Summary of Appellate Division Decision in Allstate v. Lajara

    By: Melissa Zarzycki on Mar 14, 2019

    By: Richard Robins, Esq., Brach Eichler

    By way of background, the trial judge had issued rulings that a radiologist, Dr. Damien, violated several sections of the New Jersey State Board of Medical Examiners (“BME”) regulation at N.J.A.C. 13:35-2.6 (the “rule”),  because he did not examine or review the files of patients referred to him by chiropractors for diagnostic testing, before conducting the tests, in order to verify the “necessity and appropriateness” of the tests. The amici joined Dr. Damien in arguing that these rulings were incorrect. Following the trial judge’s decision, Brach Eichler was in regular communication with Dr. Damien’s attorney regarding the case status.  Dr. Damien’s attorney expressed surprise upon release of the appellate court’s decision that the court had ruled without conducting oral argument of counsel, as he was under the impression that oral argument would be scheduled at some point after the briefing had concluded. The amici had been given permission to file a joint brief, not to participate in any oral argument, but as it turned out the appellate court conducted no oral argument.

    The appellate court overturned the trial judge’s ruling that Dr. Damien had violated sections (k)(8) and (m)(7) of the rule, which required physicians receiving referrals for testing to prepare a comprehensive report which cross-references any other tests performed on the patient pertinent to the patient’s presenting medical condition. The appellate court primarily reasoned that Allstate, which filed the suit, had failed to present expert testimony and that such testimony was required to prove that those sections were violated.

    Further, and notably, the appellate court specifically stated that it “agreed” with the amici that the trial court “incorrectly interpreted the regulations [at sections (m)(3) and (m)(6)] as requiring Damien to conduct a physical examination of any patient to determine the medical necessity of testing.” The appellate court explained that the rule did not require that the radiologist perform an exam, did not contain the phrase “medically necessary” or “medical necessity”, and that this was a higher standard than the rule stated.

    The appellate court agreed with the trial judge that Dr. Damien had violated the language in sections (m)(3) and (m)(6), which stated that a physician accepting a referral to perform a diagnostic test must “institute a procedure to assure that sufficient clinical data has been provided to justify the requested test,” and must “verify the indications for and appropriateness of diagnostic testing” if a limited licensee (such as a chiropractor) made the referral. The court reasoned that these requirements are not satisfied merely by receiving a written referral from a chiropractor. The court made a distinction between verifying the “indications and appropriateness” of testing as opposed to “determining the medical necessity of the testing.” Since Dr. Damien did not examine patients or review their files before he performed the requested tests, he violated those sections as he had not instituted procedures or “ever used particular care” to ensure there was sufficient clinical data and to verify the “appropriateness” of the tests.

    The appellate court did not further elaborate on what type or extent of “procedures” or “particular care” a radiologist would be required to use after receiving a referral from a chiropractor or other limited licensee to perform diagnostic tests, to satisfy this language. However, it should be noted that on January 2, 2018, the BME revised the rule and eliminated the language previously contained in sections (m)(3) and (m)(6) which Dr. Damien was found to have violated. Therefore, to the extent that the appellate court left any open questions about compliance with the language Dr. Damien was found to have violated, it would only apply to services rendered before that date.

    Dr. Damien and Allstate have until March 28, 2019, to file any notices with the New Jersey Supreme Court asking for consideration of the appellate court’s ruling. Because the appellate court decision was unanimous, the Supreme Court would not be required to consider the case even if requested.   


    Released: March 14, 2019, 9:58 am | Updated: March 14, 2019, 1:06 pm
    Keywords: Announcements

    Copyright © 2019 . All Rights Reserved
    All material, files, logos and trademarks within this site are properties of their respective organizations.
    Terms of Use - Privacy Policy - Contact