SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-0486- 22
PRINCETON NEUROLOGICAL SURGERY, P.C., Plaintiff-Appellant,

v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, Defendant-Respondent.

_____________________________

Submitted January 8, 2024

– Decided January 17, 2024 Before Judges Mawla and Marczyk. On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L

- 0796

- 19. Buttaci Leardi & Werner, LLC, attorneys for appella nt (John W. Leardi and Nicole Patricia Allocca, on the briefs). Stradley Ronon Stevens & Young, LLP, attorneys for respondent (Adam J. Petitt, of counsel; Robert J. Norcia, on the brief).
PER CURIAM NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court. " Although it is posted on the internet, this opinion is binding only on the parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 0486

- 22

Plaintiff Princeton Neurological Surgery, P.C. (PN S) appeals from: an August 16, 2019 order dismissing its claims against defendant Horizon Blue
Cr oss Blue Shield (Horizon) for lack of subject matte r jurisdiction and failure to state a claim; a November 15, 2019 order denying PNS's motion to amend its complaint; and six September 2, 2022 orders grantin g Horizon's motion for summary judgment and other relief dismissing PNS's common law claims. We affirm. PNS is a neurological surgery practice that is an out- of -network provider with Horizon and has no contractual fee agreement w hen it treats Horizon's beneficiaries in exchange for participating in Hori zon's managed care network. Between 2014 and 2017, PNS made insurance verificat ion calls to Horizon before treating Horizon-insured patients: D.A., K. C., J.C., D.C., M.G., D.K., T.M., P.M., B.M., and D.R. 1 According to PNS's complaint, during each call, PNS disclosed the procedure it intended to perform and each patient's insurance information to Horizon. PNS "verified the amount of benefits paya ble for each service by requesting . . . the reimbursement methodology for out- of -network services, the applicable patient cost sharing under each plan, in cluding deductibles, co1 We use initials pursuant to Rule 1:38 -3(a)(2).3 A- 0486

- 22

payments, and/or co-insurance, and also the annual out- of -pocket maximum . .

. under each patient's [p]lan." Horizon verified PNS was eligible for payment "based on a specific percentile of the [FAIR] Healt h [2] guidelines" as an out- of

network provider. PNS's complaint noted it understood the "verificati on of [p]lan benefits" was "not . . . a guaranty of payment." Indeed, dur ing every verification call placed to Horizon, there was a recorded disclaimer the representations made during the call were not a guaranty of payment. A PNS employee confirmed this fact during her deposition. Furthermore, PNS' s complaint acknowledged it knew "there are items outside of eligibility that a ffect reimbursement [such as] medical necessity." PNS performed the surgeries on the Horizon-insured patients after the verification calls. FAIR Health is used to calculate benchmark healthca re charges based on an aggregate dataset of actual charges for medical treatment and procedures, organized by geographic location, and arranged from lowest to highest costs,

2 "FAIR Health is an independent nonprofit that colle cts data for and manages the nation's largest database of privately billed h ealth insurance claims and is entrusted with Medicare Parts A, B and D claims dat a for 2013 to the present." FAIR Health, https://www.fairhealth.org/about-us (l ast visited Jan. 9, 2024).4 A- 0486

- 22

broken into percentiles. 3 It provides a fee estimator, which allows providers to view the benchmark charge data "in distinct geograp hic areas, called geozips, which are generally identified by the first three d igits of a zip code." 4 Another methodology for calculating benchmark charges is th e Prevailing Healthcare Charges System (PHCS) database. After performing the surgeries, PNS billed Horizon . The bills for each patient and Horizon's payments were detailed in PNS 's complaint as follows:

A. [PNS] submitted a bill to Horizon on behalf of D .A. detailing CPT [5] codes valued at $157,512.00. The [ninety percent] Fair Health value for those servic es for geozip 085 is $102,494.22. Horizon only paid $45,251.00, therefore leaving a balance of $57,561. 22. B. [PNS] submitted a bill on behalf of K.C. detaili ng CPT codes valued at $351,384.00. The [ninety perce nt] Fair Health value for those services for geozip 085 is $219,317.93. Horizon only paid $116,935.75, theref ore leaving a balance of $67,099.50.

3 FAIR Health, Benchmarks That Mirror the Market, https://www.fairhealth.org/methodologies (last visited Jan. 9, 2024).

4 FAIR Health, Frequently Asked Questions, https://www.feeestimator.org /faq (last visited Jan. 9, 2024).

5 The American Medical Association (AMA) promulgates CPT codes for every procedure reimbursable by medical insurance provide rs. See CPT Codes, Then and Now , American Medical Association (Aug. 4, 2015), http s://www.amaassn.org/practice-management/cpt/cpt-codes-then-and

- now.5 A- 0486

- 22 C. [PNS] submitted a bill on behalf of J.C. detaili ng CPT codes valued at $115,161.00. The [ninety perce nt] Fair Health value for those services for geozip 085 is $79,238.19. Horizon only paid $4,948.87, therefore leaving a balance of $16,736.10. D. [PNS] submitted a bill on behalf of D.C. detaili ng CPT codes valued at $151,749.00. The [ninety perce nt] Fair Health value for those services for geozip 085 is $104,931.11. Payment should be [twenty percent] of the billed charges according to the [ninety percent ] Fair Health value, which totals $30,349.80. Horizon onl y paid $7,871.95, therefore leaving a balance of $22,477.85. E. [PNS] submitted a bill on behalf of M.G. detaili ng $220,978.00 worth of services. The [ninety percent ] Fair Health value for those services for geozip 085 is $145,106.97. Horizon only paid $68,208.00, therefo re leaving a balance of $96,537.00. F. [PNS] submitted a bill on behalf of D.K. detaili ng CPT codes valued at $221,805.00. The [seventy percent] Fair Health value for those services for geozip 085 totaled $100,669.00. Horizon only paid $74,931.20, therefore leaving a balance of $25,737. 80. G. [PNS] submitted a bill on behalf of T.M. detaili ng CPT codes valued at $82,093.00. The [ninety percen t] Fair Health value for those services for geozip 085 is $48,587.70. Horizon only paid $23,198.00, therefor e leaving a balance of $25,389.70. H. [PNS] submitted a bill on behalf of P.M. detaili ng CPT codes valued at $151,749.00. The [ninety perce nt] Fair Health value for those services for geozip 085 is $112,176.28. Horizon only paid $62,083.00, therefo re leaving a balance of $50,093.28.6 A- 0486

- 22 I. [PNS] submitted a bill on behalf of B.M. detaili ng CPT codes valued at $257,145.00. The [ninety perce nt] Fair Health value for those services for geozip 085 totaled $119,290.59. Horizon only paid $6,714.94, therefore leaving a balance of $13,157.54. J. [PNS] submitted a bill on behalf of D.R. detaili ng CPT codes valued at $168,001.00. The [ninety perce nt] Fair Health value for those services for geozip 085 with the appropriate [twenty percent] balance is $76,790.40. Horizon only paid $37,413.75, therefore leaving a balance of $39,376.65. In total, PNS claimed Horizon underpaid $414,166.14 , despite that during the verification calls Horizon represented it would pay : ninety percent of Fair Health value for D.A., K.C., J.C., D.C., M.G., T.M. , P.M., B.M., and D.R.; and seventy percent of Fair Health value for D.K. Eight of the patients were covered under the State Health Benefits Plan (SHBP), which is governed by the State Health Benef its Commission. The SHBP Member Handbook qualifies what it will pay by repeatedly stating it "covers only reasonable and customary allowances . . . determined by the FAIR Health benchmark charge data or a similar nationall y recognized database." The SHBP patients were K.C., J.C., D.C., M.G., T.M., P. M., B.M., and D.R. D.K. and D.A. were covered under Horizon plans governed by the Employee Retirement Income Security Act (ERISA).7 A- 0486

- 22

At summary judgment, Horizon cited the SHBP and noted that aside from using the FAIR Health or PHCS databases to calculat e the payment to an outof -network provider, reimbursement was subject to "te rms, conditions, and limitations of the health benefits plan and Horizon 's administration of the same." Horizon noted the ERISA-governed health benefits pl ans gave Horizon "considerable discretion" to decide what was covere d and what to pay PNS for treating D.K. or D.A. Horizon's discretion include d the ability to decide whether a service was "'incidental' to another service or c ontrary to the 'framework of generally accepted methods of medical management cu rrently used in the United
States.'" FAIR Health releases updated data every May and No vember. Horizon updates its system with the May data in July and th e November data in January. On November 18, 2016, the Horizon customer service representative told PNS that D.K.'s out- of -network benefits would be reimbursed at the FAIR Health seventieth percentile. PNS never asked, and Horizon never specified, whether it would use the May 2016 or November 2016 FAIR Health data to calculate reimbursement. Furthermore, as noted in the parties' joint statement of undisputed facts, PNS had not seen D.K. for an i nitial consultation when it made the insurance verification call with Horizon. On January 4, 2017, D.K.8 A- 0486

- 22

had her surgery and PNS submitted its claim to Hori zon two days later. Horizon paid PNS at the seventieth percentile of the FAIR H ealth database, using the May 2016 FAIR Health data because the November 2016 data was not made effective in Horizon's system until January 29, 201 7. 6 PNS disputed Horizon's use of the November 2016 FAIR Health data. However , a PNS employee testified at deposition that Horizon never told PNS it was going to use the most recent FAIR Health data, and PNS never told Horizon it expected reimbursement would be based on the latest FAIR Health data. On February 13, 2015, PNS made the insurance verifi cation call to Horizon regarding D.A. Like D.K., PNS does not dis pute it did not know what services it would provide or how much it would charge Horizon , because D.A.'s initial consultation had not yet occurred. Horizon told PNS D.A.'s out- of

network benefits would be reimbursed at the ninetie th percentile of the FAIR Health data. Following the call, PNS saw D.A. and then sought prior authorization from Horizon for the services PNS dee med necessary, which Horizon granted on February 27, 2015.

6 Horizon further reduced the sum it paid because one procedure submitted by PNS was considered incidental to another procedure. PNS does not dispute the secondary deduction.9 A- 0486

- 22

D.A.'s plan defined an allowed charge as the "stand ard approved by [Horizon's] Board." As a result, Horizon reimburse d PNS at the eightieth percentile of the PHCS profile. The parties do not dispute this did not match what the Horizon representative told PNS during the insuran ce verification call. Also, PNS submitted a claim form noting D.A.'s proc edure took place in Plainsboro, but the billing address was noted as Ha milton. FAIR Health uses the geozip for the location of the procedure. Howe ver, Horizon applied the geozip for the billing address. PNS claimed it exp ected Horizon to reimburse according to the procedure geozip. In 2019, PNS sued Horizon alleging five common law causes of action, including, as relevant here, promissory estoppel an d negligent misrepresentation. Horizon moved to dismiss the co mplaint as pertained to the eight SHBP patients on grounds the Law Division lac ked subject matter jurisdiction because the Commission had final autho rity over payment of benefits and resolutions of disputes. The court en tered the August 16, 2019 order, directing PNS to present its claims to the C ommission and granting Horizon's motion. PNS moved for leave to file an amended complaint, alleging it had no standing to bring claims before the Commission beca use it was not a legal10 A- 0486

- 22

representative of the SHBP patients. The court ent ered the November 15, 2019 order denying PNS's motion, and held the SHBP patie nts were indispensable parties to PNS's common law claims and therefore a motion to amend would be futile. PNS's subsequent motion for reconsideratio n was denied. In 2021, PNS moved for summary judgment on the rem aining claims relating to D.A. and D.K. Horizon cross-moved for summary judgment, arguing PNS's claims were preempted by ERISA. The court en tered the September 2, 2022 orders, denying PNS's motion and granting Hori zon's cross-motion dismissing each count of the complaint. The court issued a separate opinion, finding PNS's claims were "expressly preempted by S ection 514 [of ERISA] because they impermissibly 'relate to' and make 're ference to' D.K.'s and D.A.'s ERISA-governed health benefits plans."
I. On appeal, PNS argues the August 16, 2019 order fi nding the court lacked subject matter jurisdiction was based on an erroneo us interpretation of Beaver v. Magellan Health Services, Inc., 433 N.J. Super. 430 (App. Div. 2013). Likewise, the November 15, 2019 order denying PNS's motion to amend the complaint because it lacked standing before the Com mission was erroneous.11 A- 0486

- 22

PNS asserts the court's reliance on Beaver was misp laced because there the plaintiff had standing as a beneficiary to rais e claims before the Commission, but then sued in the Law Division as a collateral c hallenge to a final agency decision "cloak[ed] . . . under the mantle of contr act and tort." Id. at 441. The plaintiff in Beaver had already unsuccessfully appe aled the agency decision and conceded the new case was brought to recover "unpai d benefits." Ibid. PNS argues, therefore, that Beaver is distinguishable. PNS asserts the court clearly had jurisdiction beca use a provider cannot appeal a claim to the Commission. It notes the assig nment of benefits signed by patients does not cure the standing issue either. Further, its reimbursement claims did not require a determination by the Commi ssion because the dispute with Horizon regarded the reimbursement methodology , which the court was capable of adjudicating. "Whether subject matter jurisdiction exists present s a purely legal issue . . . ." Santiago v. N.Y. & N.J. Port Auth., 429 N.J. Sup er. 150, 156 (App. Div. 2012) (internal citations omitted). Therefore , our review is de novo. Ibid. There is no dispute PNS lacked standing before the Commission because it was not a member of the health plans administere d by the Commission. N.J.A.C. 17:9-1.3 allows any "member" to pursue com plaints internally with the12 A- 0486

- 22

plan, and if the matter is unresolved, the member " may request that the matter be considered by the Commission." A member is defi ned as any covered individual, whether a "subscriber or a dependent." N.J.A.C. 17:9 -1.8. The Horizon Member Guidebook reiterates "[o]nly the mem ber or the member's legal representative may appeal, in writing, to the [Comm ission]." The Commission was created by the New Jersey Health Benefi ts Program Act, which "establishes a plan for state funding an d private administration of a health benefits program . . . ." Heaton v. State H ealth Benefits Comm'n, 264 N.J. Super. 141, 151 (App. Div. 1993); see N.J.S.A. 52:14-17.24 to -45. "The [SHBP] is, in effect, the State of New Jersey acting as a self-insurer." Burley v. Prudential Ins. Co. of Am., 251 N.J. Super. 493, 49 5 (App. Div. 1991). "[T]he [Commission] alone has the authority and res ponsibility to make payments on claims and to limit or exclude benefits ." Beaver, 433 N.J. Super. at 433 (citing N.J.S.A. 52:14-17.29(B)). The Act e mpowers the Commission to create "rules and regulations as may be deemed reas onable and necessary for [its] administration . . . ." N.J.S.A. 52:14-17.27 (a). Pursuant to this authority the Commission adopted N.J.A.C. 17:9-1.3, which per mits only members, not providers, to pursue appeals with the Commission.13 A- 0486

- 22

Therefore, the trial court's jurisdictional ruling was correct. The central issue was the reimbursement methodology used to pay PNS. This necessitated an interpretation of the SHBP, which can only be pe rformed by the Commission. The Commission alone has the authority to adjudicat e disputes related to the SHBP, N.J.S.A. 52:14-17.27, and through N.J.A.C. 17 :9-1.3, created a regulatory scheme whereby only members have standin g to pursue reimbursement claims. As a result, the court also p roperly denied PNS's motion to amend the complaint because it would not resolve PNS's lack of standing.
II. PNS argues its claims regarding D.K.'s and D.A.'s E RISA-governed plans were not preempted because the Third Circuit has he ld state common law claims are not claims for benefits due under an ERISA plan in Plastic Surgery Center, P.A. v. Aetna Life Insurance, 967 F.3d 218, 229 (3d Cir. 20 20)). PNS likens its case to Plastic Surgery and argues its promissory e stoppel claim arose when Horizon made representations to PNS regarding payment, which the court could adjudicate without interpreting the ERISA plans. In Plastic Surgery, the Third Circuit ruled that a promissory estoppel claim by an out- of -network provider for payment under an Aetna health plan was not preempted by ERISA. Id. at 230. The court held th e preemption of a common14 A- 0486

- 22

law claim by ERISA depends on whether it seeks to " enforce obligations independent of the plans" or if a determination of liability requires construction of the terms of the plans. Ibid. PNS asserts the trial court applied too stringent o f a standard because, in effect, its ruling was that any reference to ERISA triggers preemption. PNS argues its claims were not tethered to the plan, be cause the dispute regarded its request for payment under "an appropriate percentil e of FAIR Health" and its reliance on Horizon's representations of what it wo uld pay for D.K.'s and D.A.'s treatment. In other words, like Plastic Surgery, p reemption played no rol e because: the dispute was not one that ERISA intend ed to govern; its claims did not interfere with the administration of the ERISA plan; and preemption would undermine ERISA's purpose by permitting insurers to induce out- of -network providers to provide services with knowledge ERISA' s preemption would bar payment to the providers. "A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. of Manalapan, 140 N. J. 366, 378 (1995). "Whether a state law claim is preempted by ERISA is a question of law which is reviewed de novo." Feit v. Horizon Blue Cross & Blue Shield of N.J., 38515 A- 0486

- 22

N.J. Super. 470, 482 (App. Div. 2006) (quoting Find erne Mgmt. Co. v. Barrett , 355 N.J. Super. 170, 185 (App. Div. 2002)). We are unpersuaded by PNS's arguments. Section 51 4(a) of ERISA preempts state law claims that "relate to" an ERISA plan. 29 U.S.C. § 1144(a). As the trial court noted, the scope of State laws p reempted by this provision is expansive, encompassing "all laws, decisions, rules , regulations, or other State action having the effect of law, of any state[.]" Menkes v. Prudential Ins. Co. of Am., 762 F.3d 285, 294 (3d Cir. 2014). A State law "relates to" an ERISA plan if it has either a "reference to" or a "connec tion with" that plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97 (1983). Plastic Surgery is inapposite. There, the out- of -network provider was not entitled to reimbursement and entered a separate ag reement with the insurer, to cover a specific procedure for the patient "along w ith related medical services" and pay "a reasonable amount for those services acc ording to the terms of the [ERISA p]lan." 967 F.3d at 224, 232. The insurer "agreed to approve and pay for" the surgery at the "highest in[-]network level ." Id. at 224 (alteration in original). The Third Circuit held:

Whether the [provider] seeks to enforce obligations independent of the plan turns on whethe r the parties agreed (i) that [the insurer] would pro vide payment for all services necessary to perform the16 A- 0486

- 22 respective surgeries, leaving only the amount of payment pegged to the terms of the plan; or (ii) that the scope of coverage, as well as payment, would be limited to the terms of the plans

— leaving open the possibility that some services would not be compensated at all. [Id. at 231 (internal citation omitted).] Here, the record reveals no express or implied agr eement, let alone a promise that cross-referenced D.A. and D.K.'s ERISA plans as the parties had in Plastic Surgery. Moreover, reimbursement remain ed contingent upon the services D.A. and D.K.'s plans deemed necessary or incidental. In D.K.'s case, there was no representation Horizon would apply the November 2016 FAIR Health values, and Horizon was not mandated by law to apply the updated FAIR Health figures. In D.A.'s case, Horizon was not re quired to reimburse using the address where PNS rendered services. Although Hori zon's application of the PHCS methodology for reimbursement in D.A.'s case c ontradicted what its representative told PNS during the insurance verifi cation call, the call was preceded by a disclaimer and the prior authorizatio n did not pertain to the payment or result in a payment agreement.
III. PNS challenges the summary judgment ruling dismiss ing its promissory estoppel and negligent misrepresentation claims. I t contends Horizon made a17 A- 0486

- 22

promise, which induced PNS to render services to th e patients. Further, the court erred by finding there was no reliance becaus e the disclaimer abjured a guaranty of payment, which had nothing to do with H orizon's duty to provide accurate information to out- of -network providers like PNS. Summary judgment is appropriate "if the pleadings, depositions, answer s to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any mater ial fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46

- 2(c). The court considers "whether the competent e vidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resol ve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). "[W]hen the evidence 'is so one-sided that one party must prevail as a matter of law,' . . . the trial court should n ot hesitate to grant summary judgment." Ibid. (quoting Anderson v. Liberty Lobb y, Inc., 477 U.S. 242, 252 (1986)). "[W]e review [a] trial court's grant of s ummary judgment de novo under the same standard as the trial court." Templ o Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189, 199 (2016)

.18 A- 0486

- 22

Promissory estoppel requires: "(1) a clear and definit e promise; (2) made with the expectation that the promisee will rely on it; (3) reasonable reliance; and (4) definite and substantial detriment." Goldfa rb v. Solimine, 245 N.J. 326, 339 -40 (2021) (quoting Toll v. Bd. of Chosen Freeholde rs, 194 N.J. 223, 253 (2008)). A party asserting a negligent misrepresen tation claim must show the defendant had a duty of care. Zielinski v. Pro. Ap praisal Assocs., 326 N.J. Super. 219, 224 (App. Div. 1999). Whether a duty e xists is a matter of law determined by the court after "balancing several fa ctors" including "the relationship of the parties, the nature of the atte ndant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution." Carter Lincoln-Mercury, Inc., Leasing Div. v. EMAR Grp., I nc., 135 N.J. 182, 194 (1994) (quoting Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993)). The trial court correctly concluded PNS's promisso ry estoppel claim failed because as we noted in section II, Horizon did not promise PNS anything. The lack of a promise was confirmed by Horizon's discla imer. Moreover, PNS could not have reasonably relied on Horizon's representat ions as it had not seen the patients, let alone rendered services to them at th e time of the authorization call with Horizon.19 A- 0486

- 22

The negligent misrepresentation claim could not sur vive summary judgment because Horizon's duty was to its insured beneficiaries, not PNS. Horizon had no contract with PNS. We recognize Pla stic Surgery fo und the opposite, but there the insurer and the out

- of -network provider had a contract. Therefore, the court found leaving out- of -network providers with no means of enforcing their contract

would in effect allow insurers to illegitimately supplement their provider network by making promise s of payment to induce the provision of services, saf e in the knowledge that those out of network would have no recourse for breach of those promises. The consequence . . . would be for providers to begin t o require up-front payments from patients or to "deny care or raise fees to protect themselves against th e risk of noncoverage." [Plastic Surgery, 967 F.3d at 239 (quoting Lordmann Enters. v. Equicor, Inc., 32 F.3d 1529, 1533 (11th Cir. 1994).] Setting aside that PNS and Horizon did not have a c ontract, we are not convinced the concerns raised in Plastic Surgery ex ist here. We are not persuaded it would serve the public interest to bin d Horizon based upon an authorization call that was subject to a disclaimer . To find a duty under these circumstances would harm insureds, because Horizon would b e hesitant to field calls from out- of -network providers, who in turn would decline to pr ovide20 A- 0486

- 22

services to the insureds because they could not obt ain authorization from the insurer. Finally, Horizon did not misrepresent a fact that PNS justifiably relied upon. Even in the case of mistaken representation regard ing the reimbursement methodology in D.A.'s case, there was no reasonable reliance because PNS did not know D.A.'s diagnosis or the CPT codes it inten ded to bill. Therefore, the payment PNS would receive was not yet known. For these reasons, summary judgment in Horizon's fa vor was properly granted. To the extent we have not addressed an ar gument raised on appeal, it is because it lacks sufficient merit to warrant dis cussion in a written opinion. R. 2:11 -3(e)(1)(E). Affirmed.