DIAGNOSTIC MEDICAL CONSULTANTS v. ANDREI GAVRILINE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1245-05T51245-05T5

DIAGNOSTIC MEDICAL CONSULTANTS,

Plaintiff-Respondent,

v.

ANDREI GAVRILINE,

Defendant-Appellant.

__________________________________

 

Argued September 27, 2006 - Decided October 20, 2006

Before Judges Lefelt and Parrillo.

On appeal from the Superior Court of New Jersey,

Law Division, Special Civil Part, Middlesex County,

DC-9055-05.

Sander Budanitsky argued the cause for appellant (Robert C. Diorio, attorney; Mr. Budanitsky, on the brief).

Stacy Strich argued the cause for respondent (Michael Harrison, attorney; Ms. Strich, on the brief).

PER CURIAM

Defendant Andrei Gavriline appeals from an order of the Special Civil Part granting summary judgment in favor of plaintiff Diagnostic Medical Consultants (DMC), on its contract claim for recovery of the cost of diagnostic services rendered. We affirm.

The facts are not in dispute. Immediately following an automobile accident on April 18, 2001, defendant was taken to a hospital emergency room complaining of pain in the left shoulder, head, neck, lower back and chest. He was released the same day and on April 30, 2001, came under the care of Dr. Valery Rimerman who, upon examination of defendant, found muscle spasm, tenderness and limited range of motion. Dr. Rimerman diagnosed defendant's condition as cervical and lumbosacral sprain and strain and cervical and lumbosacral radiculopathy. She prescribed a course of physical therapy and ordered MRI scans of the cervical and lumbosacral spine to rule out more serious injury to those areas.

As prescribed by Dr. Rimerman, plaintiff DMC, a radiology group, performed the MRI testing on May 24, 2001. The next day, DMC notified defendant's automobile insurer, First Trenton Indemnity Company (First Trenton), of its claim for reimbursement of this medical expense under defendant's policy providing Personal Injury Protection (PIP) coverage. See N.J.S.A. 39:6A-5a. First Trenton declined payment based upon a physician advisor review that determined that the MRI testing was not medically necessary or reasonable, and thereafter DMC, upon an assignment of benefits executed by defendant, initiated arbitration of the no-fault dispute, pursuant to N.J.S.A. 39:6A-5.la. The arbitrator, finding no medical necessity for the testing, upheld the insurer's denial of plaintiff's claim.

Plaintiff then filed a complaint in the Special Civil Part, seeking payment from defendant of $2400 for the two MRI scans. After defendant answered, plaintiff moved for summary judgment, which was opposed by defendant, who argued that plaintiff's services were not medically necessary and the fee charged was in conflict with the no-fault fee schedule. After the parties stipulated to the amount of damages - $1,107.72 - the motion court reconsidered its initial denial and granted summary judgment in favor of plaintiff, reasoning:

Accordingly, I don't find any material issues of fact that would prevent the court from deciding this matter as a matter of law. Indeed, I don't find that the prior arbitration or the issues raised by defendants would prevent the plaintiff from recovering in this matter. The arbitration is in the matter of the arbitration between Diagnostic Medical Consultants, a subsidy [sic] of the plaintiff, and another claimant [against] First Trenton Companies. [I]t may have been determined that the testing was not warranted or not medically necessary, but I don't find that that ruling in any way prevents the plaintiff in this matter, Diagnostic Medical Consultants, which is apparently a radiology group, from recovering for their services. I don't find that any of the regulations or statutes cited by defendant pertain to them in their position in this litigation, they simply did perform the test . . . at the request of the defendant's doctor. In furtherance of their claim, although that was found not to be medically necessary, for the purposes of the dispute between the insurance company and the defendant and involved the plaintiff [DMC] [I] don't find that in any way prevents the plaintiffs from recovering for the services that they rendered to defendant, and -- because I don't find that any of the policies, decisions . . . nor the statutes pertain to the plaintiff under these factual circumstances, and so . . . I'm go[ing] [to] reconsider the motion for summary judgment, . . . grant the motion for summary judgment and enter judgment in favor of the plaintiff for the principal amount of $1,102.72.

We agree.

Defendant contends that he is not liable for the cost of services rendered by plaintiff because the arbitrator's finding that the MRI testing was not "medically necessary" collaterally estops plaintiff from pursuing its contract claim. However, the authority upon which defendant relies arises exclusively in the context of automobile insurance litigation involving PIP benefits coverage disputes, whose underlying principles are simply not controlling here.

In 1972 New Jersey enacted its first "no-fault" automobile law, the New Jersey Automobile Reparation Reform Act. N.J.S.A. 39:6A-1 to -35. This law provided for mandatory PIP benefits, payable without regard to fault, and defined to include payment of reasonable and necessary medical expenses. N.J.S.A. 39:6A-2e; N.J.S.A. 39:6A-4; Thermographic Diagnostics, Inc. v. Allstate Ins. Co., 125 N.J. 491, 507 (1991). Consistent with the legislative goal of compensating a larger class of citizens than the traditional tort-based system, with "greater efficiency" and at a lower premium cost, N.J. Coal. of Health Care Prof'ls, Inc. v. N.J. Dep't of Banking and Ins., Div. of Ins., 323 N.J. Super. 207, 215-16 (App. Div.), certif. denied, 162 N.J. 485 (1999), the Court has since interpreted "a necessary medical expense" as one "incurred for a treatment, procedure, or service ordered by a qualified physician based on the physician's objectively reasonable belief that it will further the patient's diagnosis and treatment." Thermographic Diagnostics, supra, 125 N.J. at 512.

After a series of other reforms, in 1998, the Legislature enacted the Automobile Insurance Cost Reduction Act, L. 1998, c. 21 (AICRA), which made further comprehensive changes to the no-fault automobile insurance laws in an effort to "preserve the no-fault system, while at the same time reducing unnecessary costs" which had resulted in increased premiums. N.J.S.A. 39:6A-1.1b; Coal. for Quality Health Care v. Dep't of Banking and Ins., 348 N.J. Super. 272, 283 (App. Div.), certif. denied, 174 N.J. 194 (2002). The Legislature found that although New Jersey's no-fault law had "provided valuable benefits in the form of medical benefits,"

[s]ince the enactment of the verbal threshold in 1988, the substantial increase in the cost of medical expense benefits indicates that the benefits are being overutilized for the purpose of gaining standing to sue for pain and suffering, thus undermining the limitations imposed by the threshold and necessitating the imposition of further controls on the use of those benefits, including the establishment of a basis for determining whether treatments or diagnostic tests are medically necessary

. . . .

[N.J.S.A. 39:6A-1.1b.]

Consequently,

on November 30, 1998, in accordance with its delegated authority, the [Department of Banking and Insurance (DOBI),] adopted N.J.A.C. 11:3-4 (Personal Injury Protection Benefits; Medical Protocols; Diagnostic Tests) and N.J.A.C. 11:3-5 (Personal Injury Protection Dispute Resolution). The regulations establish a series of medical protocols or care paths as the standard course of "medically necessary treatment" for certain soft tissue injuries of the neck and back ("identified injuries," N.J.A.C. 11:3-4.2), N.J.A.C. 11:3-4.6(a), "injuries which the DOBI thought were fraught with potential for unnecessary treatment and overutilization of benefits."

[Quality Health Care, supra, 348 N.J. Super. at 286.]

See also N.J. Coal. of Health Care, supra, 323 N.J. Super. at 223. "The care path regulations thus establish typical courses of treatment for certain common automobile-related injuries and serve as standards for measuring medical necessity." Quality Health Care, supra, 348 N.J. Super. at 286; see also N.J. Coal. of Health Care, supra, 323 N.J. Super. at 224. Medical necessity, in turn, is defined as:

1. The medical treatment or diagnostic test is consistent with the clinically supported symptoms, diagnosis or indications of the injured person;

2. The treatment is the most appropriate level of service that is in accordance with the standards of good practice and the provisions of N.J.A.C. 11:3-4, as applicable;

3. The treatment is not primarily for the convenience of the injured person or provider;

4. The treatment is not unnecessary; and

5. The treatment does not include unnecessary testing.

[N.J.A.C. 11:3-29.2]

From this body of law and regulations, applicable to "insurers who issue policies of automobile insurance containing PIP coverage[,]" N.J.A.C. 11:3-29.1(b), and governing their obligation to reimburse for medical expenses incurred by their insureds, defendant seeks to engraft upon plaintiff, a radiology group providing diagnostic services ordered by a qualified physician, a duty to determine whether that physician had an objectively reasonable belief that the testing prescribed was necessary for the patient's further diagnosis and treatment. Yet, defendant cites to no authority in contract liability jurisprudence that imposes such a legal duty upon the medical provider as an element of its cost recovery claim against the recipient of its diagnostic services, and our research discloses none. Not only is there no precedent to support defendant's view, but no public policy considerations compel the result he seeks. Here, plaintiff adhered to the instructions of a licensed physician and rendered diagnostic testing as requested by a patient free to consult his insurer, obtain a second medical opinion, or decline the proposed service, among other alternatives.

By parity of reasoning then, the arbitrator's finding does not operate as a bar to plaintiff's contract lawsuit. Collateral estoppel, developed to promote efficiency, bars a party from relitigating an issue that has been decided against them in a previous legal action. Kortenhaus v. Eli Lilly & Co., 228 N.J. Super. 162, 164 (App. Div. 1988). For collateral estoppel to apply, however, the party asserting the bar must show, among other things, that the issue to be precluded is identical to the issue decided in the prior proceeding, In re Estate of Dawson, 136 N.J. 1, 20-21 (1994); Pittman v. LaFontaine, 756 F. Supp. 834, 841 (D.N.J. 1991) (stating that for [an] issue to be precluded subsequent action must involve substantially similar or identical issues), and that the issue was actually litigated in the prior proceeding. Ibid.

Here, as already noted, the issues are distinctly dissimilar. At issue in the arbitration proceeding was whether plaintiff, acting as subrogee of defendant, was entitled to reimbursement from defendant's insurer by providing sufficient evidence that its diagnostic testing was medically necessary within the meaning of New Jersey's no-fault law governing the respective obligations of auto insurer, insured and medical provider. See N.J.S.A. 39:6A-2e; N.J.S.A. 39:6A-4. At issue in plaintiff's Law Division action, on the other hand, was whether it may recover in contract for the costs it incurred rendering diagnostic services to defendant. Thus, lacking the requisite identity of claim and issue, the arbitrator's finding is of no preclusive effect.

As to plaintiff's contract action, it is undisputed that plaintiff rendered diagnostic services to defendant as ordered by defendant's physician, and that the cost of these services have been stipulated. Moreover, plaintiff has certified that the fees charged were usual, customary and reasonable in comparison with the amounts charged by similar providers in the prevailing area at the time the services were rendered. Because there is no genuine dispute as to any material fact, because as an element of its cause of action, plaintiff has no independent legal duty to ascertain whether the physician's determination of "medical necessity" was objectively reasonable, and because defendant has presented no meritorious defense to plaintiff's contract claim, the motion judge properly granted plaintiff summary judgment as a matter of law. R. 4:46-5(a); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Affirmed.

 

Indeed, even under AICRA's implementing regulations and automobile insurance medical protocols, only physicians may review and deny insurance claims on the basis that a procedure was not medically necessary. N.J.A.C. 11:3-4.7(c)(4).

(continued)

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A-1245-05T5

 

October 20, 2006