Northeast Georgia Cancer Care, LLC v. Blue Cross & Blue Shield of Georgia, Inc.

• Decision Date: 26 March 2009
• Docket Number: No. A08A1789.,A08A1789.
• Citation: 297 Ga. App. 28,676 S.E.2d 428
• Parties: NORTHEAST GEORGIA CANCER CARE, LLC v. BLUE CROSS & BLUE SHIELD OF GEORGIA, INC. et al.
• Court: Georgia Court of Appeals

676 S.E.2d 428

297 Ga. App. 28

NORTHEAST GEORGIA CANCER CARE, LLC v. BLUE CROSS & BLUE SHIELD OF GEORGIA, INC. et al.

No. A08A1789.

Court of Appeals of Georgia.

March 26, 2009.

Blasingame, Burch, Garrard & Ashley, E. Davison Burch, King & Spalding, Athens, James Walton Boswell III, Atlanta, for appellant.

McKenna, Long & Aldridge, Bruce Perrin Brown, James Andrew Washburn, Jeffrey Ronald Baxter, Cook, Noell, Tolley & Bates, Atlanta, J. Vincent Cook, Athens, for appellees.

Donald J. Palmisano, Atlanta, Brian W. Looby, amici curiae.

BERNES, Judge.

Northeast Georgia Cancer Care, LLC filed the instant lawsuit against Blue Cross & Blue Shield of Georgia, Inc. and Blue Cross and Blue Shield Healthcare Plan of Georgia, Inc. (collectively "Blue Cross"), seeking a declaratory judgment and alleging claims of breach of legal duty, tortious interference with business relations, and unfair trade practices. Pursuant to these claims, Northeast challenges Blue Cross's refusal to allow Northeast and its medical oncologists to participate as an approved health care provider for Blue Cross's HMO network. Blue Cross filed a motion to dismiss Northeast's claims, which the trial court granted. For the reasons set forth below, we affirm.

OCGA § 9-11-12(b)(6) provides that an action can be dismissed upon the merits where the complaint fails to state a claim upon which relief can be granted. Dismissal is appropriate only where a complaint shows with certainty that the plaintiff would not be entitled to relief under any state of facts that could be proven in support of his claim.... [W]e review the dismissal de novo, construing the complaint's allegations and all possible inferences therefrom in favor of the plaintiff.

(Citations and punctuation omitted.) Walker County v. Tri-State Crematory, 284 Ga.App. 34, 35, 643 S.E.2d 324 (2007).

So viewed, Northeast's complaint, as amended, alleges that Northeast is a group of cancer and blood disorder treatment specialists whose practice consists of medical and radiation oncologists. Their main office is located in Athens; however, they have satellite offices throughout the state. From 2002 to 2007, Northeast participated as an approved health care provider in Blue Cross's health maintenance organization ("HMO") and preferred provider organization ("PPO") networks. In 2003, a dispute over payments and reimbursements arose between the parties. According to Northeast, Blue Cross breached the reimbursement provisions of their provider contracts. As a result of the dispute, Northeast terminated its provider contracts with Blue Cross, effective April 30, 2007.

Eventually, the parties settled the payment and reimbursement dispute. Thereafter, Northeast attempted to negotiate new provider contracts with Blue Cross. Although Northeast previously had been the only Blue Cross cancer care provider in the Athens area, another entity, Georgia Cancer Specialists ("GCS"), opened an office in Athens in May 2007. Blue Cross entered into an exclusive one-year contract with GCS to provide medical oncology services to its HMO members in the Athens area from July 1, 2007 until July 1, 2008. As a result of the exclusive contract with GCS, Blue Cross informed Northeast that the HMO network was closed and excluded Northeast and its medical oncologists from participating in the HMO network.

Blue Cross later extended contracts allowing Northeast's individual radiation oncologists to participate as providers in the HMO, PPO, and PAR networks, and allowing the medical oncologists to participate as providers in the PPO and PAR networks. Northeast as an entity, however, continued to be excluded from Blue Cross's insurance plans.

Northeast filed suit against Blue Cross, seeking a declaratory judgment as to its right to participate as an HMO provider under Georgia's Any Willing Provider statute (the "AWP statute"). Northeast also alleged claims of breach of a legal duty for failure to comply with the AWP statute, tortious interference with business relations, and violations of Georgia's Uniform Deceptive Trade Practices Act ("UDTPA").¹ Blue Cross moved for dismissal of these claims, and the trial court granted the motion. This appeal followed.

1. In its declaratory judgment claim, Northeast sought a statutory construction of the AWP statute, OCGA § 33-20-16.² According to Northeast, the AWP statute mandates that Northeast and its medical oncologists be allowed to participate as providers in the Blue Cross HMO network under the same terms and conditions offered to other participating physicians. Blue Cross argues, however, that Northeast's claim is procedurally and substantively barred since Northeast failed to exhaust its administrative remedies before the Insurance Commissioner and since the AWP statute does not apply to HMOs. We agree that Northeast's claim was procedurally barred by the failure to exhaust administrative remedies. Thus, dismissal of the claim was proper.³

OCGA § 33-20-30 sets forth the procedure for resolving disputes arising from the alleged violation of statutes regulating insurance health care plans under the Health Care Plan Act, OCGA § 33-20-1 et seq.:

Any dispute arising within the purview of this chapter with reference to the regulation and supervision of any health care corporation shall within 30 days after such dispute arises be submitted by the aggrieved person to the Commissioner for his decision with reference thereto, provided nothing in this Code section shall authorize or require the Commissioner to determine the contractual rights between the parties interested in any such corporations. After proper notice and hearing, any decisions and order of the Commissioner made pursuant to this chapter shall be binding on the persons involved unless set aside on review as provided by this Code section.

OCGA § 33-20-30 applies to disputes concerning the regulation and supervision of HMOs pursuant to OCGA § 33-21-28(a).⁴ And, significantly, the Insurance Rules and Regulations provide a procedure in which an interested person may obtain a declaratory ruling by the Commissioner as to the applicability of any statutory provision. See Ga. Comp. R. & Regs. r. 120-2-2-.05(2).⁵ Accordingly, Northeast was first required to submit its dispute to the Insurance Commissioner for a hearing and resolution in accordance with this mandated statutory and regulatory scheme.

Northeast emphasizes that OCGA § 33-20-30 does not authorize or require the Commissioner to determine the contractual rights between the parties, and argues that this exception to the administrative remedy requirement applies here. We disagree and conclude that Northeast's reliance upon the exception is misplaced. This case cannot be deemed a dispute requiring a determination of the parties' contractual rights because, in fact, no contract existed between the parties. Indeed, Northeast's complaint centers around the fact that Blue Cross has refused to enter into a contract that would allow it to participate as a health care provider in Blue Cross's HMO, PPO, and PAR networks. Simply, this case seeks a determination as to whether the AWP statute applies to HMO insurance networks under the regulatory scheme set forth in Title 33 and the Health Care Plan Act. As such, the exception to the administrative remedy requirement does not apply, and Northeast was required to exhaust its administrative remedies as provided in OCGA § 33-20-30.⁶

Nor do we find merit in Northeast's contention that Blue Cross waived the exhaustion issue by failing to assert it as a defense in the answer to the complaint. The failure to exhaust administrative remedies is not designated as an affirmative defense or a defense that is waived if not presented in the answer to the complaint. See OCGA §§ 9-11-8(c), 9-11-12(h)(1). And, pretermitting whether a party's failure to pursue administrative remedies pertains to subject matter jurisdiction that cannot be waived,⁷ the record reflects that Blue Cross timely raised the issue in the court below, obtained a ruling from the trial court on the issue, and has further argued the issue in this appeal. It follows that no waiver occurred in this case.

As explained in Cerulean Cos. v. Tiller, 271 Ga. 65, 66-68(1), 516 S.E.2d 522 (1999), the rationale for requiring exhaustion of administrative remedies is to permit the agency to apply its expertise, preserve the agency's autonomy, allow for a more efficient resolution, and provide for the uniform application of matters within the agency's jurisdiction. In keeping with this purpose, a party is required to pursue available administrative remedies before seeking relief in the superior court. Id. Because Northeast failed to do so as required by OCGA § 33-20-30, its declaratory judgment claim must fail. Id. See also Chatham County Bd. of Assessors v. Jepson, 261 Ga.App. 771, 771-772(1), 584 S.E.2d 22 (2003).

2. Northeast also alleged that Blue Cross was liable in tort under OCGA § 51-1-6 based upon its breach of a legal duty to comply with the AWP statute. Again, Northeast's claim was properly dismissed.

Northeast's claim in this regard essentially raises the same allegations and question regarding the AWP statute as those presented in Division 1 above. And, as previously stated, Northeast was required to exhaust its administrative remedies before the Insurance Commissioner to pursue these claims. Northeast cannot do indirectly that which it is prohibited from doing directly, and thus, cannot bypass the mandatory administrative procedures by attempting to present its claim under the guise of a tort action seeking the recovery of damages. See Perkins v. Dept. of Med. Assistance, 252 Ga.App. 35, 37(1), 555 S.E.2d 500 (2001). Because Northeast's dispute must be resolved in accordance with the administrative procedures of the Insurance Code provisions and Northeast failed to exhaust its administrative remedies as required, dismissal of its claim was proper.

3. Northeast...