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In re Yucht

Superior Court of New Jersey, Appellate Division

September 3, 2013

IN THE MATTER OF PHILIP YUCHT

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 20, 2012

On appeal from the School Employees' Health Benefits Commission, Division of Pensions and Beneits.

Steven P. Weissman argued the cause for appellant Philip Yucht (Weissman & Mintz, LLC, attorneys; Mr. Weissman and Meredith Richardson, on the briefs).

Diane J. Weeden, Deputy Attorney General, argued the cause for respondent Division of Pension and Benefits (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Weeden, on the brief).

Before Judges Simonelli and Koblitz.

PER CURIAM

Appellant Philip Yucht (Yucht) was a participant in the School Employees' Health Benefits Program (SEHBP) under the N.J. Direct 10 plan. He appeals from the July 20, 2011 final administrative determination of respondent Division of Pensions and Benefits (Division), which denied his appeal of the decision of the School Employees' Health Benefits Commission (Commission) to reduce his reimbursement for out-of-network mental health services provided by a licensed clinical social worker (LCSW). We reverse.

Health care providers bill patients for services under codes established by the Current Procedural Terminology (CPT codes).[1] Each service has its own CPT code[2] and each CPT code has a usual, customary and reasonable (UCR) rate. CPT code 90806, at issue here, is the CPT code for an individual 45-50 minute psychotherapy service.

N.J.S.A. 52:14-17.46.7 provides that the N.J. Direct 10 plan will reimburse a participant "80% of reasonable and customary charges" for out-of-network services. The statute defines "reasonable and customary charges" as "charges based upon the 90th percentile of the [UCR] fee schedule determined by the Health Insurance Association of America or a similar nationally recognized database of prevailing health care charges." N.J.S.A. 52:14-17.46.7. The Health Insurance Association of America is now known as the Prevailing Healthcare Charges System (PHCS). Thus, the statute requires that the 80% reimbursement for out-of-network services be based upon the PHCS UCR fee schedule.

The PHCS UCR fee schedule established UCR rates for CPT codes without regard to the provider's professional level or licensure. Prior to January 1, 2009, the N.J. Direct 10 plan reimbursed a participant 80% of the PHCS UCR rate for a CPT code 90806 out-of-network service without regard to the provider's professional level or licensure.

On April 23 and June 18, 2010, a LCSW provided out-of-network individual psychotherapy services to Yucht under CPT code 90806. At the time, the PHCS UCR rate for CPT code 90806 was $200 per session in the geographical area where the LCSW's office was located.

Horizon Blue Cross Blue Shield of New Jersey (Horizon) is the third-party administrator for the SEHBP N.J. Direct plans. Magellan Health Services (Magellan) is the company Horizon contracts to manage N.J. Direct 10 claims for behavioral health services. Neither company is a "nationally recognized database of prevailing health care charges."

Sometime prior to May 2009, Magellan evaluated the PHCS UCR fee schedule for behavioral health services and determined it did not accurately or adequately support behavioral health UCR rates because it did not consider the rendering provider's professional level. Magellan saw that the fee schedule had the same UCR rate regardless of whether the provider was a psychiatrist (M.D.), psychologist (Ph.D.), LCSW, licensed marriage family therapist (LMFT), licensed professional counselor (LPC) or clinical nurse specialist (CNS), even though the typical charges of these various professional levels ...


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