Opinion

pca v. ut

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN

NO. 3-93-284-CV

PCA HEALTH PLANS OF TEXAS, INC.,

APPELLANT

vs.

BERNARD RAPOPORT, ELLEN C. TEMPLE, LOWELL H. LEBERMANN, JR.,

PETER R. CONEWAY, ROBERT J. CRUIKSHANK, REVEREND ZAN W. HOLMES, JR.,

HONORABLE TOM LOEFFLER, DR. MARIO E. RAMIREZ, AND MARTHA E. SMILEY,

MEMBERS OF THE BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM,

APPELLEES

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT

NO. 93-06199, HONORABLE F. SCOTT MCCOWN, JUDGE PRESIDING

PCA Health Plans of Texas, Inc. ("PCA") filed a petition in district court for a writ

of mandamus, declaratory judgment, and injunctive relief against the members of the Board of

Regents of the University of Texas System ("Regents"). PCA sought enforcement of the Texas

State College and University Employees Uniform Benefits Act, arguing that the Act required the

Regents to include PCA as part of the University's health care plan for its employees and retirees.

Tex. Ins. Code Ann. art. 3.50-3, § 4(b)(4)(D) (West Supp. 1994). The district court denied the

writ of mandamus and all other requested relief. We will affirm.

BACKGROUND

PCA is a certified and federally-qualified health maintenance organization ("HMO")

that has provided health care services to employees of the University of Texas at Austin ("UT

Austin") since 1987. PCA's health care plan was one of the options available to UT Austin

employees and retirees under the Texas State College and University Employees Uniform

Insurance Benefits Act. Tex. Ins. Code Ann. art. 3.50-3 (West 1981 & Supp. 1994) ("University

Employees Act"). PCA is also approved to provide health care services to state employees under

the Texas Employees Uniform Group Insurance Benefits Act, the statute governing health care

benefits provided to all other state employees. Tex. Ins. Code Ann. art. 3.50-2 (West 1981 &

Supp. 1994) ("State Employees Act").

In February 1993, PCA filed its application to continue providing services to UT

Austin employees and retirees for the 1993-1994 fiscal year. However, the University System

Administration recommended to the Regents that the University not continue to contract for health

services from PCA. In April 1993, the Regents decided not to include PCA as one of the health

care options provided UT Austin employees and retirees. PCA filed a petition in district court

for writ of mandamus and injunctive relief seeking to compel the Regents to contract with PCA

for the 1993-1994 fiscal year. PCA also sought declaratory judgment that the University

Employees Act imposed upon the Regents a mandatory duty to contract with PCA to provide

health care services to University employees and retirees. See University Employees Act §

4(b)(4)(D). After a hearing, the trial court rendered judgment denying mandamus and all other

relief requested. PCA appeals.

DISCUSSION

In its first point of error, PCA argues the trial court erred in denying PCA's request

for a writ of mandamus. A writ of mandamus is appropriate to compel public officials to perform

ministerial acts. Walker v. Packer , 827 S.W.2d 833, 839 (Tex. 1992); Anderson v. City of Seven

Points , 806 S.W.2d 791, 793 (Tex. 1991). Mandamus is proper in this case only if the Regents

of the University of Texas had no discretion to reject PCA's application to provide health care

services to UT Austin employees and retirees.

The University Employees Act governs the health coverage a state university must

provide its employees and retirees. The statute provides:

The institution shall select and contract for services performed by health

maintenance organizations that are approved by the federal government, if

available, or by the State of Texas, if available, to offer health-care services to

eligible employees and retired persons in a specific area of the state. . . . A health

maintenance organization that has been approved to provide health-care services

to employees and retired persons of the state under the Texas Employees Uniform

Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is

qualified upon proper application to the institution to provide similar services to

eligible employees and retired persons of any institution or agency under this Act

located in the same area of the state. More stringent requirements may not be

imposed on health maintenance organizations under this Act than are imposed by

the state or by the federal government.

University Employees Act § 4(b)(4)(D) (emphasis added). PCA asserts that because it is a health

maintenance organization (HMO) approved to provide health care services under the State

Employees Act, the Regents are required to contract with PCA to provide health care services to

university employees and retirees as well. (1) We disagree. The plain meaning of the statute is that

any HMO that has been approved to provide health care services to other state employees under

the State Employees Act is also eligible to provide those services to university employees under

the University Employees Act. (2) The statute does not directly state, nor even imply, however, that

all HMOs that have met the requirements of the State Employees Act are entitled to provide

similar services to university employees and retirees. The University Employees Act confers

discretion upon the Regents to select from among approved applicants; the discretion to select

includes the discretion to exclude a qualified HMO option. While the ERS selects the health plan

options for all other state employees, the governing regents of state universities have been given

the discretion to select a separate health plan for each institution. The scope of the Regents'

discretion is not restricted to the choices made by the ERS; otherwise there would be no purpose

in affording these institutions the option of designing comparable but distinct health care benefits.

PCA maintains that the University Employees Act removes the Regents' discretion

to exclude ERS-approved HMOs. When the statute declares that ERS-approved HMOs are

qualified , PCA argues the term means more than approved; it means entitled . In support of this

interpretation, PCA argues that unless "qualified" is read to confer entitlement, the sentence

denominating ERS-approved HMOs as qualified becomes meaningless. PCA correctly states that

"every word in a statute is presumed to have been used for a purpose" and that every sentence,

clause, and word in a statute is to be given effect if reasonable and possible. Perkins v. State , 367

S.W.2d 140, 146 (Tex. 1963).

We recognize that all ERS-approved HMOs are necessarily state or federally

approved, and therefore fall within the class of HMOs mentioned in the first sentence of the

statutory provision. See State Employees Act § 5(e). We agree that the sentence stating they are

"qualified" to provide services must confer some additional rights upon, or recognize some

difference between, ERS-approved HMOs and all other HMOs. If this were not the case, a

separate sentence dealing with other state or federally approved HMOs would indeed be

meaningless. However, we do not agree that ERS-approved HMOs have the right to contract with

UT Austin, depriving the University of its discretion to accept or reject any approved HMOs.

Rather, the distinction between the two classes of HMOs is that ERS-approved HMOs have

already gone through the approval process necessary to be selected as a health provider to other

state employees, which includes examination of their bidding contracts for certification of actuarial

soundness by the State Board of Insurance. See State Employees Act § 5(a). Upon request by

the University, HMOs seeking to provide services under the University Employees Act must

submit to a similar evaluation. See University Employees Act § 4(b)(4)(B). The statute

recognizes that once an HMO has been screened by the State Board of Insurance, a second

evaluation and certification of actuarial soundness is unnecessary. The statute therefore provides

that ERS-approved HMOs are not required to submit to another such examination in order to be

eligible to contract with a state university. In this sense, HMOs approved to provide services to

state employees are already "qualified" to provide similar services to university employees; all

other HMOs must still have their bidding contracts evaluated and certified as to actuarial

soundness by the State Board of Insurance if the university so requests. University Employees

Act § 4(b). We conclude that an HMO that "is qualified . . . to provide similar services" is an

HMO that has already been screened by the State Board of Insurance pursuant to the State

Employees Act; therefore, a qualified HMO need not go through a second screening process to

be eligible to provide similar services under the University Employees Act. However, being

qualified to provide health care services does not guarantee a provider a contract with a state

university. The statute only requires the Regents to select an HMO from the pool of eligible

providers; it does not require them to select all qualified providers.

This reading of the statute comports with the legislative purpose in enacting a

separate insurance benefits act for Texas state college and university employees. The statute is

designed to give institutions of higher education broad discretion in fashioning an employee health

care plan. The statute permits the University to "design a plan around existing local conditions."

University Employees Act § 4(b)(1). The plan at issue in this appeal was designed to meet the

local conditions of the employees of UT Austin. The health care benefits chosen must be

"comparable," rather than identical to, those provided employees of other agencies of the State

of Texas. Id. If the effect of the statute were to require the University to contract with all HMOs

selected by the ERS under the State Employees Act, a separate statute governing institutions of

higher learning would be pointless. The very fact that the legislature has permitted educational

institutions to design a program different from that provided all other state employees

demonstrates its intent that these institutions should have autonomy in decisions about employee

health care coverage. Because the statute does not require that the Regents contract with PCA to

provide health care services to UT Austin employees and retirees, the trial court properly denied

PCA's writ of mandamus. The first point of error is overruled.

In its second point of error, PCA asserts the trial court erred in failing to award

injunctive relief insuring that PCA's health maintenance organization health care plan is fairly

presented as a health care option to UT Austin employees for the 1993-1994 fiscal year. The trial

court's final judgment renders moot any request for temporary injunctive relief. See Isuani v.

Manske-Sheffield Radiology , 802 S.W.2d 235, 236 (Tex. 1991). To obtain permanent injunctive

relief, PCA must establish that the Regents acted improperly. See University Interscholastic

League v. Buchanan , 848 S.W.2d 298, 301 (Tex. App.--Austin 1993, no writ). PCA argues that

section 4(b)(4)(D) imposes upon the Regents a mandatory, non-discretionary duty to contract with

PCA. They contend that the Regents acted improperly when they violated this statutory duty.

Because we have rejected the argument that the University Employees Act requires the Regents

to contract with PCA, we overrule PCA's second point of error.

CONCLUSION

We hold that under the University Employees Act, the Regents have the discretion

to select or reject eligible, qualified HMOs, even those providing health care services to state

employees and retired persons under the State Employees Act. Accordingly, we affirm the trial

court's judgment.

Bea Ann Smith, Justice

Before Chief Justice Carroll, Justices Aboussie and B. A. Smith;

Chief Justice Carroll not participating

Affirmed

Filed: August 17, 1994

Publish

1. PCA points to a 1987 Attorney General opinion in support of its interpretation of

the statute. See Op. Tex. Att'y Gen. No. JM-744 (1987). We conclude that this opinion does

not address the question presented in this appeal and thus lends no support to PCA's position.

2. We will refer to these HMOs as "ERS-approved" because they have met the

requirements set forth in the State Employees Act and have been selected by the

Employee Retirement System to provide health care services to state employees pursuant

to that Act.