PER CURIAM.
Michael McDermott appeals from a final determination of the School Employees' Health Benefits Commission (Commission), dated October 6, 2014, accepting a decision of the Independent Review Organization (IRO) which upheld the denial of coverage for a nerve graft reconstruction surgical procedure. We affirm.
We briefly summarize the salient facts. In January 2012, McDermott had a total shoulder replacement, which left him with significant complications in his right arm. In February 2012, McDermott was seen by Dr. Andrew Elkwood of The Plastic Surgery Center, who diagnosed a right-sided brachial plexus injury. McDermott's injury did not spontaneously improve, and in June 2012, Dr. Elkwood performed surgery to reanimate McDermott's right brachial plexus.
According to Dr. Elkwood, McDermott made significant improvement following surgery; however, he was experiencing respiratory difficulties. In February 2013, tests were performed which showed a right diaphragmatic paralysis. In March 2013, nerve conduction studies and an EMG were performed.
Dr. Elwood referred McDermott to Dr. Matthew R. Kaufman, who saw McDermott in March 2013, and found that he was still suffering from a paralyzed right diaphragm. He recommended that McDermott undergo nerve graft surgery to reanimate his right diaphragm. He proposed to repair the injured section of McDermott's right phrenic nerve, either with a fully functioning nerve re-routed from a nearby location in McDermott's body, or "bypassing" the injured section using a portion of nerve taken from a remote location of his body.
Dr. Kaufman rejected other treatment options, and determined that there was no likelihood that McDermott's condition would improve spontaneously, and his condition would deteriorate without surgical intervention. He opined that, without the surgical procedure, McDermott was in "imminent danger of a permanent respiratory dysfunction."
McDermott is a school teacher, and he participates in NJ Direct through the School Employees Health Benefits Plan (SEHBP), which is administered by Horizon Blue Cross Blue Shield of New Jersey (Horizon). The SEHBP does not cover any treatment, procedure, equipment, device, supply or drug that is considered investigational or experimental.
In March 2013, the Patient Coordinator at The Plastic Surgery Center sought pre-authorization and a network exception from Horizon for the surgery. Horizon denied pre-authorization, finding that the procedure was investigational/experimental and not covered under the SEHBP. McDermott initiated two appeals with Horizon. The first level appeal was denied on March 28, 2013, and the second level appeal denied on May 10, 2013. In both appeals, Horizon adhered to the earlier determination that the procedure was investigational or experimental.
McDermott sought external review of Horizon's decision by an IRO, and Horizon referred the matter to MES Solutions, one of the three IROs it had engaged to perform such reviews. The IRO determined that the nerve graft reconstruction procedure is investigational under the terms of the SEHBP.
McDermott appealed the IRO's decision to the Commission, which rendered a final decision in the matter on October 6, 2014. The Commission found that there were no disputed issues of fact, and it was able to reach its decision on the basis of its enabling statutes without conducting a trial-type administrative hearing.
The Commission noted that the IRO had reviewed all of the documentation that McDermott had submitted in support of his appeal, including relevant medical studies. The Commission found that the proposed nerve graft procedure was investigational or experimental and therefore not covered under the SEHBP. This appeal followed.
On appeal, McDermott argues: (1) the Commission's decision violates express and implied legislative policies; (2) the Commission erred by finding that there were no disputed issues of fact; and (3) the Commission's decision is not supported by sufficient credible evidence.
Our review of final decisions of administrative agencies is limited to determining whether: (1) the decision violates express or implied legislative policies; (2) the decision is unsupported by substantial evidence in the record; and (3) the agency made a decision "`that could not reasonably have been made on a showing of the relevant factors.'"
When reviewing a final agency decision, an appellate court may not "substitute its judgment of the facts for that of an administrative agency."
Benefits under contracts purchased or authorized by the SEHBP
In addition,
The Commission has adopted by reference all of the policy provisions contained in its contracts with "health, prescription drug, and dental plans."
Horizon has "medical policies" which it uses to determine whether a treatment is experimental or investigational. One policy states that a treatment, procedure, equipment, device, supply or drug will be considered "investigational/experimental" if it fails one of the following criteria:
Here, the IRO found that the first criterion did not apply, because it only applies to technologies approved by a federal regulator agency. The IRO determined that the proposed nerve graft surgical procedure did not meet the second criterion in the Horizon policy because peer-reviewed surgical literature, which documented some success in direct nerve repair after transection, pertained to situations that were not analogous to McDermott's clinical condition.
The IRO stated that, although the reports submitted were encouraging, they could not be considered "well designed, well documented investigations" providing "strong scientific evidence" that is "specifically germane to the current clinical question of unilateral diaphragmatic dysfunction in an adult who by report has shortness of breath with exertional activity."
The IRO also noted that Dr. Kaufman, McDermott's current attending physician, had published a case series involving twelve patients with the same clinical condition as McDermott, specifically, long-term, unilateral phrenic nerve injury following surgery. The IRO stated that Dr. Kaufman had reported eight of the nine patients experienced improvement in diaphragmatic function. The IRO found that the study, which was "of a small end," was encouraging but flawed. The IRO noted that one third of the subjects did not have a complete assessment of "outcome measures" and there was a potential for the introduction of bias.
The IRO also noted that Dr. Kaufman recently had a new manuscript accepted for publication in the "Annals of Thoracic Surgery." The manuscript is entitled, "Functional Restoration of Diaphragmatic Paralysis — An Evaluation of Phrenic Nerve Surgery." The manuscript addressed the question of whether the proposed phrenic nerve surgery was comparable or better than the current standard of care, diaphragmatic plication.
The IRO concluded that the study had "limitations" and "weakness[es]." The IRO stated that the manuscript was not "strong scientific evidence in the form of a prospective randomized clinical control trial" that would "establish safety and efficacy with the current standard of care for symptomatic diaphragmatic paralysis of diaphragmatic plication."
The IRO also found that McDermott had not fully satisfied the third criterion, which requires evidence based on published data, that the proposed technology "improves health outcomes." The IRO stated that McDermott's submission only met this criterion "in limited form" since Dr. Kaufman's study only pertained to a small number of patients. The IRO stated, "The data presented is promising and should serve as the basis of a much larger randomized prospective clinical controlled trial of this technique."
In addition, the IRO addressed the fourth criterion, which requires that the "treatment provided" be shown to be "as safe and as effective as any established modality." The IRO found that this criterion had only been partially satisfied. The IRO noted that submitted manuscript reported that plication of the diaphragm led to slightly better improvement in respiratory function when compared to phrenic nerve surgery, based upon pulmonary function test data. The IRO stated that the data in the most recent study did not suggest that the proposed surgical technique is superior to the diaphragmatic plication.
The IRO also found that the fifth criterion had not been satisfied. The IRO noted that, based upon its review of the database maintained by the United States National Institute of Health, the proposed surgical technique is not the subject of a clinical trial. The IRO pointed out that there had been a clinical trial "studying diaphragmatic reinnervation of tetraplegic patients with respiratory insufficiency," but the study had been completed and the clinical condition under review was not analogous to McDermott's condition.
Thus, the IRO found that one of the five criteria in the Horizon policy did not apply, and the surgical procedure proposed for McDermott did not satisfy the other four criteria. The IRO therefore concluded that the procedure was investigational under the definition employed to determine whether a procedure is "investigational/experimental." The Commission accepted the IRO's decision.
We are convinced that the Commission's determination is supported by sufficient credible evidence in the record, and its decision is entirely consistent with the applicable law, which expressly excludes any experimental or investigative service or supply from coverage under the SEHBP.
McDermott argues, however, that the Commission erred by refusing to refer the matter to the Office of Administrative Law for an evidentiary hearing before an Administrative Law Judge. We disagree. A trial-type hearing is only required if the matter before the agency presents contested material issues of fact.
McDermott further argues that the Commission and the IRO ignored certain evidence. He contends: the nerve graft surgical procedure has been approved by twenty-eight separate health plans; Dr. Kaufman has successfully conducted more than eighty of these procedures; and three physicians indicated in letters that they deemed the procedure to be a standard surgical procedure. The record shows, however, that the Commission and the IRO considered all of the evidence that McDermott submitted in support of his appeals. The Commission and the IRO found that the procedure was investigational or experimental.
The evidence cited by McDermott does not warrant a different conclusion. The nerve graft procedure may have been approved by other health plans, but that does not address the issue of whether it is covered under the SEHBP. Furthermore, Dr. Kaufman may have performed more than eighty of these procedures, but the record shows that he is the only surgeon doing so in the United States. Moreover, the opinions of the other physicians regarding to the procedure are not dispositive as to whether it is covered by the SEHBP.
We have considered McDermott's other arguments and conclude that they are without sufficient merit to warrant discussion in this opinion.
Affirmed.