Pennsylvania Medical Soc. v. Foster
| Decision Date | 11 January 1991 |
| Citation | 137 Pa.Cmwlth. 192,585 A.2d 595 |
| Parties | PENNSYLVANIA MEDICAL SOCIETY, Petitioner, v. Constance B. FOSTER, Insurance Commissioner of the Commonwealth of Pennsylvania, and Ernest D. Preate, Jr., Attorney General of the Commonwealth of Pennsylvania, Respondents. |
| Court | Pennsylvania Commonwealth Court |
Robert B. Hoffman, Reed, Smith, Shaw & McClay, with him, Elizabeth Metz, Pennsylvania Medical Society, Harrisburg, for petitioner.
Gregory P. Miller, Philadelphia, with him, Janice L. Anderson, Deputy Atty. Gen., John G. Knorr, III, Chief Deputy Atty. Gen., Chief of Litigation Section, and Ernest D. Preate, Jr., Atty. Gen., Harrisburg, for respondents.
Gregory R. Neuhauser, with him, Kevin J. McKeon, Malatesta, Hawke & McKeon, Harrisburg, for amicus curiae, Pa. Chiropractic Federation.
Before CRAIG, President Judge, and DOYLE, COLINS, PALLADINO, McGINLEY, SMITH and PELLEGRINI, JJ.
This action was filed on March 27, 1990 by Pennsylvania Medical Society (PMS) on behalf of its physician members against the Insurance Commissioner, Constance B. Foster, and the Attorney General, Ernest D. Preate, Jr. The Petition for Review filed by PMS concerns implementation of Section 18 of the Act of February 7, 1990, P.L. 8, 1990-6 (Act 6), which amended Section 1797 of the Pennsylvania Motor Vehicle Financial Responsibility Law (Law), 75 Pa.C.S. § 1797. PMS's Petition was amended on March 30, 1990, requesting declaratory and injunctive relief. The five counts, as summarized in PMS's brief, are as follows Count I presents a due process claim premised on the Act's and the Commissioner's failure to address a series of basic billing questions necessary for physicians to implement the Act. The Petition, at Para. 21(A-E) lists five such questions. Count I contends that because of these failures, the Act violates their due process rights both because it is both [sic] unconstitutionally vague and unconstitutionally oppressive.
Count II seeks the proper construction of Section 1797(a) as to the billing questions raised in Count I.
Count III contends that the charge limitations imposed by Section 1797(a) violate the due process clause in the absence of legislative findings, fairly made, that physician charges to motor vehicle accident victims are excessive and/or unnecessarily high or that they have contributed in a meaningful way to increases in the costs of motor vehicle insurance.
Count IV contends that Section 1797(a) constitutes an impermissible delegation of legislative authority in two distinct respects--first to the federal government and separately to a private party, Pennsylvania Blue Shield.
Count V contends that the Commissioner has misinterpreted and misapplied a central provision of Section 1797(a) providing that physicians be compensated at '110% of the [Medicare] prevailing charge at the 75th percentile'. At the direction of the Commissioner, insurance companies are compensating physicians at a rate which differs substantially from the legislative command.
PMS's brief at p. 1-2.
Act 6, which became effective July 1, 1990, mandates that insurers reduce premiums by a minimum of 10% to 22%, depending on choices made by the insured, and fees a medical provider can charge for treating automobile accident victims at the lower of 110% of the prevailing Medicare rate calculated at 75% of its customary charge in a particular locality for a particular service, or the provider's usual and customary charge. 1 Act 6 also amended the Crimes Code 2 by providing anti-fraud provisions with criminal penalties.
The preliminary injunction sought by PMS was granted by this Court on April 11, 1990 after hearing. 3 The Insurance Commissioner was directed to ensure that Section 1797(a) was not implemented. This ruling was promptly appealed, resulting in an automatic supersedeas. On April 19, 1990 the Supreme Court temporarily stayed the automatic supersedeas until further order of Court, which in essence allowed Act 6 provisions to take effect.
On April 19, 1990, the Attorney General filed preliminary objections. In his brief in support of his preliminary objections, he states as follows:
The Attorney General is an unnecessary party in light of the Commissioner's participation in this suit as a respondent. Should the court ever declare Section 1797 unconstitutional, the Attorney General would be bound by that decision.
Attorney General's brief at p. 10. PMS indicates that it will not oppose the granting of the preliminary objections in light of the Attorney General's above-quoted statement. Therefore, we sustain the Attorney General's preliminary objections and the Petition for Review is dismissed against him.
On April 30, 1990, the Insurance Commissioner also filed preliminary objections to PMS's amended petition for review. These objections are in essence as follows: (1) that PMS has failed to state a claim because it has not demonstrated that Act 6 is vague and ambiguous on its face so as to violate due process of law; (2) that PMS has failed to state a claim for violation of the Fourteenth Amendment of the United States Constitution or Article I, Section 1 of the Pennsylvania Constitution because it has not demonstrated that its members have a protected interest in reimbursement amounts that they would receive from insurers for services rendered to automobile accident victims and PMS has not shown that Act 6 is not rationally related to a legitimate state interest; (3) that PMS has failed to state a claim because it has not demonstrated that the General Assembly has delegated legislative power in violation of Article II, Section 1 of the Pennsylvania Constitution; (4) that this Court lacks jurisdiction under the Declaratory Judgments Act because PMS failed to join all necessary parties; (5) that this Court lacks jurisdiction under the Declaratory Judgments Act because PMS failed to allege any actual justiciable controversy; and (6) that PMS's request for declaratory and injunctive relief is barred by the doctrine of sovereign immunity.
When determining whether to dismiss or sustain preliminary objections, we are guided by the following principles as stated in Gekas v. Shapp, 469 Pa. 1, 364 A.2d 691 (1976):
The standards for sustaining preliminary objections in the nature of a demurrer are quite strict. A demurrer admits every well-pleaded material fact set forth in the pleadings to which it is addressed as well as all inferences reasonably deducible therefrom, but not conclusions of law.... In order to sustain the demurrer, it is essential that the plaintiff's complaint indicate on its face that his claim cannot be sustained, and the law will not permit recovery.... If there is any doubt, this should be resolved in favor of overruling the demurrer.
Id. at 5-6, 364 A.2d at 693 (citations omitted).
We will now address the Insurance Commissioner's preliminary objections to PMS's challenges regarding the provisions of Act 6.
PMS in its amended petition alleges that Section 1797(a) of the Law is unconstitutionally vague in that it lacks clarity so that physicians will not know who is to compensate them, at what rate, and when, therefore violating due process.
It is fundamental to our jurisprudence that enactments of the Legislature are clothed with a presumption of constitutional validity, and that appellants, by claiming that an act is unconstitutional, carry a heavy burden of proof. See, e.g., United States v. Vuitch, 402 U.S. 62, 70, 91 S.Ct. 1294, 1298, 28 L.Ed.2d 601 (1971); In re William L., 477 Pa. 322, 329, 383 A.2d 1228, 1231 (1978); Tosto v. Pennsylvania Nursing Home Loan Agency, supra, 460 Pa. at 16, 331 A.2d at 205 [ (1975) ], quoting Daly v. Hemphill, 411 Pa. 263, 271, 191 A.2d 835, 840 (1963) ().
The Insurance Commissioner asserts that PMS's allegations concerning the facial validity of the Act contain no facts concerning the enforcement of the questioned provisions and that her statement of policy addresses and clarifies the manner in which PMS's members will be reimbursed. Although the statement expressly indicates that it is "not ... entitled to the force and effect of law," policy statements do provide information as to an agency's tentative intentions for the future. Hillcrest Home, Inc. v. Department of Public Welfare, 123 Pa.Commonwealth Ct. 289, 553 A.2d 1037, petition for allowance of appeal denied, 522 Pa. 614, 563 A.2d 500 (1989).
PMS complains that as of the date of argument regulations had not been promulgated by the Insurance Department that could clarify its intentions. This Court believes that properly promulgated regulations can cure vagueness problems, but without a proper record we cannot at this juncture determine whether portions of Section 1797(a) are unconstitutionally vague.
It is well-settled that:
Vague statutes offend the constitution because they may (1) trap the innocent by failing to give a person of ordinary intelligence reasonable opportunity to know what is prohibited so that he may act accordingly; or (2) result in arbitrary and discriminatory enforcement in the absence of explicit guidelines for their application.... [A] legislative enactment will be deemed invalid 'only if it is so vague and indefinite that courts are unable to determine with any reasonable degree of certainty the intent of the legislative body or so incomplete, conflicting and inconsistent in its provisions that it cannot be executed.'
Pennsylvania Builders Association v. Department of Revenue, 122 Pa.Commonwealth Ct. 493, 506, 552 A.2d 730, 737 (1989), aff'd per curiam, 524 Pa. 134, 569 A.2d 928 (1990) (citations omitted).
In light of the above, we cannot state with certainty that PMS's petition cannot be...
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