September 3, 2019
In Monmouth Medical Center a/s/o Michael Annucci v. State Farm Indemnity Co., A-3004-17T1 and A-4208-17T1, an August 12, 2019 published opinion discussing consolidated appeals, the New Jersey Appellate Division clarified whether it had the jurisdiction to review trial court decisions that vacated the decisions of Dispute Resolution Professionals (“DRPs”). In both matters on appeal, the DRPs had issued decisions in relation to Personal Injury Protection (“PIP”) benefits disputes between medical care providers and a PIP carrier, and both DRPs had agreed with the reimbursement decisions and rationale of State Farm Indemnity Co., in refusing to reimburse certain medical expenses.
Following State Farm’s refusal, both medical providers at issue in this decision demanded arbitration, pursuant to the Alternative Procedure for Dispute Resolution Act (“ADPRA”), N.J.S.A. 2A:23A-1 to -30. More particularly, N.J.S.A. 39:6A-5.1(a) provides that disputes between an insurer and claimant regarding whether PIP benefits are due may be resolved by binding arbitration. Both hospital claimants here were assignees of the benefits due to individual State Farm insureds. Similarly, in both cases, State Farm denied reimbursements to the claimants for ancillary services provided after a hospitalization and surgery, contending that New Jersey’s Hospital Outpatient Surgical Facility (“HOSF”) fee schedule did not provide for reimbursement of those services. The claimants contended that their billing had complied with Medicare requirements, and that the HOSF fee schedule’s “bundled” fee allowance was equivalent to the sought-value of the reimbursed services. In other words, the claimants contended that they were being denied payment to which they would otherwise be entitled due to their failure to bundle their bills, and decision to follow Medicare billing requirements.
After the DRPs entered awards that were in favor of State Farm, and adverse to the claimants, both claimants filed complaints in New Jersey Superior Court, seeking vacation of the awards pursuant to the APDRA. This Act permits courts to vacate arbitration awards in certain, limited instances. Here, it was argued that the DRP had “committed prejudicial errors when he imperfectly executed his power and erroneously applied law to the issues and facts presented.” Two separate trial court judges issued two separate awards, on largely the same reasoning, vacating the DRP awards, ruling essentially that the DRP’s decision denied reimbursement based on billing format alone, even when the billed amounts submitted were consistent with the HOSF fee schedule.
State Farm appealed both trial court orders. The respondents contended that the Appellate Division lacked jurisdiction under the ADPRA to hear the appeal, insofar as the ADPRA states:
Upon the granting of an order confirming, modifying[,] or correcting an award, a judgment or decree shall be entered by the court in conformity therewith and be enforced as any other judgment or decree. There shall be no further appeal or review of the judgment or decree.
N.J.S.A. 2A:23A-18(b) (emphasis added).
This statutory prohibition is not universally enforced to preclude appeals of these orders. For instance, New Jersey courts have held that the ADPRA’s “general elimination of appellate jurisdiction” does not apply to child support orders. The Court has also recognized that there may be other circumstances where public policy would require appellate court review. Moreover, appellate jurisdiction is necessary where a trial court has exceeded its jurisdiction. However, this arises in only the most unusual of circumstances. Merely believing that the trial court was mistaken in confirming, modifying, or correcting an award, is insufficient for an appellate court to exercise jurisdiction over the trial court. When a trial judge adheres to the statutory grounds for a reversal, modification, or correction of an arbitration award, the appellate court lacks jurisdiction to review that determination.
Thus, the Appellate Division determined that the trial court orders adhered to this framework, and the court’s discretion was otherwise not reviewable. State Farms’s appeals were dismissed.
For more information on New Jersey PIP litigation and arbitration, contact MKC&I’s Tom Emala at (973) 822-1110 or at temala@mcgivneyandkluger.com