Appeals from the decision of the Insurance Commissioner of Pennsylvania in the case of the Application of Blue Cross of Western Pennsylvania to the Insurance Commissioner, No. 5-HSA-1966.
Marion K. Finkelhor, Assistant City Solicitor, with him Ralph Lynch, City Solicitor, for appellant, City of Pittsburgh.
Maurice Louik, County Solicitor, with him Thomas M. Rutter, Jr., Assistant County Solicitor, for appellant, County of Allegheny.
Robert A. Miller, Assistant Attorney General, with him Frederic G. Antoun, Deputy Attorney General, and Fred Speaker, Attorney General, for appellees.
Edward L. Springer, with him Ruffin, Perry, Springer & Hazlett, for intervenor.
Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. President Judge Bowman disqualified himself. Opinion by Judge Manderino. Dissenting Opinion by Judge Mencer.
This case involves an appeal by the City of Pittsburgh (City) and the County of Allegheny (County) from a decision of George F. Reed, the Insurance Commissioner of Pennsylvania, approving a rate increase requested by Blue Cross of Western Pennsylvania (Blue Cross). On April 3, 1969, Blue Cross filed with the Insurance Department a request for a rate increase for its subscribers in twenty-nine counties in western Pennsylvania, including residents of the City of Pittsburgh and Allegheny County. The requested increase was publicly announced, as was the fact that the Insurance Commissioner would hold a public hearing in Pittsburgh to afford the public an opportunity to present any relevant information concerning the increase which had been submitted to the Insurance Department. When the hearing was convened on May 28, 1969, representatives from both the City and County were permitted to make statements. However, the Insurance Commissioner explicitly refused to allow anyone, except members of the Insurance Department, to cross-examine any representative of Blue Cross. Both the City and County objected to this procedure as being violative of due process procedures required by the Administrative Agency Law, but they were overruled by the Commissioner. The hearing was concluded on June 10, 1969, and on July 13, 1970, the Insurance Commissioner approved Blue Cross' request for a rate increase. The City and County appealed from the decision of the Commissioner approving the rate increase. Blue Cross of Western Pennsylvania participated as intervenor. This appeal was subsequently transferred to the Commonwealth Court pursuant to the Commonwealth Court Act (Act No. 185 of January 6, 1970 (1969) P.L. , 17 P.S. 211-1 et seq.).
The City and County have taken this appeal under the Administrative Agency Law (Act of June 4, 1945,
as amended, P.L. 1388, 71 P.S. 1710.1 et seq.). Section 41 (71 P.S. 1710.41) of the law provides for an appeal from an adjudication of an administrative agency.
The City and County specifically challenge the failure of the Commissioner to allow the City and County to cross-examine witnesses, arguing that an adjudication by the Commissioners without having given a party the right to cross-examine is error.
Blue Cross' position is that the approval of the rate increase was not an adjudication within the terms of the Administrative Agency Law and that therefore the procedural requirements of that law were not applicable to the hearings on the rate increase.
The central question is whether or not a decision by the Insurance Commissioner approving a rate increase by Blue Cross of Pennsylvania is an adjudication within the meaning of the Administrative Agency Law. If it is such an adjudication then the Commissioner was bound to give any party the right to cross-examine at the hearing.
First, there is no question that generally the Department of Insurance is covered by the Administrative Agency Law. That law specifically enumerates the agencies which are covered by the Administrative Agency Law and one of the listed agencies is the Insurance Department. (Section 51, 71 P.S. 1710.51).
Under the Administrative Agency Law an adjudication is defined as: ". . . any final order, decree, decision, determination or ruling by an agency affecting personal or property rights, privileges, immunities or obligations of any and all of the parties to the proceeding in which the adjudication is made, but shall not mean any final order, decree, decision, determination or ruling based upon a proceeding before a court, or which involves the seizure or ...