Cohen, J.c.c., Temporarily Assigned.
The plaintiffs, Blue Cross and Blue Shield, made payments for hospital and surgical services which, they now assert, were within the workmen's compensation exclusions of their contracts. They brought this action against their subscriber and his injured dependent for the amount of the payments. The matter is here on plaintiffs' motion for summary judgment.
The exclusionary language in the two contracts is essentially the same. The quoted clause is from the Blue Cross contract, and the only differing language in the Blue Shield contract is placed in brackets:
The Plan shall not be liable for: * * * Hospital services rendered for [services resulting from] any * * * accidental injury arising out of and in the course of employment for which benefits and/or compensation are available in whole or in part under the provisions of any Workmen's Compensation Law, * * * whether or not the covered person claims compensation or received benefits for * * * services thereunder. * * *
Defendant Mary Jane Phillips was injured on October 10, 1967 while employed by Fedders Corporation. Her accident arose out of and in the course of her employment. Her employer provided medical treatment for a substantial period of time. She was paid temporary disability by her employer's workmen's compensation carrier.
In April 1970, apparently dissatisfied with her progress and her treatment, Mrs. Phillips consulted Dr. Weisenfeld. The record does not disclose whether she made a demand upon her employer for further treatment. She did, however, receive from her employer's carrier a prompt and timely notice that it would consider as "unauthorized," under R.S.
34:15-15, any treatment by Dr. Weisenfeld. She nevertheless decided to go ahead. According to her testimony in the Division of Workmen's Compensation, her own attorney at that time told Mrs. Phillips the treatment was unauthorized.
Dr. Weisenfeld performed exploratory surgery in the lumbar and sacral spine and fused the fifth lumbar and first sacral vertebrae. The apparently eligible bills were $2691.10 and plaintiffs paid them in the ordinary course of business. In July 1970 Blue Cross ascertained that Mrs. Phillips had filed a workmen's compensation petition and soon gave notice to the Division and the employer's carrier of its claim for the hospital charges. R.S. 34:15-15.1.
In August 1972 Mrs. Phillips' petition came before the judge of compensation for resolution. It is apparent from the judge's remarks that the matter had been the subject of numerous fruitless prior conferences. It is equally clear that the surgery, performed three years after the accident and without authorization, was a major stumbling block to earlier resolution. The parties proposed a settlement for approval pursuant to N.J.S.A. 34:15-58. They proposed that Mrs. Phillips be paid for 17 1/2% of partial total permanent disability and that the 1970 surgery and hospitalization be held unauthorized and thus not reimbursable by the carrier to Blue Cross or to Mrs. Phillips. In her testimony in the Division Mrs. Phillips said she understood that it would be her responsibility to pay all bills for unauthorized treatment.
The judge of compensation entered an order approving the settlement. That order had the same effect as a judgment resolving the issues raised in the petition. He found the disability resulting from the compensable injury to have been "post-operative residuals exploritories [ sic ] L4-L5, L5-S1 and fusion L5-S1 and post-traumatic neurosis."
The judge of compensation ruled that the surgery and hospitalization were unauthorized. Thus, the residual effects of the surgery were held to have resulted from the compensable injury, but the cost of the surgery and ...