Court Opinion

ID: 5769997
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:30:13.355871+00
Date Added: 2024-06-11T08:41:44.912782
License: Public Domain

Nunez, J. (dissenting).
I dissent and vote to affirm the judgment appealed from.
In my view Special Term properly annulled the determination of the Superintendent of Insurance and remanded the matter to him for his reconsideration and approval of a temporary emergency increase in subscriber rates, limited to the absolute minimum amount necessary to maintain the statutory solvency of Associated Hospital Service of New York (AHS-Blue Cross); such increase to remain in effect pending certification of reimbursement rate schedules by the Commissioner of Health *494pursuant to article 28 of the Public Health Law and for a period of 30 days following such certification. In this manner the solvency of AHS is preserved and the clear legislative mandate in the recent hospital cost control legislation (L. 1969, ch. 957) is observed.
In my view the Superintendent is duty bound to examine and approve the rates of payment by AHS to hospitals pursuant to section 254 of the Insurance Law prior to his approving an increase in rates pursuant to section 255. It would be clearly unreasonable for the Superintendent to attempt to pass upon requested rate increases without giving any consideration not only to the amount but to the reasonableness of hospital repayment rates (see Matter of Thaler v. Stern, 44 Misc 2d 278).
By the 1969 amendments, the Legislature has established certain standards by which the Commissioner of Health is to determine and certify approval of rates of reimbursement by AHS to member hospitals. Notable among those standards is one which restricts increases in the rate of reimbursement to the rate of increase in the cost of living. It appears from the AHS brief that a new schedule of rates of reimbursement to member hospitals will be certified by the Commissioner of Health during early January, 1970. Instead of approving increases for community rated plans that would insure the solvency of AHS for the short period pending the certification of the new rates of reimbursement, the Superintendent granted a purportedly emergency increase of much larger proportions to carry AHS through an indefinite period and at least through 1970.
While there is nothing on the face of section 255 of the Insurance Law making certification a condition precedent to rate approval, there are inescapable indications that such was within the intendment of the Legislature (see Red Hook Cold Stor. Co. v. Department of Labor, 295 N. Y. 1, 7). An examination of the history, terms and purposes of the legislation involved clearly shows the necessity for such certification which is designed as an incentive to hospitals to increase efficiency, improve services and institute economies.
AHS should not be permitted to approve requested rate increases by its member hospitals without giving any consideration to the adequacy and reasonableness of the hospital repayment rates. This would leave the subscribers completely unprotected at the mercy of the hospitals and bearing the cost of possible inefficiency of operation or unreasonableness of charges or inclusion of improper items in the amounts demanded by the member hospitals. An operation which is greatly affected *495with the public interest, as this one is, should be carefully supervised and controlled.
By reversing Special Term and confirming the determination of the Superintendent, this court is perpetuating the Superintendent’s procedure of approving only rate increases characterized as “ emergency ” measures in order to avoid statutory insolvency of Blue Cross. If this view of his functions, namely, that he need not take into consideration the rates of reimbursement, is ratified, there would be no incentive to AHS to apply for a restructuring of rates, the old rate structure would be perpetuated and costs thereunder would continue to spiral. By requiring the Superintendent to adhere to the new reimbursement formula mandated by the Legislature, subscribers are protected against the inefficiencies of hospital service and they will be assured that they need not shoulder them merely because Blue Cross is willing to go to the brink of insolvency before requesting an increase in premiums.
The Superintendent of Insurance in my opinion does not serve the public interest in granting the applied for increase in exercise of his emergency powers for a period far beyond January 1, 1970, at which time he will be in possession of the findings and recommendations of the Commissioner of Health. In granting this emergency “ temporary ” rate increase, the Superintendent has not only thwarted the legislative intent to terminate or at least slow down the skyrocketing costs of hospital care, he has failed to properly protect the interests of the millions of Blue Cross subscribers. In so doing he has gone illegally beyond his powers and his determination should therefore be annulled.
For the foregoing reasons and those stated by Mr. Justice Brust at Special Term, I would affirm.
Stevens, P. J., Tilzer, Markewich and McNally, JJ., concur in Per Curiam opinion; Nunez, J., dissents in opinion.
Judgment reversed, on the law, without costs and without disbursements, the determination of respondent Superintendent of Insurance reinstated, and the petitions dismissed without costs.