Ctr. for Functional Restoration of the Spine, LLC v. U.S. Office of Pers. Mgmt., Civ. No. 16-7084

THE CENTER FOR THE FUNCTIONAL RESTORATION OF THE SPINE, LLC, as assigneeand statutory derivative beneficiary for Evangelia Minto, Plaintiff, v. U.S. OFFICE OF PERSONNEL MANAGEMENT, Defendant.

Civ. No. 16-7084

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

RECEIVED: January 22, 2018

January 19, 2018

NOT FOR PUBLICATION

OPINION

THOMPSON, U.S.D.J.

INTRODUCTION

This matter comes before the Court upon the Motion for Summary Judgment by Defendant United States Office of Personnel Management ("Defendant" or "OPM") (ECF No. 22) and the Cross Motion for Summary Judgment by Plaintiffs Evangelia Minto and The Center for the Functional Restoration of the Spine, LLC ("the Center"), (collectively "Plaintiffs") (ECF No. 24). The Court has decided these Motions based upon the written submissions of the parties pursuant to Federal Rule of Civil Procedure 78(b). For the reasons stated herein, Defendant's Motion for Summary Judgment is granted and Plaintiffs' Cross Motion is denied.

BACKGROUND

This case arises out of a surgical procedure Mrs. Evangelia Minto had for a spinal injury, performed by doctors at the Center, and the subsequent refusal to cover the insurance claim for said surgery by a federally-contracted insurance carrier. The relevant, undisputed facts are as follows: Mrs. Evangelia Minto was insured through her husband's health insurance plan with the National Association of Letter Carriers ("NALC") through Federal Employee Health Benefits ("FEHB"). (Def.'s Mot. Summ. J. at 1, ECF No. 22-1.) All FEHB carriers must provide services that OPM finds an individual is entitled to under the terms of his or her plan. (Id.); 5 U.S.C. § 8902(j). Mrs. Minto's plan contract through NALC ("the Plan") provided coverage for only "medically necessary" services, medications, and procedures. (R. at 0134-36 (citing brochure which purported to be a complete and official statement of medical benefits).)¹ The Plan defines medical necessity as services or treatments that NALC determines:

Are appropriate to diagnose or treat your condition, illness, or injury; [] Are consistent with standards of good medical practice in the United States; [] Are not primarily for the personal comfort or convenience of you, your family, or your provider; [] Are not related to your scholastic education or vocational training . . . .

(R. at 0139.) The Plan brochure expressly notes that medical necessity is not guaranteed by the fact that a medical provider has "proscribed, recommended, or approved" a particular course of treatment or service. (R. at 0140.) The terms of the Plan also provided NALC with the right to pursue independent medical review of an insurance claim to determine whether the particular treatment or procedure meets the standards and requirements of the Plan. (R. at 0138.)

In 2008, Mrs. Minto underwent her first back surgery performed by William K. Main, M.D. ("Dr. Main"), an undisputedly medically necessary procedure to fuse her C4-6 vertebrae. (R. at 0011.) Experiencing more pain, she returned to Dr. Main, who performed another medically necessary fusion procedure on January 31, 2013, designed to foster bone growth between the C6 and C7 vertebrae. (R. at 0011, 0058.) Mrs. Minto returned to Dr. Main on June4, 2014, yet again experiencing pain. (R. at 0031.) Dr. Main believed she suffered from "probable pseudarthrosis," recommended an MRI, and advised she refrain from strenuous activity and follow up in due course to "discuss additional diagnostic or therapeutic considerations." (Id.) Mrs. Minto sought the second opinion of Steven Paragioudakis, M.D. ("Dr. Paragioudakis") of the Center on October 13, 2014. (R. at 0035.) At a first examination appointment on October 13, 2014,² Dr. Paragioudakis noted that Mrs. Minto was experiencing left shoulder and arm pain with weakness (R. at 0035), and he initially diagnosed her with pseudarthrosis with instability at C6-7 causing severe neck pain (R. at 0038). He ordered an x-ray, CAT scan, and MRI. (R. at 0037-38.) Following these imaging studies, at a pre-operation appointment on October 29, 2014, Dr. Paragioudakis concluded that Mrs. Minto had "psuedoarthrosis and adjacent level degeneration" and that she would "undergo an anterior cervical revision with removal of hardware at C4-6 and instrumented fusion at C3-4, C6-7." (R. at 0050-51.)

The Center sought approval for the hospital stay from Care Allies, which sent a letter approving the medical necessity only for the length of stay for the procedure scheduled for October 31, 2014. (R. at 0017, 0019.) The letter and an accompanying email from Ms. Theresa Doll expressly emphasized that, "whether or not expenses for your hospital stay and any related expenses will be covered, can only be determined by your health plan. This notice is not a guarantee of payment." (R. at 0019.) Dr. Paragioudakis performed Mrs. Minto's surgery on October 31, 2014 with the "absolutely necessary" assistance of Marc S. Menkowitz, M.D. ("Dr. Menkowitz). (R. at 0053.) Dr. Paragioudakis composed an operative report that documentedpseudarthrosis. (R. at 0053-55.) In a post-operation appointment and review on December 19, 2014, Mrs. Minto expressed that she was "extremely satisfied with the surgical outcome," had no complaints of numbness or weakness, and no longer needed prescription pain medication. (R. at 0065.)

On February 4, 2015, NALC acknowledged the insurance claims submitted by the Center for Drs. Paragioudakis and Menkowitz for $172,837 and $169,090, respectively. (R. at 0338-40.) NALC contracted Maximus Federal Services, Inc. ("Maximus") to review the claim and determine whether the surgery was medically necessary to treat Mrs. Minto's condition, thereby warranting coverage under the Plan. (R. at 0147.) Maximus is an independent review service that has an independent board-certified orthopedic surgeon—with no affiliation to Maximus, the providers, patient, or NALC—review claims and claim appeals. (R. at 0148.) On February 25, 2015, Maximus sent NALC a completed audit report concluding that the procedure was medically unnecessary (R. at 0147-48), having found no evidence of pseudarthrosis within the information and documentation provided and thus no need for revision surgery: "[T]here were no medical records provided prior to surgery or from follow-up services. Therefore, there is no information pertaining to the enrollee's history other than the listed pre-operative diagnosis." (R. at 0150.) NALC received this report on March 3, 2015 (R. at 0141), and on March 11 and 13, 2015, NALC sent letters to the Doctors with these results and its decision that the procedure was not medically necessary under the Plan (R. at 0086-89). On March 16, 2015, Connie, the billing manager at the Center, called asking for an explanation as to the denial, and NALC representatives indicated that she could submit additional documentation in support of the claim for Mrs. Minto's procedure. (R. at 0141.) On March 30, 2015, consistent with its denial ofcoverage, NALC sent letters to various care providers associated with the surgery noting overpayments of insurance.³ (R. at 0352-61.)

On April 18, 2015, the Center appealed to NALC's Special Investigation Unit, with additional documentation, including the CAT scan and MRI report, and Dr. Paragioudakis's post-operative report; NALC sent these materials to Maximus on May 21, 2015 for a second independent review. (R. at 0091, 0362, 0412.) On June 26, 2015, Maximus sent a new report to NALC concluding that the surgery was not medically necessary for Mrs. Minto's condition. (R. at 0172-73.) Maximus's reviewer cited peer research and articles for this conclusion, discussing that motion analysis is a better indication of pseudarthrosis than CT scans because it is less subjective and more predictive than imaging studies that fail to detect gross motion across fusion sites—as the radiographic report failed to do in this case. (R. at 0175.) On July 13, 2015, NALC issued a letter with these results confirming its initial denial of coverage. (R. at 0028, 0143.) The letter also informed Mrs. Minto of her right to appeal NALC's decision to OPM. (R. at 0029.)

On October 6, 2015, Dr. Paragioudakis submitted a letter attesting to the medical necessity of the procedure on Mrs. Minto's behalf, alleging that no less than three doctors confirmed a finding of pseudarthrosis. (R. at 0062.) On October 9, 2015, Maggs & McDermott, LLC, on behalf of Mrs. Minto and Drs. Paragioudakis and Menkowitz, appealed NALC's decision to OPM. (R. at 0463.) The appeal enumerated eight pieces of evidence that allegedly demonstrated why NALC's conclusion to deny coverage was flawed. (R. at 0464.) Thereafter,Mrs. Minto cancelled her NALC coverage in December 2015, effective December 31, 2015. (R. at 0144.) On December 29, 2015, OPM requested an explanation from NALC and a copy of NALC's complete file. (R. at 0144.) OPM then sought an advisory opinion from an independent medical reviewer,⁴ and received a Medical Review Analysis Report on January 22, 2016. (R. at 0453.) The report considered two questions: (1) whether the October 31, 2014 procedure was medically necessary, and (2) whether the CPT codes for the procedure were properly documented. (R. at 0454.) The report noted that there is a lack of quality literature and evidence finding surgery appropriate for the type of pain Mrs. Minto experienced, and that there was no correlation between her physical exam findings or her CT scan with the dermatomal pattern of pain in her upper extremities. (R. at 0456-57.) OPM issued its final opinion letter on January 29, 2016, upholding NALC's repeated finding that the procedure was not medically necessary under the terms of the Plan because there was no clear documentation of pseudarthrosis. (R. at 0001-02.)

On October 12, 2016, Mrs. Minto and the Center filed the present lawsuit against Defendant, appealing OPM's final decision. (See generally ECF No. 1.) Amended complaints were filed on June 9 and...