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Magid v. Board of Trustees


May 6, 2009


On appeal from the Board of Trustees, State Health Benefits Commission, TYP 05383-05.

Per curiam.


Submitted December 2, 2008

Before Judges Wefing, Parker and LeWinn.

Petitioner Emanuel Magid appeals from the October 10, 2007 final administrative decision of the State Health Benefits Commission (SHBC), denying his request for reimbursement of certain private duty nursing expenses he incurred on behalf of his now-deceased wife, Phyllis Magid. For the reasons that follow, we reverse.


Petitioner is a retired employee of the Newark Board of Education who, in addition to primary insurance coverage under Medicare, has continuing secondary coverage under the so-called Traditional Plan of the New Jersey State Health Benefits Program (SHBP) administered by Horizon Blue Cross-Blue Shield of New Jersey (Horizon). On March 12, 2002, petitioner's seventy-six-year-old wife was hospitalized at Mount Sinai Hospital in New York City, for surgery related to two hip fractures. Shortly after her admission, Mrs. Magid was found to have cancer, namely B-cell blastic non-Hodgkin's lymphoma. Following two hip surgeries on March 15 and 26, 2002, she was transferred to the oncology floor to undergo chemotherapy. Her cancer treatment lasted from April 12 to May 15, 2002.

During the two-month period immediately following her first hip surgery through her chemotherapy treatment, Mrs. Magid experienced pain and numerous physical problems related to the surgeries, as well as serious side effects from the chemotherapy. She also suffered from pre-existing coronary problems, and fluctuations in her blood pressure. Her emotional state was very fragile during this period and she came under the care of a clinical psychologist and a psychiatrist who prescribed "medications for mood and pain management" during her "entire hospitalization at M[oun]t Sinai."

In consultation with Mrs. Magid's treating physicians, Dr. Elton Strauss and Dr. Valentin Fuster, petitioner hired private duty nurses from March 15 to May 15, 2002. In addition to her post-surgical pain and trauma and the cancer diagnosis and treatment, Mrs. Magid also suffered from neuropathy, spinal stenosis, vascular insufficiency, significant depression and death anxiety during her hospitalization. As the result of her various illnesses, she died of "multi-organ failure" on August 30, 2002.

The Member Handbook for petitioner's Horizon insurance plan sets forth the following guidelines governing claims for private duty nursing care:


Private duty nursing is only available under very strict standards. Private duty nursing will only be covered under extraordinary circumstances upon evidence of a clear and convincing objective need.

Private duty nursing must be ordered by a doctor; and provided by one of the following:

--- Registered nurse (R.N.), other than you, your spouse, or a child, brother, sister, or parent of you or your spouse.

--- Licensed practical nurse (L.P.N.), other than you, your spouse, or a child, brother, sister, or parent of you or your spouse.

Private duty nursing will not be covered if the care is:

--- the type of care normally provided by or that should be provided by hospital nursing staff[.]

On June 29, 2003, petitioner filed a claim with Horizon seeking reimbursement of $25,500, which he had incurred in hiring private duty nurses for his wife. He stated in his appended letter that the nurses had been "required by [p]hysicians due to severe problems from March 12, 2002 on . . . ." He further stated that the nurses had all been "assigned by the Private Duty Nursing Office at Mount Sinai Hospital . . . ."

On September 25, 2003, Horizon denied petitioner's request for insurance coverage. Petitioner appealed. Horizon then obtained the nurses' notes from Mount Sinai Hospital and, upon review, advised the SHBC that payment would be denied because "[a]lthough the patient had multiple problems managed and treated during this hospitalization[,] they did not result in extraordinary circumstances that could not be effectively handled by the hospital's regular nursing staff."

On November 15, 2004, the SHBC tabled the matter to enable petitioner to submit medical documentation from his wife's treating physicians. Petitioner submitted the following: (a) a November 5, 2004 letter from Dr. Janet Cuttner, a hematologist who had been involved with Mrs. Magid's chemotherapy, stating that Mrs. Magid had been "in constant pain and required extraordinary nursing care. . . . At no time was she completely without pain . . . . I believe the private duty nurses were an important part of her care"; (2) a November 11, 2004 letter from Dr. Strauss, who had been Mrs. Magid's treating orthopedist for the two years preceding her death, stating that she "required constant attention [and] needed to be turned to prevent decubiti, pneumonitis and further breakdown of her musculoskeletal system. Nursing care could not be expected to be able to deliver these services[,]" and adding: "Private duty nursing was recommended as a major treatment modality. Without private duty nursing[,] Mrs. Magid would not have sustained her life to the time that she did. . . . This nursing care was a major player in [her] treatment protocol . . . ."; and (3) a December 13, 2004 letter from Dr. Fuster, Mrs. Magid's treating cardiologist, stating: "Because of her recent cardiac surgery history, staged orthopedic surgeries, and labile blood pressure problems, I supported the team's suggestion that the family hire registered professional nurses for private duty care and close monitoring[,]" and adding: "Private duty RNs monitored her labile blood pressure, febrile post-operative and rehab course to prepare her for chemotherapy through 05-15-02."

On January 19, 2005, the SHBC denied petitioner's reimbursement request. He appealed, and the matter was transferred to the Office of Administrative Law (OAL) for a hearing before an administrative law judge (ALJ).

At that hearing, petitioner described the numerous services performed by the private duty nurses, including: checking and changing Mrs. Magid's wound dressings; checking the surgical areas for drainage; controlling and administering intravenous medications for pain and treatment management; flushing out the intravenous tube ports; assisting with blood transfusions; recording her vital signs; providing "special skin care" and oral care; physically changing her position in bed to prevent bed sores and to alleviate pain; and providing emotional support to help her deal with her depression.

Petitioner testified that the private duty nurses were hired based upon the recommendation of his wife's treating doctors, and that it was not a personal decision by him or his wife. He stated that the doctors "definitely indicated clearly . . . that it ha[d] to be private duty nursing in the recovery and after."

Petitioner presented the videotaped deposition testimony of Dr. Strauss, in which the following exchange occurred:

Q: And was it your office's recommendation that private duty nurses would be appropriate to tend to her needs?

A: Of course. . . . .

Q: And what was your basis for that opinion, Doctor?

A: Well, even in a major teaching hospital like Mount Sinai, and this is not to be negative about any form of nursing, and Mrs. Magid was a charming lady who was extremely helpful, as was her husband, when you have two legs that are injured/broken, when you have a spine that has nerve compression, when you have an abdomen that has a fresh surgical incision from the aneurysm, when you have the neuropathy that plagues both legs as well as some forms of neuropathy in both upper extremities as well, moving that type of person is not going to be able to be done by one nurse. And, in fact, it's not going to be able to be done by two nurses.

Now, every time a patient has a need, whether this need be, I need to move, I need to turn, I need a glass of water, I need to use the bedpan. I need a drug. Nurses are not going to be able to be by their bedside on a constant, . . . minute-by-minute, 15 minutes, 30 minutes time interval.

Unfortunately, nursing is not what it used to be because of the fact that the job of nursing has become very complex from the fact that documentation is needed on every patient. They spend a lot of time writing. And to sum this up, Mrs. Magid was not going to get the care that she needed.

The idea of any fracture fixation is to [im]mobilize the patient. And Mrs. Magid because of all her other comorbidities, forgetting the two fractures[,] needed to be moved constantly. And she needed to be turned to prevent pneumonia, to prevent bed sores, to deal with her bowels, to deal with just about every possible factor that one could imagine.

Here you have somebody who has two legs broken, neuropathy, spinal stenosis and is basically a paraplegic. She has no use of her lower extremities and she's not strong enough. She's not a 21-year-old that can pick herself up from a T-bar over the bed and kind of move themselves from one side of the bed to the other.

Q: So between the period of March 15th and May 15th, do you have an opinion as to whether or not private duty nursing was necessary for her care?

A: I do have an opinion.

Q: And what is that?

A: And a very strong opinion.

That private duty nursing was needed. And even the word private duty nursing is probably not as strong as the fact that she needed a team of people to deal with her. To pick up someone who's 120 pounds of dead weight, that's not a one nurse type of deal. She needed as much private assistance as she could get. And without the private duty nursing, Mrs. Magid would not have been with us as long as she survived.

Petitioner also presented the videotaped deposition testimony of Dr. Fuster who, although he could not remember specific details of Mrs. Magid's hospitalization, did "remember her very well[,]" and referred to his December 13, 2004 letter as stating his professional opinion that private duty nursing care for this patient "was quite justified." Dr. Fuster further testified that, even during the time when Mrs. Magid was on a telemetry unit staffed with cardiac nurses, he nonetheless felt private duty nurses were essential because of Mrs. Magid's dramatically fluctuating blood pressure. He stated:

A: It is required.

Q: To supplement that care?

A: It is required because the nurses in hospital. Let me explain to you. . . .

[W]e're dealing with a disease that in two minutes can be devastating. The nurses are not available around the clock. This kind of fluctuations in blood pressure that you see in the record requires somebody there. There's no monitoring system that tells you the blood pressure now is beyond 70. The reason we have a constant monitoring system. But not in terms of the blood pressure. And you can just go through these. This person needs to have somebody around the clock and somebody who knows what we are talking about.

Dr. Fuster stated that Mrs. Magid was in a telemetry unit rather than in the cardiac care unit because she was "very vulnerable[]" as a result of her numerous medical conditions.

Petitioner also submitted a letter from William Waked, Ph.D., the psychologist who had treated Mrs. Magid during her post-surgical rehabilitation from March 29 to April 12, 2002. Dr. Waked noted that Mrs. Magid had a history of depression prior to her hospital admission, and he saw her twice weekly to address numerous issues of depression, anxiety, emotional lability, acute pain and inability to focus on rehabilitation goals. The doctor stated:

Given Mrs. Magid's grave medical condition and clinically depressed/anxious state with break-through pain, private duty nursing was begun and strongly supported by the medical staff, including myself. The available patient-nurse contact was not of sufficient frequency to help enhance her chances of benefiting from the therapies and medical procedures she needed, and to cope adequately. Struggling with an aggressive cancer and two major surgeries, she was clinically depressed and experiencing nighttime awakenings, death anxiety, acute feelings of helplessness and intermittent hopelessness, and physical pain/weakened state, following months of already heavily taxed mental resources and attempts to overcome one medical setback after another. Provision of private duty nursing reflected both sound clinical judgment given her situation and use of a practical intervention that is an endorsed practice in palliative care medicine to help alleviate human suffering in patients with a life threatening medical condition. Hence, the additional nursing care, bedside help and psychological support that private duty nursing afforded her was justified and warranted in my opinion, and by those who treated her.

Dr. George Safran, a physician board-certified in emergency medicine and family practice, testified as the SHBC's "medical director of complex case management . . . responsible for reviewing appeals . . . ." He explained that a case is analyzed to determine whether the "treatment . . . rendered . . . meets the standard of care. . . ." Dr. Safran first reviewed Mrs. Magid's hospital records approximately three weeks prior to his testimony at the OAL hearing on August 7, 2006.

Dr. Safran described his review process as follows: "We apply the standards that are set forth, and we correlate them with the needs of the patient and see whether the needs of the patient are being met according to those standards." Based upon his review of Mrs. Magid's hospital records, and his familiarity with the standards governing nursing care in New York, Dr. Safran opined that "the staff nurses at Mt. Sinai had met those standards when delivering nursing care to Mrs. Magid." Therefore, he concluded, "there was no need for something beyond the standard of care."

On cross-examination, Dr. Safran took issue with the opinions of Drs. Strauss and Fuster, stating that their testimony was not supported by the record because there was "no mention anywhere in the medical record that they were dissatisfied with the care that was being rendered while it was being rendered." He added: "There is nowhere in the record that gives an explanation as to why they ordered private duty nursing." Because neither doctor had written a contemporaneous order for private duty nursing in Mrs. Magid's medical records, Dr. Safran rejected their "[s]ubsequent testimony" which, he opined, "can be colored by events. . . . [O]ngoing treatment . . . gives me the best indication as to what the [p]hysician's thought processes were."

Petitioner advised the ALJ that, until hearing this testimony from Dr. Safran in the OAL proceeding, he had no notice that his claim was denied for this reason. Therefore, the ALJ granted petitioner's request to submit a post-hearing supplemental letter from Dr. Strauss on this issue. In that letter, Dr. Strauss stated:

I have been a practicing physician of 30 years at two major medical centers in New York City. From 1979 through 1985 I was at the Hospital for Joint Diseases Orthopedic Institute and from 1985 through the present at Mt. Sinai Medical Center in New York City. I have never ordered in the medical record a private duty nurse. Even in the city hospitals system where all patients are Serviced [sic] type patients, an order is never placed in the medical record. This is not the policy of any hospital that I am aware of. The doctor suggests private duty nursing in extraordinary cases. Ms. Phyllis Magid was that type of case.

On February 16, 2007, the ALJ rendered her initial decision, denying petitioner's claim for the following reasons:

The nursing standards of care as outlined in the New York State Nurse's Association, the New York Board of Nursing, and the American Nursing Association were met. None of the doctors that testified, nor was it indicated anywhere in the medical records, that Mrs. Magid was receiving a substandard level of care necessitating the hiring of a private duty nurse. I FIND that Mrs. Magid was receiving the standard level of care from the hospital nursing staff.

I FIND that Mrs. Magid's condition, although serious and she suffered from numerous serious maladies, she did not require extraordinary medical services that could not be normally furnished by the hospital staff nurses. Doctors Strauss and Fuster said nothing during their testimony that indicated that Mrs. Magid needed anything the hospital staff nurses could not deliver. I also FIND, that although the private duty nurses provided her with more compassionate care and gave her emotional support, the record does not support that private duty nursing was a medical necessity. Neither doctor, at the time Mrs. Magid was ill and in the hospital documented the need for a [private duty nurse].

I FURTHER FIND that nothing in Mrs. Magid's medical chart says anything about the lack of her receiving quality nursing care. The record is devoid of any extraordinary circumstances that required Mrs. Magid to receive the services of a private duty nurse. The treatment she received did not demand the special or direct attention of a private duty nurse. In fact, much of the services provided by the private duty nurses were the same services the hospital staff nurses were providing. Private duty nursing is covered under very strict guidelines, I do not FIND that Mrs. Magid required any nursing service outside of those guidelines.

I FIND that Mr. Magid is not eligible to be reimbursed for the private duty nursing care Mrs. Magid received.

The SHBC adopted the ALJ's decision in a letter dated March 9, 2007. Petitioner appealed from that decision and the SHBC moved before us for a remand to consider petitioner's exceptions and to file a supplemental decision. We granted that motion, and the SHBC rendered a final administrative decision on October 10, 2007.

The SHBC reaffirmed its adoption of the ALJ's findings of fact and concluded that petitioner had failed to meet his burden of proving extraordinary circumstances warranting private duty nursing care. The SHBC noted that, because the "underlying rationale of Dr. Strauss and Dr. Fuster in ordering the [private duty nursing] was not found anywhere in the record[,] . . . their testimony that the service [wa]s medically necessary is not supported by documentation in the medical record." The SHBC noted that Dr. Safran found no "substandard nursing care indicated anywhere in the medical records, and . . . that neither of petitioner's doctors testified that the nursing care was sub-standard."


On appeal, petitioner raises the following issues for our consideration:

I. Under the Terms Of The State Health Benefits Program (Traditional Plan) The Petitioner/Appellant Has Established By Clear and Convincing Evidence That Extraordinary Circumstances Existed Entitling Him To Reimbursement For Private Duty Nursing Expenses Incurred.

II. The Language Contained In the State Health Benefits Program, Traditional Plan, Member Handbook Creates An Ambiguity Relating To When Private Duty Nurses Expenses Are Reimbursable.

III. Due To The Ambiguity In The Membership Handbook, The Ambiguity Should Be Resolved In Favor Of Coverage.

IV. Should The Court Determine That The Coverage Under the Policy Extends To Private Duty Nurses, The Respondent Should Be Required To Pay Appellant's Legal Fees.

Our scope of review of administrative decisions is narrowly circumscribed. In re Taylor, 158 N.J. 644, 656 (1999). Our role is to determine "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record' considering 'the proofs as a whole'" and "with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." Ibid. (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)). We "may not 'engage in an independent assessment of the evidence . . . . '" In re Taylor, supra, 158 N.J. at 656 (quoting State v. Locurto, 157 N.J. 463, 471 (1999)). We will accord a strong presumption of reasonableness, Smith v. Ricci, 89 N.J. 514, 525 (1982), and give great deference to administrative decisions. State v. Johnson, 42 N.J. 146, 159 (1964). We do not, however, simply rubber stamp the agency's decision. Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980). An administrative decision will be reversed only when it is found to be "arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole." Ibid.

Having carefully reviewed the record, we nonetheless conclude that we need not determine whether the decisions of the ALJ and the SHBC are supported by the evidence. We decline to reach this determination because we concur with petitioner's second argument regarding ambiguity in the Handbook language.

Petitioner contends that the Handbook language regarding coverage of private duty nursing care is ambiguous in its reference to "extraordinary circumstances[,]" a standard that does not appear to be defined in any SHBC document. Dr. Safran testified that the Handbook is the "policy that the [S]tate uses, and that is the only one that's available." He stated that the "language in the plan [regarding private duty nursing care] is such that . . . it is open to interpretation, whether it be mine or anybody else that is reviewing it. . . . There really is no standard set forth in the [Handbook]."

We note that Dr. Strauss described Mrs. Magid's circumstances as "extraordinary" on two occasions. In his deposition, the doctor stated that he considered Mrs. Magid's condition during the period he was treating her to be "extraordinary circumstances[.]" In his supplemental letter, Dr. Strauss wrote: "The doctor suggests nursing care in extraordinary cases. [Mrs.] Magid was that type of case."

Dr. Safran offered two highly individualized examples when asked what facts would constitute "extraordinary circumstances" in his opinion. Describing his examples as "merely illustrative[,]" the doctor posited the cases of (1) a patient "in the intensive care unit who was [intubated] on a vent[i]lator with multiple intr[a]venous cardiac medications used to support heart function, and blood pressure in addition to monitoring illness . . . ."; and (2) "a patient . . . with multiple trauma . . . who has traumatic brain injury . . . who is having intercranial pressure monitoring done who also has other types of internal injuries . . . ." Dr. Safran stated that both examples presented "enormous complexity" that would "require more than one person taking care of concurrent problems."

Dr. Strauss opined that Mrs. Magid's case was of sufficient "complexity" that the hospital's "[n]ursing care [staff] could not be expected to deliver" all the services she required. Dr. Fuster expressed a similar opinion, particularly in light of Mrs. Magid's fluctuating blood pressure, which he considered to be potentially life-threatening.

When Dr. Safran's examples are compared and contrasted with the descriptions of Mrs. Magid's circumstances provided by Drs. Strauss and Fuster, the term "exceptional circumstances" does appear to be subjective and, we therefore conclude, ambiguous.

Ambiguity will be found to exist "where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage." Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979). Here we have a disagreement among medical professionals as to what conditions will constitute "exceptional circumstances." The opinions of Drs. Strauss and Fuster support the conclusion that private duty nursing care for Mrs. Magid was within the "boundaries of coverage[]" as set forth in the Handbook. Dr. Safran stated that her condition was not sufficiently "complex" to warrant coverage. If medical professionals disagree on the meaning of "exceptional circumstances," how is an "average policyholder" supposed to "make out the boundaries of coverage"? Ibid.

Where, as here, "the controlling language of a[n insurance] policy will support two meanings, one favorable to the insurer and the other to the insured, the interpretation favoring coverage should be applied . . . ." Butler v. Bonner & Barnewall, Inc., 56 N.J. 567, 576 (1970). "Traditional rules of construction of insurance policies favor a reading advantageous to the insured." Lundy v. Aetna Cas. & Sur. Co., 92 N.J. 550, 559 (1983). Where "the policy is ambiguous, the policy will be construed in favor of the insured." Nav-Its, Inc. v. Selective Ins. Co., 183 N.J. 110, 118 (2005).

Such a result is supported by the very principles governing the administration of the SHBP:

The goal of the State Health Benefits Program Act is to provide comprehensive health benefits for eligible public employees and their families at tolerable cost. It establishes a plan for state funding and private administration of a health benefits program which will protect public employees from catastrophic health expenses . . . .

By undertaking that very consequential role in the financial security of public employees and their families, the State also undertakes to play fair with them. Hidden or unfair reservations in insurance policies are ignored because they do not reflect the reasonable expectations of the parties. Because of the significance of health insurance to public employees and their families, and the Legislature's undertaking to furnish insurance and determine its scope, one of the goals of the Legislature must have been to assure the fair and evenhanded application of Program provisions, and the avoidance of crabbed interpretations of ambiguous terms. [Heaton v. State Health Benefits Comm'n, 264 N.J. Super. 141, 151-52 (App. Div. 1993).]

Mrs. Magid's treating physicians recommended private duty nursing care to address her multiple medical and post-surgical issues. Both doctors opined that, because of those complex issues, Mrs. Magid's needs could not be met by the staff nurses alone. Under the circumstances, we conclude that the Handbook term "exceptional circumstances" must be interpreted to extend coverage to petitioner for the private duty nursing services.

The absence of a written order for such care in the hospital records does not defeat petitioner's claim, particularly in light of Dr. Strauss' statement that, in his experience of thirty years at two major medical centers including Mount Sinai Hospital, orders for private duty nursing are "never placed in the medical record. That is not the policy of any hospital that [he] is aware of." While the Handbook provides that "[p]rivate duty nursing must be ordered by a doctor," there is no requirement that such order be in writing in the patient's hospital record. It is undisputed that petitioner obtained private duty nursing care for his wife in consultation with, and upon the recommendation of, her treating physicians. Under the circumstances, we conclude that petitioner satisfied this prerequisite to insurance coverage.


Finally, petitioner contends that, if we determine that he is entitled to the insurance coverage at issue, we should require respondent to pay his legal fees. The State counters that such fees are not authorized under Rule 4:42-9.

This issue was not raised below and, therefore, we will not consider it. "[A]ppellate courts will decline to consider questions or issues not properly presented [below] . . . 'unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest.'" Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (quoting Reynolds Offset Co., Inc. v. Summer, 58 N.J. Super. 542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554 (1960)). Petitioner's request for legal fees meets neither of these exceptions.



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