DENTAL HEALTH ASSOCIATES, PA VS. HORIZON BLUE CROSS BLUE SHIELD(L-7842-11, ESSEX COUNTY AND STATEWIDE)
A-2923-15T3
| N.J. Super. Ct. App. Div. | Oct 19, 2017Background
- Dental Health Associates (plaintiff), a Medicaid/NJ FamilyCare dental provider, sued Horizon entities (defendants) alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and tortious interference based on denials/limitations of orthodontic and other dental claims.
- Horizon administered Medicaid-managed dental benefits under a contract with the New Jersey Department of Human Services (DHS); Horizon’s obligations were subject to DHS-defined covered services.
- In 2010–2012 the State narrowed, then later broadened, orthodontic coverage for children as part of budgetary and policy changes; DHS issued guidance and a corrective-action process for managed-care organizations.
- Plaintiff claimed lost business from the State’s 2010 restriction (and other alleged practices), submitted an expert valuation for lost profits, but conceded at summary judgment oral argument that it could not identify any specific claim Horizon denied.
- The trial court granted summary judgment for Horizon, finding plaintiff presented no admissible evidence of denied claims, failed to show Horizon breached a contract governed by DHS coverage rules, and had not exhausted administrative remedies; the court also denied plaintiff’s reconsideration motion based on no new evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Horizon breached the Participating Dentist Agreement by denying coverage for orthodontics | Horizon wrongly denied medically necessary orthodontic claims despite contract requiring covered services | Horizon’s duties were governed by DHS/Horizon contract and State coverage limits; plaintiff identified no specific denied claims | Judgment for Horizon — no breach proven; losses resulted from State policy change, not Horizon breach |
| Whether plaintiff breached-implied covenant claim survives summary judgment | Horizon acted in bad faith to deprive plaintiff of contract benefits | No evidence Horizon acted arbitrarily or beyond State-imposed coverage; no factual record of denials | Judgment for Horizon — no material facts showing bad faith |
| Whether plaintiff’s tortious interference claim can proceed | Horizon’s actions (denials/appeals process) interfered with plaintiff’s prospective advantage | Losses stemmed from State budget/coverage decisions, not intentional malicious acts by Horizon | Judgment for Horizon — interference not established |
| Whether plaintiff exhausted administrative remedies / entitlement to reconsideration | Exhaustion exception applies; plaintiff later produced a denied claim and evidence of futile pre-authorization submissions | Plaintiff failed to exhaust appeals and produced no new previously unavailable evidence; one late claim does not cure deficiencies | Denial of reconsideration affirmed — no new evidence and exhaustion failure remains |
Key Cases Cited
- Bhagat v. Bhagat, 217 N.J. 22 (2014) (summary judgment standard and review of evidential materials)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (trial court summary judgment procedures and standards)
- Cypress Point Condo. Ass'n v. Adria Towers, L.L.C., 226 N.J. 403 (2016) (de novo review of legal conclusions on summary judgment)
- Davis v. Devereux Found., 414 N.J. Super. 1 (App. Div. 2010) (abuse-of-discretion review for reconsideration denials)
- Marinelli v. Mitts & Merrill, 303 N.J. Super. 61 (App. Div. 1997) (standards for reconsideration review)