Original jurisdiction in case of Parkview Hospital and Tri-County Hospital v. Commonwealth of Pennsylvania, Department of Public Welfare.
James H. Stewart, Jr., Nauman, Smith, Shissler & Hall, for petitioners.
Margaret Hunting, Deputy Attorney General, with her John A. Kane, Assistant Attorney General, Joel M. Ressler, Deputy Attorney General, and Harvey Bartle, III, Acting Attorney General, for respondents.
President Judge Crumlish and Judges Wilkinson, Jr., Mencer, Rogers, Craig, Williams, Jr. and Palladino. Judges Blatt and MacPhail did not participate. Opinion by Judge Wilkinson, Jr. Dissenting Opinion by Judge Craig. Judge Williams, Jr. joins this dissent.
[ 56 Pa. Commw. Page 219]
By an Application for an Ex Parte Preliminary Injunction and by a Petition for Review, the Hospital Association of Pennsylvania (Association) and over 150 individual member hospitals brought an action in equity to enjoin the operation of a "nondiscrimination clause" contained in Paragraph B(11) of a November 1979 Inpatient Hospital Care Agreement (Agreement). The Agreement is a contract between the Department of Public Welfare (Department) and hospitals agreeing to participate in the Pennsylvania Medical Assistance (Medicaid) program. Section 443.1 of the Public Welfare Code, Act of June 13, 1967, P.L. 31, as amended, added by Section 5 of the Act of July 31, 1968, P.L. 904, as amended, 62 P.S. § 443.1,
[ 56 Pa. Commw. Page 220]
requires all hospitals seeking to receive Medicaid payments to enter into a written agreement with the Department. Paragraph B(11) of the Agreement was included by the Department pursuant to Section 49.101 of the Human Relations Commission's contract compliance regulations, 16 Pa. Code § 49.101, and incorporates the "nondiscrimination clause" contained in 16 Pa. Code § 49.101(d). The Medicaid contracts to which the Association's member hospitals were parties when the Application for an Ex Parte Injunction and the Petition for Review were filed did not contain the "nondiscrimination clause" and were on the verge of terminating.
On November 16, 1979 a hearing on the application for an injunction was held before the late President Judge Bowman, who entered an order enjoining both the termination of the then existing medicaid contracts and the implementation or enforcement of Paragraph B(11) of the new Agreement then being offered by the Department. The hospitals signed the new contracts before President Judge Bowman, after a hearing on continuation of the temporary injunction, issued a new order on December 19, 1979 continuing the injunction with respect to certain subsections of Paragraph B(11) of the Agreement. An appeal from that preliminary injunction now awaits the review of the Pennsylvania Supreme Court. Upon stipulation by counsel for all parties and order of this Court, Parkview Hospital and Tri-County Hospital of Springfield remain as the petitioners.
The Petition for Review submits, inter alia, that the affirmative action duties imposed by the Agreement's Paragraph B(11) are beyond the jurisdiction and authority of the Department, that they are inconsistent with provisions of the Pennsylvania Human Relations Act, Act of October 27, 1955, P.L. 744, as amended, 43 P.S. § 951 et seq., and that the Human Relations
[ 56 Pa. Commw. Page 221]
Commission's contract compliance regulations and their source, Governor's Executive Order 1972-1, are unauthorized. Presently before the Court are the Department's preliminary objections.
The Department's first preliminary objection raises the question of this Court's jurisdiction over the matter in that petitioners have alleged no harm in connection with inclusion of the "nondiscrimination clause" and have no standing to bring this action. The lack of standing argument appears to be based on the Department's assertion that if petitioners "do not want to comply with the provisions of the Agreement, they can elect not to participate in the medical assistance program." We reject the theory that the petitioners "lost no right or legitimate expectation ...