Use of State Workers’ Compensation Fund to Pay MCOs’ Fees Constitutional
Northwestern Ohio Building & Const. Trades Council v. Conrad (7/18/01), 92 Ohio St.3d 282.
Issue: Can the BWC use workers’ compensation premiums to fund MCO payments?
Background: Northwestern Ohio Building and Construction Trades Council, an employer, filed a declaratory judgment suit claiming the payment of fees to MCOs from the state insurance fund violated Oh. Const. Art. II, Sec. 35. The Court of Appeals found the use of the state insurance fund to pay these fees unconstitutional.
Decision: Supreme Court reverses (4-3).
Court says that the use of premium contributions from the state insurance fund for the payment of administrative and performance incentive fees to MCOs does not violate Article II, Section 35 of the Ohio Constitution. The Supreme Court ruled:
The use of premium contributions from the State Insurance Fund for the payment of administrative and performance incentive fees under Ohio Adm.Code 4123-6-13 to managed care organizations certified by the Bureau of Workers’ Compensation under the Health Partnership Program does not violate Section 35, Article II of the Ohio Constitution.
R.C. 4121.441 and O.A.C. 4123-6-13 do not specify the source of the administrative and performance payments. Court concludes that the BWC reasonably interpreted the statutory scheme when it decided to use the state insurance fund for these payments.
The Court finds the use of these funds constitutional because the medical management services performed by the MCOs are an integral part of the plan.