Court Opinion

ID: 4191024
Source: CourtListenerOpinion
Date Created: 2017-07-31 13:07:44.579115+00
Date Added: 2024-06-11T14:39:50.342102
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NOT FOR PUBLICATION WITHOUT THE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-5550-14T1

IN THE MATTER OF STATE AND SCHOOL
EMPLOYEES HEALTH BENEFITS COMMISSIONS'
IMPLEMENTATION OF I/M/O PHILIP YUCHT.

           Argued telephonically July 13, 2017 – Decided July 31, 2017

           Before Judges Simonelli and Carroll.

           On appeal from New Jersey Department of
           Treasury, Division of Pensions and Benefits.

           Ira W. Mintz argued the cause for appellants
           CWA and Clinical Social Work Guild 49
           (Weissman & Mintz LLC, attorneys; Mr. Mintz,
           on the briefs).

           Danielle P. Schimmel, Deputy Attorney General,
           argued the cause for respondents State
           Health Benefits Commission      and     School
           Employees'    Health    Benefits    Commission
           (Christopher S. Porrino, Attorney General,
           attorney; Melissa H. Raksa, Assistant Attorney
           General, of counsel; Ms. Schimmel, on the
           brief).

PER CURIAM

     The background underlying the present appeal is set forth in

our prior unpublished opinion in In re Yucht, No. A-6298-10 (App.

Div. Sept. 3, 2013).        Briefly summarizing, effective January 1,

2009, the State Health Benefits Commission (SHBC) and the School
Employees' Health Benefits Commission (SEHBC) (collectively, the

Commissions) both voted to implement a tiered system for the

payment     of    out-of-network        behavioral       services   provided       to

participating members based on the providers' professional level.

Id. (slip op. at 5).         Before this change was effected,                claims

for such services were paid at the same rate regardless of whether

the provider was a psychiatrist (M.D.), psychologist (Ph.D.),

licensed clinical social worker (LCSW), licensed marriage family

therapist       (LMFT),   licensed   professional          counselor    (LPC),     or

clinical nurse specialist (CNS), even though the typical charges

of these various professionals varied.               Id.    (slip op. at 3-4).

     Following the change, all out-of-network behavioral health

services provided by a M.D. continued to be paid at 100% of the

usual, customary and reasonable (UCR) rate.                 Id. (slip op. at 5).

However, members who received these services from a Ph.D. saw

their reimbursement reduced by 15%, from a CNC by 30%, and from a

LCSW, LMFT, and LPC by 35%.              Ibid.     We held that this tiered

reimbursement       system   violated         N.J.S.A.     52:14-17.46.7,     which

requires that participating members be reimbursed 80% of the

"reasonable and customary charges" for out-of–network services,

based on the 90th percentile of the Prevailing Healthcare Charges

System    UCR    fee   schedule   "or    a    similar      nationally   recognized

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database of prevailing health care charges."                 Id. (slip op. at

10).

       The Commissions thereafter approved resolutions to implement

our decision in Yucht, retroactive to 2009.                As a result, claims

submitted under the prior tiered payment system would be reimbursed

if a participating member provided proof that he or she paid the

difference between the provider's full charge and the amount that

was previously reimbursed.

       The   Division   of    Pensions    and   Benefits    (Division)    posted

notice of the Commissions' reimbursement procedure on its website,

accompanied by a link to the claim form.              Also, on July 22, 2014,

the Division sent a letter to "[a]ll Certifying Officers, Human

Resource Directors, and Benefits Administrators participating in

the State Health Benefits Program and School Employees' Health

Benefits Program."           The letter advised that "[e]mployees who

received reimbursement for behavioral health claims for services

provided by an out-of-network provider between May 4, 2009 and

March 23, 2014, may be entitled to a reconsideration of their

claims."     It enclosed the claim form to be provided to employees,

and also provided a link to access the claim form on-line.                    The

notice specified that the deadline for filing claims was December

31, 2014.      Finally, it contained a section entitled "EMPLOYER

RESPONSIBILITIES,"      directing        that   the   employers   "make      this

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information available to your location's employees and forward

this letter and attachment to your human resources staff, benefit

administrators, and any other staff members responsible for the

administration of health benefits for your location's employees."

       On December 3, 2014, the Communications Workers of America,

AFL-CIO and Clinical Social Work Guild 49, an affiliate of the

Office     and        Professional          Employees             International       Union

(collectively, the Unions) filed a petition with the Commissions

challenging        the     implementation        of         our    holding     in    Yucht.

Specifically, the Unions asserted that the Division's "website

post   does    not    constitute     adequate,             meaningful      notice   of   the

members' right to recompense."              The Unions requested two remedies:

(1) that the December 31, 2014 deadline for filing reconsideration

requests be extended; and (2) that all potentially affected members

be   mailed    a     written    explanation           of    the    Yucht    decision     and

directions      on       how   to   apply       for        additional      reimbursement.

Alternatively, if a list of the potentially affected members was

not readily available, the Union requested that the information

be mailed to all members.

       On June 9, 2015, the Commissions denied the Unions' petition.

The Secretary to the Commissions explained:

                Your [December 3, 2014] letter was provided
              to the [SHBC] on March 11, 2015.      At that
              meeting, the SHBC requested that its review

                                            4                                       A-5550-14T1
of the request be tabled and that the Division
provide information regarding the number of
claims received by Horizon during the initial
time period and each of the extensions.

  Your letter was provided to the [SEHBC] on
March 25, 2015.   In reviewing your request,
the SEHBC also considered the following:

     Notification was posted on the Division's
      website;

     Letters were sent via mail and email to
      all Certifying Officers at State agencies
      as well as local employers participating
      in the SHBP/SEHBP (copy enclosed); and

     857 claims were received by Horizon
      within the required timeframe. Of these,
      481   (56%)   were   determined  to   be
      ineligible for additional reimbursement.

  On May 13, 2015, the above information was
presented to the SHBC along with the
following:

     211 requests were received prior to the
      initial deadline of September 30, 2014;

     520 requests were received between
      September 30, 2014 and December 31, 2014;

     115 requests were received between
      December 31, 2014 and January 9, 2015
      (these claims were accepted as they were
      postmarked prior to December 31); and

     41 requests were received after January
      9, 2015 and were denied because the
      deadline had passed.

  The above figures were current as of May
11, 2015.     The SHBC also noted that
approximately 56% of claims were deemed

                       5                          A-5550-14T1
           ineligible for additional reimbursement for
           one of the following reasons:

                    The member was unable to provide proof
                     of   payment  to   the  provider   above
                     Horizon's initial reimbursement (i.e.,
                     the member was not "balance-billed");

                    The services were provided by a Medical
                     Doctor and therefore the payments were
                     not reduced as a result of tiering;

                    The provider's charges were less than the
                     tiered allowed amounts and therefore the
                     payments were not reduced; or

                    The member was not covered under the
                     SHBP/SEHBP at the time of service.

             After being presented with the foregoing
           information, the SHBC and SEHBC did not elect
           to take any action regarding this matter.
           Therefore, the deadline for reimbursement
           requests will remain at December 31, 2014 and
           no further notification will be distributed
           to members.

     The Unions appeal from the Commissions' June 9, 2015 decision.

They argue that the form of notice approved by the Commissions to

advise members who might be entitled to additional reimbursement

as a result of our decision in Yucht is inadequate.              For the first

time on appeal, they contend that the Commissions should reprocess

all member claims and issue "refunds" without members filing a

request for reimbursement, even when the member may have incurred

no additional out-of-pocket expenses.            Alternatively, the Unions

assert   that       the   Commissions   should   be   required    to   provide

                                        6                              A-5550-14T1
"meaningful notice" to members of their right to seek additional

reimbursement.

     In    response,     the   Commissions         argue    that     they       provided

reasonable notice of the availability of reimbursement following

Yucht.      They    further    assert       that     the    issue       of    mandatory

reimbursement      was   not   raised       before       either     Commission         and

therefore should not be addressed on appeal.

     Established precedents guide our task on appeal.                         Appellate

review of an administrative agency decision is limited.                          See In

re Herrmann, 192 N.J. 19, 27 (2007).                    A "strong presumption of

reasonableness     attaches    to   the     Division's       decision."           In    re

Carroll, 339 N.J. Super. 429, 437 (App. Div.) (quoting In re Vey,

272 N.J. Super. 199, 205 (App. Div. 1993) aff'd, 135 N.J. 306

(1994)), certif. denied, 170 N.J. 85 (2001).                The burden is on the

appellant to demonstrate grounds for reversal.                     McGowan v. N.J.

State Parole Bd., 347 N.J. Super. 544, 563 (App. Div. 2002); see

also Bowden v. Bayside State Prison, 268 N.J. Super. 301, 304

(App. Div. 1993) (holding that "[t]he burden of showing the

agency's action was arbitrary, unreasonable, or capricious rests

upon the appellant"), certif. denied, 135 N.J. 469 (1994).

     "Appellate courts ordinarily accord deference to final agency

actions,    reversing     those     actions        if     they    are        'arbitrary,

capricious or unreasonable or [if the action] is not supported by

                                        7                                        A-5550-14T1
substantial credible evidence in the record as a whole.'"                N.J.

Soc'y for the Prev. of Cruelty to Animals v. N.J. Dep't of Agric.,

196 N.J. 366, 384-85 (2008) (alteration in original) (quoting

Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)).             Under

the arbitrary, capricious, and unreasonable standard, our scope

of review is guided by three major inquiries: (l) whether the

agency's decision conforms with relevant law; (2) whether the

decision is supported by substantial credible evidence in the

record; and (3) whether in applying the law to the facts, the

administrative agency clearly erred in reaching its conclusion.

In re Stallworth, 208 N.J. 182, 194 (2011) (citations omitted).

     When an agency decision satisfies such criteria, we accord

substantial    deference   to   the   agency's    fact-finding   and   legal

conclusions,    while   acknowledging     the    agency's   "expertise   and

superior knowledge of a particular field."           Circus Liquors, Inc.

v. Governing Body of Middletown Twp., 199 N.J. 1, 10 (2009)

(quoting Greenwood v. State Police Training Ctr., 127 N.J. 500,

513 (1992)).     We will not substitute our own judgment for the

agency's even though we might have reached a different conclusion.

Stallworth, supra, 208 N.J. at 194; see also In re Taylor, 158

N.J. 644, 656 (1999) (discussing the narrow appellate standard of

review for administrative matters).

                                      8                             A-5550-14T1
       Applying our highly deferential standard of review, we are

satisfied that the record sufficiently supports the Commissions'

decision that members were provided with adequate notice and

instructions for submitting a request for claims reconsideration

prior to the December 31, 2014 deadline.          As the Commissions point

out,    notice   was   posted   together   with   a   direct      link   on    the

Division's   website.        Additionally,   letters       were   sent   to    all

Certifying Officers1 at State agencies as well as local employers

participating in the SHBP and SEHBP, directing them to make the

reimbursement protocol available to employees.               We note, as did

the    Commissions,    the   significant   number     of   claims   that      were

presented after these notices were provided.               While perhaps not

the most effective form of notice, we cannot conclude that the

notification procedure implemented by the Commissions was not

reasonably calculated to advise eligible members of their right

to seek supplemental reimbursement.          Absent a finding that the

Commissions' action was arbitrary, capricious, or unreasonable,

1
  Pursuant to N.J.S.A. 52:14-17.43, "[t]he certifying agent of
each participating employer shall submit to the Division of
Pensions such information and shall cause to be performed in
respect to each of the employees of such employer such duties as
would be performed by the State in connection with the program."
By regulation, "[t]he certifying officer shall be responsible for
the duties described by N.J.S.A. 53:14-17.43, including providing
documentation requested by the Commission or the Division in a
timely manner. . . .    [and] for all other duties relating to
matters concerning the SHBP." N.J.A.C. 17:9-1.9(b),(c).

                                     9                                   A-5550-14T1
we are thus constrained to affirm the Commissions' notification

procedures.

     In their December 3, 2014 petition, the Unions requested two

specific remedies, neither of which sought automatic reimbursement

without the need to either apply or provide proof of loss.               In

conformity    with   general   principles   of   appellate   practice,   we

decline to address the Union's requests for such reliefs that were

not presented to the Commissions.       See Nieder v. Royal Indem. Ins.

Co., 62 N.J. 229, 234 (1973) (discussing the limited circumstances

in which an appellate court will consider an argument first raised

on appeal).

     Affirmed.

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