MEDICAL AID CONTRACTS

MEDICAL AID CONTRACTS.

(1) Consent to a medical aid contract by a majority of workmen will be binding for the contractual period on all persons subsequently employed.

(2) Supervisor without authority to withhold approval because number of workmen now employed is small compared to number which will be employed a year hence.

(3) Medical aid contract effective for any designated period not exceeding three years.

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                                                                  March 27, 1951

Honorable A. M. Johnson
Director of Labor and Industries
Olympia, Washington                                                                                             Cite as:  AGO 49-51 No. 480

Dear Sir:

            This will confirm our oral opinion to you, construing the medical aid contract statute (section 7724, Rem. Rev. Stat.), as follows:

            (1) Workmen who are presently employed on a construction job, by a majority vote, may consent to a medical aid contract which will be binding for the contractual period on all persons who may be employed subsequently.

            (2) The fact that the number of workmen now employed may be infinitesimally small by comparison with the number who will be employed within the year if the large‑scale construction work goes forward according to schedule does not constitute valid grounds for the supervisor of industrial insurance to withhold approval of a medical aid contract which meets the medical service standards prescribed in this statute.

            (3) A medical aid contract may be operative for any designated period of time, not exceeding three years.

                                                                     ANALYSIS

             [[Orig. Op. Page 2]]                                                                             

            (1) Our conclusion is in line with a previous opinion of this office, dated March 14, 1946, to the then Director of the Department of Labor and Industries.  The question therein propounded was whether or not a majority of workmen who were dissatisfied with a medical aid contract which had been assented to by a majority of the workmen of an employer at the time the contract was effectuated were still bound by its terms for the full contractual period.  We held that labor turnover, however large, does not affect the terms of a medical aid contract and each workman accepting employment with an employer under a medical aid contract, by force of statute, accepts the existing contract and becomes bound in the same manner as the original workman when the contract was made.

            (2) Section 7724, Rem. Rev. Stat., vests in the supervisor of industrial insurance the discretionary power to disapprove a contract "when found not to provide for such care of injured workmen as is contemplated by the provisions of section 7715 and * * *" if in his judgment the ownership or management of such hospital or hospital association (submitting the contract) shall not be such as to produce satisfactory service.  While at first blush, it may appear inequitable that a large number of workmen should be bound by a contract consented to by a small coterie of employees at the time the contract was originally consummated, and who may not still be employed, the statute vests in the supervisor of industrial insurance continuing control and also gives dissatisfied employees remedial rights.  At any time the supervisor determines the medical service and care actually rendered under a contract does not measure up to the standards fixed by law, upon a hearing had upon notice to the employer and workmen interested thereunder, he may make an order that the contract shall terminate unless the deficiency is remedied to his satisfaction.  Such a hearing may be initiated by a complaint filed with the supervisor by any interested person.

            (3) The statute is plain in its terms that a valid contract need not cover a three year period.  When a contract meets the exactions of the Workmen's Compensation Act, the supervisor shall approve the same, and it shall "take and continue in effect for any period of time specified therein, not exceeding three years from the date of such approval."

Very truly yours,

SMITH TROY
Attorney General

T. H. LITTLE
Chief AssistantAttorney General