ENDO SURGI CENTER A/S/O BERNADETTE HARPER V.NJM INSURANCE GROUP

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1934-17T3
ENDO SURGI CENTER a/s/o
BERNADETTE HARPER,
Plaintiff-Respondent, APPROVED FOR PUBLICATION
June 19, 2019
v.
APPELLATE DIVISION
NJM INSURANCE GROUP,
Defendant-Appellant.
_____________________________
Argued December 11, 2018 – Decided February 7, 2019
Before Judges Hoffman, Suter and Geiger.
On appeal from Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-2518-17.
Robert A. Cappuzzo argued the cause for appellant
(Chasan Lamparello Mallon & Cappuzzo, PC,
attorneys; Robert A. Cappuzzo, of counsel and on the
brief; Richard W. Fogarty, on the briefs).
Carl A. Salisbury argued the cause for respondent
(Bramnick, Rodriguez, Grabas, Arnold & Mangan,
LLC, attorneys; Carl A. Salisbury, on the brief).
The opinion of the court was delivered by
SUTER, J.A.D.
In N.J. Mfrs. Ins. Co. v. Specialty Surgical Ctr. of N. Brunswick, ___ N.J.
Super. ___, ___ (App. Div. January 29, 2019) (slip op. at 2), we affirmed trial
court orders that "held the PIP [1] medical fee schedule [did] not provide for
payment to an ambulatory surgical center (ASC) for procedures not listed as
reimbursable when performed at an ASC." That precedent resolves this case.
We reverse the trial court's summary judgment order that granted reimbursement
to the ASC because the medical procedure involved in this case was not
reimbursable when performed separately at an ASC.
Bernadette Harper, a New Jersey Manufacturers Insurance Company
(NJM) insured, sustained injury to her lower back in a February 2012 car
accident. In April 2014, she received a lumbar discography at an ASC operated
by Endo Surgi Center in Union (Endo Surgi). Endo Surgi sought $10,000.02 in
reimbursement from NJM for the discography.2 NJM denied payment.
The ASC filed a demand for PIP arbitration with Forthright, Inc., an entity
that was contracted with the State to provide dispute resolution professionals
1
"PIP" means personal injury protection as provided for in N.J.S.A. 39:6A-4.
2
Endo Surgi's claim requested reimbursement for services on three different
dates. The discography was performed on April 22, 2014. Endo Surgi's total
claim, for all three dates of service, was $13,582.82 in medical benefits. NJM
challenged the discography portion; it did not challenge the remaining $3582.62.
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(DRPs) to hear PIP disputes. See Kimba Med. Supply v. Allstate, Ins. Co., 431
N.J. Super. 463, 467 (App. Div. 2013). In November 2016, the DRP ruled in
favor of Endo Surgi that the claim was reimbursable. NJM appealed that
decision to a three-DRP panel, which reversed the DRP's decision in March 2017
as "contrary to the [l]aw, specifically N.J.A.C. 11:3-29.5."
Endo Surgi filed a Law Division complaint under N.J.S.A. 2A:23A-13 of
the Alternative Procedure for Dispute Resolution Act (APDRA) seeking to
vacate the three-DRP panel's decision. Endo Surgi contended it was entitled to
reimbursement under N.J.A.C. 11:3-29.4(g) because the procedure was
reimbursable under Medicare rules. Both parties filed motions for summary
judgment. On November 17, 2017, the trial court granted Endo Surgi's cross-
motion for summary judgment, ordering reinstatement of the DRP's award that
allowed reimbursement, and denying NJM's motion.
Endo Surgi's claim is for reimbursement under the PIP medical fee
schedule, N.J.A.C. 11:3-29.1 to -.6 and 11:3-29 (Appendix, Exhibits 1 to 7) (Fee
Schedule), for Harper's lumbar discography. The Department of Banking and
Insurance (Department) promulgated the Fee Schedule "on a regional basis for
the reimbursement of healthcare providers . . . for medical expense benefits . . .
under [PIP] coverage . . . ." Specialty Surgical, ____ N.J. Super. at ____ (slip
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op. at 3) (alterations in original) (quoting N.J.S.A. 39:6A-4.6(a)). "ASC facility
fees are listed in Appendix, Exhibit 1 by CPT [3] Code." Ibid. (quoting N.J.A.C.
11:3-29.5(a)).
This lumbar discography claim was billed under CPT Code 62290. In
April 2014, when this claim was submitted, this CPT Code 62290 was listed on
the Fee Schedule, but the column listing reimbursement for an ASC did not list
any dollar amount for reimbursement, instead it had the notation "N1."
N.J.A.C. 11:3-29.5(a) provides that "[c]odes that do not have an amount
in the ASC facility column are not reimbursable if performed in an ASC." In
the Department's Frequently Asked Questions (FAQ), the Department
explained:
Question: There is no fee in the ASC facility fee column
of Appendix, Exhibit 1 for the service I want to provide
in an ASC.
Answer: N.J.A.C. 11:3-29.5(a) and 29.4(e)3 state that
when there is no fee in the ASC facility fee column of
Appendix, Exhibit 1 for a service, the facility fee for
that service is not reimbursable if performed in an ASC.
Stated another way, the only facility fees that are
reimbursable for services performed in an ASC are
those CPT and HCPCS codes that have facility fees
listed in the ASC Facility Fee Column of Appendix,
Exhibit 1. The fact that, subsequent to the
promulgation of the fee schedule rule, [Medicare] may
3
A "CPT Code" means "Current Procedural Terminology" Code.
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have authorized additional procedures to be performed
in an ASC does not permit an ASC to be reimbursed for
those services unless there is an amount listed in the
ASC Fee Column of Appendix, Exhibit 1 for the
corresponding CPT code. However, certain codes that
do not have fees in the ASC facility fee column have
"N1" in the payment indicator column. The "N1"
payment indicator means that the service can be
performed in an ASC but a facility fee is not separately
reimbursable because the service is included in another
procedure. N.J.A.C. 11:3-29.5(a) and 29.4(e)3 apply
only to facility fees and do not apply to physician
services.
[(Emphasis added).]
The Law Division judge granted reimbursement because after January 1, 2014,
Medicare allowed reimbursement to ASCs that performed this CPT Code. The
court did not consider it fair that the Department's PIP medical fee schedule did
not allow reimbursement to an ASC "once Medicare indicated that this particular
discography performed at a[n] [ASC] facility is reimbursable." The court
referenced another regulation, N.J.A.C. 11:3-29.4(g), which provided:
[e]xcept as specifically stated to the contrary in this
subchapter [that is, Subchapter 29], the fee schedules
shall be interpreted in accordance with the following,
incorporated herein by reference, as amended and
supplemented: the relevant chapters of the Medicare
Claims Processing Manual, updated periodically by
[Medicare], that were in effect at the time the service
was provided.
[N.J.A.C. 11:3-29.4(g).]
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The court stated that the . . . whole point of . . . the language contained in 11:3-
29.4(g) and the spirit of that, [is] that the . . . fee should be . . . reimbursable."
On appeal, NJM argues the trial court's order should be vacated because
CPT Code 62290 is not reimbursable to ASCs under the Department's PIP
Medical Fee Schedule when performed separately.4 It contends the trial court
did not have the legal authority to amend the Fee Schedule to conform it with
Medicare's reimbursement rules. In doing so, the trial court improperly
substituted its judgment for that of the Department. NJM asks that we exercise
"supervisory authority" to correct this significant concern of public policy.
"We exercise de novo review of legal questions." Specialty Surgical, __
N.J. Super. at __ (slip op. at 9) (citing State v. Gandhi, 201 N.J. 161, 176 (2010);
Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
In Specialty Surgical, we addressed the same legal issue. In that case, the CPT
codes being considered for reimbursement when performed at an ASC were not
listed in the Department's medical fee schedule at all. Id. at __ (slip op. at 4-5).
4
As NJM explains in its brief, the "ASC may host a procedure utilizing this
code but as a packaged procedure, it is not separately reimbursable by a No -
Fault insurer. This is because the cost of hosting procedures marked with an
'N1' modifier, such as CPT 62290, is included in other charges." Endo Surgi
does not dispute the lumbar discography was the only procedure performed on
Ms. Harper on April 22, 2014 and was not "bundled" with another procedure.
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The defendants cited N.J.A.C. 11:3-29.4(g) as authority to permit
reimbursement of those CPT Codes because they were reimbursable by
Medicare, even though they were not included in the Fee Schedule. Id. at __
(slip op. at 9-10). In discussing the Fee Schedule, we observed in Specialty
Surgical that it listed various CPT codes.
For many, there was an amount listed that could be
reimbursed to an ASC if it performed the service listed.
For some other listed CPT Codes, there was no
reimbursement figure for an ASC. Clearly, if the CPT
Code is listed and no amount is set forth for an ASC,
the ASC cannot receive payment for that service.
[Id. at __ (slip op. at 13) (emphasis added).]
We also rejected the argument in Specialty Surgical that Endo Surgi
makes here that the Fee Schedule is amended when Medicare permits
reimbursement to an ASC of a CPT Code. "The fact that Medicare now includes
the CPT Code does not result in the automatic amendment of the Fee Schedule;
instead, we conclude it is the Department, not Medicare, that amends the Fee
Schedule." Id. at ___ (slip op. at 15).
In this case, CPT Code 62290 was listed in the Fee Schedule but that
schedule did not include a reimbursement amount for an ASC because it did not
permit reimbursement when performed separately at an ASC. The trial court
erred in ordering reimbursement. This case presents one of those "rare
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circumstances" where our review of a trial court order is necessary because of
our "nondelegable special supervisory function." Riverside Chiropractic Grp.
v. Mercury Ins. Co., 404 N.J. Super. 228, 239 (App. Div. 2008) (quoting Mt.
Hope Dev. Assocs. v. Mt. Hope Waterpower Project, LP, 154 N.J. 141, 152
(1998)); see Specialty Surgical, __ N.J. Super. at __ (slip op. at 7). We are
constrained to reverse in light of our decision in Specialty Surgical.5
Reversed.
5
Endo Surgi claims the trial court erred by not awarding it attorney's fees when
it granted the cross-motion for summary judgment. Endo Surgi did not file a
cross-appeal of the trial court's order. Because of this, the issue is not properly
before us. See State v. Chavies, 345 N.J. Super. 254, 265 (App. Div. 2001).
"Appellate courts ordinarily decline to consider issues not presented to the trial
court unless they 'go to the jurisdiction of the trial court or concern matters of
great public interest.'" Kvaerner Process, Inc. v. Barham-McBride Joint
Venture, 368 N.J. Super. 190, 196 (App. Div. 2004) (quoting Nieder v. Royal
Indem. Ins. Co., 62 N.J. 229, 234 (1973)); see also U.S. Bank Nat'l Ass'n v.
Guillaume, 209 N.J. 449, 483 (2012) (declining to consider argument raised for
the first time on appeal).
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