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PENNSYLVANIA DENTAL ASSOCIATION ET AL. v. COMMONWEALTH PENNSYLVANIA (03/05/79)

decided: March 5, 1979.

PENNSYLVANIA DENTAL ASSOCIATION ET AL., PETITIONERS
v.
COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT, RESPONDENT; MEDICAL SERVICE ASSOCIATION OF PENNSYLVANIA, T/D/B/A PENNSYLVANIA BLUE SHIELD, INTERVENOR



Appeal from the Order of the Department of Insurance in case of In Re: Blue Shield Amendment No. 5 to Comprehensive Prepaid Dental Program 5-H-1970, RLA:7:19:77.

COUNSEL

Thomas A. Beckley, with him William J. Madden, Jr., Bradley S. Gelder, and, of counsel, Beckley & Madden, for petitioners.

David T. Kluz, Assistant Attorney General, for respondent, Commonwealth.

William H. Wood, with him Robert L. Rubendall, and Keefer, Wood, Allen and Rahal, for respondent, Pennsylvania Blue Shield.

President Judge Bowman and Judges Wilkinson, Jr., Mencer, Rogers, Blatt, DiSalle and MacPhail. Judges Crumlish, Jr. and Craig did not participate. Opinion by Judge MacPhail.

Author: Macphail

[ 41 Pa. Commw. Page 49]

This is an appeal by the Pennsylvania Dental Association (PDA) and several individual dentists (Petitioners) from a decision of the Department of Insurance (Department) approving Amendment No. 5 to Filing No. 5-H-1970, a comprehensive prepaid dental program (Master Contract), which provides for dental insurance payments from Pennsylvania Blue Shield (Blue Shield) to its subscribers and participating dentists.

After the proposed amendment had been submitted to the Department in February of 1977 and after proper advertising, a public hearing was held on June 17, 1977. At the hearing testimony was presented by the Department, Blue Shield and PDA. On July 19, 1977, the Insurance Commissioner for the Commonwealth (Commissioner) approved the amendment.

Our scope of review is set forth in Section 44 of The Administrative Agency Law (Law), Act of June 4, 1945, P.L. 1388, as amended, 71 P.S. ยง 1710.44.*fn1

[ 41 Pa. Commw. Page 50]

All insurance contract provisions must be approved by the Department before they may be implemented.*fn2 Prior to ruling upon any revisions, amendments or original contracts, the Department customarily affords interested persons the opportunity to be heard. Our case law indicates that

     where, as here, a statute confers discretion upon an administrative tribunal, its actions are subject to judicial review only to determine whether or not there has been an abuse of discretion or a purely arbitrary exercise of authority. . . . Whether the court may have reached a different opinion or judgment in a particular case is not sufficient to reverse administrative action because judicial discretion may not be substituted for administrative discretion. (Citation omitted.)

Slanina v. Sheppard, 27 Pa. Commonwealth Ct. 376, 379, 366 A.2d 963, 965 (1976). PDA and Petitioners (collectively, Appellants) contend that the Department's hearing in the instant case was conducted on an informal basis rather than a formal basis and that as a result "the atmosphere at the hearing prevented a record capable of supporting Department's adjudication." Appellants specifically complain that they were denied the right to cross-examine witnesses. We note from the record that the first witness called at the hearing was Mr. Archer, from the Department, who stated on behalf of the Commissioner that ...


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