Court Opinion

ID: 6800744
Source: CourtListenerOpinion
Date Created: 2022-07-22 14:07:40.421083+00
Date Added: 2024-06-11T16:03:12.907969
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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 parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-0631-19
                                                                   A-0823-19
                                                                   A-1216-19

GARDEN STATE BARIATRIC
& WELLNESS CENTER, LLC,

         Petitioner-Appellant,

v.

STATE OF NEW JERSEY,
DEPARTMENT OF BANKING
AND INSURANCE,

     Respondent-Respondent.
___________________________

NEW JERSEY SPINAL
MEDICINE AND SURGERY,
PA,

         Petitioner-Appellant,

v.

STATE OF NEW JERSEY,
DEPARTMENT OF BANKING
AND INSURANCE,

         Respondent-Respondent.
___________________________

ADVANCED GYNECOLOGY
AND LAPAROSCOPY, PC,

     Petitioner-Appellant,

v.

STATE OF NEW JERSEY,
DEPARTMENT OF BANKING
AND INSURANCE,

     Respondent-Respondent.
___________________________

           Argued November 29, 2021 – Decided July 22, 2022

           Before Judges Messano, Accurso, and Enright.

           On appeal from the New Jersey Department of
           Banking and Insurance.

           George P. Barbatsuly argued the cause for appellants
           (K&L Gates LLP, attorneys; Anthony P. La Rocco,
           George P. Barbatsuly, and Stacey A. Hyman, on the
           briefs).

           Eleanor Heck, Deputy Attorney General, argued the
           cause for respondent (Matthew J. Platkin, Acting
           Attorney General, attorney; Melissa H. Raksa,
           Assistant Attorney General, of counsel; Eleanor Heck
           and William B. Puskas, Jr., Deputy Attorneys General,
           on the brief).

PER CURIAM

                                                                   A-0631-19
                                    2
      In these consolidated cases, three out-of-network medical providers,

Garden State Bariatric & Wellness Center, LLC, New Jersey Spinal Medicine

and Surgery, P.A., and Advanced Gynecology and Laparoscopy, P.C., appeal

letters issued by the Department of Banking and Insurance declining to take

action against Horizon Blue Cross Blue Shield, which the providers allege has

misapplied the recently enacted Out-of-Network Consumer Protection,

Transparency, Cost Containment and Accountability Act, N.J.S.A. 26:2SS-1 to

-20 (OON Act), forcing them into costly and protracted administrative actions

to recover fees Horizon wrongfully refused to pay on presentation.

      Although not unsympathetic to appellants' plight, we dismiss their

appeals.1 The Department's authority to investigate or seek penalties for any

alleged violations of the OON Act is wholly discretionary. See N.J.S.A.

26:2SS-17(b). Thus, under long-settled law, appellants' right to bring their

complaints to the attention of the Department, "does not carry with it a right to

judicial review" of the Department's response to those complaints. See

1
  The Department made a motion in 2020 to dismiss the appeal on the grounds
of finality and standing, which we denied without prejudice to allow those
issues to be presented to the merits panel. Both sides have addressed
appellants' standing to maintain this appeal at length in their merits briefs.

                                                                          A-0631-19
                                       3
Marques v. N.J. State Bd. of Med. Exam'rs, 264 N.J. Super. 416, 418 (App.

Div. 1993). "Indeed, no such right exists." Ibid.

      The OON Act went into effect in August 2018 with the purpose of

protecting New Jersey consumers from "certain surprise out-of-network

charges . . . for hospital emergency room procedures or for charges by

providers that the consumer had no choice in selecting." N.J.S.A. 26:2SS-2(b).

The Act prohibits health care providers from billing a person covered under a

New Jersey "health benefits plan" for "inadvertent out-of-network services"

"in excess of any deductible, copayment, or coinsurance amount," N.J.S.A.

26:2SS-8(a)(1), and likewise obligates carriers to ensure "the covered person

incurs no greater out-of-pocket costs than the covered person would have

incurred with an in-network health care provider for covered services,"

N.J.S.A. 26:2SS-9(a). "Inadvertent out-of-network services" are defined as

health care services "covered under a managed care health benefits plan that

provides a network" that are "provided by an out-of-network health care

provider" when "a covered person utilizes an in-network health care facility

for covered health care services and, for any reason, in-network health care

services are unavailable in that facility." N.J.S.A. 26:2SS-3 (emphasis added).

                                                                          A-0631-19
                                      4
      Appellants, all out-of-network medical facilities, 2 complained to the

Department that following enactment of the OON Act, Horizon had re-

programed its systems to automatically process appellants' reimbursement

claims for elective services provided at appellants' out-of-network facilities —

claims they contend are not subject to the OON Act — as if they were

prohibited inadvertent services performed at in-network facilities. Each of

appellants presented proof of admitted underpayments by Horizon, ranging

from tens of thousands to hundreds of thousands of dollars, with Garden State

Bariatric further presenting correspondence from Horizon admitting that codes

for primary and co-surgeons performing certain elective procedures at

appellants' out-of-network facilities should have been omitted from Horizon's

"Out-Of-Network mandate process." In the letters, Horizon represented it had

"submitted a technical request to remove these types of claims from the

mandate process," and promised that bills "not inadvertent or emergent" that

"happen to be included in this OON process," will be adjusted and paid at the

out-of-network level or the level previously authorized.

2
  Garden State Bariatric provides "elective bariatric surgery to qualifying
patients," including those insured by Horizon. New Jersey Spinal Medicine
offers "elective, medically necessary complex spinal surgery." Advanced
Gynecology performs "elective, medically necessary general gynecology and
minimally invasive surgical treatment."

                                                                          A-0631-19
                                      5
      Although the Department investigated the claims and Horizon

reprocessed many of them, the Department closed the matters without taking

any further action against Horizon. Appellants contend the problem persists

with Horizon continuing to automatically apply the OON Act to appellants'

claims for scheduled elective treatment at out-of-network facilities, to plans

not covered by the Act, N.J.S.A. 26:2SS-3 and 9(d), and demanding appellants

present proof that patients who scheduled elective, medically-necessary and

often pre-authorized surgery at appellants' out-of-network facilities with out-

of-network providers were aware any assistant surgeon was also an out-of-

network provider before reprocessing the claims — ostensibly because patients

having surgery at in-network facilities with in-network surgeons can be

surprised when assistant surgeons provided by the facility are out-of-network.3

3
  Although the Act provides the Department the authority to adopt regulations
to implement the Act, N.J.S.A 26:2SS-18, the Department has yet to do so. It
has, however, issued an administrative bulletin, Department of Banking and
Insurance Bulletin No. 18-14, Nov. 20, 2018, https://www.state.nj.us/dobi/
bulletins/blt18_14.pdf, stating "[t]he Act prohibits providers from billing
covered persons for inadvertent and/or involuntary out-of-network services for
any amount above the amount resulting from the application of network level
cost-sharing to the allowed charge/amount. See N.J.S.A. 26:2SS-7 to -9"
(emphasis added). The bulletin defines "involuntary" as out-of-network
services rendered on an emergency or urgent basis. The Act requires health
care providers and facilities to make disclosures to covered persons of their
network status and charges, N.J.S.A. 26:2SS-4 to -5, but carriers appear

                                                                          A-0631-19
                                       6
      Appellants claim the Department erred in accepting Horizon's

reprocessing of certain claims without holding Horizon to account for its

systematic improper application of the OON Act and its intentional

misapplication of the Act's negotiation and arbitration process. They contend

"in closing the files on [their] complaints with no action, [the Department]

disregarded the express and implied legislative policies" underlying the Act

and its "general authority to investigate an insurer's unfair claims settlement

____________________
responsible only to ensure "that the covered person incurs no greater out-of-
pocket costs than the covered person would have incurred with an in-network
health care provider for covered services" in those instances when "a covered
person receives inadvertent out-of-network services, or services at an in-
network or out-of-network health care facility on an emergency or urgent
basis," N.J.S.A. 26:2SS-9 (emphasis added).

       The parties appear to dispute the carrier's obligation to police the
disclosures the Act requires of providers and facilities, with appellants
claiming Horizon's alleged concern about "inadvertent" or "surprise" charges
for out-of-network assistant surgeons provided by in-network facilities is
irrelevant to the all out-of-network, scheduled services provided by appellants,
and the Department appearing to suggest, without any citation to the Act, that
Horizon could refuse reimbursement if appellants failed to establish to
Horizon's satisfaction that the covered person made a knowing choice to use
the out-of-network provider. In other words, that Horizon could enforce the
obligation of health care facilities and providers to make the disclosures to
covered persons required by the Act instead of leaving enforcement to the
Department through the imposition of penalties. The parties agree the Act's
arbitration provisions "do not apply to a covered person who knowingly,
voluntarily, and specifically selected an out-of-network provider for health
care services." N.J.S.A. 26:2SS-10(e) and -11(d).

                                                                          A-0631-19
                                       7
practices." They argue we should reverse the Department's decisions and

remand their complaints to the Commissioner with direction to "fully

investigate" appellants' claims. The Department argues the providers "lack

standing to compel [it] to take any action regarding their complaints be cause

the Commissioner's authority to take such action is purely discretionary."

      We agree with the Department that appellants lack standing to compel

the Department to take any specific action on their complaints under the Act.

Although our courts take "a liberal approach to standing to seek review of

administrative actions," In re Camden County, 170 N.J. 439, 448 (2002), and

appellants' have been clear they will suffer financially if Horizon applies the

OON Act to claims not covered by the statute, it is not the duty of the

Commissioner or her Department to adjudicate appellants' dispute with

Horizon over reimbursable claims. See In re Lazarus, 81 N.J. Super. 132, 136-

37 (App. Div. 1963).

      The Legislature has determined that persons or entities violating the Act

"shall be liable to a penalty" collected by the Commissioner in a summary

proceeding pursuant to the Penalty Enforcement Law, N.J.S.A. 2A:58-10.

N.J.S.A. 26:2SS-17(a). The statute provides that upon finding a carrier, such

as Horizon, "has failed to comply with the requirements" of the Act, "the

                                                                          A-0631-19
                                       8
commissioner may . . . initiate such action as the commissioner determines

appropriate." N.J.S.A. 26:2SS-17(b)(1). Obviously, the Commissioner's

authority to investigate or bring an enforcement action against a carrier under

the OON Act is purely discretionary. See N.J.S.A. 26:2SS-17(b).

      As we noted in Lazarus, "the function of the complainant in matters such

as these" is to bring to the attention of the agency, acts on the part of regulated

entities that may indicate an entity's "continuing activities may harm the public

interest." 81 N.J. Super. at 137. It is then for the agency, not the complainant,

to "act[] as a guardian of the public interest." Ibid.

      Appellants' complaints about Horizon's alleged improper implementation

of the OON Act brought the matter to the attention of the Department, which

subsequently exercised its statutorily accorded discretion by reviewing

appellants' claims and corresponding with Horizon about them. That the

Department declined to take action against Horizon or investigate the

complaints further is not a decision appealable to this court. See Lazarus, 81

N.J. Super. at 137-38. We cannot compel the Commissioner to exercise her

discretion in a specific manner. See Twp. of Neptune v. N.J. Dept. of Env'tl

Prot., 425 N.J. Super. 422, 434 (App. Div. 2012).

      Appeal dismissed.

                                                                            A-0631-19
                                        9