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

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. ...


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