A legal opinion provided to the Colorado Medical Society is unequivocal: forcing doctors and other licensed health care providers (such as hospitals) to accept the Colorado Option plan being proposed in House Bill 1232 is illegal, potentially setting up the groundwork for legal action should the bill be signed into law. 

Not so fast, according to a May 6 legal opinion obtained by Healthier Colorado, one of the main proponents of HB 1232.

Colorado Politics obtained the April 22 opinion authored for CMS by Conklin, Cardone & Rutberg, which states that “it is well-established that physicians and other licensed health care providers have an inalienable constitutionally-protected right in the privilege to practice granted by their licensure.”

What that means, based on a 1953 Colorado Supreme Court ruling, is that when the state confers a license on someone to practice a profession, that license becomes “a valuable personal right” which cannot be altered in any way except after due notice and with a fair and impartial hearing before an unbiased tribunal.

In addition, the opinion said, doctors and other licensed providers have the right to carry on a legitimate business as a property right. It cannot be taken away by “an exercise of police power,” a term of art that originally appeared in House Bill 1232 but has since been amended out.  

HB 1232 also could interfere with the First Amendment right of association, or as the opinion explains, the right to refuse to associate with whomever one chooses. 

The Colorado Medical Practice Act also applies here, the opinion states. The MPA cannot use a physician’s refusal to participate in a health benefit plan as grounds for action by the Colorado Medical Board, the opinion states, because that has nothing to do with protecting the citizens of the state from an unqualified licensee. In addition, the MPA cannot impose “administrative fees” against licensees, something contemplated by House Bill 1232, which sets up a fine of $5,000 for any licensed doctor who refuses to accept the standardized plan set up by the bill. 

The opinion says this would amount to disciplinary action, which isn’t authorized by the Colorado Medical Act and which the memo suggests could be a violation of  the Colorado and U.S. Constitution. 

“Any administrative action or penalty against a licensed physician for failing to participate in a health benefit plan would likely be unlawful, unconstitutional and unenforceable,” the opinion concludes.

Authored by Lowrey, Parady, Lebsack, the May 6 rebuttal claims the CMS opinion is “legally inaccurate and erroneous.” The bill proponents can “proceed with confidence that the CMS memo does not raise any genuine constitutional concern, nor does it identify a viable legal challenge.”

To the claim that the bill would violate the First Amendment right of association, the memo states there has never been a single instance when a court has expanded the right of association to general commercial conduct. Citing a 1989 Supreme Court case, the memo states that the Constitution “does not guarantee a right to choose employees, customers, suppliers or those with whom one engages in simple commercial transactions, without restraint from the State.”

Excluding a particular patient or refusing to engage with a particular insurer does nothing to protect an expressive associational right. That latter right was established under the 1953 case Alabama vs. NAACP, which decided that individual members of the NAACP “had a right to associate together free from undue state interference.” The memo notes previous attempts to assert the claims from the CMS memo on this issue have not been successful.

As to the claim in the CMS opinion that the state has no authority to fine health care providers without due process, the Healthier Colorado opinion states that the bill creates a new category for unprofessional conduct. Finally, the memo states, the claim that the General Assembly has no authority to change the Medical Practices Act is incorrect; the General Assembly “may use its full powers in enacting statutes” and is not bound by the actions of a previous General Assembly.

Promoting access to healthcare by protecting patients from unaffordable medical costs is in line within the state’s “police power” to protect the health, safety and welfare of Coloradans, the memo concluded. 

The Colorado Hospital Association said through a spokesperson that “HB 21-1232 is an unprecedented and complex legislative policy.  As a matter of course, CHA routinely conducts analysis and review, including legal, on proposed legislation that affects hospitals. We have not received or reviewed the legal opinion currently being considered by CMS. It’s important to remember there are many different perspectives on a policy of this magnitude, and challenges, including legal ones, are typically part of the legislative process.”