AMBULATORY SURGICAL CENTER OF SOMERSET v. ALLSTATE FIRE CASUALTY INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE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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