Managed Healthcare Northwest, Inc. v. Department of Consumer & Business Services

75 P.3d 912, 189 Or. App. 444, 2003 Ore. App. LEXIS 1219
CourtCourt of Appeals of Oregon
DecidedSeptember 10, 2003
Docket02-053; A117587
StatusPublished
Cited by1 cases

This text of 75 P.3d 912 (Managed Healthcare Northwest, Inc. v. Department of Consumer & Business Services) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Managed Healthcare Northwest, Inc. v. Department of Consumer & Business Services, 75 P.3d 912, 189 Or. App. 444, 2003 Ore. App. LEXIS 1219 (Or. Ct. App. 2003).

Opinion

*446 WOLLHEIM, J.

Petitioners, a group of Oregon workers’ compensation managed care organizations (MCOs), seek judicial review of OAR 436-015-0070(2). ORS 183.400. OAR 436-015-0070 provides, in part:

“(1) The MCO shall authorize a physician who is not a member of the MCO to provide medical services to an enrolled worker if the physician qualifies as a primary care physician [PCP]. For the purposes of this rule, the physician must:
* * * *
“(d) Agree to comply with all terms and conditions regarding services governed by the MCO. For purposes of this section, the phrase ‘all terms and conditions regarding services governed by the MCO’ means MCO treatment standards, protocols, utilization review, peer review, dispute resolution, billing and reporting procedures, and fees for services * * *.
******
“(2) The MCO cannot deny authorization of a primary care physician based on past practices.”

(Emphasis added.) For the reasons that follow, we determine that the rule is valid.

Under ORS 183.400(4), we may invalidate a rule only if we conclude that it violates the constitution, exceeds the agency’s statutory authority, or was adopted without compliance with applicable rulemaking procedures. Petitioners do not contend that the challenged rule was adopted without compliance with applicable rulemaking procedures, nor do they contend that the rule violates the constitution. Furthermore, petitioners concede, and we agree, that the director had the authority to promulgate the challenged rule. 1 *447 Petitioner’s only contention is that the adopted rule is ultra vires because it conflicts with the statutory mandates that require MCOs to provide “quality continuity, and other treatment standards,” ORS 656.260(4)(a), and to provide “adequate methods of * * * quality assurance * * * to ensure appropriate treatment or to prevent inappropriate * * * treatment, to exclude from participation in the plan * * * individuals who violate these treatment standards * * ORS 656.260(4)(d).

ORS 656.260 explains how health care providers may become “certified” to provide managed care as an MCO. ORS 656.260(1) provides, in part:

“Any health care provider or group of medical service providers may make written application to the Director of the Department of Consumer and Business Services to become certified to provide managed care to injured workers for injuries and diseases compensable under this chapter.”

ORS 656.260(5) explains that health care providers seeking to provide managed care must submit a plan that complies with statutory specifications; otherwise the director shall refuse, or may revoke or suspend, certification. ORS 656.260(5) provides, in part:

“The director shall refuse to certify or may revoke or suspend the certification of any health care provider or group of medical service providers to provide managed care if the director finds that:
“(a) The plan for providing medical or health care services fails to meet the requirements of this section.
“(b) Service under the plan is not being provided in accordance with the terms of a certified plan.”

Pursuant to ORS 656.260(4),

“[t]he director shall certify a health care provider or group of medical service providers to provide managed care under a plan if the director finds that the plan:
“(a) Proposes to provide services that meet quality, continuity and other treatment standards prescribed by the *448 director and will provide all medical and health care services that may be required by this chapter in a manner that is timely, effective and convenient for the worker.
* * * *
“(g) Authorizes workers to receive compensable medical treatment from a primary care physician who is not a member of the managed care organization, but * * * with whom the worker has a documented history of treatment, if that primary care physician agrees * * * to comply with all the rules, terms and conditions regarding services performed by the managed care organization. Nothing in this paragraph is intended to limit the worker’s right to change primary care physicians prior to the filing of a workers’ compensation claim.”

(Emphasis added.)

As petitioners contend, OAR 436-015-0070(2) prohibits MCOs from considering a PCP’s past practices when deciding whether to authorize a PCP to treat an injured worker. Petitioners argue that, to be authorized under ORS 656.260(4)(g), a PCP merely needs to agree “to comply with all the rules, terms and conditions regarding services performed by the managed care organization.” Petitioners contend that a “parade of horribles” will result if OAR 436-015-0070(2) is applied literally to preclude an MCO from ever denying authorization of a PCP because of the PCP’s “past practices.” For example, petitioners point out that, under OAR 436-015-0070(2), a PCP previously removed from an MCO for improper behavior (e.g., sexual abuse of a patient) who subsequently agrees once more “to comply with all the rules, terms and conditions” must be allowed to continue providing treatment. At oral argument, petitioners hypothesized that the rule could therefore allow for a “revolving door,” whereby unprofessional PCPs continually violate the MCO’s procedures but must be immediately reinstated by simply agreeing once more to comply.

Petitioners also argue that OAR 436-015-0070(2) “exceeds or contravenes specific, clearly expressed statutory policies and mandates” because, pursuant to ORS 656.260

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Bluebook (online)
75 P.3d 912, 189 Or. App. 444, 2003 Ore. App. LEXIS 1219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/managed-healthcare-northwest-inc-v-department-of-consumer-business-orctapp-2003.