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Selley v. Liberty Northwest Insurance Corporation

Court of Workers Compensation of Montana

November 16, 1998

DARCI SELLEY Petitioner
v.
LIBERTY NORTHWEST INSURANCE CORPORATION Respondent/Insurer for TURN OF THE CENTURY, INCORPORATED Employer.

          Submitted: September 9, 1998

          DECISION AND JUDGMENT

          MIKE MCCARTER JUDGE.

         Summary: After learning the claimant's physician, Dr. Richard A. Nelson, did not have hospital privileges and thus did not meet the criteria of section 39-71-116(30), MCA (1993) for designation as a treating physician, insurer informed claimant it would not reimburse for future treatment by that physician. Claimant argued the insurer had compensated Dr. Nelson during her first two years of treatment with him, that changing physicians would create a hardship, and that the insurer was equitably estopped from refusing future compensation to Dr. Nelson. Claimant also argued section 39-71-116(30), MCA (1993) was unconstitutional in that it limited medical payments under the WCC to physicians with hospital privileges.

         Held: The insurer was not equitably estopped from refusing future payment to Dr. Nelson where it did not make any representation or concealment of fact and was not shown to have knowledge that Dr. Nelson did not meet statutory criteria for a treating physician. [Note: the WCC was reversed on this ground; see Selley v. Liberty Northwest, 2000 MT 76.] The statutory distinction between physicians with and without hospital admitting privileges is not unconstitutional. While claimant invoked the due process clauses of the Montana and federal constitutions, her arguments follow equal protection analysis. In determining whether the distinction is rationally related to a legitimate government objective, the Court is not limited to the legislative record but must consider any possible purpose of the legislation. A requirement of hospital privileges does have legitimate legislative purposes. If a claimant requires hospitalization and her treating physician does not have admitting privileges, another physician must be called in, leading to a likely learning curve and potential additional cost. Moreover, hospital privileges are not granted to every licensed physician and the requirement can serve as a means to filter out the least competent physicians. Although the record contains no question of Dr. Nelson's competence, and suggests he gave up admitting privileges as a result of moving his residence beyond hospital proximity requirements, the distinction nonetheless is rationally related to legitimate governmental purposes. The fact that a legislative classification is "imperfect" does not mean it necessarily violates equal protection.

         Topics:

         Constitutions, Statutes, Regulations and Rules: Montana Code: section 39-71-116(30), MCA (1993). The insurer was not equitably estopped from refusing future payment to claimant's physician, whom it learned did not have hospital admitting privileges and thus did not qualify as a treating physician, where the insurer did not make any representation or concealment of fact and was not shown to have had knowledge that the doctor did not meet statutory criteria for a treating physician. [Note: the WCC was reversed on this point; see Selley v. Liberty Northwest, 2000 MT 76.]

         Estoppel and Waiver: Equitable Estoppel. The insurer was not equitably estopped from refusing future payment to claimant's physician, whom it learned did not have hospital admitting privileges and thus did not qualify as a treating physician, where the insurer did not make any representation or concealment of fact and was not shown to have had knowledge that the doctor did not meet statutory criteria for a treating physician. [Note: the WCC was reversed on this point; see Selley v. Liberty Northwest, 2000 MT 76 .]

         Physician: Treating Physician: Who may be. The insurer was not equitably estopped from refusing future payment to claimant's physician, whom it learned did not have hospital admitting privileges and thus did not qualify as a treating physician, where the insurer did not make any representation or concealment of fact and was not shown to have had knowledge that the doctor did not meet statutory criteria for a treating physician. [Note: the WCC was reversed on this point; see Selley v. Liberty Northwest, 2000 MT 76.]

         Constitutional Law: Equal Protection. The distinction drawn by section 39-71-116(30), MCA (1993) between physicians with and without hospital admitting privileges is not unconstitutional. In determining whether the distinction is rationally related to a legitimate government objective, the Court is not limited to the legislative record but must consider any possible purpose of the legislation. A requirement of hospital privileges has legitimate legislative purposes. If a claimant requires hospitalization and her treating physician does not have admitting privileges, another physician must be called in, leading to a likely learning curve and potential additional cost. Moreover, hospital privileges are not granted to every licensed physician and the requirement can serve as a means to filter out the least competent physicians. Although the record contains no question of Dr. Nelson's competence, and suggests he gave up admitting privileges as a result of moving his residence beyond hospital proximity requirements, the distinction nonetheless is rationally related to legitimate governmental purposes. The fact that a legislative classification is "imperfect" does not mean it necessarily violates equal protection. [Note: the WCC's decision was reversed on other ground, with the Supreme Court not reaching the constitutional argument, see Selley v. Liberty Northwest, 2000 MT 76.]

         ¶1 This case is presented for decision based on an agreed statement of facts and stipulated exhibits. The issue is whether respondent's, Liberty Northwest Insurance Corporation (Liberty), refusal to recognize and reimburse Dr. Richard A. Nelson as claimant's treating physician was improper.

         Facts

         ¶2 Darci Selley (claimant) was injured on January 7, 1995, while working for Turn of the Century, Incorporated, which was insured by Liberty. Liberty accepted liability for her claim and has paid both wage loss and medical benefits.

         ¶3 Since her injury the claimant has been treated by Dr. Nelson. For the first two years of treatment, Liberty reimbursed Dr. Nelson for his treatments, however, in the first quarter of 1997, Liberty's claims adjuster learned that Dr. Nelson does not have hospital admitting privileges at any hospital near his medical practice. Liberty then refused further reimbursement to Dr. Nelson on the basis that he does not qualify as claimant's treating physician. Its refusal affected only prospective reimbursement. It did not refuse payment of any of Dr. Nelson's bills incurred prior to its notice that it was not responsible for his services.

         Discussion

         ¶4 Liberty's refusal to reimburse Dr. Nelson after it learned he lacks hospital admitting privileges is based on section 39-71-116(30), MCA (1993), which provides:

(30) "Treating physician" means a person who is primarily responsible for the treatment of a worker's compensable injury and is:
(a)a physician licensed by the state of Montana under Title 37, chapter 3, and has admitting privileges to practice in one or more hospitals, if any, in the area where the physician is located;
(b)a chiropractor licensed by the state of Montana under Title 37, chapter 12;
(c)a physician assistant-certified licensed by the state of Montana under Title 37, chapter 20, if there is not a physician, as defined in subsection (30)(a), in the area where the physician assistant-certified is located;
(d)an osteopath licensed by the state of Montana under Title 37, chapter 5; or (e)a dentist licensed by the state of Montana under Title 37, chapter 4. [Emphasis added.]

         ¶5 The parties agree that Dr. Nelson does not have admitting privileges at either St. Vincent Hospital or the Deaconess Hospital in Billings, Montana. They also agree that he has not had admitting privileges at either hospital for the last seven years. He had them prior to that time but resigned his privileges when he moved to Columbus, Montana.

         ¶6 Based on the agreed issues presented in this case, the Court must and does assume that the Billings hospitals are the relevant hospitals for purposes of section 39-71-116(30), MCA (1993), or that Dr. Nelson does not have admitting privileges at any other hospital "in the area" where he practices. At least claimant does not argue that Dr. Nelson has admitting privileges which would satisfy the section.

         ¶7 In disputing Liberty's refusal to further reimburse Dr. Nelson, claimant tenders two legal grounds. First, she argues that Liberty's prior payments to Dr. Nelson estops it from now disputing that he is her treating physician. Second, she argues that section 39-71-116(16), MCA (1993), is unconstitutional.

         I. Estoppel

         ¶8 The doctrine of equitable estoppel precludes a party from profiting from its wrong:

Equitable estoppel has long been recognized in Montana and is invoked to promote justice, honesty and fair dealing; the purpose of the doctrine of equitable estoppel is to prevent a party from taking unconscionable advantage of his or her wrong while asserting a strict legal right.

Billings Post No. 1634 v. Montana Dept. of Revenue, 284 Mont. 84, 90, 943 P.2d 517, 520 (1997). Even without consideration of the specific elements of the doctrine, claimant has failed to demonstrate any wrong by Liberty. At best she has demonstrated that Liberty belatedly learned that Dr. Nelson did not have admitting privileges and therefor did not satisfy the definition of a treating physician.

         ¶9 Beyond a general purpose analysis, the elements which the claimant must prove to estop Liberty are:

1.the existence of conduct, acts, language, or silence amounting to a representation or a concealment of a material fact;
2.these facts must be known to the party estopped at the time of his conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him;
3.the truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel at the time it was acted upon by him;
4.the conduct must be done with the intention, or at least the expectation, that it will be acted upon by the other party, or under circumstances both natural and ...

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