New Jersey Healthcare Coalition v. New Jersey Dep’t of Banking & Insurance, 440 N.J. Super. 129 (App. Div. 2015). According to today’s opinion by Judge Reisner, every few years “health care providers and other interested parties” file suit to contest personal injury protection (“PIP”) regulations promulgated by the Department of Banking and Insurance. This opinion involves challenges to a set of PIP regulations issued in 2012.
The regulations at issue address “reimbursable medical procedures and the facilities in which they can be performed, the fees health care providers can charge for those procedures, counsel fees that may be awarded at PIP arbitration, and other related issues.” Applying the deferential standard of review and the presumption of validity that, as Judge Reisner explained in some detail, applies to review of the validity of administrative regulations, the panel rebuffed all of the attacks on those regulations.
Judge Reisner noted that “[t]he majority of appellants’ issues are a rehash of contentions we have considered and rejected in prior cases.” Her opinion was published, however, since “PIP reimbursement is a matter of general public importance,” and it was important to memorialize in a published opinion clarifications that the Department of Banking and Insurance (“the Department”) made to some of the regulations in the context of this appeal.
Judge Reisner first addressed regulations that concern awards of attorneys’ fees. She stated that the applicable rule “essentially adopts” the principles of Rendine v. Pantzer, 140 N.J. 292 (1995), and Rule of Professional Conduct 1.5. Appellants contended that, read literally, the rule would permit a downward adjustment of an attorney’s lodestar but not an upward adjustment. The Department represented, however, that it viewed the rule as permitting an upward adjustment in an appropriate case. In light of that concession, Judge Reisner held that appellants’ challenge to that rule was moot. The panel also found moot appellants’ attack on another section of the attorneys’ fee regulation that appellants contended forbade direct payments of fees to medical providers’ attorneys, again because the Department had clarified that the rule did not in fact preclude direct payment of fees.
Another regulation to which appellants objected denied reimbursement for certain procedures when performed in ambulatory service centers while permitting reimbursement if those same procedures were performed in a hospital outpatient surgery facility. Judge Reisner observed that this regulation paralleled federal Medicare regulations, which had concluded that performing those procedures in ambulatory service centers was unsafe for patients. It was not arbitrary for the Department to follow that Medicare policy.
Appellants’ challenge to a regulation that permitted “on the papers” PIP arbitrations with the consent of all parties, in cases involving less than $1,000, also failed. The enabling statute did not forbid proceedings on the papers, very few proceedings currently involve oral testimony, and proceedings on the papers “in cases involving de minimis claims is certainly consistent with the statute’s overall purpose to reduce costs and expedite the decision of claims.”
Appellants also attacked the Department’s methodology for calculating reimbursement rates for providers, asserting that providers’ billed charges, not the fees actually paid, should have formed the basis for regulations regarding reimbursement. Judge Reisner cited prior cases in which the Appellate Division had “repeatedly upheld” the use of paid fees in setting reimbursement rates. Since “well-qualified experts can disagree” on this issue, the Department’s choice was not arbitrary, capricious, or unreasonable in this case either.
Judge Reisner noted that “after virtually every major amendment to the regulations, appellants have warned of dire consequences for accident victims, whom they allege would be stripped of access to medical treatment by virtue of regulatory restrictions. Yet, the reported opinions do not reflect that they have documented the occurrence of those consequences.” In this appeal, some of the feared consequences were avoided or mitigated, at least in part, by the Department’s clarifications or concessions regarding the meaning of the regulations. Those clarifications were made only because litigation was brought. Though these cases routinely do not succeed overall, they do sometimes (as here) achieve portions of the results that appellants seek.