JIGNYASA DESAI, D.O., LLC, ETC. v. NEW JERSEY MANUFACTURERS INSURANCE COMPANY (L-5247-21, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0221-21
JIGNYASA DESAI, D.O., LLC APPROVED FOR PUBLICATION
on assignment of H.Y.L., 1
October 20, 2022
Plaintiff-Appellant, APPELLATE DIVISION
v.
NEW JERSEY MANUFACTURERS
INSURANCE COMPANY, 2
Defendant-Respondent.
________________________________
Argued October 11, 2022 – Decided October 20, 2022
Before Judges Whipple, Mawla and Smith.
On appeal from the Superior Court of New Jersey,
Law Division, Bergen County, Docket No. L-5247-21.
S. Gregory Moscaritolo argued the cause for appellant.
Gregory E. Peterson argued the cause for respondent
(Dyer & Peterson, PC, attorneys; Gregory E. Peterson,
on the brief).
1
We use initials to protect the patient's privacy, pursuant to Rule 1:38-3(a).
2
Respondent is interchangeably referred to as New Jersey Manufacturer's
Insurance Group and New Jersey Manufacturer's Insurance Company by the
parties and the documents contained within the appellate record.
The opinion of the court was delivered by
MAWLA, J.A.D.
Plaintiff Jignyasa Desai, D.O., LLC appeals from a September 20, 2021
Law Division order denying its request to modify an arbitration award
involving defendant New Jersey Manufacturer's Insurance Company (NJM),
regarding reimbursement for nerve tests performed on plaintiff's patient,
H.Y.L. We reverse and remand for entry of an award in plaintiff's favor,
consistent with this opinion.
The parties' dispute was arbitrated pursuant to the Alternative Procedure
for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -19. A dispute
resolution professional (DRP) found for defendant, and plaintiff appealed to a
three-DRP panel, which affirmed the original award by a majority ruling.
Plaintiff appealed from the panel's decision, and a Law Division judge
affirmed in an oral opinion.
On this appeal, plaintiff urges us to exercise our supervisory function
and reverse, arguing there is a split in authority in the interpretation of the
governing regulation, N.J.A.C. 11:3-29.4(e). The regulation states:
[T]he insurer's limit of liability for any medical
expense benefit . . . not set forth in or not covered by
the fee schedules shall be a reasonable amount
considering the fee schedule amount for similar
services . . . . When a [current procedural terminology
(CPT)] code for the service performed has been
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changed since the fee schedule rule was last amended,
the provider shall always bill the actual and correct
code found in the most recent version of the . . . [CPT
book]. The amount . . . the insurer pays for the
service shall be in accordance with this subsection.
Where the fee schedule does not contain a reference to
similar services or equipment as set forth in the
preceding sentence, the insurer's limit of liability for
any medical expense benefit for any service or
equipment not set forth in the fee schedules shall not
exceed the usual, customary and reasonable [(UCR)]
fee.
[Ibid.]
The American Medical Association (AMA) promulgates CPT codes for
every procedure reimbursable by medical insurance providers. 3 The CPT
codes contain no fee schedules, basic units, relative values, or related listings.
N.J.A.C. 11:3-29.2. Rather, the Commissioner of the New Jersey Department
of Bank and Insurance (DOBI) promulgates the fee schedule. N.J.S.A. 39:6A-
4.6. Therefore, the CPT codes and the fee schedules may sometimes be out of
synch.
Plaintiff started a course of treatment for H.Y.L., which involved
electromyography and nerve conduction velocity (NCV), or nerve conduction
study tests. Plaintiff received approval for the testing under CPT code 95913,
3
See CPT Codes, Then and Now, American Medical Association (Aug. 4,
2015), https://www.ama-assn.org/practice-management/cpt/cpt-codes-then-
and-now.
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which is defined as "[thirteen] or more nerve studies." It then conducted
twenty separate NCV tests, which contained three different types of tests
coded in the New Jersey fee schedule at the time, including: Eight motor
nerve studies coded under 95903; ten sensory tests under 95904; and two "H"
tests under 95934. These three codes are no longer recognized by the CPT
book and have been consolidated under one current code, 95913. 4 "These
changes were made in an effort to address the overlap in the pre-test and post-
test work involved in the procedures." Ibid. As a result, CPT 95913 does not
differentiate the type of test, rather, the code represents the administration of
"[thirteen] or more" tests.
Under the old codes, the prices per unit for the tests were as follows:
95903, $176.35; 95904, $135.64; and 95934, $155.93. Thus, the total billed
under the old codes for H.Y.L. would be $3,079.06 ((176.35 x 8) + (135.64 x
10) + (155.93 x 2)). Plaintiff billed $9,585 using CPT 95913. Defendant
reimbursed $2,292.55, representing $176.35, the per unit price of the most
expensive old test code, CPT 95903, multiplied by thirteen.
Pursuant to N.J.A.C. 11:3-29.4(e), when a code is updated it is cross-
referenced to the old code that it replaced. This process is commonly referred
4
Nerve Conduction Studies (Codes 95907-95913) (March 2013), AMA CPT
Assistant, https://www.findacode.com/newsletters/ama-cpt-assistant/index.
html.
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to as "cross-walking."5 Plaintiff argued this method required defendant to
"cross-walk" the tests performed back to the old codes, 95903, -04, and -34,
which correspond to the current code, 95913, resulting in an additional
$786.51 for the additional seven tests performed.
During arbitration, each party provided expert testimony to support its
view of the billing dispute. The DRP found NJM "sufficiently reimbursed"
plaintiff. Moreover, based on the evidence defendant presented, the DRP
concluded "the relative value units . . . for the NCS portion of the testing has
been modified by the AMA" to lower the value of the testing under the form er
codes. A majority of the DRP panel affirmed holding "[t]he CPT code
language for CPT 95913 caps reimbursement at [thirteen] studies. There is no
mistake of law or misapplication of the regulation."
The Law Division judge noted "if this is not decided consistently[,] it's
going to cause more problems going forward . . . ." However, he concluded
"this is a UCR case. It is not a crosswalk situation. And I have no reason to
disturb the factual findings below[,] which led to [the DRP] deciding the case
the way [they] did." The judge further found "[t]his is not a coding dispute
between the parties[]" because it deals with "reimbursement of NCV testing
5
Crosswalking, MB&CC, https://www.medicalbillingandcoding.org/crosswal
king/.
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. . . under an agreed code." He concluded the correct method was not to
crosswalk "because the way it's coded now there's no differentiation at all."
The DRP's decision "was supported substantially by the factual information
given to the DRP below and . . . the reason for the CPT code change was to
prevent or someway restrict what was considered at that time as . . . overbilling
by medical providers."
I.
When parties "knowingly agree[] to resolve their disputes under the
APDRA," they agree to a limited right of appeal. Mt. Hope Dev. Assocs. v.
Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 152 (1998). Once a trial
judge reviews an arbitration award under the APDRA, "[t]here shall be no
further appeal or review" of decisions "confirming, modifying or correcting an
award . . . ." N.J.S.A. 2A:23A-18(b). The exceptions to this rule include when
it is "necessary for [the reviewing court] to carry out its 'supervisory function
over the [trial] courts.'" Morel v. State Farm Ins. Co., 396 N.J. Super. 472,
476 (App. Div. 2007) (quoting Mt. Hope Dev. Assocs., 154 N.J. at 152). Our
supervisory review is warranted "where public policy would require appellate
court review." Mt. Hope Dev. Assocs., 154 N.J. at 152; see also Allstate Ins.
Co. v. Sabato, 380 N.J. Super. 463, 472 (App. Div. 2005).
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Plaintiff urges us to exercise our supervisory authority to settle a split in
authority and points us to a litany of DRP decisions interpreting N.J.A.C. 11:3-
29.4(e) through the cross-walking methodology. Conversely, defendant's brief
cites several decisions that reach the opposite conclusion. Plaintiff argues our
review is also warranted because the judge exceeded his authority under
APDRA, and his decision did not satisfy the substantial evidence standard.
II.
Because this dispute regards interpretation of a regulation, our review is
de novo. N.J. Mfrs. Ins. Co. v. Specialty Surgical Ctr. of N. Brunswick, 458
N.J. Super. 63, 70 (App. Div. 2019). On a de novo review of a regulation, we
give "effect to [its] plain language" and look to agency interpretation of the
regulation. In re Young, 471 N.J. Super. 169, 180 (App. Div. 2022) (quoting
In re M.M., 463 N.J. Super. 128, 138 (App. Div. 2020)); N.J. Ass'n of Sch.
Adm'rs v. Schundler, 211 N.J. 535, 549 (2012).
The plain language of N.J.A.C. 11:3-29.4(e) informs an insurer its "limit
of liability for any medical expense . . . not set forth in . . . the fee schedules
shall be a reasonable amount considering the fee schedule amount for similar
services . . . ." But "[w]here the fee schedule does not contain a reference to
similar services or equipment . . . the insurer's limit of liability . . . shall not
exceed the [UCR]." Ibid.A-0221-21
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DOBI explained its interpretation of N.J.A.C. 11:3-29.4(e) through the
following hypothetical:
Q. The CPT code for the service performed has been
changed since the fee schedule rule was last amended.
For example, CPT codes 64470 through 64476 for
facet joint injections have been deleted and replaced
by codes 64490 through 64495 in the 2010 edition of
the CPT manual. How should facet joint injections be
billed and paid?
A. The provider should always bill the actual and
correct CPT code that he or she is providing. The
amount that the insurer pays for the service is
determined by whether the service is similar to one
already on the fee schedule as required by N.J.A.C.
11:3-29.4(e). That is the standard for determining
whether the fee for a CPT code that is on the fee
schedule can be used to set a fee for a code that is not
on the fee schedule. The answer depends on the
circumstances of each case.
In the case of [f]acet joint injections, although the
descriptions of the procedures have been revised and
reorganized and the new codes have been placed in a
new subsection of the CPT code book . . . [DOBI]
notes that the [related value units] for the new codes
are very similar to those for the deleted codes.
[Auto Medical Fee Schedule Frequently Asked
Questions, NJ Department of Banking and Insurance,
https://www.state.nj.us/dobi/pipinfo/medfeeqa.html
(last updated February 2011).]
The plain language of N.J.A.C. 11:3-29.4(e), and DOBI's interpretation
of it, makes clear plaintiff's interpretation is the correct one. Pursuant to the
regulation, the new CPT code, 95913, should be billed to the deleted CPT
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code(s), 95903, 95904, and 95934. The parties do not dispute the new code
substitutes for the deleted ones. Thus, the related value units of the new code
and the deleted ones are similar. Defendant's contention the UCR analysis
should control ignores N.J.A.C. 11:3-29.4(e)'s instruction to consult the fee
schedule and bill based on "similar services" if a code no longer exists in the
CPT book. For these reasons, we reverse and remand for entry of an award in
plaintiff's favor.
III.
Finally, plaintiff argues we should remand for a determination of
counsel fees. Attorney's fees are allowable "[i]n an action upon a liability or
indemnity policy of insurance, in favor of a successful claimant." R. 4:42-
9(a)(6). The court considers:
(1) the insurer's good faith in refusing to pay the
demands; (2) excessiveness of plaintiff's demands; (3)
bona fides of one or both of the parties; (4) the
insurer's justification in litigating the issue; (5) the
insured's conduct in contributing substantially to the
necessity for the litigation on the policies; (6) the
general conduct of the parties; and (7) the totality of
the circumstances.
[Enright v. Lubow, 215 N.J. Super. 306, 313 (App.
Div. 1987).]
An award of counsel fees is discretionary. Ibid. (internal citations omitted)
(citing Felicetta v. Com. Ins. Co., 117 N.J. Super. 524, 529 (App. Div. 1971)).
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"Such fees may be allowed on appeal." Maros v. Transamerica Ins. Co., 76
N.J. 572, 579 (1978) (citing Corcoran v. Hartford Fire Ins. Co., 132 N.J.
Super. 234, 244-45 (App. Div. 1975)).
The issue presented was novel and unsettled. For these reasons, and
because we are unconvinced the Enright factors would favor an award of fees
to plaintiff, we decline to remand for consideration of counsel fees.
Reversed and remanded. We do not retain jurisdiction.
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