Court Opinion

ID: 6499582
Source: CourtListenerOpinion
Date Created: 2022-07-13 14:05:56.845839+00
Date Added: 2024-06-11T09:11:32.158494
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NOT FOR PUBLICATION WITHOUT THE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-0916-19

THE PLASTIC SURGERY
CENTER, P.A., as Delegated
Authorized Representative and
Assignee for M.K.,

          Petitioner-Appellant,

v.

STATE HEALTH BENEFITS
COMMISSION and HORIZON
BLUE CROSS BLUE SHIELD
OF NEW JERSEY,

     Respondents-Respondents.
____________________________

                   Argued June 30, 2021 – Decided July 13, 2022

                   Before Judges Accurso and DeAlmeida.

                   On appeal from the State Health Benefits Commission,
                   Department of the Treasury.

                   Michael M. DiCicco argued the cause for appellant
                   (Maggs, McDermott & DiCicco, LLC, attorneys;
                   James A. Maggs, of counsel and on the briefs;
                   Michael M. DiCicco and Stephanie L. DeLuca, on the
                   briefs).
           Amy Chung, Deputy Attorney General, argued the
           cause for respondent State Health Benefits
           Commission (Matthew J. Platkin, Acting Attorney
           General, attorney; Melissa H. Raksa, Assistant
           Attorney General, of counsel; Amy Chung, on the
           brief).

           Michael E. Holzapfel argued the cause for respondent
           Horizon Blue Cross Blue Shield of New Jersey
           (Becker LLC, attorneys, join in the brief of respondent
           State Health Benefits Commission).

     The opinion of the court was delivered by

ACCURSO, J.A.D.

     The Plastic Surgery Center, P.A. appeals from a December 12, 2019

final agency decision of the State Health Benefits Commission concluding

Surgery Center lacked standing to appeal to the Commission from a decision

by Horizon Blue Cross Blue Shield of New Jersey denying Surgery Center

reimbursement for out-of-network medical services to M.K., a State Health

Benefits Program member. 1 We affirm, essentially for the reasons expressed

in the Commission's fully-explained and well-reasoned decision.

1
  Surgery Center contends its appeal is from "the September 30, 2019 Final
Administrative Determination" of the Commission. There is no administrative
determination, final or otherwise, of September 30, 2019. The Commission
wrote a one-page letter dated August 22, 2019, to Surgery Center's counsel
advising "[p]roviders do not have standing to appeal to the Commission."
Counsel avers he did not receive that letter until September 30, 2019. While

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      The essential facts are not disputed. Surgery Center submitted a claim to

Horizon for services rendered to M.K. at the Center on December 16, 2014,

which was denied through two levels of internal appeal at Horizon, and by an

external review by an independent review organization. Following those

denials, Surgery Center submitted an appeal request to the Commission. In a

comprehensive seven-page decision, the Commission explained why it does

not accept appeals from providers, or indeed from anyone other than the

member directly.

      Specifically, the Commission explained NJ DIRECT is a preferred

provider organization (PPO) self-insured plan offered to SHBP members and

administered by Horizon. Horizon provides plan participants a network of

providers who agree to provide services per contract with Horizon at

discounted rates with no balance billing. In addition to providing members

care by participating "in-network" providers, NJ DIRECT also allows members

to use out-of-network providers subject to the member's payment of

that may be so, it does not render the August 22 letter the Commission's "Final
Administrative Determination" of September 30, 2019. The only decision of
the Commission appealable as of right in this matter pursuant to Rule 2:2-
3(a)(2) is the Commission's December 12, 2019 decision. The August 22,
2019 letter is interlocutory, thus requiring our leave to appeal, see Rule 2:5-6,
which plaintiff has neither sought nor received.
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                                        3
deductibles and co-insurance and the understanding that the plan's payment to

out-of-network providers is limited to reimbursement of reasonable and

customary costs with the member responsible for any balance.

      The Commission explained that "allowing out-of-network providers to

appeal reimbursement amounts undermines Horizon's ability to recruit in-

network providers" willing to provide services at discounted rates in exchange

for direct payment by the plan and increased patient volume resulting from

plan referrals. "If a provider can appeal to receive additional payments beyond

what the plan prescribes, it removes one of the important incentives for

providers to participate in the network."

      As the Commission explained, Surgery Center is an out-of-network

provider, thus members such as M.K. who choose to have procedures

performed there instead of at an in-network hospital "choose[] to be

responsible for the co-insurance and any charge above the reasonable and

customary allowance." While members and providers, with the written

consent of the member and only to the extent the adverse determination

involves medical judgment, may pursue internal appeals to Horizon and,

following that, an independent review organization, only the member may

further appeal to the Commission pursuant to regulation and plan guidelines.

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                                        4
        The Commission explained that when providers such as Surgery Center

advise patients such as M.K. they will not balance bill the patient and instead

attempt to appeal a reimbursement policy to the Commission the member does

not object to, they undermine legislative policy by eliminating the financial

incentive to use in-network providers and increase the cost of the plan for all

members and their public employers. Thus, the Commission concluded that

allowing an out-of-network provider standing to appeal that reimbursement

policy "would be inimical to the purpose of the SHBP," and could even "serve

to facilitate fraud against the program by permitting providers and members to

consort to waive the co-insurance requirements set forth under the governing

law."

        As to Surgery Center's claim of derivative standing based on an

assignment of benefits executed by M.K. three months before the procedure at

issue, the Commission explained it "does not recognize an assignment of

benefits as legal representation of a member" because it is contrary to the

statute that "requires reimbursement be made only to SHBP members,"

N.J.S.A. 52:14-17.29, and the member guidebook providing that the member

will be paid directly for services rendered by out-of-network providers, and is

otherwise not permitted by the SHBP's contract with Horizon. The

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                                        5
Commission observed that permitting out-of-network providers with no

standing to appeal directly to the Commission to appeal indirectly through

assignment would obviously undermine the plan design by allowing them to

gain advantages over in-network providers contractually prohibited from such

appeals.

      Surgery Center appeals, reprising the same arguments it made to the

Commission, including that it is an "interested person" within the meaning of

the Administrative Procedures Act, N.J.S.A. 52:14B-1 to -31 , entitled to a

declaratory ruling from the Commission, notwithstanding it never sought a

declaratory ruling from the Commission, and that the statute leaves any such

declaratory ruling to the agency's discretion.

      Having reviewed the record in light of our limited role in reviewing

administrative agency action, Russo v. Bd. of Trs., Police & Firemen's Ret.

Sys., 206 N.J. 14, 27 (2011), we are convinced none of these arguments is of

sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      The law is clear only SHBP members may pursue appeals to the level of

the Commission. N.J.A.C. 17:9-1.3(a). We agree with the Commission that

allowing out-of-network providers to evade that limitation by assignment is

contrary to the public interest. As we have noted previously, anti-assignment

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                                        6
clauses "advance the overarching public interest in limiting health care costs

for, if the patient could assign his or her rights to payment to outside medical

providers, it would undercut the pre-arranged costs with in-network providers

that are relied upon by non-profit health services corporations in deciding the

premium amount." Somerset Orthopedic Assocs., P.A. v. Horizon Blue Cross

& Blue Shield of N.J., 345 N.J. Super. 410, 417-18 (App. Div. 2001). As we

noted in Somerset with respect to Horizon, "the general policy favoring full

alienability of choses in action embodied in N.J.S.A. 2A:25-1 must bend to the

far more specific expression of legislative intent in N.J.S.A. 17:48E-1 to -48."

Id. at 423.

      Affirmed.

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