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Valley Hospital v. Spunt

February 3, 2010

THE VALLEY HOSPITAL, PLAINTIFF-APPELLANT,
v.
BARRY SPUNT AND CHRISTY SPUNT A/K/A CHRIS SPUNT A/K/A CHRISTY PAGE A/K/A CHRIS PAGE, DEFENDANTS/THIRD-PARTY PLAINTIFFS, AND GROUP HEALTH INCORPORATED,*FN1 AND EMPIRE BLUE CROSS BLUE SHIELD OF NEW YORK, THIRD-PARTY DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-3246-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 11, 2010

Before Judges Reisner and Yannotti.

This case concerns a dispute between plaintiff Valley Hospital (the hospital), defendant-third party plaintiff Christy Spunt, a former hospital patient, and her insurers third-party defendants Empire Blue Cross Blue Shield of New York (Empire) and Group Health Incorporated (GHI). The hospital appeals from a September 12, 2008 order granting Empire's summary judgment motion and dismissing the complaint on the grounds that the hospital's lawsuit constituted balance billing prohibited under its provider contract with Empire. The hospital also appeals from an October 24, 2008 order denying its motion for reconsideration. We reverse the order granting summary judgment and remand this matter to the trial court.

I.

We discuss the facts and procedural history at some length because they illuminate the result we reach in this case. The hospital filed a complaint on May 3, 2007, against Christy and Barry Spunt, seeking recovery of $17,931.88 in payments for medical services provided to Christy.*fn2 Defendant filed an answer and counter-claim on October 2, 2007, alleging that the hospital was an "in-network provider, of which, according to the defendant's insurance policies, 100% of all bills are covered," and claiming that the hospital negligently billed her insurance carriers and improperly charged her for alleged out-of-network services which were in fact in-network services. She also filed a third-party complaint against her insurance carriers, GHI and Empire, alleging breach of their duty to make payment under her insurance policies. By leave of court, on July 18, 2008, the hospital filed an amended complaint seeking an additional $55,108.61 for medical services provided to Christy.*fn3

On August 11, 2008, Empire filed a motion for summary judgment. Empire asserted the following in its one-paragraph statement of undisputed material facts:

Plaintiff the Valley Hospital is a participating provider in Empire's network and is a party to a network provider agreement with Empire. Attached hereto . . . is a portion of this agreement which bars the Valley Hospital from filing lawsuits against member-patients for services rendered. Accordingly, the proposed amended claim must fail as a matter of law.

Empire also relied upon the certification of one of its attorneys, which referenced the network provider agreement (provider agreement) between the hospital and Empire, and attached a copy of the Agreement.

The provider agreement contained the following language:

Empire is the sole party responsible for making payment to Hospital as compensation for providing Covered Services to its Covered Persons. Under no circumstances, including insolvency of Empire or termination of this Agreement, shall Hospital seek payment from the Covered Person for payment of Covered Services rendered while this Agreement is in effect, except for visit fees, copayments or coinsurance . . . . Hospital's obligation to hold Covered Persons harmless for the cost of Covered Services rendered shall apply even if Hospital asserts that compensation paid or payable by Empire for a Covered Service rendered hereunder has not been made in accordance with this Section VI or is otherwise inadequate. Hospital may bill a Covered Person for any non-covered services; provided, however that for services which are not covered because Empire has determined that the services are medically unnecessary, Hospital may only bill for such services in accordance with Paragraphs C and D below. However, Hospital shall not bill a Covered Person until it has received an explanation of benefits (EOB) from Empire that states that the service at issue is not deemed to be medically necessary . . . .

It is clear that this provision precludes balance billing for covered services, but it is not clear that it applies to charges for services which simply are not covered under the policy, as opposed to charges denied as excessive or denied because they relate to medically unnecessary procedures. Further, Empire did not provide an explanation from a knowledgeable Empire employee as to how the agreement was administered. The hospital's response did not clarify these issues.

The hospital's response to Empire's statement of material facts admitted that the hospital is "generally" a participating provider in Empire's network and is "generally a party to a network provider agreement with Empire." However, the hospital disputed that it was a "participating provider" for purposes of the specific services rendered to Christy. The hospital asserted that it was a non-participating provider in the Spunts' "Comprehensive Benefits Plan (CBP)," which Barry Spunt received as a New York City employee,*fn4 and ...


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