• Appellate Division of New Jersey Declines to Exercise Jurisdiction over Pip Reimbursement Action
  • December 30, 2015 | Author: Gina M. Zippilli
  • Law Firm: Capehart & Scatchard, P.A. - Mount Laurel Office
  • The issue in Yoo v. Travelers of New Jersey, A-5810-13T2 (App. Div. November 17, 2015), is one we have seen before, namely whether the Appellate Court will entertain jurisdiction over reimbursement actions regarding personal injury protection (“PIP”) benefits. Yoo reaffirms the long standing rule in New Jersey that a trial court’s decision of PIP reimbursement actions will be considered “final,” thereby barring any further review by our courts.

    The facts in Yoo are likewise familiar to facts seen in countless other PIP reimbursement actions; overcharging of fees. Between July and October 2011, the insured underwent 3 “platelet rich plasma” injections. The medical provider charged $7,500 for each injection for a total amount of over $22,000. The provider brought a PIP reimbursement action through Arbitration Forums and the matter was handled by a Dispute Resolution Professional (“DRP”). While the DRP found that the 3 injections were “medically necessary,” the DRP modified the cost per injection to $63.95 reasoning that the provider failed to provide sufficient evidence that the $7,500 per injection was reasonable and customary. On January 30, 2014, the DRP awarded $472.56 to the provider, plus fees and costs as the prevailing party.

    This finding begs the question- how did the DRP arrive at $63.95 per injection? On January 4, 2013, the Department of Banking and Insurance (“DOBI”) adopted a medical fee schedule that set reimbursement for the particular injection that the insured received at $63.95 per injection. The DOBI’s regulation was clear that the newly adopted fee schedule was not to be applied retroactively and therefore seemed inapplicable to the facts in Yoo. During the January 30, 2014 arbitration, the DRP was aware of this newly implemented fee schedule and modified the amount per injection to reflect same. The DRP’s reasoning: the provider failed to introduce proofs of the usual, customary and reasonable cost of identical injections and the DRP had nothing else on which to rely.

    Not surprisingly, the provider appealed the matter to the trial court. The trial court ruled that the DRP did not exceed his authority in using the fee schedule because his decision in this regard was due to the provider’s failure to supply evidence and not the DRP’s choice to apply the regulation retroactively. As expected, the provider brought his case before the Appellate Division. It was there that the Appellate Court reaffirmed the history and purpose behind the Alternative Procedure for Dispute Resolution Act:

    Under the APDRA, a party to an alternative resolution proceeding may make application to the Superior Court to vacate, modify or correct the award within certain timeframes... An award can be vacated by a court if the [DRP] committed prejudicial error by erroneously applying law to issues and facts.... Where the trial court confirms, modifies or corrects an award, the Act specifies, there shall be no further appeal or review of the judgment or degree.

    While extraordinary circumstances have been found in rare cases to justify an Appellate review, none were present in Yoo. Indeed, the Appellate Division found that the trial court acted within the bounds of the APDRA statute and declined to extend jurisdiction.