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DOCKET NO. A-1214-08T11214-08T1









Submitted January 21, 2010 - Decided

Before Judges Graves and Sabatino.

On appeal from a Final Administrative

Determination of the State Health Benefits


Disability Rights New Jersey, attorney for

appellant (Susan W. Saidel, on the brief).

Paula T. Dow, Acting Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Jeff S. Ignatowitz, Deputy Attorney General, on the brief).


Appellant J.S., on behalf of her minor daughter, E.D., challenges the decision of the State Health Benefits Commission (Commission) denying coverage for physical and occupational therapies. E.D. is covered under NJ PLUS, a plan established within the New Jersey State Health Benefits Program and administered by Horizon Blue Cross Blue Shield (Horizon). After reviewing the record and applicable law in light of the arguments advanced on appeal, we reverse and remand for further proceedings.

E.D. was born on December 9, 1994, with agenesis of the corpus callosum (ACC). In August 2003, appellant requested prior authorization of benefits for physical and occupational therapy services for her daughter. On August 22, 2003, Horizon denied appellant's request, claiming that the services were contractually excluded from appellant's benefit plan because their purpose was to achieve development beyond any level of functioning that E.D. had previously demonstrated. Horizon cited a provision of the NJ PLUS Member Handbook that excludes educational or developmental services or supplies, including "services or supplies that are rendered with the primary purpose being to provide the person with a service or supply that is being provided to promote development beyond any level of function not previously demonstrated."

Following "a first level internal appeal," Horizon confirmed the denial of coverage and appellant appealed to the Commission. After the Commission voted to uphold Horizon's decision, appellant appealed the Commission's determination and requested a hearing in the Office of Administrative Law (OAL). The administrative hearing took place before an Administrative Law Judge (ALJ) on August 14, 2007, and February 20, 2008. Three witnesses testified during the first hearing on August 14, 2007: appellant; Dr. Barbara Leech, a psychologist who testified as appellant's expert; and Dr. Sau Yee, M.D., who testified as an expert for Horizon. Wendy Rutan, a service operations manager for Horizon, testified at the second hearing.

At the administrative hearing, appellant argued that ACC was a biologically-based mental illness (BBMI), as defined by N.J.S.A. 52:14-17.29d, and E.D. was entitled to physical and occupational therapy services pursuant to the Mental Health Parity Act (MHPA). The MHPA requires the Commission to "provide coverage for biologically-based mental illness under the same terms and conditions as provided for any other sickness." N.J.S.A. 52:14-17.29e. Appellant also claimed the Commission erred by denying coverage based on the developmental exclusion clause because E.D.'s physical and occupational therapy was not intended to achieve development beyond a level of functioning that E.D. had previously demonstrated.

Appellant testified that E.D. is often defiant, hostile, and oppositional toward both parents, and suffers from over-stimulation, anxiety, anger, and frustration. In addition, E.D. struggles to build close relationships with others, has no close friends, and often alienates her peers. According to appellant, E.D. seeks sensory gratification by chewing gum and "constantly hugging" her mother. Appellant also testified E.D. has low muscle tone in the trunk area and spine curvature, which causes her stomach to "pop out" and her back to "sway in." Moreover, appellant testified E.D. has problems with balance and strength, and she complains of fatigue and back pains when engaging in simple physical activity, such as a short walk or "sitting for long periods of time."

As a "sensory seeker," E.D. "will eat constantly" unless appellant intervenes. Consequently, E.D. is "very overweight." Appellant testified E.D. was twelve years old at the time of the hearing, five feet three inches tall, and weighed at least 190 pounds. Appellant also confirmed that the physical and occupational therapy services E.D. had received helped her with her balance, coordination, and endurance.

Appellant's expert, Dr. Leech, conducted a neuropsychological evaluation of E.D. in April and May 2006, and her written report was entered into evidence. According to Dr. Leech, E.D. has a "known history" of ACC, which she characterized as "a biological disorder of the brain." When Dr. Leech was asked why she believed ACC was a biological disorder of the brain, she testified: "Because it is a congenital abnormality of the brain that causes [E.D.'s] problems."

Dr. Leech testified that E.D.'s symptoms are typically treated with physical and occupational therapy. She explained that ACC is treated by "focus[ing] on giving the person compensatory strategies" and that "[w]ith ACC we're not looking to fix the problem, we're looking to help the person cope better."

Dr. Sau Yee, who is board certified in pediatrics and internal medicine, testified on behalf of Horizon. Dr. Yee admitted he "never had any hands-on experience" with ACC, but testified he was "familiar with it as a result of [his] training." According to Dr. Yee, ACC is an "anatomical defect in development" rather than a mental illness or a "mental or nervous condition."

Wendy Rutan, a Horizon service operations manager who handles complaints and appeals, testified that Horizon considered the physical and occupational therapy services requested by appellant "to be developmental in nature and therefore not eligible under the contract." Rutan acknowledged, however, that Horizon paid for E.D.'s occupational therapy services from February 14, 2001, through June 20, 2001, and from June 15, 2005, through August 17, 2005; and for physical therapy from July 28, 2003, through August 20, 2003, and from August 21, 2006, through September 7, 2006. But Rutan claimed those services were approved for coverage in error and should have been denied under the developmental exclusion.

In a written decision on July 9, 2008, the ALJ concluded that E.D. was entitled to coverage because her ACC satisfied the statutory definition of a BBMI. Alternatively, the ALJ determined the "non-restorative clause" was ambiguous as applied to children and "the favorable meaning should be applied":

The greater weight of the relevant proofs support the fact that E.D. has a biologically-based mental illness because her condition is rooted in her brain and it is a mental and nervous condition as defined in the statute. In addition, the fact that ACC is not specifically mentioned as a BBMI does not bar E.D. from coverage . . . and, as stated hereinabove, since it is ambiguous in the statute, the favorable meaning should be applied.

On October 8, 2008, the Commission issued a final administrative determination. The Commission reversed the ALJ's decision and reaffirmed its prior denial of coverage because "[t]he only medical expert produced at the hearing, Dr. Yee, testified that [ACC] is not a BBMI." According to the Commission:

The Initial Decision is also incorrect because the ALJ improperly concluded that ACC is a biologically based mental illness eligible for coverage under the Mental Health Parity Act. The ALJ supported this legal conclusion by stating that E.D. has a BBMI "because her condition is rooted in her brain and it is a mental and nervous condition as defined in the statute." This conclusion is clearly erroneous because there is no evidence in the record that supports this conclusion. To the contrary, the only medical expert, Dr. Ye[e][,] testified that the condition was not a mental illness.

. . . .

The ALJ improperly concluded that the greater weight of the relevant proofs support the fact that E.D. has a biologically-based mental illness because her ACC is a condition of her brain. There is insufficient factual support for the conclusion that ACC is a mental and nervous condition within the meaning of the MHPA[.]

Our role in reviewing the final decision of an administrative agency is limited. In re Taylor, 158 N.J. 644, 656 (1999). We will not reverse an agency's decision unless: (1) it is arbitrary, capricious, or unreasonable; (2) it violates express or implied legislative policies; (3) it offends the State or Federal Constitution; or (4) the findings on which it is based are not supported by substantial, credible evidence in the record. Univ. Cottage v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007). In this case, the Commission found that "ACC is not a mental illness within the meaning of the MHPA," but appellant contends the record does not support that finding. We must therefore determine whether the Commission's finding is supported by substantial, credible evidence in the record as a whole. Substantial evidence is "such evidence as a reasonable mind might accept as adequate to support a conclusion." In re Pub. Serv. Elec. & Gas Co., 35 N.J. 358, 376 (1961) (quoting In re Application of Hackensack Water Co., 41 N.J. Super. 408, 418 (App. Div. 1956)).

Pursuant to the MHPA, the NJ PLUS plan must "provide coverage for biologically-based mental illness under the same terms and conditions as provided for any other sickness under the contract." N.J.S.A. 52:14-17.29e. The MHPA also provides that a person with a BBMI must satisfy the following requirements: (1) have "a mental or nervous condition caused by a biological disorder of the brain"; (2) that "results in a clinically significant or psychological syndrome or pattern"; (3) that "substantially limits the functioning of the person with the illness." N.J.S.A. 52:14-17.29d. Under the statute's "same terms and conditions" clause, "a carrier cannot apply different copayments, deductibles or benefit limits to biologically-based mental health benefits than those applied to other medical or surgical benefits." Ibid.

"The fact that biologically-based mental illnesses affect development in some and other neurological functions in others should not be the determinant of coverage." Markiewicz v. State Health Benefits Comm'n, 390 N.J. Super. 289, 299 (App. Div. 2007). Furthermore, "[t]he motivation and spirit of the parity statutes is to afford greater coverage to those afflicted with BBMIs." Micheletti v. State Health Benefits Comm'n, 389 N.J. Super. 510 (App. Div. 2007). However, "'mental disorders' . . . should be limited to diseases that are primarily psychiatric in nature and which do not have a direct physical cause. Accordingly, physical diseases which may affect the brain, but which clearly involve physical causes . . . are not 'mental disorders.'" Jay M. Zitter, Annotation, What Constitutes Mental Illness or Disorder, Insanity, or the Like, Within Provision Limiting or Excluding Coverage Under Health or Disability Policy, 19 A.L.R.5th 533, 540 (1994).

The Commission concluded that the ALJ erred by accepting the testimony of Dr. Leech, a psychologist, and disregarding the testimony of Dr. Yee, a medical doctor. According to the Commission, Dr. Yee, "the only expert qualified to give a medical opinion, testified that ACC is not a 'mental or nervous condition,' . . . which would qualify for coverage under the statute." Therefore, the Commission argues its decision should be affirmed. However, appellant claims "[t]he Commission erred by finding that the only expert opinion that can be considered is from a medical doctor." In addition, appellant argues that Dr. Yee's "conclusory opinion" was inadequate to establish that E.D.'s condition is not a BBMI as defined by the MHPA.

During the administrative hearing, the parties agreed Dr. Leech was qualified to testify as an expert in the field of neuropsychology, and Dr. Yee was qualified to testify as an expert in the field of pediatrics. Dr. Leech testified she is a licensed psychologist with over twenty-five years of experience, has a doctoral degree and a certificate in neuropsychology, and has evaluated several children who suffer from ACC. Her opinion was that ACC meets the statutory definition of a BBMI. Although Dr. Yee did not dispute E.D.'s diagnosis or that therapy was medically necessary, he testified that ACC is not a BBMI as defined by N.J.S.A. 52:14-17.29d.

The testimony of Dr. Leech and Dr. Yee was properly admitted under N.J.S.A. 52:14B-10, which provides for the liberal admission of evidence in a contested case. However, we agree with the Commission that appellant failed to satisfy her burden of proof because she did not present any testimony from a medical doctor or other medical evidence sufficient to demonstrate that E.D.'s condition meets the statutory definition of a BBMI. While Dr. Leech's opinion as a psychologist was admissible expert testimony, Dr. Yee was the only medical doctor and, therefore, the only expert qualified to give a medical opinion. Accordingly, appellant failed to establish that E.D. is entitled to receive services under the MHPA because her condition is a BBMI.

On the other hand, notwithstanding Dr. Yee's medical background and expertise, we find his testimony insufficient to establish that ACC is not a BBMI because he only offered a net opinion. "The [net opinion] rule requires an expert 'to give the why and wherefore' of his or her opinion, rather than a mere conclusion." Rosenberg v. Tavorath, 352 N.J. Super. 385, 401 (App. Div. 2002) (quoting Jimenez v. GNOC, Corp., 286 N.J. Super. 533, 540 (App. Div.), certif. denied, 145 N.J. 374 (1996)). That did not happen in this case.

Dr. Yee testified that ACC is an "anatomical defect in development" and not a BBMI because it is not a "mental or nervous condition." But beyond those conclusory assertions, Dr. Yee provided no explanation, reasoning, facts, or data to support his opinion that ACC did not qualify as a BBMI. Furthermore, by his own admission, Dr. Yee had no "hands-on experience" with ACC, never performed an in-person examination of E.D., and conducted only a "paper review" after a previous Horizon medical director determined that coverage should be denied. Based on these circumstances, we conclude there is insufficient credible evidence to support the finding by the Commission that ACC is not a BBMI and a remand is necessary to further develop the record. See Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 10 (2009) (an appellate court must determine "whether the record contains substantial evidence to support the findings on which the agency based its action.") (citing Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)).

In addition, relying on Micheletti, supra, 389 N.J. Super. 510, and Markiewicz, supra, 390 N.J. Super. 289, appellant argues the developmental exclusion clause in the NJ PLUS Handbook should not apply to E.D. because she is a young child who is still developing. See Micheletti, supra, 389 N.J. Super. at 525 (stating that terms such as "developmental" and "restorative" may be ambiguous and inapplicable to infants and young children). However, we agree with the Commission that Micheletti and Markiewicz are distinguishable and limited to their facts because they involved autism and pervasive developmental disorder, which are both specifically enumerated as BBMIs in the MHPA. Because ACC is not specifically listed in the statute as a BBMI, we cannot sustain the ALJ's conclusion, at least on the present record, that the developmental exclusion in the NJ PLUS contract is categorically inapplicable to E.D. In this case, ACC is not a medical condition that clearly qualifies as a BBMI under the MHPA, whereas in Micheletti and Markiewicz, the conditions at issue, autism and pervasive developmental disorder, were specifically defined as BBMIs in the statute. On remand, the applicability or inapplicability of the developmental exclusion should be reexamined, with the benefit of appropriate expert testimony.

In view of the foregoing, the final administrative decision denying appellant's requested coverage is reversed and remanded to the Commission for re-transmittal to the OAL for further consideration. At the remand hearing, the parties shall be afforded the opportunity to supplement the record with additional expert testimony and other relevant material. After the ALJ renders a decision, the matter shall be submitted to the Commission for a final administrative determination. We do not retain jurisdiction.

Reversed and remanded.


To protect the identity of appellant's daughter, we have used initials for appellant.

ACC is defined as "[a] birth defect in which there is a partial or complete absence of the corpus callosum (the nerve fibers that connect the two hemispheres of the brain)." J.E. Schmidt, M.D., Attorneys' Dictionary of Medicine and Word Finder A-191 (2007). Individuals with ACC may have normal intelligence "with some subtle differences in brain function seen on neurological testing." Ibid. However, "[i]n other instances, the defect is associated with other cerebral abnormalities, with mental retardation, seizures, and spasticity." Ibid.

Pursuant to N.J.S.A. 52:14-17.29d, "'biologically-based mental illness' means a mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with the illness." Such illnesses include, but are not limited to, "schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, paranoia and other psychotic disorders, obsessive-compulsive disorder, panic disorder and pervasive developmental disorder or autism." Ibid.

Appellant acknowledges, however, that the evaluation was conducted "for the purpose of E.D.'s educational and therapy needs," and not in conjunction with this litigation.





March 4, 2010