Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hip of New Jersey Inc. v. New Jersey Department of Banking and Insurance

March 12, 1998

HIP OF NEW JERSEY, INC., D/B/A HIP HEALTH PLAN OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF BANKING AND INSURANCE, DEFENDANT-RESPONDENT. PHP HEALTHCARE CORPORATION AND PINNACLE HEALTH ENTERPRISES, L.L.C., A WHOLLY OWNED SUBSIDIARY OF PHP, PLAINTIFFS/INTERVENORS- APPELLANTS, PUBLIC INTEREST LAW CENTER OF NEW JERSEY, INC., AND NEW JERSEY CITIZEN ACTION, DEFENDANTS/INTERVENORS- RESPONDENTS.



Argued February 18, 1998

Before Judges Pressler, Conley and Carchman.

The opinion of the court was delivered by: Carchman, J.s.c (temporarily assigned).

On appeal from final decision of Department of Banking and Insurance.

This appeal requires us to determine whether an Asset Purchase Agreement and Health Services Agreement and annexed schedules (the Agreements) provided in support of an application to amend a Certificate of Authority issued by the State of New Jersey, as well as the letter approving the amendment (the Letter, or collectively, the Documents), are available to interested third-parties under the Right to Know Law, N.J.S.A. 47:1A-2 (RTKL), or the common-law right to know or whether they are protected by the confidentiality provisions of the Health Maintenance Organizations Act, N.J.S.A. 26:2J-1 to -44 (HMO Act). The Commissioner of the Department of Banking and Insurance concluded that, except for the provider agreements, the Documents were not confidential and would be released. We agree, and conclude that the Documents are not confidential under the HMO Act and fall within the scope of RTKL. Accordingly, we affirm.

I.

The issue arises in the following factual context. In 1997, appellant HIP of New Jersey (HIP), an HMO, entered into an Asset Purchase Agreement with PHP Healthcare Corporation (PHP), a Delaware for-profit corporation, for the purchase by PHP of certain of the assets of HIP. At the same time, a Health Services Agreement was entered into between HIP and Pinnacle Health Enterprises, L.L.C. (PHE), a Delaware Limited Liability Corporation, for PHE to facilitate the administration of medical services to HIP enrollees. Neither PHE nor PHP are licensed or otherwise authorized in any capacity to provide health care services or benefits in the State of New Jersey.

These transactions required an amendment to HIP's state-issued Certificate of Authority, and approval by respondent New Jersey Department of Banking and Insurance (the Department) was, therefore, necessary. In August 1997, HIP notified the Department and the Department of Health and Senior Services (DOHSS) of its intention to seek approval from these agencies for a modification to its Certificate of Authority as part of the sale of its assets to PHP. Along with this request, HIP submitted a copy of the Health Services Agreement.

When HIP submitted the necessary documents to the Department for approval, HIP asserted that all HIP documents related to the transaction were confidential and not public documents pursuant to N.J.S.A. 26:2J-3 and N.J.A.C. 8:38-2.7. In a letter to the Department, HIP stated that the agreement was "not to be treated as a public document but rather treated as confidential and proprietary information." Additionally, HIP, PHP and PHE *fn1 asserted that the Asset Purchase Agreement and Health Services Agreement must remain confidential because they set forth, in detail, the substance of HIP, PHP and PHE's business operations.

On September 23, 1997, in response to HIP's application for approval, the Department's Chief of the Managed Care Bureau (the Chief) wrote to HIP and requested a copy of the Asset Purchase Agreement, stating:

e require a copy of the agreement for review, and will maintain it as confidential since it is an integral part of the transaction with a "provider."

HIP maintains that it submitted the Asset Purchase Agreement to the Department in reliance on the Department's promise of confidentiality. Upon submission of the Asset Purchase Agreement to the Department and DOHSS, HIP again, in a letter dated September 24, 1997, stated its intention that the agreement remain confidential.

At your request, yesterday we supplied each of you with a copy of the Asset Purchase Agreement between HIP of New Jersey, Inc. and PHP Healthcare Corporation. Since these were submitted pursuant to N.J.S.A. 26:2J-26, they shall not be treated as public documents, but rather as confidential and proprietary; we understand that you will treat them as such.

On October 28, 1997, HIP obtained approval of the Agreements with PHE and PHP from the Department. On December 17, 1997, the Assistant Commissioner of the Department informed HIP by letter that New Jersey Citizen Action (Citizen Action), a public interest group, had requested copies of all public documents relating to the transaction between appellants. The letter went on to state:

Upon review of our files, we noted that when the asset purchase agreement between PHP and HIP was submitted and when the health services agreement between PHE and HIP was submitted, HIP claimed that these documents were not public documents pursuant to N.J.S.A. 26:2J-26.

We do not believe that these agreements are confidential pursuant to N.J.S.A. 26:2J-26 or any other statute or regulation. Accordingly we intend to release the agreements and the October 28, 1997 approval letter of Commissioners Randall and Fishman to New Jersey Citizen Action on December 26, 1997. If you disagree with our position, we advise you to pursue legal recourse.

The Department maintained that all of its requests for information from HIP sought information that was required by the Department to determine whether HIP was transferring a controlling interest in its HMO to PHP or PHE and whether the transaction complied with all requirements of the HMO Act (N.J.S.A. 26:2J-1 to -44) and HMO regulations (N.J.A.C. 8:38-1.1 to -15.4). As an attachment to the Health Services Agreement, HIP had submitted various provider agreements between PHE and physicians, hospitals and other providers. The Department concluded that these provider agreements were not subject to disclosure and refused to release those documents.

By letters dated December 19 and 22, 1997, HIP requested that the Department delay the release of the documents and reconsider its position. In a letter dated December 23, 1997 to the Attorney General of New Jersey, with copies sent to the Department, the Public Interest Law Center of New Jersey (PILC) - another group expressing interest in the documentation - outlined in greater detail the documents previously requested by Citizen Action. Specifically, PILC requested copies "of any documents or correspondence evidencing the terms of the agreement between HIP and PHP." Although the Department agreed to postpone its release of the HIP documents until January 22, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.