Opinion ID: 1531008
Heading Depth: 1
Heading Rank: 2

Heading: Substantive Constitutional Provisions

Text: The plaintiffs fail to demonstrate any unconstitutional impairment of their contracts. A law which affects a contract does not necessarily violate Art. I, § 13 of the Constitution of Missouri and Art. I, § 10 of the Constitution of the United States. Private executory contracts are not immune from the valid exercise of the police power, and persons cannot oust the state of its police power by making long-term contractual arrangements. State ex rel. Kansas City v. Public Service Commission, 524 S.W.2d 855 (Mo. banc 1975). The police power exists to promote the public health, safety and welfare. Providing freedom of choice as to health care providers is clearly within the scope of this power. An exercise of the police power is valid if the objective is proper and the means adopted to accomplish that object are rationally related to the end sought. Missouri Dental Board v. Alexander, 628 S.W.2d 646 (Mo. banc 1982). Forbidding health service corporations from discriminating against certain health care providers is a rational method of ensuring freedom of choice in the health care market. Plaintiff cites Ketcham v. King County Medical Service Corp., 81 Wash.2d 565, 502 P.2d 1197 (1972), as authority that this type of freedom of choice statute unconstitutionally impairs contracts. We disagree with the logic of that decision. The Washington court viewed the purpose of the statute to be one of taking benefits from one class of providers and giving them to another. The opinion also revealed a strong bias against optometrists. The primary purpose of House Bill 127, as we see it, is to provide freedom of choice among health care providers. This is a matter of importance to the public health which falls within the police power of the state. The test of substantive due process is met if a statute has a rational relationship to a legitimate state interest. United States v. Carolene Products Co., 304 U.S. 144, 58 S.Ct. 778, 82 L.Ed. 1234 (1938). There is an obvious state interest in providing freedom of choice for health care consumers, and the statute bears a rational relationship to that interest. State policies are for the legislature to decide and legislative decisions should be reversed only upon a clear showing of unconstitutionality. Plaintiffs' due process argument has no merit. Plaintiffs claim a violation of the equal protection clause of the Fourteenth Amendment because §§ 354.027 and 354.090.2 apply only to health service corporations. Section 354.027 provides that such corporations must pay any licensed provider even though the corporation has no contract with the provider. Commercial insurance companies generally do not have provider contracts, and a provision of this kind is not necessary in the regulation of these companies. Section 375.936(11)(b) prevents insurance companies from discriminating against an extensive list of licensed providers in the provision of policy benefits. Section 354.090.2 would compel plaintiffs to recognize the assignment of membership benefits to a pharmacist as valid. Commercial insurance companies would not ordinarily discriminate among pharmacists because they do not usually make payments to pharmacists, and plaintiffs fail to demonstrate that this section places them at a invidious disadvantage. The equal protection clause guarantees equal treatment for all who are similarly situated but does not forbid a state from creating classes in the adoption of regulations under its police power. City of St. Louis v. Liberman, 547 S.W.2d 452 (Mo. banc 1977). The state may validly regulate health service corporations in a manner differing from the regulation of commercial insurers. The two are organized under different chapters of the state code. Each provides insurance by different methods. Plaintiffs' own witness testified that there is a rational basis for treating health service corporations in a different way. The statutes contain several chapters, each applying to a different class of insurer, and the provisions show substantial variation. Plaintiffs are not members of a suspect class, nor does the statute involve fundamental personal rights. Plaintiffs, therefore, have the burden of showing that any distinction is purely arbitrary. Such a showing has not been made. When the substantial differences between nonprofit hospital and medical service corporations and commercial insurance carriers are considered, the legislature, in exercising its police powers, may classify nonprofit corporations as separate from commercial insurers. Hospital Service Corp. of Rhode Island v. West, 112 R.I. 164, 308 A.2d 489 (1973). With this power goes the authority to regulate the industries differently if the regulation is reasonable. On this point, plaintiff again relies on a decision from another state. Blue Cross v. Commonwealth of Virginia, 221 Va. 349, 269 S.E.2d 827 (1980). An anti-discrimination statute exempted commercial insurance companies from 1973 until 1979. Missouri already has a statute, § 375.936(11)(b), prohibiting discrimination by commercial insurers. The statute does not impose an onerous burden on the plaintiff. We also disagree with the Virginia Court's holding that there are no differences between health service corporations and commercial insurers which justify differing regulation.