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New Jersey Manufacturers Insurance Co. v. Specialty Surgical Center of North Brunswick

Superior Court of New Jersey, Appellate Division

January 29, 2019

NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Plaintiff-Respondent,
v.
SPECIALTY SURGICAL CENTER OF NORTH BRUNSWICK a/s/o CLAIRE FIORE, and SURGICARE SURGICAL ASSOCIATES OF FAIR LAWN a/s/o MARTINO CHIZZONITI, Defendants-Appellants.

          Argued December 11, 2018

          On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-3647-17 and L-4927-17.

          Keith J. Roberts and Richard B. Robins argued the cause for appellant Specialty Surgical Center of North Brunswick (Brach Eichler, LLC, attorneys; Keith J. Roberts, of counsel and on the briefs; Richard B. Robins, on the briefs)

          Joseph A. Massood argued the cause for appellant Surgicare Surgical Associates of Fairlawn (Massood Law Group, LLC, attorneys; Joseph A. Massood, of counsel and on the briefs; Tara M. McCluskey, on the briefs).

          Gregory E. Peterson argued the cause for respondent (Dyer & Peterson, PC, attorneys; Gregory E. Peterson, on the brief).

          Susan Stryker argued the cause for amicus curiae Insurance Council of New Jersey and the Property Casualty Insurers Association of America (Bressler, Amery & Ross, PC, attorneys; Susan Stryker, of counsel and on the briefs; Michael J. Morris, on the briefs).

          Before Judges Hoffman, Suter and Geiger.

          OPINION

          HOFFMAN, J.A.D.

         In these back-to-back appeals involving automobile insurance, which we now consolidate for purposes of this opinion, defendants appeal from Law Division orders vacating binding arbitration awards entered in their favor against plaintiff New Jersey Manufacturers Insurance Company (NJM). In both cases, the trial court held the PIP[1] medical fee schedule does not provide for payment to an ambulatory surgical center (ASC) for procedures not listed as reimbursable when performed at an ASC. We affirm.

         I.

         N.J.S.A. 39:6A-4.6(a) requires the Department of Banking and Insurance (the Department) to "promulgate medical fee schedules on a regional basis for the reimbursement of health care providers . . . for medical expense benefits . . . under [PIP] coverage . . . ." These fee schedules shall "incorporate the reasonable and prevailing fees of [seventy-five percent] of the practitioners within the region." Ibid. To comply with this statutory mandate, the Department promulgated new regulations and amendments to N.J.A.C. 11:3-29.

         N.J.A.C. 11:3-29.5(a) states, "ASC facility fees are listed in Appendix, Exhibit 1[2] by CPT[3] code. Codes that do not have an amount in the ASC facility column are not reimbursable if performed in an ASC." The Fee Schedule has three columns relevant to the instant matter: one column lists CPT codes and two columns list corresponding ASC fees, "ASC Fees North" and "ASC Fees South." The Fee Schedule does not list CPT code 63030 as a code eligible for reimbursement for physicians or ASCs.[4]

         In the first case, Claire Fiore, an NJM insured, sustained injury to her lower back in a May 2014 accident involving an automobile. In November 2015, Fiore underwent a lumbar discectomy at the ASC operated by defendant Specialty Surgical Center of North Brunswick (Specialty Surgical). Following the procedure, Specialty Surgical sought $32, 500 in reimbursement from NJM under CPT code 63030; however, NJM denied payment, claiming the treatment was not medically necessary and further asserting "the CPT code charged by the facility - 63030 - had no reimbursement value for the ASC on the [F]ee [S]chedule."

         In the second case, Martino Chizzoniti also sustained injury to her lower back in a May 2014 accident involving an automobile. In November 2015, Chizzoniti underwent lumbar decompression surgery at an ASC operated by defendant Surgicare Surgical Associates of Fair Lawn (Surgicare). Following the procedure, Surgicare sought $49, 000 in reimbursement under Chizzoniti's PIP coverage with NJM for the procedure under CPT code 63030; however, NJM denied reimbursement because "the CPT code charged by the facility - 63030 - had no reimbursement value for the ASC on the [F]ee [S]chedule."

         In each case, the ASC filed a demand for arbitration with Forthright, Inc. (Forthright), [5] and the parties proceeded to binding arbitration pursuant to N.J.A.C. 11:3-5.1(a) and the PIP endorsement in NJM's policy. After a Forthright DRP and a Forthright appellate panel found against NJM in each case, [6] NJM filed Law Division actions seeking to vacate each award under N.J.S.A. 2A:23A-13 of the Alternative Procedure for Dispute Resolution Act (APDRA), [7] alleging the awards resulted "from an erroneous and prejudicial application of the law to the facts." On August 14, 2017, the trial court filed a final order and written decision in each case, vacating each award and holding that the ASC "shall receive no reimbursement, of any kind[, ] in connection with [ASC] fees for CPT code 63030" for the surgical procedure in each case. These appeals followed.

         II.

         We first address the applicable jurisdictional constraint set forth in the APDRA. Pursuant to N.J.S.A. 2A:23A-13, a party seeking to vacate, modify, or correct an award may bring "a summary application" in the trial court. According to the statute, that judicial scrutiny by the trial court should constitute the final level of appellate review. N.J.S.A. 2A:23A-18(b) provides that "[u]pon the granting of an order confirming, modifying[, ] or correcting an award, a judgment or decree shall be entered by the [trial] court in conformity therewith and ...


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