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Karasina v. State

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


September 8, 2010

SVETLANA KARASINA, C.R.N.F.A.; RUBEN RAMOS, C.R.N.F.A.; CATHERINE DIRR, C.R.N.F.A.; ROSANN RIKER, R.N.F.A.; JOANNE WENTZELL, C.R.N.F.A.; FRANK MARTUCCI, C.R.N.F.A.; NANCY CONLEY, C.R.N.F.A.; DANETTE ARBOLEDA-MARIN, C.R.N.F.A.; JANETTE PARSONS, R.N.F.A.; CORINNE E. REAMER, R.N., B.S.N., C.R.N.F.A.; DONNA GINSBERG, R.N.F.A.; ANDREA LANGAN, C.R.N.F.A.; JO BROWNA, C.R.N.F.A.; SHAWN DOUCETTE, R.N.F.A.; SUSAN SARKOS, A.P.N., R.N.F.A.; ROSEMARY FOX, R.N.F.A.; SUZANNE ROSTOUSKIS, R.N.F.A.; MICHELLE BRENNER, A.P.N., R.N.F.A.; HEIDI BENNETT, R.N.F.A.; ROSANNE PARENTE, R.N.F.A.; PAT HEISLER, R.N.F.A.; PAMELA CALIMER, R.N., B.S.N., C.R.N.F.A.; AND COLLEEN DEVITA, C.R.N.F.A., PLAINTIFFS-APPELLANTS,
v.
STATE OF NEW JERSEY, STATE HEALTH BENEFITS PLAN, AND STATE HEALTH BENEFITS COMMISSION, DEFENDANTS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1039-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 11, 2010

Before Judges Skillman, Fuentes and Gilroy.

Plaintiffs appeal from the July 17, 2009 Law Division order that dismissed their complaint for failure to state a claim upon which relief could be granted. R. 4:6-2(e). We affirm.

Plaintiffs are Registered Nurse First Assistants (RNFAs) and/or Certified Registered Nurse First Assistants (CRNFAs) who act as surgical assistants during surgeries in lieu of assistant surgeons. On April 16, 2009, plaintiffs filed a complaint against the State, the State Health Benefits Program (SHBP) (improperly pled as State Health Benefits Plan), and the State Health Benefits Commission (the Commission), seeking a declaratory judgment determining that defendants are required to pay plaintiffs for health services rendered to state employees covered by SHBP's Traditional Plan to the same extent as if the services were performed by licensed physicians. Plaintiffs seek payment for services provided, retroactive to February 2004.

On June 5, 2009, in lieu of filing an answer, defendants filed a motion seeking to dismiss the complaint for failure to state a claim upon which relief could be granted, contending plaintiffs had failed to exhaust their administrative remedies. On July 17, 2009, the court entered an order supported by an oral opinion granting the motion. It is from this order that plaintiffs appeal.*fn1 Notwithstanding the filing of their notice of appeal on August 20, 2009, plaintiffs filed an administrative petition with the Commission seeking the same declaratory relief sought in the Law Division. Plaintiffs also sought a stay of that petition pending this appeal.*fn2

On appeal, plaintiffs argue the trial court erroneously granted the motion to dismiss their complaint because no viable administrative remedy is available to them, asserting that the administrative appeal procedure established by N.J.A.C. 17:9-1.3 only applies to members of the SHBP and plaintiffs are not members, but medical providers. We disagree.

The Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -25, provides plaintiffs with an administrative remedy to challenge defendants' denial of payment for the services rendered as surgical assistants. N.J.S.A. 52:14B-8 provides in relevant part:

[A]n agency upon the request of any interested person may in its discretion make a declaratory ruling with respect to the applicability to any person, property or state of facts of any statute or rule enforced or administered by that agency. A declaratory ruling shall bind the agency and all parties to the proceedings on the state of facts alleged. Full opportunity for hearing shall be afforded to the interested parties. Such ruling shall be deemed a final decision or action subject to review in the Appellate Division of the Superior Court. Nothing herein shall affect the right or practice of every agency in its sole discretion to render advisory opinions. [(Emphasis added).]

Because plaintiffs have a financial interest in receiving payment for their services, they are interested persons under the statute. See In re Camden County, 170 N.J. 439, 448 (2002) (holding that "the existence of a financial interest that is affected directly by the agency action will confer standing on a governing body" seeking to review such action). Furthermore, the APA requires liberal application of criteria to determine standing. Ridgewood Educ. Ass'n v. Ridgewood Bd. of Educ., 284 N.J. Super. 427, 431 (App. Div. 1995).

The Commission is responsible for interpretation of the SHBP. See Murray v. State Health Benefits Comm'n, 337 N.J. Super. 435, 439 (App. Div. 2001) ("[t]he Commission retains final authority and financial responsibility for the State Plan"). If the Commission declines to hear plaintiffs' petition for declaratory relief, or renders a decision adverse to plaintiffs, plaintiffs may seek review in the Appellate Division. R. 2:2-3(a)(2). Accordingly, plaintiffs have an administrative remedy to obtain the relief sought.

Alternatively, plaintiffs contend that they are not required to exhaust their administrative remedy as the issue involves only a matter of law. Not so.

The exhaustion of the administrative remedies doctrine requires that before a party files a direct appeal to the Appellate Division challenging a State agency's action or inaction, the party must first seek review of such action or inaction "before [the] administrative agency or officer, unless the interest of justice requires otherwise." R. 2:2-3(a)(2). The rationale behind the doctrine is that "interruption of the administrative process is not justifiable to any greater extent than interference with the trial process by interlocutory appeals. The expertise of an administrative agency may not be exercised or known until it renders its final decision and usually due deference is accorded such expertise upon judicial review." Triano v. Div. of State Lottery, 306 N.J. Super. 114, 121 (App. Div. 1997) (quoting Magliochetti v. State, 276 N.J. Super. 361, 374-75 (Law Div.1994)).

We acknowledge that the doctrine is discretionary rather than jurisdictional, Abbott v. Burke, 100 N.J. 269, 297 (1985), and that the doctrine is generally not applied "when only a question of law exists," see Brunetti v. New Milford, 68 N.J. 576, 591 (1975), or "administrative remedies would be futile." Triano, supra, 306 N.J. Super. at 121-22. However, the exhaustion doctrine "is a rule of practice designed to allow administrative bodies to perform their statutory functions in an orderly manner without preliminary interference from the courts. Therefore, while it is neither a jurisdictional nor an absolute requirement, there is nonetheless a strong presumption favoring the requirement of exhaustion of remedies." Brunetti, supra, 68 N.J. at 588 (internal citation omitted). Additionally, "where the court perceives the agency to be in a special position to interpret its enabling legislation," a court may still require administrative remedies to be exhausted, despite a question of law being the only dispute. Abbott, supra, 100 N.J. at 298.

The Commission is uniquely suited to interpret the statute upon which plaintiffs rely. See N.J.S.A. 52:14-17.29(A)(1)(e)(v)(2) ("[T]he commission may, by regulation, determine what types of services and supplies shall be included as 'eligible medical services' under the major medical expense benefits coverage as well as those which shall be excluded from or limited under such coverage."). Accordingly, we affirm the dismissal of plaintiffs' complaint without prejudice for failure to state a claim upon which relief can be granted for failure to exhaust their administrative remedies.


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