Use Back Button to return to Index of Cases
1998 MTWCC 82
WCC No. 9705-7754
LIBERTY NORTHWEST INSURANCE CORPORATION
TURN OF THE CENTURY, INCORPORATED
Summary: After learning the claimant's physician, Dr. Richard A. Nelson, did not have hospital privileges and thus did not meet the criteria of section 39-71-116(30), MCA (1993) for designation as a treating physician, insurer informed claimant it would not reimburse for future treatment by that physician. Claimant argued the insurer had compensated Dr. Nelson during her first two years of treatment with him, that changing physicians would create a hardship, and that the insurer was equitably estopped from refusing future compensation to Dr. Nelson. Claimant also argued section 39-71-116(30), MCA (1993) was unconstitutional in that it limited medical payments under the WCC to physicians with hospital privileges.
Held: The insurer was not equitably estopped from refusing future payment to Dr. Nelson where it did not make any representation or concealment of fact and was not shown to have knowledge that Dr. Nelson did not meet statutory criteria for a treating physician. [Note: the WCC was reversed on this ground; see Selley v. Liberty Northwest, 2000 MT 76.] The statutory distinction between physicians with and without hospital admitting privileges is not unconstitutional. While claimant invoked the due process clauses of the Montana and federal constitutions, her arguments follow equal protection analysis. In determining whether the distinction is rationally related to a legitimate government objective, the Court is not limited to the legislative record but must consider any possible purpose of the legislation. A requirement of hospital privileges does have legitimate legislative purposes. If a claimant requires hospitalization and her treating physician does not have admitting privileges, another physician must be called in, leading to a likely learning curve and potential additional cost. Moreover, hospital privileges are not granted to every licensed physician and the requirement can serve as a means to filter out the least competent physicians. Although the record contains no question of Dr. Nelson's competence, and suggests he gave up admitting privileges as a result of moving his residence beyond hospital proximity requirements, the distinction nonetheless is rationally related to legitimate governmental purposes. The fact that a legislative classification is "imperfect" does not mean it necessarily violates equal protection.
¶1 This case is presented for decision based on an agreed statement of facts and stipulated exhibits. The issue is whether respondent's, Liberty Northwest Insurance Corporation (Liberty), refusal to recognize and reimburse Dr. Richard A. Nelson as claimant's treating physician was improper.
¶2 Darci Selley (claimant) was injured on January 7, 1995, while working for Turn of the Century, Incorporated, which was insured by Liberty. Liberty accepted liability for her claim and has paid both wage loss and medical benefits.
¶3 Since her injury the claimant has been treated by Dr. Nelson. For the first two years of treatment, Liberty reimbursed Dr. Nelson for his treatments, however, in the first quarter of 1997, Liberty's claims adjuster learned that Dr. Nelson does not have hospital admitting privileges at any hospital near his medical practice. Liberty then refused further reimbursement to Dr. Nelson on the basis that he does not qualify as claimant's treating physician. Its refusal affected only prospective reimbursement. It did not refuse payment of any of Dr. Nelson's bills incurred prior to its notice that it was not responsible for his services.
¶4 Liberty's refusal to reimburse Dr. Nelson after it learned he lacks hospital admitting privileges is based on section 39-71-116(30), MCA (1993), which provides:
¶5 The parties agree that Dr. Nelson does not have admitting privileges at either St. Vincent Hospital or the Deaconess Hospital in Billings, Montana. They also agree that he has not had admitting privileges at either hospital for the last seven years. He had them prior to that time but resigned his privileges when he moved to Columbus, Montana.
¶6 Based on the agreed issues presented in this case, the Court must and does assume that the Billings hospitals are the relevant hospitals for purposes of section 39-71-116(30), MCA (1993), or that Dr. Nelson does not have admitting privileges at any other hospital "in the area" where he practices. At least claimant does not argue that Dr. Nelson has admitting privileges which would satisfy the section.
¶7 In disputing Liberty's refusal to further reimburse Dr. Nelson, claimant tenders two legal grounds. First, she argues that Liberty's prior payments to Dr. Nelson estops it from now disputing that he is her treating physician. Second, she argues that section 39-71-116(16), MCA (1993), is unconstitutional.
¶8 The doctrine of equitable estoppel precludes a party from profiting from its wrong:
Billings Post No. 1634 v. Montana Dept. of Revenue, 284 Mont. 84, 90, 943 P.2d 517, 520 (1997). Even without consideration of the specific elements of the doctrine, claimant has failed to demonstrate any wrong by Liberty. At best she has demonstrated that Liberty belatedly learned that Dr. Nelson did not have admitting privileges and therefor did not satisfy the definition of a treating physician.
¶9 Beyond a general purpose analysis, the elements which the claimant must prove to estop Liberty are:
¶10 The facts of this case do not satisfy the first element. Liberty's payment of Dr. Nelson's bills did not amount to a representation or concealment of fact. It simply paid the bills he submitted.
¶11 Even if the payments can be construed as a representation or concealment, claimant has failed to satisfy the second element. She has failed to establish that Liberty knew Dr. Nelson did not meet the treating physician definition. She has also failed to show that the circumstances were "such that knowledge of" that fact must be imputed to it.
¶12 Even assuming that the first two elements are satisfied, the third is not. In Elk Park Ranch, Inc. v. Park County, 282 Mont 154, 166, 935 P.2d 1131, 1138 (1997), the Supreme Court elaborated on the requirement that the complaining party have no knowledge concerning the truth of the represented facts:
In this case, there is no evidence that claimant lacked equal means to ascertain whether Dr. Nelson had hospital privileges. Indeed, she could have simply asked him.
¶13 In attacking the constitutionality of section 39-71-116(30), MCA (1993), claimant bears a heavy burden. She must persuade the Court beyond a reasonable doubt that the statute is unconstitutional.
Heisler v. Hines Motor Co., 282 Mont. 270, 279, 937 P.2d 45, 50 (1997) (citations omitted).
¶14 Claimant's constitutional challenges are directed at the requirement that Dr. Nelson have hospital privileges to qualify as a treating physician. While invoking the due process clauses of both the Montana and United State Constitutions, Mont. Const. Art. II, sec. 17; U.S. Const. Amend. 14, claimant's specific arguments are based on an alleged right to freedom of contract and on equal protection analysis. The contract argument amounts to two sentences and does not warrant discussion. Her equal protection arguments, however, are well developed, although not well cited.
¶15 Both the United States and Montana constitutions guarantee equal protection of the laws. U.S. Const. Amend. 14; Mont. Const, Art. II, § 4. "The principal purpose of the Equal Protection Clause is to ensure that citizens are not subject to arbitrary and discriminatory state action." Zempel v. Uninsured Employers' Fund, 282 Mont. 424, 428, 938 P.2d 658, 661 (1997). The Clause "does not require that all persons be treated alike regardless of whether their circumstances are the same; it requires only that all persons be treated alike under like circumstances." Id. at 432, 938 P.2d at 663.
¶16 To satisfy equal protection demands, legislatively drawn distinctions in workers' compensation matters must be "rationally related to a legitimate government objective." Id. at 429, 938 P.2d at 661. In Montana Stockgrowers v. Dept. of Revenue, 238 Mont. 113, 777 P.2d 285 (1989), the Court described the rational basis inquiry in the following terms.
238 Mont. at 117-18, 777 P.2d at 288 (1989).
¶17 In determining the purpose of the hospital privileges requirement, the Court is not limited to the legislative record when ascertaining the possible purpose of the legislation or the relationship between the legislation and that purpose. Kadrmus v. Dickenson Public Schools, 487 U.S. 450, 463 (1979). Similarly, in examining the relationship between legislation and its purpose, the Court is not limited to justifications reflected in legislative history. Legislatures are not required to engage in the sort of fact-finding and analysis required of courts. Federal Communications Comm. v. Beach Communications, Inc., 508 U.S. 307, 314 (1993). Thus, the Court must consider "every conceivable basis" which might support the statute. Id. at 315. In Federal Communications Comm. v. Beach, the Supreme Court articulated the reasons for the broad judicial analysis of the challenged statute:
Id. at 315, 1993 U.S. LEXIS 3744.
¶18 In applying these principles, I must first determine whether the definition of a treating physician affects an insurer's liability for medical services. If it does not, then Liberty would be liable for Dr. Nelson's services irrespective of the definition.
¶19 The definition does in fact affect Liberty's liability to Nelson. Liberty's liability for claimant's medical expenses is spelled out in section 39-71-704, MCA (1993). Subsection (1) provides:
Under subsection (1)(a), Dr. Nelson's services must satisfy the definition of "primary medical services." The Court assumes, as it must, that this is the provision involved in the present case since neither party has argued that "secondary medical services" are at issue.
¶20 "Primary medical services" are defined in section 39-71-116(21), MCA (1993), as follows:
Stringing sections 39-71-116(21) and 39-71-704(1)(a) together, Liberty is liable for Dr. Nelson's services if, and only if, his services are "primary medical services." Since "primary medical services" must be prescribed by a treating physician, and since Dr. Nelson does not qualify as a treating physician, Liberty is not liable for his services or for any treatment he prescribes. Thus, the issue raised by claimant is properly joined in this litigation.
¶21 Utilizing the equal protection analysis set out previously, the Court must determine whether the legislature's limitation of medical payments to physicians with hospital privileges has a legitimate governmental purpose and whether the limitation is related to that purpose.
¶22 Claimant urges that the hospital privileges requirement is rifle shot legislation aimed specifically at Dr. Nelson, therefore its purpose is corrupt and illegitimate. Consideration of her argument would require that I engage in a fact-finding exercise regarding the legislature's intent. The Montana legislature has 100 representatives and 50 senators. Any attempt by me, or any other court, to determine the motivation of legislators voting for the requirement would require mind-reading. It is the sort of analysis condemned by the United States Supreme Court.
¶23 Claimant's challenge, however, is not limited to legislative motives. She further argues that the denial of reimbursement for treatment by a physician lacking hospital privileges is irrational. The Court disagrees.
¶24 A requirement of hospital privileges has a legitimate purpose. If a claimant requires hospitalization and her treating physician does not have admitting privileges, then another physician will have to be called in. There is a learning curve for any new physician, and the potential of an additional cost.
¶25 Moreover, hospital privileges are not granted every licensed physician. In this day and age, concern with the competency of physicians goes beyond minimal licensing requirements. The Congress of the United States has by law established a national registry of physicians with the express purpose of obtaining and disseminating information concerning medical malpractice suits, disciplinary action by licensure boards, and disciplinary action taken with regard to hospital privileges. 42 USC §§ 11101 to 11137. The national registry was established in 1986, P.L. 99-660. Insurance companies, medical licensing boards, and health care entities, including hospitals, are required to report malpractice claims, adverse licensing actions, and actions adversely affecting clinical privileges. 42 USC §§ 11131 to 11133. Hospitals are required to obtain information reported to the national database prior to granting a physician clinical privileges and to check with the national registry every two years concerning physicians with hospital privileges. 42 USC § 11135. Hospitals are likely to filter out the least competent physicians in granting and continuing hospital privileges.
¶26 In saying this, the Court does not intend to disparage Dr. Nelson's competence or qualifications. It has no evidence to indicate that Dr. Nelson gave up his hospital privileges for any reason other than his relocating to Columbus, Montana. I assume that he is highly qualified and competent. However, the fact that he would be granted hospital privileges if he requested them does not invalidate the hospital privileges requirement.
¶27 The fact that a legislative classification is "imperfect" does not mean it necessarily violates equal protection principles. Arneson v. State by and through Dept. of Admin., Teachers' Retirement Div., 262 Mont. 269, 274, 864 P.2d 1245, 1248 (1993). Mathematical nicety and perfect equality are not required. Dandridge v. Williams, 397 U.S. 471, 485 (1970). Given the scrutiny contemplated by Congress in adopting the national registry for physicians, it is reasonable to assume that, as a group, physicians with hospital privileges are more competent, as measured by malpractice and adverse actions with respect to licensure and medical privileges, than the group of physicians lacking hospital privileges.
¶28 Claimant points out, however, that medical practitioners other than physicians licensed under Title 37, chap. 3, MCA, are not subject to the hospital privilege requirement. She argues that there is no rational basis for the distinction. The Court disagrees.
¶29 The distinction between medical doctors, on the one hand, and dentists and chiropractors, on the other, is rationally justified by the fact that the conditions treated by the latter two professions are far more limited than the conditions treated by medical doctors and typically do not require hospitalization. Chiropractic treatment is essentially limited to external adjustment and manipulation: chiropractors cannot prescribe prescription drugs or perform surgery, however, minor.(1) The practice of dentistry is limited to mouth.(2)
Medical doctors are required to have a far broader knowledge of medical conditions and treatment, and are authorized to perform treatment which chiropractors and dentists are not. If the patient has a medical condition that may require hospitalization, then the patient is likely to also have a medical doctor attending him or her in addition to any chiropractor or dentist.
¶30 Osteopaths licensed under Title 37, chapter 5, MCA, are similarly exempt from the hospital privileges requirement. § 39-71-116(30)(d), MCA (1993). Osteopaths may be licensed under either Title 37, chapter 5, or as medical doctors under Title 37, chapter 3. Osteopaths licensed under chapter 5 are limited in their practice, much like chiropractors. Section 37-5-101(2), MCA, defines the practice of osteopath, within the meaning of that chapter, as follows:
Osteopaths licensed under the chapter are expressly precluded from prescribing drugs or doing surgery. § 37-5-305, MCA.(3)
¶31 As noted briefly above, osteopaths may also be licensed as medical doctors under Title 37, chapter 3. Section 37-3-306(6), MCA, which is part of the licensing chapter applicable to medical doctors, provides:
Osteopaths who have graduated since 1955 from schools accredited by the American Osteopathic Association are licensed as medical doctors. §§ 37-3-102, 305, 306, MCA. Thus, they are subject to the hospital privileges requirement of section 39-71-116(30)(a), MCA (1993).
¶32 The distinction between medical doctors and physician assistants has a different sort of justification. That justification is apparent from the text of section 39-71-116(30)(c), MCA (1993), which provides that a claimant may elect a physician assistant (PA) as a treating physician only "if there is not a physician, as defined is subsection (30)(a), in the area where the physician assistant-certified is located." It is only when a medical doctor is unavailable to act as a treating physician that the provision comes into play. Permitting treatment by a PA is certainly more reasonable than requiring a claimant to obtain treatment outside of the area where he or she resides, or to go without treatment altogether. Inclusion of PAs in the list of treating physicians does not render subsection (30) irrational.
¶33 Claimant has failed to persuade me beyond a reasonable doubt that the hospital privileges requirement of section 39-71-116(30)(a), MCA, violates either her or Dr. Nelson's right to equal protection of the laws. The requirement has a legitimate purpose and is reasonably related to that purpose. The distinctions between medical doctors and other types of medical practitioners who may act as treating physicians are rational and not arbitrary.
¶34 Finally, I consider claimant's request for attorney fees and a penalty. An award of either requires a finding that the insurer has acted unreasonably. §§ 39-71-612, -2907, MCA. Whether or not I am correct in my decision on the merits of this case, the insurer's defenses are not unreasonable. Claimant's estoppel argument is not so patently correct that it cannot be reasonably disputed. And, unless a statute has already been declared unconstitutional, a litigant is entitled to rely on the presumption that the statute is constitutional.
¶35 1. The requirement that a physician licensed under Title 37, chapter 3, MCA, have hospital privileges in order to be designated a treating physician under section 39-71-116(30), MCA (1993), does not violate either the claimant's or Dr. Nelson's rights to equal protection of the laws.
¶36 2. The petition is dismissed with prejudice.
¶37 3. This Decision and Judgment is certified as final for purposes of appeal pursuant to ARM 24.5.348.
¶38 4. Any party to this dispute may have 20 days in which to request a rehearing from this Decision and Judgment.
DATED in Helena, Montana, this 16th day of November, 1998.
c: Mr. Don Edgar Burris
1. Section 37-12-101(3), MCA, defines the practice of chiropractic as follows:
2. Section 37-4-101(2), MCA, defines the practice of dentistry as follows:
3. The section provides:
Use Back Button to return to Index of Cases