The advice of two workers’ compensation court judges may help doctors win higher fees from Blue Cross & Blue Shield of Rhode Island, but it is raising ethical questions about the jurists’ membership on a panel which drafts workers’ compensation legislation. At a spring meeting of the Workers’ Compensation Advisory Council, Chief Judge Robert Arrigan and Justice George Healy urged the Rhode Island Medical Society to tell doctors to petition the Workers’ Compensation Court to receive higher fees. And Arrigan offered to establish a special calendar at the court to expedite the fee petitions.
Those moves, said Jeffrey Shaman, professor of law at DePaul University and senior fellow at the American Judicature Society, raise ethical questions about impartiality. “I think you might have a separation of powers problem,” Shaman said, adding “It sounds kind of untoward. The whole problem is because judges are sitting on this board and then they’re hearing cases involving laws the board recommended.”
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Arrigan and Healy refused to be interviewed by the Providence Business News, instead offering to respond to written questions. In a letter, Healy defended his role on the advisory council as “devoted to improving the law and administration of justice” and therefore in compliance with the Code of Judicial Conduct, the ethical rules governing judges. In recent years, Attorney General Sheldon Whitehouse, AFL-CIO Secretary-Treasurer George Nee, and others have praised Arrigan’s and Healy’s work on the council as instrumental to the success of Rhode Island’s workers’ compensation law..
The history of the Blue Cross dispute starts in 1992 when the Rhode Island General Assembly passed a comprehensive overhaul of the state’s workers’ compensation law recommended by a blue ribbon panel which included Arrigan, Nee and Whitehouse. Among the changes was the establishment of a medical fee schedule. Until 1995, Blue Cross, which sells no workers’ compensation insurance, but administers self-insurance programs for most Rhode Island municipalities and handles some claims for Beacon Mutual, adhered to the schedule. But then the insurance giant implemented a lower schedule and informed doctors that if they billed patients for the difference, they would be terminated as providers for all Blue Cross insurance products. Because of Blue Cross’ huge market share, few doctors can afford to be terminated at Blue Cross providers.
Instead, the Rhode Island Orthopedic Society, backed by the Rhode Island Medical Society (RIMS), sued Blue Cross insisting that the company’s discounted fees violated the medical fee schedule established under the workers’ compensation law.
The law calls for the Rhode Island director of labor and training to establish a fee schedule based upon “the 90th percentile of the usual and customary fee charged by health care providers…and in no case shall the rate of reimbursement exceed that amount.” The orthopedic society argues that the law sets fees at the 90th percentile. Nee agrees, saying that drafters wanted injured workers to receive quality health care to encourage them to return to work as quickly as possible. But Blue Cross insists that the 90th percentile is the maximum a physician can charge and that insurers are free to negotiate for lower fees. In September 1998, Superior Court Judge Michael Silverstein sided with Blue Cross.
The orthopedic society appealed the decision to the Rhode Island Supreme Court where the case is pending. At the same time, RIMS introduced legislation at the General Assembly to insure that fees would be set at the 90th percentile. As part of its campaign for the legislation, RIMS director of government and public affairs Steven DeToy made a presentation to the Workers’ Compensation Advisory Board at its March meeting.
The board, also established by the 1992 law, includes representatives of business and labor, Beacon Mutual Insurance Company President Donald Vass, the directors of the departments of labor and training, business regulation and administration, the chairpersons of the House and Senate Labor Committees and Judges Arrigan and Healy. While changes in workers’ compensation law must be passed by the General Assembly, as a practical matter legislation endorsed by the council becomes law with little debate.
As DeToy started to explain RIMS proposal to the council, Arrigan interrupted, saying, “You want me to tell you how to solve your problem?” Then Arrigan recommended that doctors who did not receive fees equal to the 90th percentile from Blue Cross should petition the workers’ compensation court for full payment. He also promised to establish a new court calendar to expedite the petitions. Healy agreed and added that Blue Cross would quickly learn of its error, saying “The message gets out real quick if you’re paying $500 to $700 per case for something that you have no defense for.”
DeToy left the meeting pleased, commenting “The judges have given us an option and we’re going to take it.” A recent issue of RIMS’ Rhode Island Medical News advises doctors to petition to court to obtain “the balance of the fee to which they are entitled under the law” and adds that the court will “presumably make petitioning physicians whole.”
Scott Fraser, Blue Cross’ assistant vice president-legislative affairs refused to comment on Arrigan’s and Healy’s comments. Shaman, who helped draft the American Judicature Society’s model ethics code for judges, cautioned that their comments may not be a violation of Rhode Island’s Code of Judicial Conduct, but certainly raise questions.
The Code of Judicial Conduct expressly states a judge should not make a promise of how he would rule on a case,” Shaman said. And, referring to the advice that doctors file petitions with the court, he adds, “Judges are not allowed to practice law.”
In his letter to the Providence Business News, Judge Healy responded to the criticism by writing, “The comments made at the advisory council meeting were an attempt to explain the position the court had taken in the past in this matter. While we certainly do not issue a formal disclaimer, I do not feel that any one could construe such a discussion as the provision of legal advice.”
But the central problem, Shaman stated, is Arrigan’s and Healy’s active role on the advisory council. Both judges participate in discussions of legislative issues and Healy sometimes drafts legislation. A recent council discussion, for example, showed that a proposal to clarify the Workers’ Compensation Fraud Prevention Unit’s authority to obtain medical records was altered to accommodate Judge Healy’s concerns.
Under the code of conduct, judges are prohibited from sitting on a governmental committee or commission except on “the improvement of the law, the legal system or administration of justice.” In his letter, Healy clearly stated that he believes his work on the council falls within that exception.
But Injured Workers of Rhode Island executive director Fred Burke objects to judges sitting on the advisory council. “There’s supposed to be three branches of government and what you have now is a mixing of the judicial with the legislative.” he said, adding “The court is supposed to interpret the law, not write the law.”
The council’s chairperson, the AFL-CIO’s Nee, however, disagreed. The council does not draft legislation, he said, but submits its recommendations to the bill’s sponsor, who then gives it to legislative staff. Rhode Island is viewed as a model for other states, he said, because it has an ongoing committee to review the law which represents all interests. And he added, the General Assembly clearly wanted Arrigan on the panel because it specified in the law that the chief judge be a council member.
Arrigan has had past ethical problems. In 1996, the Rhode Island Supreme Court publicly censured him for raising funds for charity from the bench. Other ethical violations alleged by the Commission on Judicial Tenure and Discipline, concerning private meetings with employers, were dismissed by the state’s highest court.
