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Princeton Surgical Associates v. Aziz

April 8, 2010


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Middlesex County, Docket No. DC-025624-08.

Per curiam.


Submitted: March 17, 2010

Before Judges Axelrad and Fisher.

Plaintiff Princeton Surgical Associates, P.A. (Princeton Surgical) appeals from the dismissal of its collection complaint, following a bench trial, alleging breach of contract for surgical services performed upon defendant. We reverse and remand for entry of a judgment.

The following facts, which were not in dispute, were presented during the Special Civil Part trial, in which testimony was presented by Princeton Surgical's billing representative, defendant, his wife and his son. On February 26, 2007, defendant was admitted to the emergency room of the University Medical Center at Princeton (UMCP) after experiencing intense abdominal pains. As defendant was in too much pain to personally fill out the requisite admission contract, his adult son did so on his father's behalf, expressly agreeing that defendant would be responsible for payment of services provided they were not covered by insurance. The contract further provided the patient might be obligated for medical bills in addition to those of the hospital as follows:


In addition to your hospital bill, you may also receive separate bills from physicians for their professional services (i.e. Anesthesia, Emergency Services, Pathology, Radiology, etc.) I hereby authorize payment directly to any and all of my treating physicians and/or surgeons for benefits otherwise payable to me. I understand that I am financially responsible for any charges not covered by my health insurance benefits.

A medical examination revealed that defendant was suffering from a gangrenous gallbladder, for which he received treatment. Within two days of admission, it appeared defendant needed urgent surgery. Therefore, the staff at UMCP contacted Dr. Sae Hahm, the "on call" surgeon employed by Princeton Surgical, who performed a cholecystectomy (surgical removal of the gallbladder) on defendant.*fn1 Defendant saw Dr. Hahm at his office for post-operative visits on March 20 and April 9, 2007, which were included in the cost of the surgery. During the first visit, defendant completed a registration form, agreeing to be "financially responsible for all charges whether or not paid by insurance."

Defendant is a PPO participant with Blue Cross/Blue Shield of Alabama (BCBS-Alabama), which does not pay for out-of-network services. The hospital is a BCBS-Alabama participant and, although its claim was originally denied because it was not timely submitted, its bill was ultimately paid. However, none of the members of Princeton Surgical are participating physicians with BCBS-Alabama. Therefore, although Dr. Hahm's bill was submitted to BCBS-Alabama, and both the surgeon and defendant filed appeals with BCBS-Alabama, the carrier ultimately denied the claim because, pursuant to the Explanation of Benefits, the charges were "not eligible for coverage under [defendant's] contract."

Consequently, Princeton Surgical filed suit against defendant for the unpaid medical bill, including statutory counsel fees and costs, totaling $3,519.60. In his answer and during trial, defendant did not challenge or dispute the quality of work performed by Dr. Hahm or the reasonableness of the fee. The essence of his defense was that when he went to an in-network hospital, he assumed a hospital-employed, in-network surgeon was performing the procedure. Defendant claimed the hospital staff should have told him that Dr. Hahm was not a participating physician with BCBS-Alabama before the surgery was performed to allow him the opportunity to consider other alternatives.

The court dismissed Princeton Surgical's complaint with prejudice, concluding the hospital was the entity at fault, so Princeton Surgical's recourse was against the hospital. The court found the hospital mistakenly listed the wrong carrier, resulting in an apparent delay in the processing of the claim and its ultimate rejection. The court further found the hospital was at fault for not informing defendant that the surgeons it utilized were not in-network. This appeal ensued.

On appeal, Princeton Surgical argues the court made both errors of fact and law necessitating reversal. It further contends it is entitled to a judgment against defendant on the theories of breach of contract, unjust enrichment and quantum meruit. Princeton Surgical alternatively argues for a remand for the opportunity to conduct additional cross-examination of defendant, recall its witness and present closing arguments.

Princeton Surgical correctly points out the undisputed fact that defendant's insurance claim was denied on the merits, i.e., defendant's PPO does not pay out-of-network physicians, not because of any purported error or delay by either or both Princeton Surgical or the hospital in the processing of the claim. The court also placed an inappropriate and unfair burden on the surgeon to "have informed the defendant of the situation and perhaps gotten another surgeon." Dr. Hahm's primary ...

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