a whole and interpret each of its provisions in the context of the entire statutory scheme. Blondell v. Baltimore Police Dept., 341 Md. 680, 691, 672 A.2d 639 (1996). The Court of Appeals has stated:

If the language alone does not provide sufficient information on the Legislature's intent, then courts will look to other sources to discern the Legislature's purpose.... Because the meanings of even common words may be context-dependent, ... we often proceed to consider other external manifestations of legislative intent, such as the amendment history of the statute, its relationship to prior and subsequent law, and its structure.

Armstead v. State, 342 Md. 38, 56, 673 A.2d 221 (1996) (internal quotation marks and citations omitted).

Finally, "[c]ommon sense must guide us in our interpretation of statutes, and `we seek to avoid constructions that are illogical, unreasonable, or inconsistent with common sense.'" Marriott Employees Federal Credit Union v. Motor Vehicle Administration, 346 Md. 437, 445, 697 A.2d 455 (1997)(quoting Frost v. State, 336 Md. 125, 137, 647 A.2d 106 (1994)).

C. §§ 19-710.1 and 19-712.1.

We agree with MIA that the statutes are clear and susceptible of but one interpretation,...