Parrish v. Rocky Mountain Hosp. & Medical Services Co.

• Decision Date: 17 March 1988
• Docket Number: Nos. 85CA1081,86CA1242,s. 85CA1081
• Citation: 754 P.2d 1180
• Parties: Michael W. PARRISH, Plaintiff-Appellant, v. ROCKY MOUNTAIN HOSPITAL & MEDICAL SERVICES COMPANY, d/b/a Blue Cross and Blue Shield of Colorado, and the Colorado State Employees' and Officials' Group Insurance Board of Administration, Defendants-Appellees. . VI
• Court: Colorado Court of Appeals

Page 1180

754 P.2d 1180

Michael W. PARRISH, Plaintiff-Appellant, v. ROCKY MOUNTAIN HOSPITAL & MEDICAL SERVICES COMPANY, d/b/a

Blue Cross and Blue Shield of Colorado, and the Colorado

State Employees' and Officials' Group Insurance Board of

Administration, Defendants-Appellees.

Nos. 85CA1081, 86CA1242.

Colorado Court of Appeals,

Div. VI.

March 17, 1988.

Ozer, Spriggs & Trueax, P.C., Robert Ozer, Denver, for plaintiff-appellant.

Sherman & Howard, C. Brad Peterson, Michael A. Williams, F. Brittin Clayton III, Denver, for defendant-appellee Rocky Mountain Hosp. & Medical Service, d/b/a Blue Cross and Blue Shield of Colorado.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Neil Tillquist, Asst. Atty. Gen., Hall & Evans, Alan Epstein, Denver, for defendant-appellee Colorado State Employees' and Officials' Group Ins. Bd. of Admin.

SILVERSTEIN ^*, Judge.

Plaintiff, Michael W. Parrish, seeks reversal of (1) the denial of his petition for a preliminary injunction, and (2) the dismissal, by summary judgment, of his action against Rocky Mountain Hospital & Medical Services Company d/b/a Blue Cross and Blue Shield of Colorado (Blue Cross), The Colorado Employees' and Officials' Group Insurance Board of Administration (Board), and the State of Colorado (not a party on this appeal). We affirm the denial of the preliminary injunction and the dismissal of the action.

Dismissal of the Action

We treat the dismissal issues first because the correctness of the denial of the preliminary injunction depends largely on our determination of these issues.

In his complaint, the plaintiff sets forth seven claims for relief. The first claim is for breach of contract and the remaining six are claims arising from asserted tortious acts.

A. The First Claim for Relief

Plaintiff contends the trial court erred in granting summary judgment on this claim because there are unresolved issues of fact. However, in our determination of this asserted error, we treat the allegations of the complaint, supplemented by the stipulations of the parties, as true.

Plaintiff is a duly licensed doctor of chiropractic, a large number of whose patients are employees of the State of Colorado. Most of these patients are insured by a group insurance plan underwritten and funded by the Board, and administered by Blue Cross. Between August 1, 1984, and June 1, 1985, (the action was filed June 26, 1985) plaintiff treated many state employees "all of which patients have duly and lawfully assigned to plaintiff any and all rights to payment or reimbursement by defendants of the benefits to which said patients are entitled for the expenses of plaintiff's treatment."

Plaintiff asserts that defendants are liable to him on such assigned accounts in the sum of $103,372.55, that demand has been made on defendants, and that defendants have refused to pay. In refusing to pay, the defendants rely on the provision in the plan contract which reads:

"All benefits stated in the Contract are personal to the Employee or Dependent. Neither those benefits nor Blue Cross and Blue Shield of Colorado's payments to the covered individual may be assigned to any person, corporation or entity: Any attempted assignment shall be void. The only exception to this provision is Blue Cross and Blue Shield of Colorado's right to pay Participating Facility and Professional Providers directly."

We note that plaintiff does not allege that he is a "Participating" provider as defined in the contract.

Plaintiff asserts that the quoted provision is contrary to the law of assignments in Colorado. However, as held in Scott v. Fox Brothers Enterprises, Inc., 667 P.2d 773 (Colo.App.1983), contracts generally are assignable, except where assignment is prohibited.

The validity of non-assignable clauses in group health care contracts has been upheld in the courts of other states. See Obstetricians-Gynecologists, P.C. v. Blue Cross & Blue Shield of Nebraska, 219 Neb. 199, 361 N.W.2d 550 (1985); Kent General Hospital, Inc. v. Blue Cross & Blue Shield of Delaware, Inc., 442 A.2d 1368 (Del.1982); Augusta Medical Complex, Inc. v. Blue Cross of Kansas, Inc., 230 Kan. 361, 634 P.2d 1123 (1981). In so holding, those courts have noted that the policy of free alienability of choses in action can be overcome by the strong policy of freedom of contract. Further, the courts found that such non-assignment clauses in this type of contract are valuable tools in persuading health providers to keep their health care costs down. We agree with this rationale; accordingly, we hold that the non-assignable clause is valid and enforceable and that the assignments relied on by plaintiff are void. Therefore, it was not error to dismiss the first claim for relief.

We have reviewed plaintiff's assertions of procedural errors in the dismissal of this claim, and find them to be without merit.

B. The Second through Seventh Claims for Relief

On August 1, 1984, the master contract was amended to read: "Medically necessary services rendered by a licensed chiropractor are covered up to a maximum benefit of $1,000 per individual per contract year." Plaintiff contends that this provision violates the Colorado statutes, and bases these six claims on this alleged violation. Specifically, plaintiff asserts that defendants must comply with §§ 10-8-103(3)(a) and 10-16-107(1)(a), C.R.S. (1987 Repl.Vol. 4A). We disagree.

Both of the statutes relied on by plaintiff provide that different fee schedules can be set for different health services performed by different professions but that the same fee schedule shall "be used for that portion of health services which are substantially identical although performed by different professions." The defendants...