Court Opinion

ID: 7960235
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:35:43.303884+00
Date Added: 2024-06-11T16:34:24.812739
License: Public Domain

White, J.
(concurring in part and dissenting in part). I agree that in an appeal from a decision of the Insurance Commission under § 510(1), MCL 550.1510(1); MSA 24.660(510)(1), the independent hearing officer is limited to affirming or reversing the decision of the ic and that the iho exceeded his authority in requiring that the remedial plan be submitted for his review. I also agree that the iho exceeded his authority in awarding attorney fees.
I dissent, however, from the majority’s reinstatement of the ic’s determination. I do not agree that the iho is required to defer to the judgment of the ic unless it is "so clearly wrong that it is equivalent to the extreme of a confiscatory or oppressive *734rate,” ante, 729 or that the ic’s judgment cannot be challenged on appeal. I am not persuaded by the majority’s analogy to proceedings involving the Public Service Commission. The statutes governing "appeals” from administrative determinations of the Public Service Commission have provided, from at least five years before the Supreme Court enunciated in Detroit v Michigan Railroad Comm, 209 Mich 395, 433-434; 177 NW 306 (1920) the standard of review relied upon by the majority, that
the burden of proof shall be upon the [complainant/appellant] to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable. [MCL 462.26(8); MSA 22.45(8), previously MCL 462.26(e); MSA 22.45(e), 1915 CL 6706, see also 1915 CL 8134(e).]
In contrast, the instant statute provides that the appeal is to be conducted pursuant to Chapter 4 of the Administrative Procedures Act, MCL 24.271-24.287; MSA 3.560(171)-3.560(187), the contested case provisions. It does not provide that the iho must defer to the ic’s judgment or otherwise limit the iho’s authority except to provide in § 515, MCL 550.1515; MSA 24.660(515), the ultimate decisions open to the iho in the various appeals permitted under the Nonprofit Health Care Corporation Reform Act.
This Court’s review of the iho’s decision is under Chapter 6 of the Administrative Procedures Act, MCL 24.301-24.306; MSA 3.560(201)-3.560(206), and is limited to the determination whether there is competent, material, and substantial evidence on the whole record. While it is also appropriate to set aside an agency decision if substantial rights have been prejudiced because the decision is in *735violation of statute, exceeds the statutory authority, is made upon unlawful procedure resulting in material prejudice to a party, is arbitrary, capricious, or clearly an abuse or unwarranted exercise of discretion, or is affected by other substantial and material error of law, the iho’s decision was not deficient in these respects. The iho’s decision was not contrary to law and, while aspects of his decision exceeded his statutory authority, the decision that the plan did not reasonably satisfy the goals of the act was within his express statutory authority. And, while it may have been appropriate to place the burden of proof on those who appealed the ic’s determination rather than placing it on Blue Cross and Blue Shield of Michigan, it is clear from the iho’s decision that the petitioners would have prevailed even if the burden had been placed on them. Thus, any error in placing the burden of proof did not result in material prejudice to bcbsm. Nor did the iho commit a substantial and material error of law in failing to defer to the judgment of the ic, because he was required under the Administrative Procedures Act to make a decision based upon the record made before him considered as a whole and in accordance with competent, material, and substantial evidence.
Finally, the decision was not arbitrary, capricious, or clearly an abuse or unwarranted exercise of discretion and was based on competent, material, and substantial evidence. There was substantial evidence in the ic’s report itself indicating that in certain parts of the state, the access goal was not achieved. This was implicitly recognized by the ic when he stated:
. . . This decision [that the access goal was met] is based on the fact that bcbsm achieved an overall *736service benefit level participation rate of 90%, an overall formal participation rate of 68.3%, and a formal participation rate in every region of the lesser of 50% or twice the bcbsm membership proportion of the population. It is acknowledged that these standards of reasonableness are proxies for more germane standards which relate a target population to an appropriate mix of providers by specialty.
Insurance Bureau staff believe that a standard based on major specialty and by geographical area may be more appropriate to determine whether bcbsm has met the access goal. Future evaluations of the medical doctor provider class plan therefore may give more weight to the appropriate mix of covered services provided by major specialties.
There was also competent, material, and substantial evidence to support the iho’s finding that the quality goal had not been met. Again, the ic implicitly acknowledged the deficiencies when he recognized that bcbsm applied utilization review programs as a proxy for standards of medical care, that utilization review programs "cannot be responsive to changes in medical knowledge because of their retrospective nature,” that "such programs are not effective in identifying widespread practices of over or under utilization of services,” that utilization review is unlikely to be effective with providers who participate per case, and that "standards of medical necessity would be preferable to relying so heavily on utilization review to monitor quality of care.” The ic also stated:
Bcbsm acknowledged that, during the period under review, it had not provided physicians with medical practice guidelines and protocols that define the reasonable standards that providers are expected to meet. Physician testimony before the *737Insurance Bureau demonstrated strong concerns about the difficulty of obtaining prompt, reasonable explanations from bcbsm regarding reimbursement issues, audit determinations, medical necessity determinations, etc., during the period under review. Input from subscribers received through the Insurance Bureau’s consumer assistance function also indicated that bcbsm is slow to recognize new medical procedures.
While the ic stated that "some mitigating factors” "must be acknowledged,” it appears that he based his decision that bcbsm met the quality of care goal largely on the fact that bcbsm had changed its practice since the end of the review period. Thus, the iho’s conclusion that the plan did not meet the goal for the period in question was supported by the record.
I would affirm the iho’s reversal of the ic’s decision approving the plan and reverse the iho’s award of attorney fees and retention of jurisdiction to review the remedial plan. I would require that bcbsm submit a remedial plan to the ic under § 511, MCL 550.1511; MSA 24.660(511). Any appeal under that section would then be a new appeal to be heard by a newly selected iho.