Weiner v. Maryland Ins. Admin.
Decision Date | 01 September 1994 |
Docket Number | No. 47,47 |
Citation | 652 A.2d 125,337 Md. 181 |
Parties | Phillip WEINER, et al. v. MARYLAND INSURANCE ADMINISTRATION et al. , |
Court | Maryland Court of Appeals |
Joseph S. Kaufman, argued by Howard J. Schulman, Baltimore, for appellant.
Christina Gerstung Beusch, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., Dennis W. Carroll, Asst. Atty. Gen., on brief), argued by Edwin R. Goodlander, Baltimore, for appellee Blue Cross & Blue Shield of Maryland.
Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, KARWACKI, BELL and RAKER, JJ., and JOHN J. GARRITY, * Judge of the Court of Special Appeals of Maryland, Specially Assigned.
In December, 1992, Blue Cross and Blue Shield of Maryland (BCBSM), a non-profit health service plan as defined by Maryland Code (1957, 1994 Repl.Vol.) 1 , Art. 48A, § 354, filed a form of contract with the Maryland Insurance Administration (MIA) for approval pursuant to Art. 48A, § 356. 2 This form is a proposed contract between BCBSM and voluntarily participating pharmacies providing, inter alia, a new formula 3 for reimbursement to pharmacies for filling prescriptions for members of BCBSM's prescription drug plans. The form was approved by MIA on March 12, 1993 without holding a hearing. On March 31, 1993, a number of individual pharmacists and the Maryland Pharmacists Association 4 (the Pharmacists), requested a hearing, complaining, inter alia, about the new reimbursement formula. 5
On May 11, 1993, Donald Brandenberg, an Associate Insurance Commissioner, held a hearing in response to the Pharmacists' request, to determine whether the contract form should be approved. Mr. Brandenberg began, over objections from the Pharmacists, by characterizing the proceeding as "an informational hearing," and inviting all present, on both sides of the dispute, to speak. Counsel for the Insurance Commissioner explained why the matter was not a quasi-judicial proceeding, necessitating an adjudicatory hearing. All who wished to speak were allowed to do so, and the Associate Commissioner reviewed numerous documents submitted into the record. On July 12, 1993, the Associate Commissioner issued an order approving a modified version 6 of the contract form, concluding that there was no basis on which to disapprove it. 7
The Pharmacists sought judicial review of the Associate Commissioner's decision in the Circuit Court for Baltimore City, and BCBSM successfully moved to intervene. Judicial review of the decision was conducted on the record. Following a hearing on January 3, 1994, the court issued an order affirming the Associate Commissioner's decision. The Pharmacists appealed that judgment to the Court of Special Appeals. Prior to any consideration of the case by the intermediate appellate court, we issued a writ of certiorari on our own motion to consider the four issues raised by the appellants: (1) whether appellants should have been granted an adjudicatory hearing on their complaints before the Associate Insurance Commissioner; (2) whether the Associate Insurance Commissioner improperly shifted the burden of proof onto the appellants; (3) whether the Associate Insurance Commissioner's approval of the proposed contract form was supported by the evidence before him; and (4) whether we should consider the for-profit status of a BCBSM subsidiary. 335 Md. 341, 643 A.2d 441. We shall hold that the appellants were not entitled to an adjudicatory hearing. In light of that holding, we need not address the second and third questions presented. We will not consider appellants' fourth issue, as we find nothing in the record to indicate that it was raised at the hearing before the Associate Commissioner; therefore, the issue was not preserved for judicial review. E.g., Mayor and City Council of Ocean City v. Taber, 279 Md. 115, 126, 367 A.2d 1233, 1239 (1977). Therefore, we shall affirm the judgment of the Circuit Court for Baltimore City.
The Pharmacists contend that they were entitled to an adjudicatory or quasi-judicial hearing before the Associate Insurance Commissioner with all the rights which attach to such a hearing, such as the right to cross examine witnesses. They claim that the informational or quasi-legislative hearing which they were afforded was insufficient.
It is well settled that a party is entitled to a quasi-judicial hearing before an administrative agency only if that type of hearing is required by statute or regulation or mandated by constitutional due process concerns. Sugarloaf Citizens Ass'n v. Northeast Md. Waste Disposal Auth., 323 Md. 641, 652, 594 A.2d 1115, 1120 (1991). We therefore first turn to the statutory provisions governing administrative hearings.
Article 48A, § 356 requires that the terms and provisions of any contract to be executed by a non-profit health service plan with those who provide health services to the plan's subscribers, be submitted to the Insurance Commissioner for approval. Section 356 provides, in pertinent part:
Sections 354 through 361H of Art. 48A comprise subtitle 20 of that Article and exclusively govern non-profit health services plans. Section 361B of subtitle 20 at the time of the hearing before the Associate Insurance Commissioner in the instant case provided:
"All decisions and findings of the Commissioner made under the provisions of this subtitle are subject to review by the court in accordance with the provisions of § 242B of this article." 8
Section 242B of Art. 48A, in pertinent part, provides:
* * * * * * "If the Circuit Court for Baltimore City finds that the Commissioner's order or decision is not supported by the preponderance of the evidence on consideration of the record as a whole, or is not in accordance with law, the court shall reverse or modify the Commissioner's order or decision in whole or in part."
A form of contract to be entered into by a non-profit health plan, such as BCBSM, and a group of providers, such as pharmacists, must be submitted to the Insurance Commissioner for approval. Art. 48A, § 356(a). No hearing of any type is required prior to the Commissioner's approval of the contract. See Id. Indeed, an amendment "shall be deemed approved unless disapproved by the Commissioner ...," after the expiration of a 60 day waiting period following the filing. Id. In contrast, a hearing is expressly required any time the Commissioner finds, subsequent to approval of a form of contract, that the contract does not meet the requirements of this section. Art. 48A, § 356(c). Additionally, Art. 48A, § 242B(1) provides "[a]ny insurer or rating organization aggrieved by any order or decision of the Commissioner under this...
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