Court Opinion

ID: 9671969
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:46:16.588572+00
Date Added: 2024-06-11T18:16:13.468225
License: Public Domain

LEIBSON, Justice,
dissenting.
Respectfully I dissent.
The issue is whether the Secretary of Finance and Administration may contract for health care coverage for state employees under KRS 18A.225 with health maintenance organizations (HMOs) which are not federally qualified in those areas of the state where the appellant, a federally qualified HMO, is available to provide services.
Appellant, HealthAmerica Corporation of Kentucky (“HealthAmerica”), has filed a declaratory judgment action to prevent the Secretary of Finance from discontinuing HealthAmerica’s contract to provide services and substituting the services of competing HMOs, Humana Health Plan, Inc. and Independence Health Plan of Kentucky, in the areas presently served by HealthAmeri-ca. HealthAmerica maintains that it is a federally qualified HMO, whereas Humana Health Plan and Independence Health Plan are not federally qualified. Further, Heal-thAmerica maintains that the enabling legislation, KRS 18A.225, in pertinent part, specifies that the Secretary of Finance must contract with federally qualified HMOs to the exclusion of HMOs which are not federally qualified except in those areas where there are no federally qualified HMOs to provide service. The language of the statute supports this position.
But this case was not decided on the merits. It was decided on standing to sue. The trial court concluded that HealthAmer-ica had no present or substantial interest in *949whether the actions of the Secretary of Finance were contrary to the terms of the statute, that HealthAmerica had no judicially recognizable interest in the subject matter. The trial court dismissed the within action on grounds that HealthAmerica had no standing to sue. We have affirmed. I disagree.
Lexington Retail Beverage Dealers’ Association v. Department of Alcoholic Beverage Control, Ky., 303 S.W.2d 268 (1957) has been cited as controlling authority in both the opinion of the trial court and the present majority opinion. It is not in point. This is an unfair competition case. The Lexington Retail Beverage case was not such a case.
In this case HealthAmerica’s basic position, which has not been significantly disputed, is that federally qualified HMOs must meet standards which exceed the state requirements for HMOs in both the range and manner of supplying basic health care benefits and the method of organization and operation. This upgrades the quality of service, which was the statutory intent, and it also builds increased cost factors. Thus state qualified HMO’s which are not also federally qualified present unfair competition.
In the Lexington Retail Beverage case the complainants were a group of liquor license holders challenging the action of the Alcoholic Beverage Control Board which increased the quota for liquor licenses in Fayette County. We held that “[a]s holders of liquor licenses they have been bestowed no contract or property rights.” 303 S.W.2d at 270. There was no statutory basis for complaining if additionál liquor licenses were granted.
HealthAmerica, by contrast, has an un-controverted property right, a contract for HMO services with the state, which was preserved by operation of statute unless there were alternative licensees available with whom the Secretary of Finance could contract who met the statutory standard. The terms of the statute, reasonably construed, give HealthAmerica a vested interest to demand that KRS 18A.225 be complied with.
HealthAmerica had standing to prevent unlawful competition resulting from the unauthorized acts of the Secretary of Finance.
STEPHENS, C.J., and GANT, J., join in this dissent.