Appeal from the Order of the Insurance Commissioner of the Commonwealth of Pennsylvania, in case of In Re: Pennsylvania Blue Shield, Camp Hill, PA 17011, Docket No. R84-3-3, dated April 16, 1985.
Thomas E. Wood, with him, William H. Wood, Keefer, Wood, Allen & Rahal, for petitioner.
Jean M. Callihan, Assistant Counsel, with her, Beth C. Sheligo, Assistant Counsel, M. Hannah Leavitt, Chief of Litigation, and Paul Laskow, Chief Counsel, for respondent.
Joseph J. Malatesta, Jr., with him, Kevin J. McKeon, Malatesta, Hawke, McKeon & Morris, for intervenor, The Chiropractic Fellowship of Pennsylvania.
Roger F. Cox, with him, Zenola Harper, Blank, Rome, Comisky & McCauley, for intervenors, Pennsylvania Chiropractic Society and the Individual Intervenors.
President Judge Crumlish, Jr., Judges Craig, MacPhail, Doyle, Barry, Colins and Palladino. Opinion by Judge Barry. Dissenting Opinion by President Judge Crumlish, Jr.
[ 103 Pa. Commw. Page 234]
This is an appeal by Pennsylvania Blue Shield (Blue Shield) from an adjudication of the Insurance Commissioner (Commissioner) that Blue Shield had violated Sections 6322 and 6329 of the Professional Health Services Plan Corporation Act (Act), 40 Pa. C.S. §§ 6322 and 6329 and Section 5(a)(7)(ii) of the Unfair Insurance Practices Act, Act of July 22, 1974, P.L. 589, 40 P.S. § 1171.5(a)(7)(ii). The proceedings before the Commissioner were initiated on March 15, 1984, by the Insurance Department (Department) which issued an Order to Show Cause against Blue Shield. Both the Pennsylvania Chiropractic Society and the Chiropractic Fellowship of Pennsylvania have intervened.
Blue Shield is a general medical service corporation engaged in operating a non-profit professional health service plan as defined under the Act. Blue Shield offers services under two different types of contracts. The "community-rated" contract is the standard Blue Shield contract offered to individuals and to groups having less than 100 members. The "experience-rated" contracts are those offered to groups of over 100 members, usually organizations or employers. All insurance rates and subscriber contracts must be approved by the Insurance
[ 103 Pa. Commw. Page 235]
Department under Section 6329 of the Health Services Act, 40 Pa. C.S.A. § 6329.
Until 1980 Blue Shield did not extend coverage for chiropractic services. However, by the Act of October 10, 1980, P.L. 801, No. 151 (Act 151), several significant amendments were made to the Act. Under Section 6302 of the Act, doctor of chiropractic was added to the definition of "health service doctor" and chiropractic services were included within the definition of professional health services. Under Section 6322(b) professional health services which were not included in a subscriber agreement must now be made available to a subscriber upon request and for an appropriate premium.
On December 29, 1980, Blue Shield submitted two filings to the Department for approval, both of which included endorsements to its community-rated group contracts which would provide coverage for services provided by doctors of chiropractic when requested by the subscriber and for an additional charge.*fn1 The Commissioner disapproved these filings in his Order and Adjudication of August 12, 1982, interpreting the new amendments set forth in Act 151 for the first time. The Commissioner ruled that Act 151 prevents Blue Shield from imposing requirements on those seeking chiropractic services which it does not impose upon those seeking the same services from other health service doctors. He observed that Blue Shield's right to select whatever services it provides to its subscribers is not affected; however, if it decided to provide a particular service it could not base its coverage on the type of license the service provider holds if that provider is a "health service doctor" as defined in Section 6302. Blue Shield did not appeal this ruling.
[ 103 Pa. Commw. Page 236]
On September 28, 1981, Blue Shield submitted to the Insurance Commissioner a filing proposing to add chiropractic services to experience-rated contracts when requested.*fn2 Blue Shield then requested that this filing be used as a prototype under which it would enroll all qualified experience-rated groups requesting chiropractic coverage and dispense with further filing requirements for each group. The Department granted these requests.
On March 15, 1984, the Department issued an Order To Show Cause alleging that Blue Shield violated the provisions of the Act and the Unfair Insurance Practices Act by improperly denying reimbursement to experience-rated group subscribers who, in availing themselves of services for which they were covered under their subscriber contracts, utilized the services of a chiropractor rather than a medical doctor or other health service doctor. On April 16, 1985, the Commissioner, adopting the reasoning of the previous Commissioner*fn3 in the August 12, 1982 Adjudication, ruled that Blue Shield was in violation of both the Act and the Unfair Insurance Practices Act. He made the following relevant conclusions of law:
3. Pennsylvania Blue Shield has violated Sections 6322 and 6329 of the Professional Health Services Plan Corporation Act, 40 Pa. C.S. §§ 6322 and 6329, by including doctors of chiropractic within the definition of 'doctor' in agreements with experience-rated groups only upon the specific request of such groups and upon
[ 103 Pa. Commw. Page 237]
the payment of a separate, additional initial payment for such inclusion.
4. Pennsylvania Blue Shield has violated Sections 6322(b) and 6329 of the Professional Health Services Plan Corporation Act, 40 Pa. C.S. §§ 6322 and 6329, by unfairly discriminating against certain health service doctors, namely doctors of chiropractic, by failing to reimburse doctors of chiropractic for performing professional health services covered under experience-rated group contracts for Pennsylvania Blue Shield subscribers, unless the experience-rated group specifically requests the inclusion of doctors of chiropractic, when it reimburses other health service doctors for performing the same professional health services without requiring that the experience-rated group specifically requests that other health service doctors be included in the contract.
5. Pennsylvania Blue Shield has violated Section 5(a)(7)(ii) of the Unfair Insurance Practices Act, Act of July 22, 1974, P.L. 589, No. 205, 40 P.S. 6 1171.5(a)(7)(ii), by unfairly discriminating between its subscribers who are covered by experience-rated group contracts and those covered by non-group direct pay contracts by providing payment for covered professional health services rendered by doctors of chiropractic to experience-rated group contract subscribers only when coverage for such services is specifically requested by the group.
Blue Shield was ordered to provide coverage for services performed by a chiropractor which are covered when performed by another health service doctor and to refrain from adding chiropractic coverage to ...