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PITTSBURGH v. INSURANCE DEPARTMENT PENNSYLVANIA ET AL. (09/22/72)

decided: September 22, 1972.

PITTSBURGH
v.
INSURANCE DEPARTMENT OF PENNSYLVANIA ET AL., APPELLANTS



Appeal from order of Commonwealth Court of Pennsylvania, Nos. 911 and 912 Commonwealth Docket 1970, in re City of Pittsburgh and County of Allegheny v. Insurance Department of Pennsylvania and George F. Reed, Insurance Commissioner, and Blue Cross of Western Pennsylvania.

COUNSEL

Charles D. Cowley, Assistant Attorney General, with him Gerald Gornish, Deputy Attorney General, and J. Shane Creamer, Attorney General, for appellant.

Eugene B. Strassburger, III, Executive Assistant City Solicitor, with him Thomas M. Rutter, Jr., Assistant County Solicitor, Francis A. Barry, County Solicitor, and Ralph Lynch, Jr., City Solicitor, for appellees.

Edward L. Springer, with him Springer & Perry, for intervening appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy and Nix, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Eagen concurs in the result. Mr. Justice Manderino took no part in the consideration or decision of this case. Concurring Opinion by Mr. Justice Pomeroy. Mr. Chief Justice Jones joins in this concurring opinion.

Author: Roberts

[ 448 Pa. Page 469]

Appellants, the Insurance Commissioner of Pennsylvania and intervenor Blue Cross of Western Pennsylvania,*fn1 seek reversal of an order of the Commonwealth Court*fn2 directing the Insurance Commissioner to hold a hearing subject to the requirements of the Administrative Agency Law*fn3 concerning a proposed rate filing by Blue Cross*fn4 and to permit appellees, the City of Pittsburgh and the County of Allegheny, to cross-examine witnesses at such hearing.*fn5 We need not reach the question, resolved by the Commonwealth Court, whether the approval of rates by the Insurance Commissioner pursuant to the Nonprofit Hospital Plan Act*fn6 is an "adjudication" for purposes of the Administrative Agency Law requiring a trial type hearing.*fn7 Instead, we hold contrary to the Commonwealth Court, that appellees the City of Pittsburgh and the County of Allegheny have no standing to challenge the procedures followed by the Insurance Department in approving or rejecting the rate filing submitted by Blue Cross.

[ 448 Pa. Page 470]

We therefore reverse the order of the Commonwealth Court.

Blue Cross filed a request on April 3, 1969, with the Insurance Commissioner for approval of an increase of rates charged to its subscribers in twenty-nine counties in Western Pennsylvania. The Insurance Commissioner then announced that a public informational hearing would be held to disclose the basis for the rate filing to interested persons and organizations and to provide such persons and organizations an opportunity to submit relevant information for consideration by the Insurance Department concerning the proposed rate filing.

At the hearing held on May 28 and May 29, 1969, the Insurance Commissioner announced that cross-examination of witnesses could be conducted only by the members of the Insurance Department. The City of Pittsburgh and the County of Allegheny objected to this limitation.*fn8 Their objections were overruled. After the hearings and the submission of additional data by Blue Cross, the Insurance Commissioner approved the rate filing on July 13, 1970. The rates were to go into effect on November 1, 1970.*fn9

The Nonprofit Hospital Plan Act under which Blue Cross filed its application provides: "The rates charged to subscribers by nonprofit corporations, subject to the provisions of this act . . . shall, at all times, be subject to the prior approval of the Insurance Department. . . . If any such application ...


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