The representative of the Catholic St. Joseph Hospital Foundation, Shi-Chie Chang (now changed into Tsong-Ming Li by a motion to assume the action, hereinafter “Petitioner 1”), and the Central Health Insurance Bureau of the Department of Health, the Executive Yuan prior to the governmental reorganization (now reorganized as the National Health Insurance Administration, Ministry of Health and Welfare, hereinafter “NHI Administration”), entered into a National Health Insurance Healthcare Providers Contract (hereinafter “the Contract”). During September to October in 2007, a surgical surgeon under the supervision of Petitioner 1 conspired with a patient to mix someone else’s cancer tissues into the patient*s biopsy, misleading the examination results to be malignant breast tumors. With the false result, a mastectomy surgery and other treatments were taken. Based upon such treatments, Petitioner 1 applied for multiple medical expenses to the Insurer. The false claims were later investigated and found out by the prosecutor. According to the laws at the time of the said fraud, i.e. related provisions of the Regulations Governing Contracting and Management of National Health Insurance Medical Care Institutions (hereinafter “Contracting and Management Regulations”) enacted according to the authorization of Article 55, Paragraph 2 (hereinafter “Provision I”) of the National Health Insurance Act promulgated on August 9, 1994 (hereinafter “NHI Act of 1994”), including the part regarding contract suspension under Article 66, Paragraph 1, Subparagraph 8, amended and promulgated on March 20, 2007 (hereinafter “Provision II”), Article 70, First Sentence regarding refusal of reimbursement during contract suspension, amended and promulgated on February 8, 1996 (hereinafter “Provision III”), and Article 20, Paragraph 1 of the Contract, the NHI Administration suspended Petitioner 1’s contracted surgical services (including outpatient and inpatient ones) for around 2 months and refused to pay for any expenses associated with services rendered to the insurance beneficiaries by the liable physician within the period of suspension. Petitioner 1 objected and filed a lawsuit for the administrative remedy. Meanwhile, according to Article 39, Paragraph 1 of the Contracting and Management Regulations, amended and promulgated on September 15, 2010 (hereinafter “Provision IV”) concerning offsets of the suspended contract period, Petitioner 1 applied for deductions to offset the enforcement of the suspended contract period (hereinafter “offsets of the suspended contract period”) on May 4, 2011. The NHI Administration approved this application and agreed to deduct NTD $ 14,001,281. Petitioner 1’s lawsuit was later dismissed by the final judgement of Supreme Administrative Court 101-Pan-929 (2012), which held the appeal meritless. Petitioner 1 petitioned for constitutional interpretation to this Court, contending that Provision I to 4 violated the Gesetzesvorbehalt principle and the principle of proportionality under Article 15 and 23 of the Constitution. The petition satisfies the criteria specified in Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Interpretation Procedure Act and shall be granted review.
Further, Petitioner Hsian-Tang Chen as Dongtai Pharmacy (hereinafter Petitioner 2), and the NHI Administration entered into the Contract too. Chen Hsian Tang did not practice in person as a pharmacist at the Pharmacy from 12 pm, May 18 to 10 am, May 19 of 2013. Instead he hired another pharmacist to dispense, while using the stamp of “Dongtai Pharmacy Hsian-Tang Chen” on the prescriptions. Chen’s name as the dispensing pharmacist continued to be used in the computer system, according to which Petitioner 2 declared and apply for medical expenses. The false claims were found out through on-site investigation by the NHI Administration on June 12, 2014. The NIH deducted NTD $ 311,710, i.e. 10 times of the related medical expenses declared (hereinafter “deductions of medical expenses”) [Note], according to Article 37, Paragraph 1, Subparagraph 1 of the Contracting and Management Regulations, amended and promulgated on December 28, 2012 (hereinafter “Provision VI”), under the authorization of Article 66, Paragraph 1 of the National Health Insurance Act (hereinafter “Provision V), amended and promulgated on January 26, 2011 (hereinafter “the existing NHI Act”), and Article 20 of the Contract. Petitioner 2 objected and filed a lawsuit for the administrative remedy. The lawsuit was later dismissed by the final judgment of the Taipei High Administrative Court 105-Jian-Shang-55 (2016), which held the appeal meritless. Petitioner 2 petitioned for constitutional interpretation to this Court, contending that Provision V and VI violated Article 7, 15, 16 and the Gesetzesvorbehalt principle under Article 23 of the Constitution. The petition satisfies the criteria specified in Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Interpretation Procedure Act and shall also be granted review.
Both of the two petitions abovementioned involve the issues of, when the contracted insurance medical care institution breaches the contract, whether the NHI Administration’s measures taken according to Provision I to VI violate the Gesetzesvorbehalt principle as well as the principle of clarity and definiteness of authorization, and therefor are inconsistent with the Constitution. Given the commonality of the petitions, this Court consolidates the above two cases and renders this Interpretation as follows:
1. The issue regarding whether the provisions in question violate the Gesetzesvorbehalt principle and the principle of clarity and definiteness of authorization.
In accordance with its organizational laws and regulations, the NHI Administration is a national organization. To exercise its legally authorized powers, the NHI Administration enters into the Contract concerning matters of administering the National Health Insurance (hereinafter “National Health Insurance”) with various healthcare providers, and reaching into agreements that such insurance medical care institutions are qualified as the providers of medical and healthcare services for the insured, in order to fulfill the administrative purposes of improving people*s health as well as maximizing public benefits. For these reasons, the said Contract in nature is an administrative contract, which has been affirmed by J.Y. Interpretation No. 533. The National Health Insurance is a compulsory social insurance. When diseases, injuries or maternity accidents occur to the insurance beneficiaries during the period when the insurance contract is valid, medical services will be rendered by the insurance medical care institution. The NHI Administration will pay for medical expenses to the insurance medical care institution according to the Contract. Since the Contract is an administrative contract, the public law relations between the NHI Administration and the insurance medical care institution may be created, altered or extinguished by contracts, unless, except where no contract may be made by the nature of such relations or under law or regulation (see Article 135, First Sentence of the Administrative Procedure Act). The scope of the Gesetzesvorbehalt principle in a rule-of-law nation includes but is not limited to matters restraining people’s rights enumerated in Article 23 of the Constitution. Administrative measures by the government, even if not directly restricting people’s freedoms, shall be authorized by statute or by statute-authorized rules in the case where such measures are related to material public interests. When the law authorizes the Competent Authority to make supplemental rules, such authorization shall be specific and precise (see J.Y Interpretations No. 443 and No. 743). The content of the National Health Insurance Contract involves whether the National Health Insurance system could soundly operate, which is critical to whether the state could provide comprehensive healthcare services in pursuit of the health of the entire population. Such matters, involving constitutional protection of all the people’s right of existence and right to heath, are considered important matters of material public interests. Therefore, it shall be made by statute or by rules specifically and unequivocally by statute. The so-called specific and unequivocal authorization of statute must be judged from the viewpoint of the relevancy as expressed by the enabling statute in its entirety rather than being judged by rigid adherence to the language of any particular provision (see J.Y. Interpretations No. 394, No. 426, No. 612 and No. 734).
Article 1 of the NHI Act of 1994 declared its object and purpose to be “to promote the health of all nationals, to administer national health insurance …, and to provide health services.” To administer the National Health Insurance, the NHI Administration enters into the Contract with insurance medical care institutions and entrusts institutions to provide medical services. Therefore, effective management of insurance medical care institutions and urging those institutions to perform the Contract in accordance with the contractual purpose are critical for the state to continuously provide comprehensive healthcare services. The matters that the NHI Administration suspends the contract, refuses to reimburse, offsets the suspended contract period, or deducts medical expenses according to Provision II to IV and VI during the performance of the Contract are important matters concerning whether the National Health Insurance could soundly operate. They also involve the right to property and the right to work of the insurance medical care institutions and their medical service personnel. According to the Gesetzesvorbehalt principle in a rule-of-law nation, they shall be made by statute or rules authorized specifically and unequivocally by statute. The abovementioned provisions, including contract suspension, refusal of reimbursement, offsets of the suspended contract period, and deductions of medical expenses, are all matters concerning management of insurance medical care institutions and measures handling breach of contract. Article 55, Paragraph 2 of the NHI Act of 1994 (aka. Provision I.) had explicitly stipulated: “[r]egulations regarding contracting and managing methods of the contracted medical institutions shall be determined by the Competent Authority.” The same provision was later amended on January 26, 2011 into Article 66, Paragraph 1 (aka. Provision V), which also explicitly provides: “[m]edical care institutions should apply to the Insurer to become contracted medical care institutions. The Competent Authority shall determine the qualifications, procedure, review standards, disqualification, resolution of violations, and other relevant matters pertaining to contracted medical care institutions.” The abovementioned statutes have authorized the Competent Authority to make regulations over abovementioned matters, and thereby the provisions in question do not violate the Gesetzesvorbehalt principle.
Another issue is whether the authorized regulations are consistent with the principle of clarity and definiteness of authorization. According to Article 31, Paragraph 1 of the NHI Act of 1994, the insurance medical care institution should render outpatient or inpatient services in accordance with the law, and the physician may give the insurance beneficiaries prescriptions for dispensation in pharmacies. Article 42 stipulated that, if medical services rendered by the insurance medical care institution’s to the insurance beneficiaries is considered to be inconsistent with the NHI Act, the insurance medical care institution should bear its own expenses. Article 52 provided that the Insurer shall assemble a medical service review committee to review the items, the quantity and the quality of medical services rendered by the insurance medical care institution under the National Health Insurance. Article 55, Paragraph 1 stipulated that the insurance medical care institutions include contracted hospitals and clinics, contracted pharmacies, medical inspection institutions designated by the Insurer, and other contracted medical care institutions designated by the Competent Authority (later amended and promulgated on July 17, 2002, with only minor textual revisions without changing its regulatory contents). Article 62 stipulated that the Competent Authority or the Insurer, for administrative necessity, may visit, inquire or ask the insurance medical care institution to provide relevant documents, such as healthcare records, diagnosis records, account records, receipts and cost of medical expenses. The insurance medical care institution should not elude, reject, obstruct to the requests. According to abovementioned articles of the NHI Act, the legislator has already provided specific guidelines concerning the content of the Contracting and Management Regulations to the Competent Authority. Measures dealing with breach of contract are common parts of a contract. The term Management of the Contracting and Management Regulations should include measures dealing with breach of contract from the view of objective interpretation. It is reasonable to assume the legislator’s intent to authorize the Competent Authority to tackle with breach of contract by the Contracting and Management Regulations in pursuit of the purposes of authorization - to effectively manage insurance medical care institutions as well as to provide comprehensive healthcare services. To sum up, Provision I’s authorization to the Competent Authority to enact the Contracting and Management Regulations is equivocal enough, in terms of its purpose, content and scope, and thereby does not violate the principle of clarity and definiteness of authorization in a rule-of-law nation. Provision V explicitly stipulates measures handling breach of contract as a part of authorization, whose scope of authorization is clear, and therefore is consistent with the principle of clarity and definiteness of authorization in a rule-of-law nation.
2. The Issue regarding whether the Contracting and Management Regulations are beyond the authorization of its enabling statute.
For the purpose of administering the National Health Insurance by the Competent Authority, the Contracting and Management Regulations are articulated as the governing regulations to administer the National Health Insurance, to enter into Contracts, to manage insurance medical care institutions and to deal with breach of contract. Parts of the regulations have been incorporated into a part of the model Contracts. Article 1, Paragraph 1 of the model Contract issued by the NHI Administration Letter No. 0990072145 of February 12, 2010 (hereinafter “Model Contract for Contracted Hospitals”) and Article 1, Paragraph 1 of the model Contract issued by the NHI Administration Letter No. 0910005868 of April 26, 2002 (hereinafter “Model Contract for Contracted Pharmacies”) both stipulate that contracting parties should administer the National Health Insurance in accordance with the NHI Act, the Enforcement Rules of the NHI Act, the Contracting and Management Regulations, other related laws and regulations, as well as the Contract. Article 20, Paragraph 1 of the Model Contract for Contracted Hospitals stipulates that, should any of the circumstances listed in Article 66 of the Contracting and Management Regulations (of whom Paragraph 1, Subparagraph 8 aka. Provision II) occur, the NHI Administration shall suspend the contract. Article 20 of the Model Contract for Contracted Pharmacies provides that should any of the circumstances listed in Article 33 of the Contracting and Management Regulations (among which Paragraph 1, Subparagraph 1 with the same regulatory contents with Provision VI) occur, the NHI Administration shall deduct the medical expenses.
Article 72, First Sentence of the NHI Act of 1994 provided: “[t]he person who apply for reimbursements or claims medical expenses through improper conduct, or makes false certification, report, misrepresentation, shall be fined in the amount equivalent to two times of the benefits or medical expenses received.” However, according to the Contract, the insurance medical care institution bears the obligation to render medical services to the insurance beneficiaries, and also enjoys the right to claim medical expenses and to apply for reimbursements based on costs to the Insurer. Further, the insurance medical care institution should declare medical expenses based on facts, not through any improper conduct, false certification, report, or misrepresentation (hereinafter “medical reimbursement frauds”). Neither should the insurance medical care institution provide medical services without following prescriptions (hereinafter “dispensations failing to follow prescriptions”). In addition to the abovementioned article imposing fines, the legislature authorized that the Insurer and the insurance medical care institution may reach into agreements by the Contract, in order to let the Insurer take handling measures when the insurance medical care institution violates the Contract, for the purposes of preventing depletion of resources of the National Health Insurance, enhancing management of insurance medical care institutions and urging those institutions to perform the Contract according to the contractual purpose, Provision II explicitly provided: “[t]he Insurer shall suspend the contract for one to three months or suspend the medical department or specific service item for one to three months, if the insurance medical care institution has any of the following circumstances during the term of the contract: … 8. Other unscrupulous behavior or false certifications, reports or statements associated with the declaration of medical expenses.” (Article 39, Subparagraph 4 of the same regulations, amended and promulgated on December 28, 2012, with the same regulatory contents) Provision III explicitly provided: “[f]or any insurance medical care institution whose contract is suspended …, the responsible or liable medical personnel shall not be reimbursed for the services of medical services they provide to insurance beneficiaries during suspension …” (Article 47, Subparagraph 1 of the same regulations, amended and publicized on December 28, 2012, with the same regulatory contents) Considering that both provisions are measures necessary for the Insurer to effectively manage insurance medical care institutions and to urge institutions to perform the Contract according to the contractual purpose, and that the nature of both provisions is different from fines imposed upon breach of administrative obligations, Provision II and III have not gone beyond the authorization of their enabling statute.
Regarding the substitution of the enforcement of the suspended contract period, Provision IV explicitly provided: “[w]here the suspension … of a contract pursuant to Articles 37 to 38 poses a threat of significant impact on the beneficiaries’ right to receive medical care, or is necessary to prevent or mitigate risks to the public, the medical care institution, subject to the Insurer’s approval, may suspend … the contract within the scope of the specific service items or categories of a medical care which violates the requirement respectively, and may apply to the Insurer for the deduction of the payment to offset the suspended … contract period according to the declared volume of the medical department which is subject to specific service items or categories of a medical care as well as the verified average points of the total volume of the district of the most recent year.” (Article 42, Subparagraph 1 of the same regulations, amended and promulgated on December 28, 2012, with the same regulatory contents) This provision stipulated the requirements, procedures and standards of substitutions of the enforcement of the suspended contract period, according to which the insurance medical care institution may apply for reimbursement deductions to offset the enforcement of the suspended contract period, with the approval of the NHI Administration and the deduction calculated according to certain methods. The essence of this provision is to allow the abovementioned enforcement of the suspended contract period to be substituted by the offsets, as long as the insurance medical care institution applies and obtains approval from the NHI Administration, so that the insurance medical care institution can continue to provide medical services to the insurance beneficiaries and declare its medical expenses. This provision remains to be within in the scope of measures necessary for the Insurer to effectively manage insurance medical care institutions and to urge institutions to perform the Contract according to the contractual purpose. Therefore, this provision is not beyond the authorization of its enabling statute.
As for dispensations failing to follow prescriptions, Provision VI explicitly provides: “[t]he Insurer may deduct ten times of the reported medical expenses by the insurance medical care institutions based on the average total value of the most recent quarter of their locations, should the insurance medical care institutions be found under any of the following circumstances: 1. Failure to provide medical services according to prescriptions …” Provision VI stipulates that the Insurer may claim for institutions’ obligations of non-performance by the Contract, which is also a measure tackling with breach of contract, falling within the scope of measures necessary for the Insurer to effectively manage insurance medical care institutions and to urge institutions to perform the Contract according to the contractual purpose. Provision VI differentiates, in terms of the regulating purpose, the behavioral patterns by regulated subjects and the nature of illegality, from Article 81, Paragraph 1, First Sentence of the existing NHI Act, which provides: “[t]he person who applies for reimbursements or claims medical expenses through improper conduct, or makes false certification, report or misrepresentation, shall be fined equivalent to two to twenty times of the benefits or medical expenses received.” Therefore, Provision VI does not exceed the authorization of the enabling statute.
To sum up, Provision II to IV and Provision VI, which have been incorporated as part of the Contract, are not beyond the authorization of the enabling statute and thereby not inconsistent with the Gesetzesvorbehalt principle.
Nevertheless, given the content of the Contracting and Management Regulations greatly affects the sustainable and sound development of the National Health Insurance system as well as the rights and obligations of insurance medical care institutions, the Competent Authority should hold public hearings according to the Administrative Procedure Act, allowing representatives of stakeholders to attend to orally present their opinions and debate. The Competent Authority should take the entire hearing records into account and make decisions accompanying with reasons of adopting stakeholders’ opinions or not. The existing Contracting and Management Regulations should be reviewed and improved.
3. The issue regarding contract suspension and refusal of reimbursement that involve the principle of proportionality
According to Articles 155 and 157 of the Constitution and Article 10, Paragraphs 5 and 8 of the Additional Articles to the Constitution, the National Health Insurance is a compulsory social insurance that the state must implement. It is an institute reflecting the duty of the state to take care of its people by offering them a decent life and having to do with the welfare of all citizens (see J.Y. Interpretation Nos. 524, 533 and 550). Resources of the National Health Insurance are not unlimited. Under the Global Budget payment system of the National Health Insurance, medical reimbursement frauds would compress reimbursements received by healthcare providers who honestly provide their services, indirectly harm the quantity and the quality of medical services received by the insured, and erode the finance of the National Health Insurance. Medical reimbursement frauds would also cause all the citizens to bear increased premiums and jeopardize the sound development of the National Health Insurance system (see J.Y. Interpretation No. 545). The purposes of contract suspension and refusal of reimbursement in Provision II and III are to prevent and tackle with medical reimbursement frauds in furtherance of comprehensive medical services. The purposes serve important public interest and therefore shall be legitimate. The means, i.e. contract suspension and refusal of reimbursement, could cause a decreased number of patients or impair the fame of contracted medical care institutions through public announcement that deters or penalizes medical reimbursement frauds to a certain degree. The means are indeed helpful to achieve the purposes. Moreover, the existing Contracting and Management Regulations, in accordance with the seriousness of contract violation, generally divide into different measures to be taken, ranging from requests to make improvement within a specific period of time, imposing contract-violation points, deducting medical expenses, to suspending or terminating the contract. Among them, contract suspension may even be implemented from one to three months in accordance with the seriousness of contract violation (see the Uniform Standards of Penalties for Violations under Article 66 of the Regulations Governing Contracting and Management of National Health Insurance Medical Care Institutions, amended and promulgated on April 16, 2007); moreover, the suspension could only be limited to the scope of the entire or a portion of service, or the outpatient or inpatient part of the specific medical department, service items or categories of a medical care which violates the requirement respectively. Additionally, Provision IV also serves as an equitable mechanism. There is nothing significantly unreasonable in above provisions. Therefore, Provision II and III concerning contract suspension and refusal of reimbursement are not inconsistent with the principle of proportionality under Article 23 of the Constitution.
4. The issue regarding offsets of the suspended contract period that involve the principle of proportionality
Provision IV regarding offsets of the suspended contract period refers to that the insurance medical care institution, by an application approved by the NHI Administration, may pay for the amounts calculated with certain methods to substitute the enforcement of the suspended contract period. The amount of deductions is calculated as below: the average monthly declared volume of the suspended medical department or the suspended service items or categories of a medical care of the most recent year, with reference to the months of suspension, multiplies the average of the verified average points of the total volume of the district of the most recent year. The deductible amount is generally equivalent to the amount of refusal of reimbursement for services provided to the insurance beneficiaries during suspension. Since contract suspension does not violate the principle of proportionality under Article 23, neither does Provision IV regarding offsets of the suspended contract period violate the same constitutional principle.
To sum up, each provision of Provisions II to IV is consistent with the principle of proportionality under Article 23 of the Constitution, as well as the right to work and right to property protected by Article 15 of the Constitution.
Petitioner 2 also contended that Provision VI is inconsistent with Articles 7 and 16 of the Constitution. However, Petitioner 2’s arguments presented regarding this part did not objectively and concretely point out how these provisions violated the Constitution, and shall be procedurally rejected. It is so noted.
Note:
The NHI Administration’s letter responding to the Judicial Yuan on July 18, 2017 stated that “ … ‘medical services failing to follow prescriptions (pharmaceutical dispensations)’ stipulated under Article 37, Paragraph 1, Subparagraph 1 of the Contracting and Management Regulations, refers to that the criteria of legal medical services (pharmaceutical dispensations) require the dispensing person not only to fulfill the subjective requirement as qualified pharmacist, but also to sign on prescriptions by himself or herself according to related pharmaceutical laws. Any part of dispensations where the signing pharmacist does not practice by himself or herself, in spite of adhering to prescriptions, remains to be within the scope of sanctions under Article 37, Paragraph 1, Subparagraph 1 of the Contracting and Management Regulations…”
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＊Translated by Chao-Tien CHANG.