Sewickley Valley Hospital v. Commonwealth

Dissenting Opinion bt

Judge Rogers :

I respectfully dissent.

Memorandum No. 74, issued by DPW and effective January 1, 1975, outlined the procedures by which hospitals could obtain reimbursement for the performance of voluntary nontherapeutic sterilizations. The procedures included the completion by the hospitals of both Parts 1 and 2 of form MA-71. DPW concedes, as it must, that Memorandum No. 74 was a policy statement only and not a regulation. See Act of July 31, 1968, P.L. 769, §201 et seq., 45 P.S. §1201 et seq. On August 6,1977, DPW published a regulation, effective August 15, 1977, embodying Memorandum No. 74, in-*202eluding the use of MA-71. . See 7 Pa. Bull. 2178, §9421.73. The claims, of Community Hospital (Community) arose after August 15, 1977 and are therefore subject to the regulation. The claims of Sewickley Valley Hospital (Sewickley) and Union City Memorial Hospital (Union) arose after January 1, 1977 but before August 15,1977. Nonetheless, DPW may, as an alternative to rulemaking procedures, proceed by adjudication to establish a binding rule. Pennsylvania Human Relations Commission v. Norristown Area School District, 473 Pa. 334, 345, 374 A.2d 671, 677 (1977). This is precisely what DPW did in the cases of Sewickley and Community, and the rule of those adjudications, as well as the regulation, was that both parts of MA-71 must be completed within prescribed time limits as a condition to reimbursement. The only inquiry to be made by this Court, then, is whether this rule is valid and whether the petitioning hospitals complied with this rule.

The rules and regulations of an administrative agency are valid if they are “(a) within the granted power, (b) issued pursuant to proper procedure, and (c) reasonable.” Pennsylvania Association of Life Underwriters v. Department of Insurance, 29 Pa. Commonwealth Ct. 459, 462, 371 A.2d 564, 566 (1977), quoting 1 K.C. Davis, Adminstrative Law, §5.03 at 299. The only question raised in these proceedings is that of whether DPW’s rule is reasonable. I believe it is. There is uncontroverted testimony in the record that DPW will not receive participating federal funds for its reimbursement program unless both parts of MA-71 are completed as required. It is therefore reasonable for DPW to require hospitals to submit MA-71 forms fully completed as a condition to reimbursement.

The petitioning hospitals conténd that, assuming DPW’s rule is valid, they should be granted an op*203portunity to show that, although the forms MA-71 they submitted were not complete, they in fact fully complied with regulations and that their failure to complete the forms was merely inadvertent. I disagree. Approval of this position would not only jeopardize DPW’s ability to obtain federal reimbursement but would also dramatically increase DPW’s administrative burden. DPW,

its concern having been reasonably aroused by the possibility of an abuse which it legitimately desired to avoid, could rationally have concluded both that a particular limitation or qualification would protect against its occurrence, and that the expense and other difficulties of individual determinations justified the inherent imprecision of a prophylatic rule.

Weinberger v. Salfi, 422 U.S. 749, 777 (1975).

I perceive of no reason why DPW’s position should suffer when the hospitals can protect themselves by a quick and simple check of the full completion of MA-71 in the first instance.

Since I conclude that the rule at issue is valid, the only remaining issue is whether the petitioning hospitals complied with it. Admittedly, Community and Union did not and are in my opinion not entitled to reimbursement. Thus, I would affirm in their cases. A question of fact existed as to whether Sewickley submitted a fully completed form. The hearing examiner found that Sewickley failed to complete Part 2 of MA-71. He based this finding upon purported copies of the MA-71 which Sewickley submitted to DPW, one offered by Sewickley which was complete and the other offered by DPW, which was not. Neither party offered Sewickley’s original MA-71 into evidence, it then being in the possession of Blue Shield. Nor was it shown that the original was unavailable. The best evi*204deuce was of course the original. Therefore, the conflicting testimony in the record concerning whether Sewickley’s MA-71 was complete or incomplete does not provide a sufficient basis for the hearing examiner’s finding. I would remand the record to DPW for further proceedings at which time Sewickley’s original MA-71 may be obtained, received in evidence, arid settle the issue.