THE STATE EX REL. HAYLETT v. OHIO BUREAU OF WORKERS’ COMPENSATION ET AL.
No. 98-675
SUPREME COURT OF OHIO
December 29, 1999
87 Ohio St.3d 325 | 1999-Ohio-134
PFEIFER, J.
Submitted May 18, 1999. IN MANDAMUS and PROHIBITION.
The managed care organization program enacted in
{¶ 1} In 1993, the General Assembly enacted
{¶ 2} An integral part of the HPP is the use of managed care organizations (“MCOs“), private entities that contract with the BWC to provide medical management and cost containment services. Each MCO has a network of business partners that provides a full range of medical services and supplies, including specialized services.
{¶ 3} Relator-claimant, Duetta Haylett, was injured at work on September 20, 1994. She filed a workers’ compensation claim that was allowed. Following
{¶ 4} Respondent Anthem Blue Cross and Blue Shield, Inc. (“Anthem“) is a certified MCO that contracted with Haylett‘s employer to manage the medical aspect of Haylett‘s workers’ compensation claim. In early 1998, Anthem conducted a utilization review of the chiropractic treatment that Haylett was receiving. In a utilization review, the MCO assesses the employee‘s medical care in terms of medical necessity, the appropriateness of the place, level, and duration of care, and the frequency or quality of the services being provided.
{¶ 5} Haylett initiated Anthem‘s dispute resolution process on February 18, 1998. Within a week, Anthem arranged another chiropractic review. That chiropractor also concluded that Haylett‘s chiropractic care was not medically necessary for her allowed conditions.
{¶ 6} On March 3, 1998, Haylett filed for a second level of review in Anthem‘s dispute resolution process. Another review was conducted on March 4, 1998, by a different chiropractor, who also concluded that Haylett was not benefiting from her chiropractic treatments. On March 9, 1998, Anthem informed Haylett and Dr. Viers of the results of the second level of the dispute resolution process.
{¶ 8} While her administrative appeal was pending before the Industrial Commission, Haylett filed for a writ of mandamus and a writ of prohibition. She seeks to compel respondents BWC and Industrial Commission to prevent MCOs from “terminating” medical treatment and benefits and from following the mandatory dispute resolution process for MCOs in
{¶ 9} This cause is now before this court as an original action in mandamus and prohibition.
Stewart Jaffy & Associates Co., L.P.A., Stewart R. Jaffy and Marc J. Jaffy, for relator, and urgins issuance of the writs for amicus curiae, Ohio AFL-CIO.
Betty D. Montgomery, Attorney General, and Dennis L Hufstsader, Assistant Attorney General, for respondent Ohio Bureau of Workers’ Compensation; and James A. Barnes, Assistant Attorney General, for respondent.
Vorys, Sater, Seymour & Pease, L.L.P., Michael J. Canter and Jacklyn J. Ford, for respondent Anthem Blue Cross and Blue Shield.
Gallon & Takacs Co., L.P.A., and Theodore A. Bowman, urging issuance of the writs for amicus curiae, Ohio Academy of Trial Lawyers.
Garvin & Hickey, L.L.C., Preston J. Garvin and Michael J. Hickey, urging denial of the writs for amici curiae, Ohio Chamber of Commerce, Ohio Manufacturers Association, Ohio Chapter of the National Federation of Independent Business, and Ohio Farm Bureau.
PFEIFER, J.
{¶ 10} At issue in this case is the constitutionality of the MCO program. Haylett argues that the MCO program violates Section 35, Article II of the Ohio Constitution because it is an improper delegation of authority to a private entity. We disagree. She also argues that MCOs violate due process when they terminate a claimant‘s medical treatment without providing prior notice and a prior hearing. We agree that the MCO program as currently administered can lead to deprivations of due process. However, based on the facts of this case, we determine that Haylett was not deprived of due process. Accordingly, we deny the writ.
{¶ 11} A statute is presumed to be constitutional and every reasonable presumption will be made in favor of its validity. State ex rel. Michaels v. Morse (1956), 165 Ohio St. 599, 603, 60 O.O. 531, 533, 138 N.E.2d 660, 664; State ex rel. Dickman v. Defenbacher (1955), 164 Ohio St. 142, 147, 57 O.O. 134, 137, 128 N.E.2d 59, 63. Accordingly, any doubt as to constitutionality is resolved in favor of the validity of the statute. Id.
The HPP/MCO Program
{¶ 12} The MCO program was created as part of an overall plan, enacted by the General Assembly in
{¶ 13} On March 28, 1995, the committee reached unanimous agreement on key aspects of the BWC‘s HPP. Following public hearings, the BWC promulgated a series of administrative rules in Ohio Adm.Code Chapter 4123-6 to implement the HPP.
{¶ 14} Under the new program, the BWC administers the HPP and monitors the MCO program, including certifying each MCO and individual provider. The BWC also conducts regular recertification reviews. The BWC exclusively determines whether a claim is compensable and what conditions are allowed, subject only to an appeal to the Industrial Commission.
{¶ 15} The medical aspect of each claim is managed by an MCO. The MCO must promptly notify the BWC of an employee‘s industrial injury. While the BWC determines the compensability of a claim, the MCO works “in conjunction with the employer, employee, attending physician, and the [BWC to] seek a course of medical or rehabilitative treatment that promotes a safe return to work.”
{¶ 16} During the life of a medical claim, the MCO performs utilization reviews, as in the case of Haylett. Utilization reviews ensure that only medical services and supplies that are medically necessary for the diagnosis and treatment of allowed conditions and that are causally related to those conditions will be considered for payment. The MCO must submit all medical bills to the BWC.
{¶ 17} The MCO program has a mandatory dispute resolution process that is available to employees, employers, and providers.
Section 35, Article II, Ohio Constitution
{¶ 18} Section 35, Article II of the Ohio Constitution provides that “laws may be passed establishing a state fund to be * * * 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 * * * collect, administer and distribute such fund, and to determine all rights of claimants thereto.” Section 35, Article II has been interpreted as a permissive grant of authority to the General Assembly and not a limitation upon its authority. State ex rel. Michaels v. Morse, supra, 165 Ohio St. at 603, 60 O.O. at 533, 138 N.E.2d at 663.
{¶ 19} Haylett contends that Section 35, Article II of the Ohio Constitution was violated because the BWC transferred its duty to administer the workers’ compensation system to a private entity.
{¶ 20} MCOs manage only the medical aspect of state-funded workers’ compensation medical benefits claims. MCOs coordinate treatment plans and review the plans to ensure that a claimant‘s treatment is medically necessary for the diagnosis and treatment of the allowed conditions. MCOs reimburse medical
{¶ 21} The BWC supervises MCOs and continually monitors and evaluates their performance. The BWC regularly reviews the certification of each MCO. The BWC makes the final decision as to payment and issues payment from the State Insurance Fund to MCOs so they can reimburse individual medical providers.
{¶ 22} Any decision by an MCO regarding treatment or payment is nonbinding and subject to multiple levels of review. The final decision as to any aspect of the claim lies with the Industrial Commission. Under the MCO program, injured employees receive the same benefits as under the previous system.
{¶ 23}
{¶ 24} We do not agree that the MCO program constitutes an attempt to privatize the state‘s workers’ compensation system in violation of Section 35, Article II of the Constitution. See State ex rel. Turner v. United States Fid. & Guar. Co. of Baltimore (1917), 96 Ohio St. 250, 117 N.E. 232 (legislation authorizing employers to self-insure for workers’ compensation upheld as constitutional). The state supervises the MCOs and makes the final decision as to the award and payment of compensation. Further, injured employees are entitled to receive the same benefits they would have received under the prior system. We hold that the MCO program is not an improper delegation of authority to a private entity and therefore does not violate Section 35, Article II of the Constitution on that ground.
{¶ 26} Under the prior system, the BWC could refuse to authorize payment for treatment without advance notice or a hearing. BWC claims examiners, who usually had no formal medical training, conducted medical reviews for reasonableness and necessity. If the BWC terminated authorization for continued treatments, the claimant could appeal that decision to the Industrial Commission. At that time, the claimant was afforded his or her first opportunity to submit additional evidence or argument. This process normally took several months to complete.
{¶ 27} The MCO dispute resolution process mandates two independent reviews by medical experts within weeks of the MCO‘s initial determination. If the claimant receives an adverse decision, the claimant is given an explanation for the denial and has the opportunity to submit additional evidence. Employers and providers may also take advantage of this process. Mandatory deadlines ensure that the dispute resolution process moves quickly.
{¶ 28} We do not believe that a dispute resolution process that provides for two reviews by medical experts over a period of less than a month and that affords a claimant the opportunity to submit additional information in support of the treatment requested constitutes a violation of the claimant‘s constitutional right to workers’ compensation benefits. We also do not believe that this non-binding review system is quasi-judicial in nature.
{¶ 29} MCOs do not usurp the power and authority of the state to administer the State Insurance Fund or to determine the terms and conditions of payment. Accordingly, we hold that the statutory scheme authorizing the MCO program does not violate Section 35, Article II of the Ohio Constitution.
{¶ 30} The
{¶ 31} In a due process challenge pursuant to the
{¶ 32}
{¶ 33}
{¶ 34}
{¶ 35} The BWC has not argued that Haylett did not comply with these requirements; indeed, the BWC had been paying for treatment for Haylett since late 1994. Instead, the BWC argues that Haylett must prove that she is entitled to ongoing medical benefits, citing
{¶ 36}
{¶ 37} In State ex rel. Jeep Corp. v. Indus. Comm. (1991), 62 Ohio St.3d 64, 66, 577 N.E.2d 1095, 1097, we stated that a “claimant has the burden of supplying medical evidence to support a temporary total disability.” However, a significant factor in that case was the fact that the claimant‘s own doctor did not believe that the claimant was temporarily and totally disabled. Id. In this case, Haylett‘s medical care provider believes that she needs ongoing medical attention. Accordingly, Jeep Corp. does not control this case.
{¶ 38} The BWC describes the current situation as a ”refusal to authorize future medical treatment” and not a termination of medical benefits. (Emphasis sic.) It states that the distinction is significant; we see the distinction as being
{¶ 39} To determine what process is due, it is necessary to consider three factors:
(1) the private interest that will be affected by the official action;
(2) the risk of an erroneous deprivation of that interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and
(3) the government‘s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Mathews, 424 U.S. at 334-335, 96 S.Ct. at 902-903, 47 L.Ed.2d at 33.
{¶ 40} In this case, the interest affected was the continuation of workers’ compensation medical benefits to which Haylett was entitled pursuant to
{¶ 41} The risk that Haylett‘s medical benefits would be erroneously deprived due to the MCO appeals process was not great. The process provides for two timely reviews, a third review by the BWC, and a final appeal to the Industrial Commission. The primary risk engendered by the system is the loss of time. In
{¶ 42} The governmental interest involved is primarily financial. The MCO program is designed, at least in part, to minimize the amount expended, while ensuring that the workers’ compensation system serves its primary function of meeting the needs of its constituents.
{¶ 43} Anthem‘s decision to terminate medical benefits was not binding. The MCO appeals process and the statutory appeals process of
{¶ 44} Haylett also argues that Anthem has a vested interest in terminating her medical treatments so that its decision was biased. This argument is contradicted by the fact that Anthem‘s decisions are not binding and are subject to review by the Industrial Commission.
{¶ 45} Haylett also fails to establish that Anthem‘s decision that her chiropractic treatments were no longer necessary promotes a financial interest of Anthem‘s. Anthem‘s MCO fee is not based upon the number of claims pending or closed, nor is it related to any particular cost-cutting measure. We reject Haylett‘s
Conclusion
{¶ 46} A writ of mandamus is an extraordinary remedy. To be entitled to a writ of mandamus, a relator must establish a clear legal right to the relief requested, a clear legal duty to perform the requested act on the part of the respondent, and no plain and adequate remedy at law for the relator. State ex rel. Crabtree v. Ohio Bur. of Workers’ Comp. (1994), 71 Ohio St.3d 504, 510, 644 N.E.2d 361, 367. Haylett has failed to establish that she has a clear legal right to the relief requested. We, therefore, deny her request for a writ of mandamus.
{¶ 47} For a writ of prohibition to issue, the relator must prove “(1) that the court or officer against whom the writ is sought is about to exercise judicial or quasi-judicial power, (2) that the exercise of that power is unauthorized by law, and (3) that denying a writ will result in injury for which no other adequate remedy exists in the ordinary course of law.” State ex rel. Keenan v. Calabrese (1994), 69 Ohio St.3d 176, 178, 631 N.E.2d 119, 121; State ex rel. Ruessman v. Flanagan (1992), 65 Ohio St.3d 464, 465, 605 N.E.2d 31, 33. We deny Haylett‘s request for a writ of prohibition because we find that the MCO program is authorized by law and that it does not unlawfully exercise quasi-judicial authority.
Writs denied.
MOYER, C.J., RESNICK, F.E. SWEENEY and LUNDBERG STRATTON, JJ., concur.
COOK, J., concurs in judgment only.
DOUGLAS, J., dissents.