NORTHWESTERN OHIO BUILDING & CONSTRUCTION TRADES COUNCIL ET AL., APPELLEES, v. CONRAD, ADMR., BUREAU OF WORKERS’ COMPENSATION ET AL., APPELLANTS.
No. 00-216
SUPREME COURT OF OHIO
Decided July 18, 2001.
92 Ohio St.3d 282 | 2001-Ohio-190
Submitted January 10, 2001. APPEAL from the Court of Appeals for Franklin County, No. 98AP-1287.
SYLLABUS OF THE COURT
The use of premium contributions from the State Insurance Fund for the payment of administrative and performance incentive fees under
COOK, J.
{¶ 1} In 1993, the General Assembly amended Ohio‘s workers’ compensation scheme to create the Health Partnership Program (“HPP“), a comprehensive managed care program administered by appellant, the Bureau of Workers’ Compensation (“BWC“), to provide medical services to employees for their compensable injuries or occupational diseases. See 145 Ohio Laws, Part II,
{¶ 2} Now we are asked to decide whether the BWC‘s use of SIF proceeds to pay administrative and performance-incentive fees to certified MCOs under the HPP violates either the Revised Code or
I. MCOs and the HPP
{¶ 3} As we noted in Haylett, supra, MCOs are an integral part of the HPP established by the General Assembly. Id., 87 Ohio St.3d at 326, 720 N.E.2d at 903. The MCOs certified by the BWC under
{¶ 4} Once certified by the BWC and selected by or assigned to an employer, MCOs manage the medical aspect of each workers’ compensation claim.
{¶ 5} The HPP also contains a mandatory dispute resolution program available to employees, employers, and providers. Id., citing
II. Administrative and Performance Incentive Payments to MCOs
{¶ 6} To compensate the MCOs for their medical-management and cost-containment services, the administrator promulgated a rule providing for certain payments to be made to the MCOs. The source of the payments made to MCOs by the BWC under this administrative rule is the focus of the instant dispute.
{¶ 7}
“(B) The bureau shall pay an MCO an administrative fee for its medical management and administrative services in a manner determined by the administrator. The administrative fee may be subject to a disincentive penalty based upon the failure of the MCO to meet predetermined performance criteria set
forth in the MCO contract. The bureau may pay an MCO a performance payment and may pay an incentive payment. “(C) In establishing performance measures, the bureau shall evaluate an MCO‘s performance based upon but not limited to:
“(1) Quality performance measures that may include return to work rates and reinjury rates.
“(2) Total cost measures that may include average total paid cost, average incurred cost, and lost-time claims to total claims ratio.
“(3) Change in cost measures that may include change in average total paid cost, change in average incurred cost, and change in lost-time to total claims ratio.
“(4) Customer satisfaction that may include in-network utilization rate and employee, employer, and provider satisfaction surveys.”
{¶ 8} The parties here stipulate that both the administrative and performance-incentive payments authorized by
{¶ 9} Douglas Maser, the BWC‘s Chief Medical Management and Cost Containment Officer in 1997, testified at a deposition about how the administrative and performance-incentive fees provided under
{¶ 10} The performance-incentive payments, Maser testified, are payable to an MCO “over and above its administrative fee” and calculated on an “MCO-by-MCO” basis. At the time of Maser‘s deposition, a total of an additional three percent of premium—over and above the three percent administrative fee—was potentially available to MCOs in incentive payments keyed to specific quality-control objectives. Of this additional three percent of premium, one percent would be paid to those MCOs that achieved a certain level of data accuracy and “reduce[d] the lag time” between claimants’ injuries and the MCO‘s report of those claims to the BWC. One percent of premium would be paid to those MCOs that participated in Phase 2 of the HPP implementation program by picking up additional claims. Finally, one percent of premium would be paid to those MCOs participating in Phase 3 of the implementation program. As of January 1, 1998, when the base administrative fee was increased to five percent, each MCO could qualify for only an additional one percent of premium in performance-incentive payments.
{¶ 11} As a result, an MCO that participated in all phases of the HPP implementation program and successfully achieved all of the BWC‘s quality-control objectives could earn administrative fees and performance-incentive payments totalling six percent of premium, to be paid from the SIF. The parties here do not dispute how the administrative fees and performance incentive payments are calculated in practice; rather, their appeal here centers on whether the use of SIF monies for these purposes is permissible at all.
III. This Declaratory Judgment Action
{¶ 12} Appellees, Northwestern Ohio Building & Construction Trades Council and International Brotherhood of Electrical Workers, Local Union No. 8 (collectively, “Northwestern“), filed the instant action in June 1997, challenging several aspects of the HPP. In its complaint, Northwestern sought two declarations from the trial court. First, Northwestern sought a declaration that the HPP statutes and rules unconstitutionally delegate essential aspects of the administration of the SIF to private entities—including the determination of the terms and conditions upon which payments shall be made from the SIF. Second, Northwestern sought a declaration that
{¶ 13} The parties eventually filed competing motions for summary judgment. In a Decision and Entry filed September 9, 1998, the Franklin County Common Pleas Court sustained the BWC‘s motion for summary judgment. The trial court determined that “the HPP statutory provisions do not unconstitutionally delegate authority and responsibility over the SIF,” and that “the use of the SIF for HPP purposes is constitutional.”
{¶ 14} Northwestern appealed to the Tenth District Court of Appeals, assigning as error the trial court‘s resolution of the same two claims raised in its complaint. The court of appeals overruled Northwestern‘s first assignment of error on the authority of this court‘s decision in Haylett, 87 Ohio St.3d 325, 720 N.E.2d 901, noting that we had already determined that the HPP “does not constitute an improper delegation of authority to a private entity.”
{¶ 15} In its second assignment of error, Northwestern contended that the use of SIF proceeds for the payment of administrative and performance-incentive fees under
IV. Analysis
{¶ 16} We shall address the BWC‘s propositions of law in reverse order because we should determine the validity of the administrative rule, as well as the BWC‘s interpretation of that rule, before we address any constitutional arguments related to the payments that the BWC has elected to make under the rule. If we were to agree with the court of appeals that the BWC lacked legislative authority to make these payments from the fund in the first instance, then we should decline to pass on any constitutional question implicated by those payments. See Norandex, Inc. v. Limbach (1994), 69 Ohio St.3d 26, 28, 630 N.E.2d 329, 331; Hal Artz Lincoln-Mercury, Inc. v. Ford Motor Co. (1986), 28 Ohio St.3d 20, 28, 28 OBR 83, 90, 502 N.E.2d 590, 597, fn. 17.
A. The Promulgation of Ohio Adm.Code 4123-6-13
{¶ 17} The General Assembly has delegated broad rulemaking authority to the administrator of workers’ compensation. See, e.g.,
{¶ 18} When the General Assembly enacted the HPP, it vested additional rulemaking authority in the administrator of workers’ compensation tailored to the specific goals of that comprehensive program. See
{¶ 19} To guide the administrator‘s efforts in promulgating rules for administering the HPP, the General Assembly enumerated twelve nonexhaustive categories of rules that it deemed necessary for the effective implementation of the program. See
{¶ 20}
B. The BWC‘s Reasonable Interpretation of Ohio Adm.Code 4123-6-13 and the Workers’ Compensation Statutory Scheme
{¶ 21} As Northwestern correctly notes, neither
{¶ 22} It is axiomatic that if a statute provides the authority for an administrative agency to perform a specified act, but does not provide the details by which the act should be performed, the agency is to perform the act in a reasonable manner based upon a reasonable construction of the statutory scheme. See Swallow v. Indus. Comm. (1988), 36 Ohio St.3d 55, 57, 521 N.E.2d 778, 779. A court must give due deference to the agency‘s reasonable interpretation of the legislative scheme. Id. See, also, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984), 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694, 703 (“if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency‘s answer is based on a permissible construction of the statute“).
{¶ 23} In Swallow, a workers’ compensation claimant awarded permanent partial and permanent total disability benefits for the loss of use of both arms and legs requested that his permanent partial benefits be paid concurrently rather than
{¶ 24} We recognize that an agency can, at times, overstep the bounds of its statutorily delegated authority when interpreting and enforcing its administrative rules. In a recent case, the United States Supreme Court decided that the Army Corps of Engineers could not interpret and enforce its own “Migratory Bird Rule” so broadly as to provide the Corps with regulatory jurisdiction over ponds in abandoned gravel pits used as habitats by migratory birds, when the Clean Water Act authorized the Corps to regulate discharges only into “navigable waters.” Solid Waste Agency of N. Cook Cty. v. United States Army Corps of Engineers (2001), 531 U.S. 159, 121 S.Ct. 675, 148 L.Ed.2d 576. In Cook Cty., the majority decided that, in order to accept the Corps‘s broad interpretation of its own jurisdiction, the court would have to pretend that the word “navigable” contained in the enabling statute had “no effect whatever.” Id. at 172, 121 S.Ct. at 683, 148 L.Ed.2d at 587-589. See, also, Riley Family Trust v. Hood (Colo.App.1994), 874 P.2d 503 (deciding that Department of Labor and Employment rule could not be interpreted to preclude payment for massage therapy prescribed by treating physician, when enabling statute authorized director to establish a fee schedule but did not grant authority to restrict treatment so long as the treatment was reasonable and necessary).
{¶ 25} In the present case, the General Assembly has not specified the source from which the BWC is to draw the funds necessary for the administrative and performance-incentive payments to be made to MCOs. The court of appeals found this legislative “gap” to be fatal, writing, ”
{¶ 26} Unlike the court of appeals, we do not find the legislative gap equivalent to a lack of authority for the agency to act. As the United States Supreme Court has noted, “[t]he power of an administrative agency to administer a * * * program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly,” by the legislature. (Emphasis added.) Morton v. Ruiz (1974), 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270, 292. Our own Swallow case implicitly recognized that no set of statutes and administrative rules will answer each and every administrative concern. Id., 36 Ohio St.3d 55, 521 N.E.2d 778. When agencies promulgate and interpret rules to fill these gaps, as they must often do in order to function, “courts * * * must give due deference to an administrative interpretation formulated by an agency that has
{¶ 27} We find that the BWC acted reasonably when it authorized the use of fund proceeds for the payments to MCOs provided under
{¶ 28} Northwestern contends that the BWC‘s interpretation of its administrative rule cannot be a reasonable one because, in its view,
{¶ 29}
{¶ 30} Northwestern seizes on Corrugated Container‘s dicta, the restrictive statutory language italicized above, and
{¶ 31} First, though
{¶ 32} Further,
{¶ 33} Moreover, as this court has previously noted, SIF proceeds have historically been used for purposes other than the payment of direct disability compensation to claimants. Thompson, 1 Ohio St.3d at 248, 1 OBR at 268-269, 438 N.E.2d at 1170. Simply put, not every dollar of the fund has been applied directly to the compensation of injured workers and their dependents,
{¶ 34} As the MCO League notes in its amicus curiae brief supporting the appellants, the “medical management” services performed by MCOs under the HPP are simply a “generalized development of earlier instances of utilization review
{¶ 35} This is not a case, such as Cook Cty., supra, in which an agency ignored express terms contained in its enabling statute in order to expand broadly its own jurisdiction. See id., 531 U.S. at 172, 121 S.Ct. at 683, 148 L.Ed.2d at 587-589. In that case, the Corps‘s interpretation of its Migratory Bird Rule rendered specific language in the Clean Water Act with “no effect whatever.” Id. Here, on the other hand, as in Swallow, 36 Ohio St.3d 55, 521 N.E.2d 778, and Chevron, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694, the agency‘s interpretation of
C. Constitutionality of the BWC‘s Interpretation
{¶ 36} Having decided that the BWC reasonably interpreted
{¶ 37}
“For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen‘s employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom.”
{¶ 38} We have previously described this constitutional provision as “a broad grant of power to establish and to administer the fund without limitation.” (Emphasis added.) State ex rel. Michaels v. Morse (1956), 165 Ohio St. 599, 603, 60 O.O. 531, 533, 138 N.E.2d 660, 663. Here, though, the court of appeals took a
{¶ 39} In Corrugated Container, the precise issue before the court was “whether the state can take money which has been set aside for the payment of awards to injured workmen and * * * transfer it to the money comprising the General Revenue Fund of the state.” Id., 171 Ohio St. at 290, 13 O.O.2d at 337, 170 N.E.2d at 256. We held that the state could not constitutionally effect this diversion of fund proceeds. Id. at 291, 13 O.O.2d at 338, 170 N.E.2d at 256-257. As we later recognized in Thompson, transferring SIF proceeds to the state‘s general revenue fund creates a risk that the proceeds will be applied to purposes wholly unrelated to the workers’ compensation system. See id., 1 Ohio St.3d at 246-247, 1 OBR at 267, 438 N.E.2d at 1169-1170. Moreover, in Corrugated Container, this court struck down an Industrial Commission resolution requiring the SIF to reimburse the general revenue fund for all amounts appropriated for the commission‘s administrative costs, when that resolution conflicted with express provisions of the Revised Code requiring the SIF to reimburse only two-thirds of those costs. Id., 171 Ohio St. 289, 13 O.O.2d 337, 170 N.E.2d 255.
{¶ 40} In Thompson, however, this court distinguished Corrugated Container, rejected the court of appeals’ “cramped” reading of
{¶ 41} The same logic and the Thompson court‘s careful distinction of Corrugated Container inform our decision here. In Thompson, this court noted that “the transfer of SIF investment funds to the DWRF is qualitatively different from the diversion of SIF funds proscribed in Corrugated Container. The DWRF is an integral component of Ohio‘s comprehensive workers’ compensation program and, therefore, the use of SIF investment income to fund the DWRF does not contravene the principle enunciated in Corrugated Container.” (Emphasis added.) Id. at 247, 1 OBR at 267, 438 N.E.2d at 1169. In Thompson, this court expressly approved the use of SIF proceeds to fund an integral component of the workers’ compensation scheme. With its interpretation of
{¶ 42} For the foregoing reasons, we conclude that the court of appeals erroneously relied on Corrugated Container to reverse the trial court‘s grant of summary judgment in favor of the appellants. We hold that the use of premium contributions from the State Insurance Fund for the payment of administrative and performance-incentive fees under
Judgment reversed.
MOYER, C.J., PFEIFER and LUNDBERG STRATTON, JJ., concur.
DOUGLAS, RESNICK and F.E. SWEENEY, JJ., dissent.
ALICE ROBIE RESNICK, J., dissenting.
{¶ 43} The majority finds the historical and dedicated purpose of the State Insurance Fund (“SIF“) too “narrow” and “cramped” for its liking. Consequently, the majority approves the diversion of $140 million per year for administrative fees and performance bonuses to organizational claims managers from a trust fund that was established for injured workers. The SIF is the tangible representation of the essential compensation bargain that forms the workers’ compensation system. It is constitutionally conceived, statutorily established, and judicially recognized as a trust fund for the benefit of injured Ohio workers and their dependents. Its quintessential purpose is to accumulate and reserve a sufficiently large sum of money to pay compensation and benefits to employees who suffer injury and disease, and to the dependents of employees who suffer death, in the course of their employment. After today, however, the premium contributions that compose the SIF can be used generally for all “purposes which relate to or are incidental to workers’ compensation,” or “to fund an integral component of the workers’ compensation scheme,” and specifically “for the payment of administrative and performance incentive fees * * * to managed care organizations.” Semantics aside, the majority has just changed the nature of the SIF in order to permit the Bureau of Workers’ Compensation (“bureau“) to tap its resources to pay administrative costs. I must dissent.
{¶ 44}
“For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen‘s employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom. * * * Laws may be passed establishing a board which may be empowered to classify all occupations, according to their degree of hazard, to fix
rates of contribution to such fund according to such classification, and to collect, administer and distribute such fund, and to determine all rights of claimants thereto.” (Emphasis added.) See, also, R.C. 4123.29(A)(2) ,4123.30 , and4123.46 .
{¶ 45} The SIF and the net premiums contributed thereto constitute a trust fund to be used solely for the payment of compensation and benefits to injured workers and their dependents. See State ex rel. Williams v. Indus. Comm. (1927), 116 Ohio St. 45, 55, 156 N.E. 101, 104. See, also,
{¶ 46} In Corrugated Container Co. v. Dickerson (1960), 171 Ohio St. 289, 291, 13 O.O.2d 337, 338, 170 N.E.2d 255, 257, we specifically held that “[n]o part of the State Insurance Fund, a trust fund for the benefit of employers and employees, may be used for administrative purposes except as provided in Section 4123.342, Revised Code.”
{¶ 47} It cannot be any clearer that the SIF, in its essential form and character, is a trust fund created by premium contributions that are set aside for and disbursed to employees who suffer loss on account of injury, disease, or death occasioned in the course of employment, and that it is not to be used for administrative purposes.
{¶ 48} Nevertheless, the majority views this basic principle as a “narrow” or “cramped” interpretation of the fund‘s permissible uses, and argues:
“First, though
Ohio Adm.Code 4123-6-13(B) provides for payment of an ‘administrative fee,’ this fee is expressly intended to compensate the MCOs for the ’medical management * * * services’ that they provide. (Emphasis added.) Id. The medical-management and cost-containment services performed by MCOs under the HPP [health partnership program] differ from ‘the duties and * * * activities of * * * the bureau’ for which an administrative cost and expense assessment is made underR.C. 4123.341 . CompareR.C. 4121.44 and4121.441 (outlining duties of MCOs under the HPP) withR.C. 4121.121 (outlining duties of the bureau and administrator).” (Ellipses sic.)
{¶ 49} Nothing could be further from the truth. In the first place,
{¶ 50} Second, the administrative duties and activities of the bureau most certainly include medical-management and cost-containment services as set forth in
{¶ 51} Third, the medical-management services provided by MCOs are just that, management services. They are not medical services. Medical services are provided by health care providers. A health care provider is “[a] physician or practitioner * * * or other legal entity licensed * * * and approved by the bureau, to provide particular medical services or supplies, including, but not limited to: a hospital, qualified rehabilitation provider, pharmacist, or durable medical equipment supplier.”
{¶ 52} Fourth, the HPP, by definition and design, is “[t]he bureau of workers’ compensation’s comprehensive managed care program.” (Emphasis added.)
{¶ 53} It is eminently clear that the majority’s attempt to distinguish the services of MCOs from the duties and activities of the bureau creates a false dichotomy. Whether administered internally by the bureau or externally through contracts with private vendors, the HPP is essentially an administrative mechanism
{¶ 54} The majority’s second argument is that
{¶ 55} To put it mildly, this argument stretches the meaning of “medical * * * recommendations and determinations” under
{¶ 56} In its third argument, the majority relies on Thompson v. Indus. Comm. (1982), 1 Ohio St.3d 244, 248, 1 OBR 265, 268-269, 438 N.E.2d 1167, 1170, for the proposition that not every dollar of the SIF must be used as a direct disability compensation payment to claimants. The majority points out that certain provisions in
{¶ 57} It is true, of course, that SIF disbursements do not always take the form of direct compensation payments to injured workers. But this does not mean that the SIF may be used to fund the administrative machinery of the workers’ compensation system. Constitutional limitations aside, the fact that certain provisions in
{¶ 58} In creating the HPP, the General Assembly conferred no authority to compensate MCOs out of the SIF. Contrary to the majority’s assertions, this lack of authority does not translate into a “legislative gap” to be filled by the bureau. “Except for amounts earmarked for safety and hygiene, actuarial audits, specified costs and fees, and reinsurance premiums, the State Insurance Fund is a trust fund maintained for the benefit of employees and employers as a source of payment of compensation and benefits; it has no other purpose.” Fulton, Ohio Workers’ Compensation Law (2 Ed.1998) 378, Section 14.1. Moreover, when the General Assembly established the HPP as part of Am.Sub.H.B. No. 107, it also amended
{¶ 59} In any event, the “utilization review” services performed by MCOs, like their other “medical management” services, are administrative in nature.
{¶ 60} In particular, the utilization review services performed by MCOs are not comparable to the medical examinations and recommendations rendered by qualified medical specialists under
{¶ 61} Moreover, there is no statutory exception that authorizes the use of SIF proceeds for purposes of “medical utilization services,” and the isolated provisions in
{¶ 62} Finally, the majority finds that “the use of SIF proceeds for these purposes does not violate Section 35, Article II of the Ohio Constitution.” The majority’s supporting rationale for this finding has three components. First, the majority suggests that the constitutional question presented in this case can be disposed of under the authority of our syllabus in State ex rel. Haylett v. Ohio Bur. of Workers’ Comp. (1999), 87 Ohio St.3d 325, 720 N.E.2d 901, where we held that “[t]he managed care organization program enacted in
{¶ 63} Aside from the obvious fact that the only Section 35, Article II issues addressed in Haylett were whether the MCO program constitutes an attempt to privatize the state’s workers’ compensation system and whether it causes delays and hardships that violate Section 35, the problem with the majority’s argument is that the specific constitutional claim asserted in the present case has nothing to do with the constitutionality of the MCO program. Any decision in this case invalidating the bureau’s present method of funding the MCO program would have no impact whatsoever on our decision in Haylett or the constitutionality of the MCO program. It would simply force the bureau to pay MCOs their administrative fee from an account that is not held in trust for the payment of compensation and benefits to injured workers and their dependents.
{¶ 64} In the second part of its constitutional analysis, the majority interprets Corrugated Container as holding only that SIF proceeds cannot be transferred to the general revenue fund because such a transfer “creates a risk that the proceeds will be applied to purposes wholly unrelated to the workers’
{¶ 65} Corrugated Container involved a challenge to certain provisions in the General Appropriation Act of 1959, which required that the SIF reimburse the General Fund for all amounts appropriated for administrative costs of the commission, and a commission resolution effectuating those provisions. Since former
{¶ 66} In its third constitutional argument, the majority reasons:
“In Thompson, this court expressly approved the use of SIF proceeds to fund an integral component of the workers’ compensation scheme. With its interpretation of
Ohio Adm.Code 4123-6-13 , the BWC simply seeks to apply SIF proceeds to fund what this court has already described as an ‘integral part’ of the HPP—the medical-management services performed by the MCOs. Haylett, 87 Ohio St.3d at 326, 720 N.E.2d at 903. As the trial court noted in this case, ‘it is uncontroverted that the SIF funds at issue are being used in the HPP for purposes which relate to or are incidental to workers’ compensation.’ “
{¶ 68} The Disabled Workers’ Relief Fund (“DWRF”) was created in 1953 as a subsidy to certain recipients of workers’ compensation. 125 Ohio Laws 506. “The creation of this subsidy was based upon the recognition that a large number of permanently and totally disabled claimants were receiving low levels of compensation, because benefits payable in a compensation claim are limited to those in effect at the time of injury, and inflation tended to victimize the recipients of such continuing benefits.” Fulton, Ohio Workers’ Compensation Law, supra, at 318, Section 10.6.
{¶ 69}
{¶ 70} The DWRF is obviously designed to pay supplemental benefits to a designated group of injured workers. “The recipients of the DWRF subsidy, namely those permanently and totally disabled employees who have previously been awarded workers’ compensation, are clearly members of this designated group.” Thompson, supra, 1 Ohio St.3d at 247, 1 OBR at 268, 438 N.E.2d at 1169. Thus, the DWRF is entirely consistent with the constitutionally enumerated
{¶ 71} As we explained in Thompson:
“The General Assembly is afforded substantial discretion to implement a comprehensive workers’ compensation program and it is not the function of the judiciary to question the wisdom of the General Assembly’s exercise of its permissive powers under
Section 35, Article II , so long as these powers are used in furtherance of the constitutionally enumerated purpose. The DWRF subsidy received by eligible permanently and totally disabled workers infusesSection 35, Article II with a meaningfulness that is fully consistent with the goals that prompted the people of Ohio to approveSection 35, Article II in the first place. Indeed, to hold otherwise and declare the DWRF program as presently funded and administered unconstitutional makes a cruel mockery of the laudable purpose that the constitutional provision was designed to serve.” Id., 1 Ohio St.3d at 249, 1 OBR at 269, 438 N.E.2d at 1171.
{¶ 72} Accordingly, we agreed with the commission in Thompson that “the transfer of SIF investment funds to the DWRF is qualitatively different from the diversion of SIF funds proscribed in Corrugated Container. The DWRF is an integral component of Ohio’s comprehensive workers’ compensation program and, therefore, the use of SIF investment income to fund the DWRF does not contravene the principle enunciated in Corrugated Container.” Id. at 247, 1 OBR at 267, 438 N.E.2d at 1169.
{¶ 73} The obvious distinction between Corrugated Container and Thompson lies in the qualitative difference between using SIF funds to pay for administrative costs and using SIF funds to provide compensation to workers who are injured in the course of their employment. It is in this sense that we considered the DWRF to be an integral component of the workers’ compensation program in Thompson. It can hardly be considered the intent of this single sentence in
{¶ 74} The same qualitative difference between administrative costs and workers’ compensation that led us to distinguish Corrugated Container in Thompson should now compel us to distinguish Thompson. While the medical management services of the MCOs may be an “ ‘integral part’ of the HPP,” the HPP is qualitatively different from the DWRF. The DWRF program is established to pay supplemental compensation to injured workers; the HPP has no compensation component. Thus, the use of SIF contributions to fund the HPP contravenes the principle enunciated in Corrugated Container.
{¶ 75} For all of the foregoing reasons, the bureau acted without statutory or constitutional authority in diverting SIF contributions to pay administrative and performance incentive fees to MCOs under the HPP, and the judgment of the court of appeals should be affirmed.
DOUGLAS and F.E. SWEENEY, JJ., concur in the foregoing dissenting opinion.
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Gallon & Takacs Co., L.P.A., Theodore A. Bowman, Jack Gallon and John M. Roca, for appellees.
Betty D. Montgomery, Attorney General; Schottenstein, Zox & Dunn, L.P.A., Kris M. Dawley and Russell J. Kutell, for appellants James Conrad and the Ohio Bureau of Workers’ Compensation.
Zeiger & Carpenter, John W. Zeiger, Marion H. Little, Jr., and Ronald E. Laymon, urging reversal for amicus curiae MCO League of Ohio.
Stewart Jaffy & Assoc. Co., L.P.A., Stewart R. Jaffy and Marc J. Jaffy, urging affirmance for amicus curiae Ohio AFL-CIO.