412 Mass. 340 | Mass. | 1992
The plaintiffs challenge the validity of certain regulations promulgated by the Department of Medical Security (department), which establish performance standards
The central issue in this case is whether the statutory grant of authority to the department to manage the Statewide uncompensated care pool (G. L. c. 118F, § 15 [4] [1990 ed.]), and to promulgate regulations establishing criteria for hospital credit and collection policies (G. L. c. 118F, § 15 [9] [1990 ed.]), authorizes the department to limit the amount of bad debt for which hospitals may seek reimbursement from the pool. 117 Code Mass. Regs. § 2.04 (4)(d)(1989). The department claims that the regulation represents a valid exercise of the broad management authority delegated to it under G. L. c. 118F, § 15 (9). The plaintiffs argue that the. regulation exceeds the authority granted to the department under G. L. c. 118F, and, in fact, contradicts the specific mandates of that statute. Additionally, the plaintiffs contend that the regulation is unconstitutional, irrational, arbitrary, and capricious. We conclude that the Superior Court judge correctly determined that the regulation exceeds the power granted to the department by G. L. c. 118F, § 15.
General Laws c. 118F (1990 ed.) was enacted as part of the Health Security Act of 1988. St. 1988, c. 23,- § 45. It is a comprehensive statute, which was intended “to promote the accessibility of health care services for all [the Commonwealth’s] citizens.” G. L. c. 118F, § 1. The statute established the department “to provide, on a basis calculated to reduce or contain the costs of the program, a program of insurance coverage, for health care services for persons in the commonwealth who are not otherwise eligible for or covered by a health insurance plan.” G. L. c. 118F, § 3. The statute authorizes the department to manage the administration of
In addition, the statute establishes a complex formula for determining a hospital’s liability to the pool and the liability of the pool to the hospital. G. L. c. 118F, § 15 (2), (3). The statute defines the variables which figure into this formula, including “[reimbursable uncompensated care - costs,” “[r]eimbursable bad debt costs,” “[reimbursable free care costs,” “[b]ad debt,” “[f]ree care,” and “[m]aximum reimbursable uncompensated care costs.” G. L. c. 118F, § 2. The department is charged with the responsibility of collecting and meting out payments to and from the pool according to the statutory scheme. G. L. c. 118F, § 15 (4).
In response to this situation, and purportedly pursuant to the authority granted by G. L. c. 118F, § 15 (9), the department promulgated a performance regulation which set for each acute hospital “a level of allowable bad debt that reflects industry-wide standards for the collection of bad debt.” 117 Code Mass. Regs. § 2.04 (4)(d).
The department maintains that G. L. c. 118F, § 15 (9), authorizes it to establish performance standards for hospital credit and collection practices. The department states that the statutory directive to establish “criteria” for hospital collection policy authorizes it to adopt a “standard” of hospital collection performance. Furthermore, the department contends that, by delegating to it the authority to determine whether a hospital has made a reasonable effort to collect a debt (see G. L. c. 118F, § 2), and directing it to promulgate regulations necessary to manage the pool (G. L. c. 118F, § 15 [9]), the Legislature implicitly granted the department the authority to judge the success of hospital collection efforts and to predetermine the level of collection performance which a hospital reasonably should achieve. We do not agree with the department’s broad interpretation of its authority under the statute.
In general, we grant substantial deference to an interpretation of a statute by the administrative agency charged with
We interpret the words used in a statute with regard to both their literal meaning and the purpose and history of the statute within which they appear. Sterilite Corp. v. Continental Casualty Co., 397 Mass. 837, 839 (1986). In applying this rule of construction in this case, we conclude that the Legislature did not expressly or implicitly authorize the department to set “performance standards” for hospital credit and collection practices by empowering it to establish “criteria” for hospital credit and collection policy. Although the term “criteria” is not defined in the statute, it appears clear in the context of the statute to refer to the procedural steps which hospitals must take to ensure that a reasonable effort has been made to qualify a patient for free care or to identify a source of payment for a patient’s medical expenses, prior to characterizing the cost of services provided to the patient as uncollectible, reimbursable bad debt. That the department appreciates this meaning of “criteria” is evident from the fact that it used that term in its regulations dealing with hospital credit and collection policies. See 117 Code Mass. Regs. §§ 2.06-2.10 (1989). These regulations, significantly, are substantially similar to those adopted by the Rate Setting Commission when it established criteria for hospital collection policy. See 114 Code Mass. Regs. § 25.03 (1987).
In our opinion, the term “criteria,” as it appears in the statute, is not interchangeable with the term “standard” as the department argues, since there is no language in the statute which suggests that the Legislature intended that the department predetermine a level of collection performance and thereby assume the power to deny hospitals compensation
Judgment affirmed.
The single justice further ruled that an order requiring compliance with the Superior Court ruling would enter after January 1, 1992, on presentation of a form of order, if such was still necessary.
GeneraI Laws c. 118F, § 2 (1990 ed.), defines an “[a]cute hospital" as “any hospital, which contains a majority of medical-surgical, pediatric, obstetric, and maternity beds as defined by the department of public health.”
The Legislature created the Statewide uncompensated care pool in 1985 “[i]n order to more equitably distribute the burden of financing uncompensated acute hospital services across all acute hospitals . . . .” St. 1985, c. 574, § 12, codified at G. L. c. 6A, § 75, repealed by St. 1988, c. 23, § 18. The purpose of the pool “is to cause each acute care hospital to assume financial responsibility for a percentage of total Statewide uncompensated care equal to the percentage of total Statewide private sector care (costs for the care of patients not insured by governmental programs) provided by that hospital.” General Hosp. Corp. v. Rate Setting Comm’n, 407 Mass. 227, 228 (1990). The pool is funded by surcharges imposed on nongovernmental payors for hospital care and treatment. Prior to the enactment of G. L. c. 118F, the Rate Setting Commission managed the pool and adopted regulations to effect its proper administration, which were enforced through an audit process. See 114.1 Code Mass. Regs. §§ 25.03, 30.00 (1987). General Laws c. 118F transferred the responsibility of managing the pool to the department.
Title 117 Code Mass. Regs. § 2.04 (4) (d) (1989) reads, in pertinent part, as follows: “The Department will set, for each hospital, a level of allowable bad debt that reflects industry-wide standards for the collection of bad debt. . . .”