Ohio Podiatric Med. Ass'n v. Taylor
| Citation | 972 N.E.2d 1065,2012 -Ohio- 2732 |
| Decision Date | 19 June 2012 |
| Docket Number | No. 11AP–916.,11AP–916. |
| Parties | The OHIO PODIATRIC MEDICAL ASSOCIATION et al., Plaintiffs–Appellants, v. Mary TAYLOR, Director and Superintendent of Insurance, Defendant–Appellee. |
| Court | Ohio Court of Appeals |
OPINION TEXT STARTS HERE
Law Office of Nanci L. Danison, LPA, and Nanci L. Danison, Dublin; McFadden Winner Savage & Segerman, and Mary Jane McFadden, Columbus, for appellants.
Michael DeWine, Attorney General, and W. Scott Myers, for appellee.
{¶ 1} Plaintiffs-appellants, The Ohio Podiatric Medical Association, Bruce G. Blank, D.P.M., and Rebecca Lynn, appeal from a judgment of the Franklin County Court of Common Pleas granting the summary judgment motion of defendant-appellee, Mary Taylor, in her capacity as the director and superintendent of the Ohio Department of Insurance (“ODI”). Because (1) the trial court properly determined R.C. 3923.23 does not require parity of payment between podiatrists and other licensed physicians; (2) ODI did not engage in illegal administrative rulemaking; and (3) plaintiffs suffered no prejudice from ODI's failure to hold a hearing on Dr. Blank's complaint, we affirm.
{¶ 2} On July 23, 2009, plaintiffs filed a complaint against ODI, seeking a declaratory judgment that: (1) ODI's issuing legal opinions to resolve complaints filed with it is an unlawful exercise of administrative authority; (2) ODI misinterpreted Ohio law when it concluded it lacks statutory authority to prohibit insurers from paying podiatric physicians less than other licensed providers for the same medical procedures; and (3) R.C. 3923.23 and R.C. 3901.20, in relation to R.C. 3901.21(W), require health insurance carriers to pay the same amount to podiatric physicians as to allopathic and osteopathic physicians for the same service. Underlying plaintiffs' complaint is their contention that, beginning in 2005 and 2006, some health insurance companies in Ohio adopted discriminatory reimbursement schedules “whereby podiatric physicians were paid less than allopathic or osteopathic physicians for performing the same medical procedures.” (Complaint, at ¶ 14.)
{¶ 3} According to the complaint and the evidence subsequently presented in the parties' cross-motions for summary judgment, health insurance companies' disparate treatment of podiatrists, compared to other licensed physicians, dates back to the 1960s when health insurance companies “were refusing to reimburse patients for medical treatment obtained from podiatric physicians even though their insurance policies provided coverage for the services.” (Complaint, at ¶ 8.) In 1969, the General Assembly responded by enacting R.C. 3923.23, which provides that reimbursement under a health insurance policy “shall not be denied” when a person licensed to practice osteopathic, optometric, chiropractic, or podiatric medicine renders a service otherwise covered by a health insurance policy. (Complaint, at ¶ 8.)
{¶ 4} “At the time ORC § 3923.23 was enacted in 1969, reimbursement under health insurance policies was routinely made by the insurer directly to the policy holder after the policy holder submitted a physician's bill for a covered service to the insurer.” (Complaint, at ¶ 9.) During the 1970s and 1980s, “following the Medicare model, health insurance carriers restructured their reimbursement systems so that * * * the physician-provider submitted the claim for payment directly to the insurer.” (Complaint, at ¶ 9.) Physicians now enter into provider agreements directly with insurance companies, and insurance companies are “third party payers,” paying health care providers directly for services rendered to the companies' insureds. (Complaint, at ¶ 9, 15; Blank affidavit.)
{¶ 5} On March 8, 2005, ODI responded to an attorney who was inquiring whether an insurer could establish different benefit levels, and thus different levels of reimbursement, for physical therapy services depending upon the license of the practitioner providing the service. ODI answered “no,” noting R.C. 3923.23 did “not prevent an insurer from placing a limitation on the total amount of coverage provided for a particular type of benefit or service, but the limitation must be based upon the type of service and not the type of license held by the provider.” (Complaint, exhibit No. 1.)
{¶ 6} Later the same year, ODI responded on November 23, 2005 to questions the Ohio Optometric Association raised regarding the applicability of R.C. 3923.23 to insurers who established different reimbursement levels for covered services, depending on whether an optometrist or an ophthalmologist performed the service. (Complaint, exhibit No. 2.) ODI stated that, “[b]y its plain language, R.C. 3923.23 prohibits the denial of reimbursement for services that may be performed by a person pursuant to any of the specified licenses,” but is “silent on the question as to whether the reimbursement level for that service may differ.” (Emphasis sic.) (Complaint, exhibit No. 2.)
{¶ 7} In 2006, podiatrists, who were network physicians with Aetna and Anthem insurance companies, received notices explaining the insurers would reduce the fee amounts paid to podiatric physicians, effective November 1, 2006. Pursuant to the new fee schedules, the insurers were offering to pay podiatrists about one half the amount the insurer would pay to a medical doctor performing the same service. According to the insurance carriers, the podiatrists either had to agree to the lower payment rates or be dropped from the insurers' network; the insurance companies refused to negotiate the lower fees. The insurers cited ODI's November 2005 opinion letter to explain the new, reduced fee schedules.
{¶ 8} Dr. Blank averred he lost patients as a result of the fee schedules Aetna adopted. Plaintiff Rebecca Lynn, insured through Aetna, explained she was Dr. Blank's long-time patient and, after Dr. Blank removed himself from Aetna's network due to the reduced benefit payments, Lynn could not afford Dr. Blank's services as an out-of-network physician.
{¶ 9} Dr. Blank, and other podiatric physicians, sent ODI complaints regarding the insurance carriers' reduced fee schedules. ODI responded by letter to the complaints, explaining reimbursement rates were “deemed to be private contractual matters between the provider and the third-party payer,” so that ODI did “not have authority to resolve” the podiatrists' complaints. ODI emphasized that R.C. 3923.23 prohibited insurers from refusing to reimburse claims but did not address negotiation of rates between providers and insurers. (R. 78, exhibit No. 5, attachment G.)
{¶ 10} On December 17, 2008, ODI issued a legal memorandum “for distribution to the public,” stating that, although R.C. 3923.23 required reimbursement for specified health care professionals, it did not authorize ODI “to require insurers to reimburse podiatrists (and other allied health care professionals) at the same rate as medical doctors for the same [current procedural terminology] code.” (Complaint, exhibit No. 3.) ODI compared R.C. 3923.23 with statutes from Arkansas, Colorado, Illinois, and Maryland, all of which expressly required parity of payment. (Complaint, exhibit No. 3.) Contrasting these statutes, ODI concluded “Ohio's insurance laws require coverage, not payment parity.” (Complaint, exhibit No. 3.)
{¶ 11} After the trial court resolved some discovery issues between the parties, ODI filed a Civ.R. 56 motion for summary judgment, noting no disputed issues of fact in the single issue of law plaintiffs' complaint presented: whether R.C. 3923.23 required parity of access or parity of reimbursement. ODI contended that, although the plain language of R.C. 3923.23 spoke to access and reimbursement in the first instance, it did not address the rate at which reimbursement was to be made.
{¶ 12} Plaintiffs filed a cross-motion for summary judgment, asking the court to declare: (1) ODI's December 2008 memorandum and November 2005 letter to be unlawful, because they authorized health insurance carriers to violate R.C. 3923.23; (2) the letters were, in effect, administrative rules not adopted in conformity with R.C. Chapter 119; and (3) ODI had a mandatory duty to conduct hearings on the podiatrists' complaints, but failed to do so.
{¶ 13} The trial court issued a decision and entry on October 3, 2011 denying plaintiffs' motion for summary judgment and granting ODI's motion for summary judgment. The trial court agreed with the parties that the language of the statute was (Decision, at 5.) The court, however, determined the statute did not “in any manner, contemplate or establish an amount of payment to be made from an insurance company to a provider.” (Decision, at 6.) Noting that plaintiffs again raised the issue of improper administrative rulemaking, the court, per its earlier ruling in connection with discovery issues, stated its only function in the action was determining statutory construction.
{¶ 14} Plaintiffs appeal, assigning the following errors:
[I.] THE COMMON PLEAS COURT ERRED IN HOLDING THAT R.C. 3923.23 DOES NOT CREATE EQUALITY OF POLICY BENEFITS/REIMBURSEMENT BETWEEN MDs AND DPMs WHEN “REIMBURSEMENT” ON ITS FACE MEANS REPAYMENT IN FULL AND THE GENERAL ASSEMBLY DECLARED R.C. 3923.23'S PURPOSE TO BE TO PROVIDE “FULL PROTECTION AND RECOMPENSE” TO PODIATRIC PHYSICIANS.
[III.] THE COMMON PLEAS COURT ERRED BY NOT FINDING THE DEPARTMENT OF INSURANCE TO HAVE...
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