                                                    I attest to the accuracy and
                                                     integrity of this document
                                                       New Mexico Compilation
                                                     Commission, Santa Fe, NM
                                                    '00'04- 09:42:47 2016.06.09
Certiorari Denied, May 19, 2016, No. S-1-SC-35862

       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2016-NMCA-051

Filing Date: March 28, 2016

Docket No. 33,127

ALBERT RODARTE,

       Appellant-Respondent,

v.

PRESBYTERIAN INSURANCE COMPANY,

       Appellee-Petitioner,

and

NEW MEXICO SUPERINTENDENT
OF INSURANCE,

       Appellee.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge

Paul D. Mannick
Santa Fe, NM

for Appellant-Respondent

Montgomery & Andrews, P.A.
Walter J. Melendres
Seth C. McMillan
Santa Fe, NM

for Appellee-Petitioner

                                   OPINION


                                       1
HANISEE, Judge.

{1}     This case requires us to determine whether certain medical treatment is covered by
a plan participant’s health benefits plan or required by applicable regulations governing such
contracts. After Albert Rodarte’s (Rodarte) daughter, Jessica, suffered a severely disabling
anoxic brain injury, he sought pre-approval from her health insurance company for Jessica
to receive hyperbaric oxygen therapy (HBOT). Presbyterian Insurance Company
(Presbyterian) denied the request, concluding that the treatment was not a covered benefit.
On review, the New Mexico Superintendent of Insurance (the Superintendent) upheld
Presbyterian’s denial of coverage, finding that HBOT was an excluded treatment under her
Presbyterian plan, and that the use of HBOT to treat Jessica’s condition was not “medically
necessary” under the New Mexico Administrative Code (the Code).1 In its appellate
capacity, the district court disagreed and reversed the Superintendent in both respects.

{2}      On petition by Presbyterian, this Court accepted certiorari in order to review the
district court’s ruling. We hold that Jessica’s condition was excluded from those for which
her Presbyterian health benefits plan provided HBOT coverage. We also hold that HBOT
was not a medically necessary treatment for Jessica’s condition under the Code. We
therefore reverse the district court.

BACKGROUND

{3}     Jessica’s injury, identified as “global anoxic encephalopathy,” resulted from an
incident of cardiac arrest and stroke that deprived her brain of oxygen for approximately
seventeen minutes. At the time, Jessica was a freshman at New Mexico State University. Her
injury left her profoundly impaired both mentally and physically. After researching Jessica’s
condition on the internet and learning of HBOT, Rodarte contacted Dr. Kenneth Stoller, who
owned and operated a facility offering the treatment. When treated by HBOT, a patient is
“enclosed in a pressure vessel and exposed to 100% oxygen at increased atmospheric
pressure.” While acknowledging that HBOT is “off-label,” Dr. Stoller nonetheless
maintained it to be a “well-established FDA approved treatment used for a wide variety of
conditions[.]” He requested prior authorization from Presbyterian to treat Jessica with a
series of forty HBOT sessions.

{4}    Presbyterian denied Dr. Stoller’s request because Jessica did “not meet the
requirements for the requested” HBOT under the terms of her insurance contract, and
because her diagnosis was “a specifically excluded condition for [HBOT] per


       1
        Grievance Procedures within the Code were revised effective January 1, 2016. Many
regulations, including some pertinent to this appeal, have been renumbered and in some
instances modified. In this Opinion, we cite to and apply the regulations in place during the
course of the underlying proceedings. We note differences to applicable regulations when
necessary or helpful to an understanding of our analysis.

                                              2
Presbyterian . . . criteria.” When Rodarte requested “adverse determination review” through
Presbyterian’s internal process of appeal,2 Presbyterian twice upheld its denial of coverage.
It first explained that “HBOT is not a covered benefit . . . due to [Jessica’s] cerebral vascular
injury[,]” and later elaborated that its decision was additionally justified by the absence of
“evidence in the literature that supports treatment with HBOT for Jessica’s condition.”
Presbyterian added that “experimental or investigational services [or] treatments are not
covered benefits.”

{5}     As permitted by the Code,3 Rodarte then sought external review by the
Superintendent. After first determining that Rodarte’s grievance qualified for external review
of an experimental or investigational treatment under 13.10.17.28 NMAC (5/15/2012), the
Superintendent convened a hearing panel to issue a recommendation regarding the propriety
of Presbyterian’s denial of coverage. The panel, comprised of two physicians and one
attorney, held an informal hearing at which Presbyterian and Rodarte presented evidence in
support of their respective positions. Utilizing the same regulation initially applied by the
Superintendent, the panel considered: (a) whether HBOT “reasonably appears to be a
covered benefit under the plan”; (b) whether HBOT “is not explicitly listed as an exclusion
under the plan”; and (c) whether HBOT is a “medical necessity.”

{6}     In its ensuing written recommendation to the Superintendent, the panel noted that
Rodarte sought HBOT treatment for anoxic encephalopathy, a condition for which the
insurance contract did not specifically include or exclude HBOT coverage. The contract did,
however, list certain conditions for which HBOT was available, and excluded “any clinical
condition not listed above,” specifically naming seven such excluded conditions. The panel
advised, however, that “it is not practical for a [p]lan to list all of the diseases and illnesses
in the world that are excluded [and] . . . if anoxic encephalopathy is not specifically listed
as covered, then it is excluded.” The panel recommended that the Superintendent uphold
Presbyterian’s denial of HBOT coverage under the terms of Jessica’s contract and for the
additional reason that under the evidence presented and considered, HBOT was not
“medically necessary” as an experimental or investigational treatment under the standard
given in 13.10.17.28(B) NMAC (5/15/2012).

{7}     In a final order, the Superintendent adopted, approved, and accepted the findings and
conclusions of the panel, adding that “even if a treatment might be considered a covered
benefit, it must also be medically necessary before an adverse determination [of coverage]
can be reversed.” Thus, the Superintendent identified the issue to be “whether as a result of


        2
         See 13.10.17.17(A) NMAC (5/15/2012) (stating that “[e]very grievant who is
dissatisfied with an adverse determination shall have the right to request internal review of
the adverse determination by the health care insurer”).
        3
        See 13.10.17.23 NMAC (5/15/2012) (setting forth process by which external review
by the Superintendent is initiated).

                                                3
[Presbyterian’s] adverse determination, [Jessica] was deprived of medically necessary
covered services.” Importantly, the Superintendent did not disturb the panel’s conclusion
that because “anoxic encephalopathy is not specifically listed as covered, then it is excluded”
from coverage under Presbyterian’s plan. The Superintendent then made a specific finding
that “[t]he HBOT treatment denied by Presbyterian in this case does not meet the
requirements necessary to establish medical necessity pursuant to 13.10.17(B) NMAC
[(5/15/2012)].”4 By the Superintendent’s order, Presbyterian’s adverse determination was
upheld.

{8}    Having failed to convince Presbyterian or the Superintendent that HBOT was a
covered benefit for Jessica’s condition under either her health plan contract or the Code,
Rodarte appealed to the district court.5 There he argued again that the insurance contract
covered HBOT for Jessica’s condition, contained no effective exclusion, and was “medically
necessary” under 13.10.17.28(B) NMAC (5/15/2012). Presbyterian insisted that its plan
covers “medically necessary” services as defined not by the Code, but by the insurance
contract itself. Presbyterian also maintained that Rodarte failed to establish that the
Superintendent’s determination of non-medical necessity in this case was unsupported by
substantial evidence.

{9}     After initially affirming the Superintendent, the district court was persuaded by
Rodarte’s motion for reconsideration that its ruling was incorrect. In granting the motion to
reconsider, the district court ruled that HBOT “reasonably appears to be a covered benefit”
under Jessica’s Presbyterian plan, and was not “explicitly listed as an excluded benefit.”
Applying 13.10.17.28 NMAC (5/15/2012) for the first time, the district court concluded as
a matter of law that “Dr. Stoller’s certification regarding HBOT as a recommended treatment
for Jessica [satisfied] the requirements for medical necessity applicable to experimental and
investigational medical procedures.” The district court concluded that in its original order,
it had “mistakenly applied” the “more general definition of medical necessity found at
13.10.17.7[(L)] NMAC [(5/15/2012)].” Ultimately, the district court reversed the
Superintendent. This appeal followed.


       4
          We note that “13.10.17(B) NMAC [(5/15/2012)]” is not a provision that existed or
exists in the Code. It is therefore unclear which “requirements necessary to establish medical
necessity” were applied by the Superintendent to determine that HBOT is not medically
necessary to treat Jessica. As discussed in greater detail herein, the Code addresses medical
necessity in both 13.10.17.7(L) NMAC (5/15/2012) (defining “medical necessity” in the
general definitional section) and 13.10.17.28(B) NMAC (5/15/2012) (setting forth the
certification requirements of medical necessity when requesting external review of an
experimental or investigational treatment adverse determination).
       5
        See NMSA 1978, § 59A-4-20(A) (2011) (stating that an appeal from “an order of
the [S]uperintendent made after an informal . . . or . . . administrative hearing . . . shall be
taken to the district court”).

                                               4
DISCUSSION

Standard of Review

{10} Under NMSA 1978, Section 39-3-1.1(D) (1999), a district court may “set aside,
reverse[,] or remand” the final decision of the Superintendent when: “(1) the
[Superintendent] acted fraudulently, arbitrarily[,] or capriciously; (2) the final decision was
not supported by substantial evidence; or (3) the [Superintendent] did not act in accordance
with law.” Our review is the same as that of “the district court sitting in its appellate
capacity, while at the same time determining whether the district court erred in the first
appeal.” Rio Grande Chapter of Sierra Club v. N.M. Mining Comm’n, 2003-NMSC-005, ¶
16, 133 N.M. 97, 61 P.3d 806.

{11} We discuss: (1) whether the HBOT treatments are a covered benefit under
Presbyterian’s plan; (2) whether such treatments are medically necessary under regulations
adopted by the Superintendent requiring a plan to provide medically necessary services; and
(3) whether the district court was correct to reverse the Superintendent.

I.     Presbyterian’s Insurance Contract Does Not Provide HBOT Coverage for
       Jessica’s Medical Condition

{12} The Presbyterian insurance contract states that it “helps pay for healthcare expenses
that are [m]edically [n]ecessary and [s]pecifically covered.” It defines “[s]pecifically
covered” to mean “only those healthcare expenses that are expressly listed and described”
in the agreement. Presbyterian’s medical policy specifically covers HBOT for certain
diabetic wounds, gangrene, compromised skin grafts, and a number of other conditions;
however, it does not list HBOT as a covered service for global anoxic encephalopathy.
Furthermore, in the “exclusions” section of the HBOT portion of the policy, the policy states,
“[a]ny clinical conditions not listed above [are] not covered, including but not limited to”
a list of seven conditions, including stroke.

{13} Presbyterian argues that HBOT for Jessica’s specific condition is not covered under
the insurance contract as it is not an expressly covered treatment in the agreement. Rodarte
contends that because Presbyterian reimburses oxygen and other therapeutic support care
services, he “would reasonably expect that HBOT, which is a method of oxygen therapy,
would be among the therapeutic and support services Presbyterian promised to provide.”
Additionally, Rodarte maintains that because HBOT falls under the plan’s coverage for short
term rehabilitation services, and “HBOT . . . is designed to repair and restore damaged brain
tissue,” its provision would be internally consistent. Rodarte claims that a contracted plan
that reasonably appears to cover oxygen can likewise reasonably be expected to cover HBOT
for global anoxic encephalopathy.

{14} In construing the language of Presbyterian’s plan, we are mindful that, “absent a
statute to the contrary, insurance contracts are construed by the same principles which

                                              5
govern the interpretation of all contracts.” Rummel v. Lexington Ins. Co., 1997-NMSC-041,
¶ 18, 123 N.M. 752, 945 P.2d 970 (internal quotation marks and citation omitted). The
process of contract interpretation “often turns upon whether . . . the contract is ambiguous.”
C.R. Anthony Co. v. Loretto Mall Partners, 1991-NMSC-070, ¶ 12, 112 N.M. 504, 817 P.2d
238. “[W]hen the policy language is clear and unambiguous, [an appellate court] must give
effect to the contract and enforce it as written.” Ponder v. State Farm Mut. Auto. Ins. Co.,
2000-NMSC-033, ¶ 11, 129 N.M. 698, 12 P.3d 960. “If the court determines that the contract
is reasonably and fairly susceptible of different constructions, an ambiguity exists.” Mark
V, Inc. v. Mellekas, 1993-NMSC-001, ¶ 12, 114 N.M. 778, 845 P.2d 1232. Whether an
agreement contains an ambiguity is a matter of law to be determined by the trial court, and
is a question we review de novo on appeal. Id.

       In determining the existence of an ambiguity, the language at issue should be
       considered not from the viewpoint of a lawyer, or a person with training in
       the insurance field, but from the standpoint of a reasonably intelligent
       layman, viewing the matter fairly and reasonably, in accordance with the
       usual and natural meaning of the words, and in the light of existing
       circumstances, prior to and contemporaneous with the making of the policy.

Rummel, 1997-NMSC-041, ¶ 19 (internal quotation marks and citation omitted).

{15} We conclude that the insurance contract unambiguously restricts coverage for HBOT
to a series of named conditions and excludes coverage of HBOT for all other treatments.
Jessica’s injury does not fall within the exclusive list of covered conditions in the contract,
and the contract expressly excludes all non-listed conditions from coverage. As well, the
contract expressly excludes strokes, one source of Jessica’s injuries, from the scope of
HBOT coverage. We are not persuaded by Rodarte’s argument that the contract’s exclusion
of HBOT for all non-covered treatment is ambiguous because the contract elsewhere covers
oxygen for rehabilitation treatment. Even assuming the phrase “oxygen” in the contract can
be read to include HBOT, “a specific provision [in a contract] relating to a particular subject
will govern in respect to that subject, as against a general provision, even though the latter,
standing alone, would be broad enough to include the subject to which the more specific
provision relates.” Weldon v. Commercial Union Assurance Co., 1985-NMSC-118, ¶ 9, 103
N.M. 522, 710 P.2d 89 (internal quotation marks and citation omitted).

{16} As did Presbyterian and the Superintendent, we therefore conclude that the HBOT
treatments in this case are not only not specifically covered treatments under the health plan
into which Presbyterian and Jessica contracted, they are specifically excluded. We reverse
the district court’s conclusion to the contrary.

II.    HBOT Is Not Medically Necessary to Treat Jessica’s Medical Condition Under
       the Code

{17}   Our Legislature empowered the Superintendent to establish “reasonable rules and

                                              6
regulations necessary for or as an aid to administration or effectuation of any provision of
the Insurance Code administered by the [S]uperintendent[.]” NMSA 1978, § 59A-2-9(A)
(1997). That authority was employed by the Superintendent to promulgate grievance
procedures, which apply to “all health care insurers that provide, offer, or administer health
benefit plans[.]” 13.10.17.2(A) NMAC (5/15/2012). One such regulation applicable to
insurers such as Presbyterian, 13.10.13.8(C)(1) NMAC, requires, at a minimum, that
evidence of health insurance coverage include “a complete statement that a covered person
shall have the right . . . to available and accessible services when medically necessary[.]”
Therefore, even if the language in a health plan specifically excludes coverage for a
treatment or service, the Superintendent’s regulations require that it be covered if it is
medically necessary. We therefore consider whether the HBOT treatments must be covered
under Presbyterian’s plan because they are medically necessary under the Code.

{18} Regarding which treatments are medically necessary, 13.10.17.7 NMAC (5/15/2012)
supplies various definitions “[a]s used in this rule[.]” The meaning of “medical necessity”
or “medically necessary” is set forth in 13.10.17.7(L) NMAC (5/15/2012). Medically
necessary treatments are those

       health care services determined by a provider, in consultation with the health
       care insurer, to be appropriate or necessary, according to any applicable
       generally accepted principles and practices of good medical care or practice
       guidelines developed by the federal government, national or professional
       medical societies, boards and associations, or any applicable clinical
       protocols or practice guidelines developed by the health care insurer
       consistent with such federal, national, and professional practice guidelines,
       for the diagnosis or direct care and treatment of a physical, behavioral, or
       mental health condition, illness, injury, or disease[.]

13.10.17.7(L) NMAC (5/15/2012).6

{19} That definition is either replaced, as argued by Rodarte, or remains substantively
applicable to the Superintendent’s grievance process, as argued by Presbyterian, when the
medical treatment sought under a health plan is characterized as experimental or
investigational. 13.10.17.28 NMAC (5/15/2012), the provision advanced by Rodarte as
defining medical necessity, primarily referenced by the Superintendent, and relied on as the
basis for the district court’s final ruling reversing the Superintendent, provides:

       If the request is for external review of an experimental or investigational
       treatment adverse determination, insurance division staff shall also consider
       whether:


       6
        The definition set forth in 13.10.17.7(L) NMAC (5/15/2012) was not modified under
the 2016 revision to the Code. It has been renumbered as 13.10.17.7(N) NMAC.

                                              7
       A.      coverage; the recommended health care service:

               (1) reasonably appears to be a covered benefit under the grievant’s
       health benefit plan except for the health care insurer’s determination that the
       health care service is experimental or investigational for a particular medical
       condition; and

               (2) is not explicitly listed as an excluded benefit under the grievant’s
       health benefit plan; and

       B.      medical necessity; the grievant’s treating provider has certified that:

               (1) standard health care services have not been effective in improving
       the grievant’s condition; or

              (2) standard health care services are not medically appropriate for the
       grievant; or

               (3) there is no standard health care service covered by the health care
       insurer that is as beneficial or more beneficial than the health care service[.]
13.10.17.28 NMAC (5/15/2012).7

{20} Having reviewed the entire administrative record, the Superintendent specifically
concluded that the “HBOT treatment denied by Presbyterian does not meet the requirements
necessary to establish medical necessity[,]” then cited a non-existent provision of the Code:
“13.10.17(B) [NMAC (5/15/2012)].” In reversing the Superintendent, the district court relied
on 13.10.17.28(B) NMAC (5/15/2012). To determine whether the district court’s reversal
of the Superintendent was correct, we must determine the applicable definition in this
circumstance.

{21} “[A] court’s interpretation of an administrative regulation is a question of law that
we review de novo.” Truong v. Allstate Ins. Co., 2010-NMSC-009, ¶ 24, 147 N.M. 583, 227


       7
         The 2016 revision to the Code renumbered 13.10.17.28 NMAC (5/15/2012) as
13.10.17.29 NMAC. Substantive changes to the language of 13.10.17.28 include the
substitution of “an IRO” for “insurance division staff,” and identification of the health care
treatment sought as both “recommended or requested.” See 13.10.17.29 NMAC. As used in
13.10.17.29 NMAC, “IRO” refers to “[i]ndependent review organization,” which are entities
under the revised Code that can be assigned to conduct the independent review. See
13.10.17.23 NMAC. Also under the 2016 revision to the Code, external review of a decision
by an IRO is binding upon both the grievant and the health care insurer unless a grievant has
and exercises a right of appeal under the Patient Protection Act, NMSA 1978, § 59A-57-1
to -11 (1998, as amended through 2003). See 13.10.17.30(A) NMAC.

                                              8
P.3d 73 (internal quotation marks and citation omitted). “In interpreting sections of the . . .
Code, we apply the same rules as used in statutory interpretation.” Alliance Health of Santa
Teresa, Inc. v. Nat’l Presto Indus., 2007-NMCA-157, ¶ 18, 143 N.M. 133, 173 P.3d 55. “We
look first to the plain language of the [regulation], giving the words their ordinary meaning,”
unless there is an indication that “a different [meaning] was intended.” N.M. Indus. Energy
Consumers v. N.M. Pub. Regulation Comm’n, 2007-NMSC-053, ¶ 20, 142 N.M. 533, 168
P.3d 105. “When [a regulation’s] language is clear and unambiguous, this Court must give
effect to that language and refrain from further . . . interpretation.” Marbob Energy Corp. v.
N.M. Oil Conservation Comm’n, 2009-NMSC-013, ¶ 9, 146 N.M. 24, 206 P.3d 135
(alteration, internal quotation marks, and citation omitted).

A.     13.10.17.28(B) NMAC (5/15/2012) Does Not Provide the Applicable Definition
       of Medical Necessity Under the Code

{22} The Code details the requirements, time frames, and considerations pertinent to the
filing and review of an adverse determination grievance. See 13.10.17.1 to -.40 NMAC
(05/03/2004, as amended through 05/15/2012). Its provisions are organized beginning with
general requirements, then preliminary determinations, initial determinations, internal
review, and finally external review. Id. For example, 13.10.17.6 NMAC (5/15/2012)
establishes “procedures for filing and processing adverse determination grievances and
administrative grievances regarding actions taken or inaction by a health care insurer.” More
specifically, 13.10.17.27 NMAC (5/15/2012) details the “[c]riteria for initial external review
of adverse determination by insurance division staff[,]” setting out factors that staff must
consider in deciding which grievances are available for review by the Superintendent.
13.10.17.28 NMAC (5/15/2012) denotes supplemental considerations in the context of
external review of experimental or investigational treatments, as indicated by the phrase
“shall also consider” in the first sentence of the provision. Regarding medical necessity,
what “shall also” be considered is the required certification of medical necessity by a
“licensed, board certified or board eligible physician qualified to practice in the area of
medicine appropriate to treat the grievant’s condition[.]” 13.10.17.28(B)(3)(b) NMAC
(5/15/2012). The language “shall also” and the fact that the section regarding medical
necessity does not supply an independent definition, but states the requirements for
supplemental certification in the context of experimental or investigational treatment adverse
determinations, is the first indication that 13.10.17.28(B) NMAC (5/15/2012) does not
replace 13.10.17.7(L) NMAC (5/15/2012)’s definition of “medical necessity.”

{23} 13.10.17.29(B) NMAC (5/15/2012) next details the procedure applicable “[i]f the
request for external review does not meet the criteria prescribed by 13.10.17.27 [NMAC
(5/15/2012)] and, if applicable, 13.10.17.28 NMAC [(5/15/2012)].” However, if the “request
meets the criteria for external review,” the Superintendent notifies the insurer and the
grievant that an informal hearing “has been set to determine whether, as a result of the health
care insurer’s adverse determination, the grievant was deprived of medically necessary
covered services.” 13.10.17.29(C) NMAC (5/15/2012). The “additional criteria” under
13.10.17.28 NMAC is plainly denoted as something that “shall also” be considered upon a

                                              9
grievant’s request for external review involving experimental or investigational treatment.
Id.

{24} Our review of 13.10.17.27 through -.29 NMAC (5/15/2012) suggests that the criteria
listed under the “medical necessity” provision of 13.10.17.28(B) NMAC (5/15/2012) merely
states applicable “criteria for initial external review” of the medical necessity of
experimental or investigational treatment, rather than supplying an independent and
superseding definition of “medical necessity” for purposes of determining whether a
treatment is covered by the plan or medically necessary under the Code. See 13.10.17.29
NMAC (5/15/2012); see also State v. Ybarra, 2010-NMCA-063, ¶ 7, 148 N.M. 373, 237
P.3d 117 (“There is no difference between our review of the Administrative Code and
statutes, and we determine and effectuate the intention of the administrative agency using
the plain language of the regulation as the primary indicator of its intent.”). We see no
indication that the “criteria for initial external review,” utilized in order to determine whether
a grievant’s request for external review is to occur as “prescribed by 13.10.17.27 [NMAC
(5/15/2012)] and, if applicable, 13.10.17.28 [NMAC (5/15/2012)]” was also intended to
substitute or replace the general definition of “medical necessity” for purposes of the
Superintendent’s hearing. See 13.10.17.29(B) NMAC (5/15/2012); see also 13.10.17.29(C)
NMAC (5/15/2012) (explaining role of 13.10.17.28 NMAC (5/15/2012) in determining
whether a request meets the criteria for external review prior to the setting of an informal
hearing); see also Alliance Health of Santa Teresa, Inc., 2007-NMCA-157, ¶ 24 (stating that
we generally do not read language into the Code).

{25} In the dissenting portion of Chief Judge Vigil’s separate opinion, he reasons that, in
the “case of an experimental or investigational treatment, the definition of ‘medical
necessity’ [under 13.10.17.28(B) NMAC (5/15/2012)] governs instead of the general
definition” under 13.10.17.7(L) NMAC (5/15/2012). (Vigil, C.J., dissenting in part, and
specially concurring, ¶ 40). But this perspective essentially revises the Code’s regulatory
language. That the criteria for medical necessity under 13.10.17.28(B) NMAC (5/15/2012)
is meant to supplement, and not replace, 13.10.17.7(L) NMAC (5/15/2012) is made most
plain by use of the prefatory directive “shall also consider.” 13.10.17.28 NMAC (5/15/2012).
Otherwise, the language would read “shall consider instead.” But it does not. We likewise
consider Chief Judge Vigil’s statement that a patient can “never win when coverage is
sought for an experimental or investigational treatment,” (Vigil, C.J., dissenting in part, and
specially concurring, ¶ 39), to be mistaken. Such a grievant must, however, establish medical
necessity by the same standard required of any grievant under the Code, that being the
general standard under 13.10.17.7(L) NMAC (5/15/2012). Additionally, in order to gain the
opportunity for a hearing before the Superintendent, such a grievant must first attain a
treating provider’s separate and compliant certification of medical necessity with the added
strictures associated with the experimental or investigational treatment sought. See
13.10.17.28(B) NMAC (5/15/2012).

{26} Indeed, it would make little sense that a treating provider’s contention could alone
establish medical necessity under the Code despite the existence of an otherwise

                                               10
comprehensively applicable definition that both applies objective criteria and directly
incorporates a health care provider’s independent assessment of those “health care services
. . . appropriate or necessary, according to generally accepted principles and practices of
good medical care[.]” 13.10.17.7(L) NMAC (5/15/2012). We view 13.10.17.7(L) NMAC
(5/15/2012) and 13.10.17.28(B) NMAC (5/15/2012) to not be mutually exclusive.
Accordingly, we conclude that the district court misinterpreted 13.10.17.28(B) NMAC
(5/15/2012) and thereby misapplied the definition of “medical necessity” under the Code.
While we recognize that the Superintendent likewise appeared to rely primarily upon
13.10.17.28(B) NMAC (5/15/2012) as the determinant of “medical necessity,” and we
generally defer to an agency’s interpretation of its own regulation, “we are not bound by the
agency’s interpretation and we may substitute our own independent judgment for that of the
agency if the agency’s interpretation is unreasonable or unlawful.” Albuquerque Bernalillo
Cty. Water Util. Auth. v. N.M. Pub. Regulation Comm’n, 2010-NMSC-013, ¶ 51, 148 N.M.
21, 229 P.3d 494 (alteration, internal quotation marks, and citation omitted). To the extent
the Superintendent’s use of 13.10.17.28 NMAC (5/15/2012) was mistaken, we are not bound
by it or the district court’s ensuing error applying the same provision. See Albuquerque
Bernalillo Cty. Water Util. Auth., 2010-NMSC-013, ¶ 51.

B.     13.10.17.7(L) NMAC (5/15/2012) Provides the Applicable Definition of Medical
       Necessity Under the Code

{27} 13.10.17.7 NMAC (5/15/2012), the applicable definitional section, announces that
“[a]s used in this rule[,]” the meaning of “medical necessity” or “medically necessary” is
established by 13.10.17.7(L) NMAC (5/15/2012). Consistent with the Superintendent’s
authority, we view this generally applicable definition to be that which should have been
applied by the Superintendent to review whether Presbyterian’s adverse determination
regarding coverage of HBOT deprived Jessica of “medically necessary covered services.”
See 13.10.17.29(C) NMAC (5/15/2012); State ex rel. Helman v. Gallegos, 1994-NMSC-023,
¶ 22, 117 N.M. 346, 871 P.2d 1352 (stating that when “the meaning of a statute is truly
clear—not vague, uncertain, ambiguous, or otherwise doubtful—it is of course the
responsibility of the judiciary to apply the statute as written”). The regulation promulgated
by the Superintendent reveals the purpose of the external review hearing: “to determine
whether, as a result of the health care insurer’s adverse determination, the grievant was
deprived of medically necessary covered services.” 13.10.17.29(C) NMAC (5/15/2012). To
this end, the Code pointedly defines “medical necessity” or “medically necessary” under
13.10.17.7(L) NMAC (5/15/2012). These rules and regulations govern insurers like
Presbyterian. See 13.10.17.2(A) NMAC (5/15/2012). Thus, for the purposes of determining
whether HBOT was “medically necessary” in Jessica’s circumstances, the Superintendent
is constrained by definitional rules it is statutorily empowered to promulgate, one being
13.10.17.7(L) NMAC (5/15/2012). It is this provision to which Presbyterian’s contract and
coverage must adhere, even in circumstances where the Code provides additionally
applicable criteria, such as the requisite certification of medical necessity set forth by
13.10.17.28(B) NMAC (5/15/2012) in the context of “initial external review of experimental
or investigational treatment adverse determinations[.]”

                                             11
III.   The District Court’s Reversal of the Superintendent Was Erroneous

{28} While we have held that the district court improperly concluded that HBOT was a
“covered benefit” pursuant to her insurance contract, and improperly applied 13.10.17.28(B)
NMAC as the definition of “medical necessity,” we must yet determine whether
Presbyterian’s denial of coverage withstands Rodarte’s challenge under 13.10.17.7(L).8 See
Marckstadt v. Lockheed Martin Corp., 2010-NMSC-001, ¶ 18, 147 N.M. 678, 228 P.3d 462
(holding in the context of vehicle insurance that parties’ freedom to contract does not excuse
them from “the necessity of meeting [applicable] statutory and regulatory requirements”).
If the denial of coverage to Jessica was proper under 13.10.17.7(L) NMAC (5/15/2012) as
well as the contract, then the Superintendent will have reached the proper result and the
district court will have erred in reversing the Superintendent. If, to the contrary, the denial
of coverage to Jessica was improper under 13.10.17.7(L) (5/15/2012), the district court’s
reversal could be correct on grounds not relied on by it. See Meiboom v. Watson, 2000-
NMSC-004, ¶ 20, 128 N.M. 536, 994 P.2d 1154 (stating that an appellate court may affirm
a trial court’s ruling on a ground that was not relied on below if reliance on the new ground
would not be unfair to the appellant). We may not “set aside, reverse[,] or remand the final
decision” of the Superintendent without a determination that it acted fraudulently, arbitrarily
or capriciously, its final decision was not supported by substantial evidence, or was not in
accordance with law. Section 39-3-1.1(D). Neither party contends, nor does our review of
the record indicate, that the Superintendent acted fraudulently, arbitrarily, or capriciously.

{29} To ascertain whether substantial evidence supported the Superintendent’s final
decision upholding Presbyterian’s coverage denial, we look to the record. We note that the
Superintendent’s internal review panel first determined that there was a lack of evidence that
HBOT improved Jessica’s condition. First, it observed that Jessica’s pre-screening exam was
conducted four months prior to the first application of HBOT and was therefore “not an
appropriate objective scientific tool for measuring the effect of HBOT.” As well, it
concluded that the case studies presented to the panel by Dr. Stoller were not comparable to
“high level research studies[,] such as those done in a prospective, randomized, controlled,
double-blinded fashion.” It also pointed to the absence of evidence establishing a causal
linkage between Jessica’s “alleged improvements” and HBOT treatment, and a study
provided by Dr. Stoller that noted the inability to gauge the efficacy of HBOT when utilized
within a year of a traumatic brain injury. We conclude this to be “relevant evidence that a
reasonable mind would find adequate to support a conclusion[,]” required for a


       8
         We recognize that Presbyterian seeks to prevail based solely upon the language of
the contract into which it and Rodarte entered, but we observe no substantive difference, nor
does Presbyterian argue one exists, between 13.10.17.7(L) NMAC (5/15/2012) and the
insurance contract’s own definition. As we have stated, the health plan contract must
conform to applicable provisions of the Code. See 13.10.13.8(C)(1) NMAC (requiring “that
a covered person shall have the right, at a minimum . . . to available and accessible services
when medically necessary”).

                                              12
determination of the existence of substantial evidence. Ponder, 2000-NMSC-033, ¶ 7
(internal quotation marks and citation omitted). Under 13.10.17.7(L) NMAC (5/15/2012),
substantial evidence supported the determination that Rodarte failed to establish the medical
necessity of HBOT to treat Jessica’s anoxic brain injury.

{30} Regarding whether the Superintendent acted in conformance with law, we recognize
that the erroneous application of 13.10.17.28(B) NMAC (5/15/2012) to the substantive
question of medical necessity in this instance can alone serve as the basis to reverse the
administrative determination. Here we cannot tell with certainty which provision the
Superintendent utilized because he cited a non-existent provision within the Code. We can,
however, nonetheless determine that the Superintendent’s ultimate determination that the
treatment was not medically necessary should have been affirmed by application of
13.10.17.7(L) NMAC (05/15/2012). See Cordova v. World Fin. Corp. of N.M., 2009-NMSC-
021, ¶ 18, 146 N.M. 256, 208 P.3d 901 (stating that appellate courts may affirm a lower
court if it is right for any reason, “so long as the circumstances do not make it unfair to the
appellant to affirm”); see also Martinez v. N.M. State Eng’r Office, 2000-NMCA-074, ¶ 21,
129 N.M. 413, 9 P.3d 657 (upholding the decision of an administrative law judge on the
basis of right for any reason). Because there is substantial evidence to support the
Superintendent’s determination, we may also conclude that it did not act fraudulently,
arbitrarily, or capriciously. Lastly, because Presbyterian consistently sought enforcement of
its contract by repeated reference to the correct governing standard for medical necessity,
as set forth within 13.10.17.7(L) NMAC (5/15/2012), we find no unfairness in our
conclusion agreeing, albeit on somewhat different grounds, with the result reached by the
Superintendent.

CONCLUSION

{31} For the foregoing reasons, we reverse the judgment of the district court and reinstate
the final order of the Superintendent upholding Presbyterian’s denial of coverage.

{32}   IT IS SO ORDERED.

                                               ____________________________________
                                               J. MILES HANISEE, Judge

I CONCUR:

____________________________________
LINDA M. VANZI, Judge

VIGIL, Chief Judge (dissenting in part, and specially concurring).

VIGIL, Chief Judge (dissenting in part, and specially concurring).


                                              13
{33} I dissent in part, and specially concur in the majority opinion for the reasons set forth
below.

DISSENT

{34} The Code requires all health benefits plans in New Mexico to provide for medically
necessary services. 13.10.17.29(C) NMAC (5/12/2012). However, HBOT treatments which
Rodarte seeks to treat Jessica’s condition are without question experimental or
investigational. As such, they are not “medically necessary” under Presbyterian’s plan9 and
they do not satisfy the Code’s general definition of “medical necessity” set forth in
13.10.17.7(L) NMAC (5/12/2012).10 That is to say, until a treatment has been vetted and
adopted as the standard of care by the federal government or national or professional medical
practice guidelines, the treatment is not “medically necessary” under Presbyterian’s plan and
the Code’s general provision.

{35} However, the Code also recognizes that in particular cases an experimental or
investigational treatment may be medically necessary for a particular patient such as Jessica.
For these cases, the Code expands the classes of treatments that may be required and sets
forth the parameters in which an experiment or investigational treatment may be medically
necessary. This is 13.10.17.28 NMAC (5/12/2012).11The majority concludes that Section .28

        9
        Presbyterian’s insurance contract defines “medical necessity” to be: “appropriate or
necessary services as determined by a Provider/Practitioner, in consultation with
Presbyterian . . . which are provided to a Member for any covered condition requiring,
according to generally accepted principles of good medical practice guidelines developed
by the federal government, national or professional medical societies, boards, and
associations, or any applicable clinical protocols or practice guidelines developed by
[Presbyterian] consistent with such federal, national and professional practice guidelines for
the diagnosis or direct care and treatment of an illness, injury, or medical condition, and are
not services provided only as a convenience.”
        10
         Unless otherwise indicated , all future references shall be to the 2012 version, and
for ease of reference shall be referred to as “Section .7(L).” Section .7(L) defines “medical
necessity or medically necessary” as: “health care services determined by a provider, in
consultation with the health care insurer, to be appropriate or necessary, according to any
applicable generally accepted principles and practices of good medical care or practice
guidelines developed by the federal government, national or professional medical societies,
boards and associations, or any applicable clinical protocols or practice guidelines developed
by the health care insurer consistent with such federal, national, and professional practice
guidelines, for the diagnosis or direct care and treatment of a physical, behavioral, or mental
health condition, illness, injury, or disease[.]”
        11
          Unless otherwise indicated, all future references shall be to the 2012 version, and
for ease of reference shall be referred to as “Section .28.” In its entirety Section .28 provides:

                                               14
serves only a gatekeeper function by “merely” setting forth criteria to consider in
determining whether to grant administrative review when a provider has denied coverage for
an experimental or investigational treatment. Majority Op. ¶ 24. The majority then
determines that an experimental or investigational treatment must fulfill an impossibility,
which is to satisfy the Code’s general definition of “medical necessity” in Section .7(L),
Majority Op. ¶ 25, and after weighing the evidence itself, concludes that the HBOT
treatments are not “medically necessary” under Section .7(L). Majority Op. ¶ 27. I dissent
from these conclusions.

{36} Presbyterian denied coverage on the grounds there is no coverage for Jessica’s
condition and because the treatment was for “experimental or investigational services [or]
treatments.” Rodarte sought administrative review of the denial, and the Superintendent
granted review under Section .28. The hearing panel appointed by the Superintendent, took
evidence and made a recommended decision. It considered whether Jessica’s proposed
treatment satisfied the criteria of Section .28, and concluded that it does not. The hearing
panel therefore recommended upholding Presbyterian’s denial of HBOT treatments under
Section .28.

{37}   The Superintendent upheld the hearing panel’s recommended decision to deny



        A.      coverage; the recommended or requested health care service:
        (1)     reasonably appears to be a covered benefit under the grievant’s health
benefit plan except for the health care insurer’s determination that the health care service is
experimental or investigational for a particular medical condition; and
        (2)     is not explicitly listed as an excluded benefit under the grievant’s health
benefit plan; and
        B.      medical necessity; the grievant’s treating provider has certified that:
        (1)     standard health care services have not been effective in improving the
grievant’s condition; or
        (2)     standard health care services are not medically appropriate for the
                grievant; or
        (3)     there is no standard health care service covered by the health care insurer that
                is as beneficial or more beneficial than the health care service:

       (a) recommended by the grievant’s treating provider that the treating provider
       certifies in writing is likely to be more beneficial to the grievant, in the treating
       provider’s opinion, than standard health care services; or
       (b) requested by the grievant regarding which the grievant’s treating provider, who
       is a licensed, board certified or board eligible physician qualified to practice in the
       area of medicine appropriate to treat the grievant’s condition, has certified in writing
       that scientifically valid studies using accepted protocols demonstrate that the health
       care service requested by the grievant is likely to be more beneficial to the grievant
       than available standard health care services.

                                              15
coverage. The Superintendent first stated that the issue presented in the administrative
hearing under 13.10.17.29(C) NMAC (5/12/2012) was whether Jessica was deprived of
“medically necessary covered services.” Thus, ruled the Superintendent, the services must
be “medically necessary” before Presbyterian’s adverse determination could be reversed.
Pertinent to the issue before us, the Superintendent specifically ruled, “Although not
expressly stated in the regulations, it is reasonable to infer that, when a treatment is denied
because it is deemed to be experimental or investigational, the standard for medical necessity
set forth in [Section .28(B)], and relied on by the [p]anel, should be applied to the evidence
in the record.” The Superintendent then specifically ruled that the HBOT treatment denied
by Presbyterian “does not meet the requirements necessary to establish medical necessity[.]”
The Superintendent also added, “pursuant to 13.10.17.B NMAC” which, as the majority
opinion points out, does not exist. In my view this error is inconsequential, as the
Superintendent and hearing panel are both clear that they were applying the standard of
medical necessity under Section .28(B) in upholding Presbyterian’s denial. (I infer a
typographical error in typing “13.10.17.B” instead of “13.10.17.28(B)”).

{38} Rodarte then appealed to the district court, specifically arguing that the HBOT
treatment was “medically necessary” under Section .28(B). As the majority points out, the
district court ultimately considered whether the treatment satisfied the requirement of
“medical necessity” in Section .28. Majority Op. ¶ 9. In its ruling, the district court ruled that
“the proper standard for the ultimate agency review of the medical necessity of an
experimental or investigational medical procedure is . . . [Section .28(B)],” and that the
specific standard in Section .28(B) applies, rather than the more general definition of
“medical necessity” found at Section .7(L). It is from this order that Presbyterian appeals.

{39} Presbyterian, the hearing panel appointed by the Superintendent, the Superintendent,
and the district court all concluded that the standard of “medical necessity” under Section
.28(B) applies. Disagreeing, the majority holds that it is nothing more than something which
must be considered in determining whether to grant administrative review. Majority Op. ¶
24. Where the majority’s reasoning fails, however, is that it results in granting an
administrative hearing which a patient can never win when coverage is sought for an
experimental or investigational treatment, because such a treatment will never satisfy Section
.7(L). As Rodarte points out, “[w]hat would be the point of permitting appeals that could
never, by definition, succeed?” The answer is that the Code does not provide for a
meaningless hearing. Instead, as the Superintendent ruled, when a treatment is denied
because it is deemed to be experimental or investigational, the standard of medical necessity
in Section .28(B) governs.

{40} Administrative regulations are to be interpreted under the same basic principles that
guide interpretation of statutes. See PC Carter Co. v. Miller, 2011-NMCA-052, ¶ 11, 149
N.M. 660, 253 P.3d 950. As such, “each section or part should be construed in connection
with every other part or section, giving effect to each, and each provision is to be reconciled
in a manner that is consistent and sensible so as to produce a harmonious whole.” Lion’s
Gate Water v. D’Antonio, 2009-NMSC-057, ¶ 23, 147, N.M. 523, 226 P.3d 622 (internal

                                               16
quotation marks and citation omitted). Moreover, “The general/specific rule provides that
when two statutes deal with the same subject matter, the statute dealing with a specific
subject will be considered an exception to, and given effect over, the more general statute.”
Lu v. Educ. Trust Bd. of N.M., 2013-NMCA-010, ¶ 13, 293 P.3d 186 (alteration, internal
quotation marks, and citation omitted). Finally, a regulation should be interpreted with
common sense, and an interpretation that leads to absurdity or contradiction should be
avoided. See Baker v. Hedstrom, 2013-NMSC-043, ¶ 36, 309 P.3d 1047. Application of
these settled principles requires that, in the case of an experimental or investigational
treatment, the definition of “medical necessity” in Section .28 governs instead of the
general definition of “medical necessity” in Section .7(L). Since the majority disagrees, I
dissent. I therefore agree with the hearing panel, the Superintendent, and the district court
that Section .28 governs administrative review when treatment has been denied on the basis
that it is experimental or investigational.

SPECIAL CONCURRENCE

{41} The foregoing dissent notwithstanding, I agree with the majority that the order of the
district court must be reversed. However, I arrive at this conclusion under Section .28.

{42} Under subsection (A) of Section.28, it must be considered: (1) whether HBOT
reasonably appears to be a covered benefit under Presbyterian’s plan, except for
Presbyterian’s determination that HBOT is experimental or investigational; and (2) HBOT
is not explicitly listed as an exclusion under Presbyterian’s plan. Part I of the majority
opinion in ¶¶ 12-16 demonstrates that Presbyterian’s insurance contract does not provide
coverage for Jessica’s medical condition. I fully concur in this portion of the majority
opinion. Moreover, this part of the majority opinion also demonstrates that the HBOT
treatments are not only not specifically covered under Presbyterian’s health plan, they are
specifically excluded. I therefore conclude that Rodarte failed to prove that subsection (A)
of Section .28 was satisfied.

{43} I next consider whether subsection (B) of Section .28 was satisfied. The issue
presented to the hearing panel was whether the HBOT treatments were “medically
necessary” under Section .28(B)(3)(b).

{44} In seeking to prove such “medical necessity” Jessica’s treating physician, Dr. Ken
Stoller certified that there is no standard health care service covered by Presbyterian that is
as beneficial or more beneficial than the proposed HBOT treatments. The hearing panel
noted, however, that “the issue is a lack of high level research studies such as those done in
a prospective, randomized, controlled, double-blinded fashion. Dr. Stoller presented several
case studies in his materials, but case studies are not a substitute [for] the types of studies
just described in the medical field.” After noting Jessica’s treatments by Dr. Stoller, and
Jessica’s response to those treatments, the hearing panel concluded, “Due to the lack of
evidence that HBOT caused Ms. Rodarte’s alleged improvements and the fact that she was
provided HBOT treatment within the first year following her diagnosis of anoxic

                                              17
encephalopathy when spontaneous improvement can occur, it is not clear that HBOT caused
Ms. Rodarte’s improvements.” Based on its review of the evidence, the hearing panel
concluded that the evidence failed to demonstrate that the HBOT treatments were medically
necessary under Section .28(B). The Superintendent in turn adopted, approved, and accepted
the hearing panel’s recommendation.

{45} I conclude that substantial evidence supports the Superintendent’s conclusion that
the HBOT treatments were not medically necessary under Section .28(B). I therefore agree
with the majority that the district court erred. However, I disagree with the majority that
independently examining the evidence to determine whether it satisfies section .7(L) is
necessary or appropriate. See Majority Op. ¶¶ 26-28.

{46}   I therefore specially concur in the result reached.

                                              ____________________________________
                                              MICHAEL E. VIGIL, Chief Judge




                                            18
