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Advanced Rehab of Jersey City, A/S/O Ruben Santiago v. Horizon Healthcare of New Jersey

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 19, 2011

ADVANCED REHAB OF JERSEY CITY, A/S/O RUBEN SANTIAGO, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
HORIZON HEALTHCARE OF NEW JERSEY, INC., DEFENDANT-RESPONDENT/ CROSS-APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, Docket No. DC-9824-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 7, 2010

Before Judges Carchman, Messano and Waugh.

Plaintiff, Advanced Rehab of Jersey City as subrogee of Ruben Santiago (Advanced), appeals from two orders that: 1) dismissed its complaint against defendant, Horizon Healthcare of New Jersey, Inc. (Horizon), following a bench trial; and 2) denied reconsideration. Advanced has raised the following issues on appeal:

POINT ONE: PLAINTIFF IS NOT OBLIGATED TO PROVE MEDICAL NECESSITY POST CLAIM DETERMINATION POINT TWO: DEFENDANT'S PLAN DOCUMENTS DO NOT GIVE DEFENDANT THE ABILITY TO RECOUP FUNDS PREVIOUSLY PAID ON A POST PAYMENT DENIAL OF MEDICAL NECESSITY POINT THREE: STANDING: DEFENDANT HAS WAIVED THE ANTI-ASSIGNMENT CLAUSE AND CONSENTED TO THE ASSIGNMENT OF BENEFITS POINT FOUR: STANDING: PLAINTIFF SHOULD NOT BE FORCED TO APPEAL TO THE STATE HEALTH BENEFITS COMMISSION [SHBC] BY BRINGING IN UNWILLING PARTIES WHO HAVE NOT BEEN INVOLVED IN THE RECOUPMENT ACTION.

POINT FIVE: PLAINTIFF COMPLIED WITH ANY APPEAL REQUIREMENTS UNDER THE POLICY

Horizon cross-appeals, contending that the trial judge "usurped the appellate court's jurisdiction and determined a claim arising under the State Health Benefits Plan [(the Plan)]."

We have considered these contentions in light of the record and applicable legal standards. We agree with the argument Horizon asserts on cross-appeal and affirm the dismissal of plaintiff's complaint.

Ruben Santiago is a member of the NJDirect program which Horizon administers on behalf of the Plan. Advanced, which does not participate in the Plan, provided "manipulation under anesthesia" (MUA) services to Santiago. On June 16, 2008, Advanced submitted a claim to Horizon, which issued payment in the amount of $5883.63 on August 5.

On September 3, Horizon advised Advanced that it "recently discovered . . . [Horizon] made overpayments." Horizon demanded repayment of $5883.63 within 45 days or it would "deduct the overpayment from future claim payments." Horizon further advised in an accompanying explanation of benefits (EOB) that "'the claim was denied because the procedure/treatment [wa]s not medically necessary'" and considered "'investigational.'" The notice provided Advanced with a toll-free phone number if it "want[ed] to dispute any items on the overpayment listing." When Advanced failed to make the repayments, Horizon began to recapture the funds from eight different patient accounts for which Advanced was seeking payment.

In November 2008, Advanced filed an appeal with Horizon. Pursuant to the Plan handbook, the plan member or provider may initiate a "First Level Appeal" of any adverse benefits decision. "If either [the member] or [his] provider is not satisfied with the determination made on [his] First Level Appeal," a "Second Level Appeal" can be filed. If dissatisfied with the results of the Second Level Appeal, the member "or [his] legal representative can appeal in writing . . . to the State Health Benefits Commission [the SHBC]." Thereafter, "[a]ny member who disagrees with the [SHBC's] decision may request that the case be forwarded to the Office of Administrative Law," where, under certain circumstances, "[a]n Administrative Law Judge will hear the case and make a recommendation." "If the recommendation is rejected, the administrative appeal process is ended. . . . [F]urther appeals may be made to the . . . Appellate Division."

Apparently, Advanced's appeal was denied at the First Level. On March 27, 2009, while its Second Level appeal was pending, Advanced filed a complaint in the Law Division, Special Civil Part, naming Horizon as defendant. Horizon moved to dismiss the complaint, arguing that Advanced failed to exhaust its administrative remedies and further appeal lay with the SHBC and not the court. On June 12, the judge entered an order dismissing the complaint without prejudice and requiring Advanced to file an appeal with the SHBC pursuant to N.J.A.C. 17:9-1.3. The order further reflected that Horizon's counsel "stipulated" that Advanced could file an appeal on behalf of Santiago, "despite the conflicting proviso . . . [in the Plan] benefit booklet," and could present the appeal "immediately" despite the pending "2nd-level appeal."

Advanced filed an appeal with the SHBC on July 6, 2009, and was advised the same day that the appeal was denied because "[o]nly a [Plan] member or the member's legal representative may appeal to the [SHBC]." Advanced then moved before the Law Division seeking leave to amend its complaint and to vacate the previously-entered dismissal. The judge entered an order on September 11, 2009 granting Advanced the requested relief.

Advanced filed an amended complaint and the matter was tried without a jury on January 28, 2010. The judge dismissed the amended complaint, finding that Advanced failed to file a timely appeal from Horizon's September 3, 2008 decision. Advanced moved for reconsideration.

In a lengthy written opinion that accompanied her March 5 order, the judge concluded not only that Advanced had failed to submit a timely appeal, but also that Advanced "failed to offer sufficient proof to rebut [Horizon's] contention that the claim was medically unnecessary." Lastly, the judge concluded that Advanced "did not pursue its administrative options prior to filing a Complaint in the Superior Court." The judge entered an order denying the motion for reconsideration, and this appeal followed.

Pursuant to the State Health Care Benefits Act, N.J.S.A. 52:14-17.25 to -17.45, the SHBC "shall establish a health benefits program for the employees of the State," together with the "rules and regulations as may be deemed reasonable and necessary for the administration of" the program. N.J.S.A. 52:14-17.27. Pursuant to the enabling legislation's grant, the SHBC adopted a comprehensive regulatory appeals process:

(a) Any member of the [Plan] who disagrees with the decision of the claims administrator and has exhausted all appeals within the plan, may request that the matter be considered by the Commission. . . . It shall be the responsibility of the member to provide the Commission with any medical or other information that the Commission may require in order to make a decision. (b) . . . .

(c) Notification of all Commission decisions will be made in writing to the member and the following statement shall be incorporated in every written notice setting forth the Commission's determination in a matter where such determination is contrary to the claim made by the claimant or his or her legal representative:

"If you disagree with the determination of the Commission in this matter, you may appeal by sending a written statement to the Commission within 45 days from the date of this letter informing the Commission of your disagreement and all of the reasons therefor. If no such written statement is received within the 45-day period, this determination shall be considered final."

(d) Any member who disagrees with the Commission's decision and submits the written statement as set forth in (c) above within 45 calendar days shall be notified of the disposition of the appeal in one of two ways:

1. The Commission shall determine whether to grant an administrative hearing on the basis of whether the matter involves contested facts or is solely a question of law. If the appeal involves solely a question of law, the Commission shall likely deny an administrative hearing request. If the request for an administrative hearing is denied, the Commission shall issue detailed findings of fact and conclusions of law. These findings and conclusions shall become the Commission's final administrative determination that may then be appealed to the Superior Court, Appellate Division.

2. If the appeal involves disputed facts, the Commission shall approve an administrative hearing request and transmit the matter to the Office of Administrative Law. Upon completion of this hearing, the Administrative Law Judge will submit to the Commission an initial decision that the Commission may adopt, reject or modify. If the Commission rejects or modifies the initial decision, it shall issue detailed findings of fact and conclusions of law that will become the Commission's final administrative determination that may then be appealed to the Superior Court, Appellate Division. [N.J.A.C. 17:9-1.3.]

It is readily apparent that the language in Horizon's Plan handbook tracks the regulatory language adopted by the SHBC.

We have consistently recognized the statutory and regulatory scheme that requires disputes regarding eligibility and the payment of benefits under the Plan to be submitted first to the SHBC, and, only thereafter, to this court for resolution. See Burley v. Prudential Ins. Co., 251 N.J. Super. 493, 498 (App. Div. 1991) (holding that "plaintiff must first seek recourse by administrative appeal to the SHBC"); see also Green v. State Health Benefits Comm'n, 373 N.J. Super. 408, 414 (App. Div. 2004) ("The SHBC has authority to adjudicate disputes between plan members and the carriers concerning health benefit claims under the State plan and may refer such disputes to the Office of Administrative Law (OAL) for an evidentiary hearing."); Murray v. State Health Benefits Comm'n, 337 N.J. Super. 435, 439-440 (App. Div. 2001) (explaining the statutory and regulatory scheme). The trial court, therefore, lacked any authority to consider Advanced's complaint in the first instance. See R. 2:2-3(a)(2) (recognizing appeals as of right to the Appellate Division from "final decisions or actions of any state administrative agency").

To the extent Advanced attempts to marshal arguments to the contrary, they lack sufficient merit to warrant extensive discussion. R. 2:11-3(e)(1)(E). Advanced contends that it should not be "forced" into bringing Santiago into the appeals process because it "does not control the insured." However, Advanced has failed to explain why it never assured itself that the Plan would reimburse Advanced before providing the MUA services to Santiago. Moreover, the Legislature has enacted a comprehensive scheme for the payment of medical benefits on behalf of the employees of state and local governments. It is not for us to second-guess that legislative determination.

Lastly, since Advanced never sought review of the agency determination, whether it complied with the timeframes for appeals as contained in the plan handbook is not an issue before us.

In short, we grant Horizon's cross-appeal and affirm the dismissal of Advanced's complaint for reasons other than those expressed by the trial judge. See El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 169 (App. Div. 2005) (noting "that a correct result, even if predicated on an erroneous basis in fact or in law, will not be overturned on appeal").

Affirmed.

20110819

© 1992-2011 VersusLaw Inc.



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