Opinion ID: 1265792
Heading Depth: 4
Heading Rank: 2

Heading: Applying the sliding scale analysis

Text: CFJ argues that the statute and regulation infringe on a fundamental interest, the physician-patient relationship, and consequently require a very high level of justification. See Falcon v. Alaska Public Offices Comm'n, 570 P.2d 469, 476 (Alaska 1977). The State responds that they affect only an economic or commercial interest, and are therefore only subject to the lowest level of scrutiny. See Herrik's Aero-Auto-Aqua Repair v. Dep't of Transp., 754 P.2d 1111, 1114 (Alaska 1988) (citing Isakson v. Rickey, 550 P.2d 359, 363 (Alaska 1976) (noting that legislation of economic and commercial interest is traditionally subject to the lowest level of scrutiny)). As the State correctly notes in its brief, the most precise description of the constitutional interest implicated here is the right of a health care provider to receive payment under the Workers' Compensation Act for continuing multiple treatments in excess of the frequency standards without administrative review. The regulation does not interfere with the doctor-patient relationship. It merely prescribes the procedures under which a physician may seek payment under the Act. Thus, the interest at issue is merely an economic one, entitled to the minimum level of judicial scrutiny. CFJ argues that, at the very least, the interest implicated here should be characterized as important because the care providers' right to engage in an economic endeavor in a particular industry is threatened. In State v. Enserch Alaska Constr., Inc., 787 P.2d 624, 633 (Alaska 1989), we held that although a statute providing that a hiring preference be given to residents of economically distressed zones for contracts involving public works projects did not result in a total deprivation of employment, it nevertheless impaired the important right to engage in economic endeavor, thereby requiring us to closely scrutinize the law. Id. The interest asserted in Enserch, however, is different from the one asserted here. The statute in Enserch completely foreclosed some members of a class of persons from participating in an economic endeavor. In contrast, the statute and regulation challenged here do not prohibit chiropractors from treating or contracting with any patient. The only interest implicated here is economic, and does not rise to the level of the interest asserted in Enserch. We consequently apply the minimum level of judicial scrutiny to the statute and regulation. [9]
Because CFJ's interest is entitled only to a minimal level of constitutional protection, in the second stage of the equal protection analysis the State must show only that its objectives were legitimate. Brown, 687 P.2d at 269. We consider the challenged provisions in light of the purposes of the entire Act and the 1988 amendments. Taylor v. Southeast-Harrison Western Corp., 694 P.2d 1160, 1162 (Alaska 1985). The State asserts that the legislature's intent in enacting AS 23.30.095(c) is clear. In Leigh we concluded that the legislature's intent in enacting AS 23.30.265(21) was clear. Leigh, 823 P.2d at 1244. In support, we quoted from the 1988 act amending chapter 30: Section 1 of the 1988 amendments to the Act provides: (a) It is the intent of the legislature that AS 23.30 be interpreted so as to ensure the quick, efficient, fair and predictable delivery of indemnity and medical benefits to injured workers at a reasonable cost to the employers who are subject to the provisions of AS 23.30.[ [10] ] Leigh, 823 P.2d at 1244-45 (citing Ch. 79, § 1, SLA 1988 and adding emphasis). See also Rydwell v. Anchorage School Dist., 864 P.2d 526, 530 (Alaska 1993). This purpose comports with the overall purpose of the Act, the provision of financial and medical benefits for victims of work-connected injuries in the most efficient, most dignified, and most certain form. Arctic Structures, Inc. v. Wedmore, 605 P.2d 426, 437 (Alaska 1979). The State maintains that ample evidence in the record supports the premise that the legislature's intent in enacting the frequency standards was to further the overall legislative policy of providing medical benefits to injured workers at a reasonable cost to employers. [11] The State cites legislative testimony given by John Lewis, a nationally recognized expert in workers' compensation legislation, who stated that the legislature could control rising workers' compensation costs was by regulating the amount of medical care that's provided, the frequency, the duration. The State also quotes Dick Cattanach, a member of the Workers' Compensation Committee, who testified: [C]ontinuing multiple treatments is an area that caused a lot of trouble because when we looked at medical costs, the medical costs went from about 25 percent of the premium dollar in 1983 to 37 1/2 percent of the premium dollar in 1986... . We tried to pose controls in two manners: One is the cost of the actual service, the second is the frequency of visits. The State maintains that in an attempt to meet the concerns regarding rising workers' compensation costs, the legislature enacted AS 23.30.095(c) and the Board subsequently promulgated 8 AAC 45.082(f) and (g), establishing additional standards and procedures to eliminate unnecessary treatment. CFJ argues that there is no need for new legislation because there is no evidence that a problem existed with the medical costs portion of the workers' compensation system, and no evidence that the new legislation requiring frequency standards would be more effective in curbing abuse than the standard  that the treatment be medically reasonable and necessary  already offered by the system. CFJ alleges that the testimony given by Cattanach was false, and thus, should not have been relied upon by the legislature. [12] CFJ further argues that because no statistics [were] kept of abuses in general or abuses of the type of treatment sought to be regulated by the frequency of treatment provisions, the new statute and regulation could not have been intended to reduce costs by curbing abuse. CFJ cites McLean v. Arkansas Bd. of Educ., 529 F. Supp. 1255, 1263-64 (E.D.Ark. 1982), for the proposition that this court is not bound by the legislature's express statement of purpose where, after reviewing the circumstances surrounding the enactment of a law, it is obvious that the legislature's statement of purpose has little, if any, support in fact. CFJ also argues that some of the statements made by Bob Anders [13] suggest a personal prejudice against chiropractors. The record as a whole nonetheless supports the legislative statement of purpose. The record contains evidence supporting the State's contention that the legislature's main purpose in enacting the frequency standards was to ensure the delivery of medical services at a reasonable cost to the employers, and not to discriminate against chiropractors. John Lewis' testimony, although questioned to some extent by CFJ, [14] indicated that one method of controlling workers' compensation costs was to regulate the frequency and duration of treatment. Thus, the legislative intent expressed in section 1 of the 1988 amendments and quoted above is supported by the record. Ch. 79, § 1, SLA 1988. CFJ relies on Brown, 687 P.2d 264, to argue that the State's interest in reducing costs is invalid. In Brown, we held that a statute adjusting benefits of workers' compensation recipients who move out of state was unconstitutional. In particular, we held that, the asserted goal of lowering insurance premiums can have no independent force in the state's attempt to meet its burden under the equal protection clause. Although reducing costs to taxpayers or consumers is a legitimate government goal in one sense, savings will always be achieved by excluding a class of persons from benefits they would otherwise receive. Such economizing is justifiable only when effected through independently legitimate distinctions. Brown, 687 P.2d at 272 (footnote omitted). CFJ's reliance on Brown is misplaced. Unlike the situation in Brown, the statute and regulation here are not designed to reduce costs by depriving a certain class of persons, e.g., chiropractors, of benefits they would otherwise receive. Rather, they are designed to reduce costs by curbing perceived abuses through procedural safeguards. Chiropractors may be paid for frequent treatments by adhering to the regulation and demonstrating that the treatments are reasonable and necessary. The purpose here was to ensure that employers are liable only for reasonable and necessary medical costs. See ch. 79, § 1, SLA 1988 and AS 23.30.265(20).
When the interest affected is entitled to only minimal judicial protection, the State need only show that the distinction [15] drawn bears a fair and substantial relationship to the Act's objective. Brown, 687 P.2d at 269-70; Sonneman, 790 P.2d at 705. In State v. Anthony, 810 P.2d 155, we stated that [d]espite the language in Isakson v. Rickey, 550 P.2d [at 362], indicating this court's lower level of scrutiny will be more rigorous and less deferential than the federal rational basis test, we have invalidated only two legislative enactments under the fair and substantial relationship test since Isakson.  [16] State v. Anthony, 810 P.2d at 159. [17] CFJ's arguments regarding the third step in the equal protection analysis overlap its substantive due process claims. See Leigh, 823 P.2d at 1247 n. 15. For the same reasons discussed above in rejecting CFJ's substantive due process claim, we conclude that the provisions do not violate the constitutional guarantee of equal protection. The challenged provisions bear a fair and substantial relationship to the State's objective of ensur[ing] the quick, efficient, fair and predictable delivery of indemnity and medical benefits to injured workers at a reasonable cost to the employers. Ch. 79, § 1, SLA 1988 (emphasis added).