AMBULATORY SURGICAL CENTER OF SOMERSET VS. ALLSTATE FIRE & CASUALTY INSURANCE COMPANY (L-1055-19, SOMERSET COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1998-19T3
AMBULATORY SURGICAL
CENTER OF SOMERSET,
individually and as Class
Representative on behalf of
others similarly situated and
JUAN GONZALEZ, individually
and as Class Representative on
behalf of others similarly situated,
Plaintiffs-Appellants,
v.
ALLSTATE FIRE & CASUALTY
INSURANCE COMPANY,
Defendant-Respondent.
______________________________
Submitted October 21, 2020 – Decided November 12, 2020
Before Judges Accurso and Vernoia.
On appeal from the Superior Court of New Jersey, Law
Division, Somerset County, Docket No. L-1055-19.
Charles Kannebecker, attorney for appellants.
Saiber LLC, attorneys for respondent (Marc E. Wolin
and Michael J. Grohs, on the brief).
PER CURIAM
Plaintiffs Juan Gonzalez (Gonzalez) and Ambulatory Surgical Center of
Somerset (Ambulatory Surgical) appeal from an order confirming arbitration
awards under the Alternative Procedure for Dispute Resolution Act (APDRA),
N.J.S.A. 2A:23A-1 to -30, and denying their application to vacate the awards.
The awards rejected plaintiffs' claim for reimbursement from defendant Allstate
Fire & Casualty Insurance Company under Gonzalez's personal injury protection
(PIP) insurance coverage for the costs of a surgical procedure performed at
Ambulatory Surgical for injuries Gonzalez allegedly suffered in an automobile
accident.1 Based on our review of the record, we are convinced we do not have
jurisdiction to consider the issues raised on appeal, and we dismiss the appeal in
accordance with N.J.S.A. 2A:23A-18(b).
1
PIP coverage is required in "every standard automobile liability insurance
policy," and, in pertinent part, it shall provide "for the payment of benefits
without regard to negligence, liability or fault of any kind, to the named insured
and members of his family residing in his household who sustain bodily injury
as a result of . . . using an automobile." N.J.S.A. 39:6A-4.
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I.
The relevant facts are not disputed. While insured by an automobile
insurance policy issued by defendant, Gonzalez allegedly suffered injuries in an
August 2011 automobile accident. Four years later, Gonzalez underwent a
surgical procedure at Ambulatory Surgical. Plaintiffs sought reimbursement
from defendant under Gonzalez's PIP coverage for the costs of the procedure.
In part, plaintiffs sought reimbursement for the costs of a procedure under
current procedural terminology (CPT) code 22551. 2
2
Plaintiffs originally sought reimbursement from defendant under CPT codes
22551, 22552, 22846, and 20931. In the trial court, plaintiffs did not seek to
vacate those portions of the arbitration awards denying their requests for
reimbursement for procedures under CPT codes 22552, 22846, and 20931.
Similarly, on appeal plaintiffs do not argue the court erred by confirming the
awards denying reimbursement for services under those CPT codes. We
conclude plaintiffs waive any claim the arbitrators or the court erred by finding
plaintiffs are not entitled to reimbursement from defendant for services provided
to Gonzalez under those codes. See Nieder v. Royal Indem. Ins., 62 N.J. 229,
234 (1973) (an appellate court generally "decline[s] to consider" an argument
that was "not properly presented to the trial court" and does not "go to the
jurisdiction of the trial court or concern matters of great public interest" (citation
omitted)); see also Sklodowsky v. Lushis, 417 N.J. Super. 648, 657 (App. Div.
2011) (holding "[a]n issue not briefed on appeal is deemed waived"); Jefferson
Loan Co. v. Session, 397 N.J. Super. 520, 525 n.4 (App. Div. 2008) (same). We
therefore consider only plaintiffs' claim the court erred by rejecting plaintiffs'
request to vacate the arbitrators' awards affirming defendant's denial of
reimbursement under CPT code 22551 and granting defendant's request to
confirm the awards.
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CPT code 22551 is not listed on the medical fee schedule promulgated by
the New Jersey Department of Banking and Insurance (DOBI) for
reimbursement of ambulatory surgical center (ASC) medical expense benefits
under PIP coverage. See generally N.J.S.A. 39:6A-4.6(a) (requiring DOBI's
Commissioner to "promulgate medical fee schedules on a regional basis for the
reimbursement of health care providers providing services or equipment for
medical expense benefits for which payment is to be made by an automobile
insurer under [PIP] coverage"). Defendant denied plaintiffs' request for
reimbursement because CPT code 22551 is not included on the fee schedule.
Plaintiffs filed a putative class action lawsuit in the United States District
Court for the District of New Jersey asserting causes of action based on
defendant's denial of the reimbursement request. Defendant moved to compel
arbitration of plaintiffs' claims pursuant to the Automobile Insurance Cost
Reduction Act, N.J.S.A. 39:6A-1.1 to -35. The court granted the motion and
stayed further proceedings in the class action lawsuit pending arbitration
pursuant to N.J.S.A. 39:6A-5.1 of plaintiffs' challenge to defendant's denial of
their reimbursement request.3
3
N.J.S.A. 39:6A-5.1 provides for the arbitration of disputes "regarding the
recovery of medical expense benefits or other benefits provided under [PIP]
coverage." N.J.S.A. 39:6A-5.1(a).
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Plaintiffs filed a demand for arbitration, seeking reversal of defendant's
denial of the request for PIP medical benefits for the CPT code 22551 procedure.
The assigned dispute resolution professional (DRP), Suzanne J. Frankland,
considered the parties' submissions, conducted a hearing, and rendered a written
decision affirming defendant's denial of the request. Frankland discussed and
interpreted N.J.A.C. 11:3-29.4, which addresses the application of the PIP
coverage fee schedules; N.J.A.C. 11:3-29.5, which pertains to ASC fees; and a
DOBI published response to a "Frequently Asked Question" concerning
reimbursement of ASC fees for CPT codes listed on the fee schedule but for
which no corresponding reimbursement amount is provided.
Frankland rejected plaintiffs' claim the fee schedule was effectively
amended procedure pursuant to N.J.A.C. 11:3-29.4(g) to include CPT code
22551 when, in 2014, the Center for Medicare & Medicaid Services (CMS)
added that code to its list of ASC covered surgical procedures approved for
Medicaid reimbursement. Frankland found reimbursement is "strictly governed
by the [f]ee [s]chedule" and concluded plaintiffs are not entitled to
reimbursement for CPT "codes that do not have a reimbursement rate in the ASC
column of the fee schedule." Frankland affirmed defendant's denial of plaintiffs'
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request for reimbursement for the CPT code 22551 procedure because the code
is not listed on the ASC fee schedule.
Plaintiffs appealed to a three-DRP panel. The panel rejected plaintiffs'
claim Frankland erred in applying the law to the issues and facts presented;
determined Frankland's award was supported by the evidence; and concluded
Frankland's determination that plaintiffs are not entitled to reimbursement
because CPT code 22551 is not listed on the ASC fee schedule is consistent with
our holding in New Jersey Manufacturers Insurance Co. v. Specialty Surgical
Center of North Brunswick, 458 N.J. Super. 63 (App. Div. 2019). In Specialty
Surgical, we considered whether procedures performed under a CPT code that
was not listed on the ASC fee promulgated by the Commissioner are
reimbursable under PIP coverage. Id. at 70-74. We determined they are not
reimbursable, see id. at 74, and affirmed the trial court holding that "the PIP
medical fee schedule does not provide for payment to an ambulatory surgical
center . . . for procedures not listed [on the fee schedule] as reimbursable when
performed at an ASC," id. at 65 (footnote omitted).
Plaintiffs filed a complaint and order to show cause under the APDRA
seeking vacation of Frankland's and the panel's decisions affirming defendant's
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denial of reimbursement for Gonzalez's CPT code 22551 procedure. Defendant
cross-moved to confirm the awards.
In a detailed and thorough written opinion, Judge Thomas C. Miller
explained that plaintiffs sought to vacate the awards under N.J.S.A. 2A:23A-
13(c)(5) and they claimed "DRP Frankland committed prejudicial error by
erroneously applying the law to the issues and facts presented."4 The judge
observed plaintiffs "fail[ed] to allege or otherwise identify in what way they
contend the . . . [p]anel erroneously applied the law to the issues and facts
presented."
Nonetheless, Judge Miller considered whether the absence of CPT code
22551 on the ASC fee schedule required the denial of plaintiffs' reimbursement
request. He appropriately concluded he was bound by the holding in Specialty
Surgical that ASC procedures are reimbursable under the PIP regulations only
if the ASC fee schedule lists the applicable CPT code and a corresponding
reimbursement amount for the procedure. Judge Miller concluded Gonzalez's
CPT code 22551 procedure is not reimbursable under PIP coverage because the
code does not appear on the ASC fee schedule.
4
Plaintiffs did not, and do not, claim the awards should have been vacated based
on any of the other four grounds supporting vacation of an award under N.J.S.A.
2A:23A-13(c)(1) to (4).
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In his analysis, Judge Miller also rejected plaintiffs' claim that N.J.A.C.
11:3-29.4(e)(3) does not provide an applicable exception to the requirement
contained in N.J.A.C. 11:3-29.4(e) that an insurer pay a "reasonable amount"
for "any service or equipment not set forth in or not covered by the fee
schedules." He explained that in Specialty Surgical we considered and rejected
an argument plaintiffs make in support of their application to vacate the awards
here—that the ASC fee schedule is automatically amended by operation of law
under N.J.A.C. 11:3-29.4 to include CPT codes CMS adopts in its Medicaid
schedule of reimbursable CPT codes for ASCs. Last, the judge concluded
Frankland and the panel correctly relied on DOBI's interpretation of its own
regulations, as reflected in its response to a "Frequently Asked Question[]." See
Specialty Surgical, 458 N.J. Super. at 71 (detailing DOBI's response to a
question included on an "Auto Medical Fee Schedule Frequently Asked
Questions" that is posted on its website). The response states that CMS's
authorization of Medicaid reimbursement for ASC procedures does not result in
a concomitant amendment of the PIP fee schedule, and an ASC may not be
reimbursed under PIP coverage "unless there is an amount listed . . . on [the Fee
Schedule] for the corresponding CPT code." Ibid. (second alteration in
original).
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Judge Miller found Frankland and the panel did not erroneously apply the
law to the issues or facts, and he concluded our decision in Specialty Surgical
required rejection of plaintiffs' arguments. The judge denied plaintiffs' request
to vacate the awards, granted defendant's request to confirm the awards, and
entered a corresponding order. This appeal followed.
II.
Where, as here, the parties arbitrated their dispute in accordance with the
APDRA, a party may move to vacate, modify, or correct the arbitration award
by filing a summary action in the Superior Court. See Specialty Surgical, 458
N.J. at 67; see also N.J.S.A. 2A:23A-13. The APDRA provides that where a
court grants a request to confirm, modify, or correct an award, it shall enter an
appropriate judgment, and "[t]here shall be no further appeal or review of the
judgment or decree." N.J.S.A. 2A:23A-18(b).
The statutory prohibition against appeals from judgments confirming
arbitration awards is not without exception. Appellate review of a trial court
judgment confirming an arbitration award is permissible in those "rare
circumstances" where "public policy" requires such a result. Mt. Hope Dev.
Assocs. v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 152 (1998). For
example, there is "a judicially-recognized caveat," Kimba Med. Supply v.
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Allstate Ins. Co., 431 N.J. Super. 463, 481 (App. Div. 2013), to N.J.S.A.
2A:23A-18(b)'s proscription where appellate review is required to fulfill our
"supervisory function over the [trial] courts," id. at 482 (quoting Mt. Hope Dev.
Assocs., 154 N.J. at 152); see also Specialty Surgical, 458 N.J. at 68; Riverside
Chiropractic Grp. v. Mercury Ins. Co., 404 N.J. Super. 228, 239 (App. Div.
2008). "This residual appellate review function, [however,] . . . is to be
exercised sparingly . . . ." Kimba Med. Supply, 431 N.J. Super. at 482.
In Morel v. State Farm Insurance Co., we determined a review of an order
confirming an arbitration award was required to fulfill our supervisory function
because the trial court did not apply the correct legal standard of review and did
not rule on the plaintiff's claims. 396 N.J. Super. 472, 476 (App. Div. 2007).
Similarly, in Kimba Medical Supply, we found our supervisory function
supported appellate review of a judgment confirming an APDRA arbitration
award because the case presented "unsettled questions of statutory
interpretation" that required "definitive precedential guidance." 431 N.J. Super.
at 482-83. In Specialty Surgical, we reviewed a judgment vacating APDRA
arbitration awards to resolve conflicting interpretations of a PIP coverage
regulation "in light of the absence of needed precedent" for the trial courts. 458
N.J. Super. at 69; see also Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, 473-
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74 (App. Div. 2005) (exercising appellate review of an order modifying an
arbitration award concerning a counsel fee claim because courts have "exclusive
supervisory powers" over counsel fees).
In contrast, we have dismissed appeals from trial court orders addressing
arbitration awards entered under the APDRA. Most recently, in Monmouth
Medical Center v. State Farm Indemnity Co., we explained we "have no
jurisdiction to tamper with the judge's decision or do anything other than
recognize that the judge has acted within his [or her] jurisdiction" where the
judge adheres to the APDRA's statutory grounds in addressing a challenge to an
arbitration award. 460 N.J. Super. 582, 590 (App. Div. 2019) (quoting N.J.
Citizens Underwriting Reciprocal Exch. v. Kieran Collins, D.C., L.L.C., 399
N.J. Super. 40, 48 (App. Div. 2008)). We dismissed appeals from trial court
orders vacating arbitration awards, finding we lacked jurisdiction under N.J.S.A.
2A:23A-18(b) because the trial judges "exercised [their] authority" in
accordance with the APDRA, "adhered to the statutory grounds in vacating
the . . . awards," and "provided rational explanations" supporting their findings
the DRPs committed prejudicial error under N.J.S.A. 2A:23A-13(c)(5). Id. at
591. We found that, under those circumstances, "there is no principled reason
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for the exercise of our supervisory jurisdiction, or any unusual circumstance s
where public policy would require our intervention." Ibid.
In Fort Lee Surgery Center, Inc. v. Performance Insurance Co., we
explained that in determining to exercise appellate jurisdiction we must decide
"whether the trial judge acted within [the] APDRA's bounds." 412 N.J. Super.
99, 103 (App. Div. 2010). Where the answer to that query is in the affirmative,
"we are bound by N.J.S.A. 2A:23A-18(b) to dismiss the appeal." Ibid.; see also
Riverside Chiropractic Grp., 404 N.J. Super. at 240 (rejecting the plaintiff's
claim the supervisory function required appellate review of a trial court order
confirming an arbitration award because there was no showing the trial court
"commit[ted] any glaring errors that would frustrate the Legislature's purpose in
enacting the APDRA").
Here, the record is bereft of any of the "rare circumstances" supporting an
exception to N.J.S.A. 2A:23A-18(b)'s proscription of appellate review of an
order confirming an APDRA arbitration award. See Mt. Hope Dev. Assocs.,
154 N.J. at 152. Appellate review is unnecessary to exercise our supervisory
function because Judge Miller: carefully considered the record presented;
analyzed plaintiffs' challenge under the correct statutory standard; provided a
reasoned and well-supported rejection of plaintiffs' application to vacate the
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awards; and applied the holding in Specialty Surgical as he was bound to do.
See Monmouth Med. Ctr., 460 N.J. at 591; see also Fort Lee Surgery, 412 N.J.
Super. at 104 (finding the exercise of our supervisory function is not implicated
where the trial court "navigate[s] within [the] APDRA's parameters" and
"provide[s] a rational explanation" for its decision); cf. Endo Surgi Ctr. v. NJM
Ins. Grp., 459 N.J. Super. 289, 291 (App. Div. 2019) (reversing an order
requiring reimbursement for an ASC procedure because the order was
inconsistent with our holding in Specialty Surgical that ASC procedures not
listed on the PIP fee schedule are not reimbursable).
Public policy also does not support an exercise of appellate review. The
arguments plaintiffs made before the trial court in support of their challenge to
the arbitration awards, and that they reprise on appeal, are identical to the
arguments we considered and rejected in Specialty Surgical. Although we
reviewed the trial court orders in Specialty Surgical for the public policy goal
of providing "guiding precedent" to prevent "continued litigation" over "whether
automobile insurers are required to reimburse ASCs where the CPT code for the
procedure does not appear in the [f]ee [s]chedule," 458 N.J. Super. at 69-70, our
decision resolved the issue, see Endo Surgi Ctr., 459 N.J. Super. at 294-95, and
plaintiffs offer no basis to revisit it. We therefore are not convinced there is a
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public policy supporting appellate review of the trial court's order. Plaintiffs'
appeal is barred under N.J.S.A. 2A:23A-18(b).
Dismissed.
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