                NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-1211-15T3



CAPITAL HEALTH SYSTEM, INC.,
CENTRASTATE MEDICAL CENTER,            APPROVED FOR PUBLICATION
HOLY NAME MEDICAL CENTER, INC.,
THE COMMUNITY HOSPITAL GROUP,                June 7, 2016
INC., t/a JFK MEDICAL CENTER,
KENNEDY HEALTH, OUR LADY OF              APPELLATE DIVISION
LOURDES HEALTH CARE SERVICES,
INC., ST. FRANCIS MEDICAL
CENTER, INC., ST. LUKE'S WARREN
HOSPITAL, INC., TRINITAS REGIONAL
MEDICAL CENTER, VALLEY HEALTH
SYSTEM, and VIRTUA HEALTH, INC.,

         Plaintiffs-Appellants,

v.

NEW JERSEY DEPARTMENT OF
BANKING AND INSURANCE,

         Defendant-Respondent.



         Argued May 25, 2016 – Decided June 7, 2016

         Before Judges Alvarez, Accurso and Haas.

         On appeal from the New Jersey Department of
         Banking and Insurance.

         Kerri Ann Law (Kramer Levin Naftalis &
         Frankel, LLP) of the New York bar, admitted
         pro   hac  vice,   argued    the cause   for
         appellants  (Greenberg    Dauber Epstein   &
         Tucker; Steven M. Goldman; Daniel Goldman
         (Kramer Levin Naftalis & Frankel, LLP) of
         the New York bar, admitted pro hac vice; and
         Ms. Law, attorneys; Michael H. Freeman,
         Steven Goldman, Daniel Goldman and Ms. Law,
         of counsel; Linda G. Harvey, of counsel and
         on the briefs).

         Richard E. Wegryn, Jr., Deputy Attorney
         General, argued the cause for respondent
         Department of Banking and Insurance (Robert
         Lougy, Acting Attorney General, attorney;
         Melissa Dutton Schaffer, Assistant Attorney
         General, of counsel; Mr. Wegryn, on the
         briefs).

         Jeffrey S. Chiesa argued the cause for
         respondent Horizon Blue Cross Blue Shield of
         New Jersey (Chiesa Shahinian & Giantomasi,
         PC, attorneys; Mr. Chiesa, on the briefs).

         Melinda Martinson, General Counsel, Medical
         Society of New Jersey and Edith M. Kallas,
         Joe R. Whatley, Jr., Ilze C. Thielmann
         (Whatley Kallas, LLP) attorneys for amicus
         curiae Medical Society of New Jersey (Ms.
         Martinson, of counsel and on the brief; Ms.
         Kallas, Mr. Whatley and Mr. Thielmann, on
         the brief).

         Howard R. Rubin, Robert T. Smith and Eric T.
         Werlinger (Katten Muchin Rosenman, LLP) of
         the District of Columbia bar, admitted pro
         hac vice, and Scott A. Resnik (Katten Muchin
         Rosenman, LLP) attorneys for amicus curiae
         New Jersey Patient Care and Access Coalition
         (Mr. Rubin, Mr. Smith and Mr. Werlinger, of
         counsel; Mr. Resnik, of counsel and on the
         brief).

         The opinion of the court was delivered by

HAAS, J.A.D.




                              2                         A-1211-15T3
      Appellants, a group of ten New Jersey hospitals,1 appeal

from the September 18, 2015 final decision of the New Jersey

Department of Banking and Insurance (the Department), approving

Horizon    Blue       Cross      Blue    Shield        of    New    Jersey's        (Horizon's)

application       to       establish       the    OMNIA        Health    Alliance          (OMNIA)

network.      OMNIA is a health benefits plan that contains a two-

tiered     network         of    hospitals        and       physicians        under      which     a

member's cost-share (deductibles, co-insurance, and co-payments)

are   lower     if     the      member     elects       to    use   a    Tier       1   provider.

Horizon    designated           appellants       as     Tier    2   hospitals           under    the

OMNIA tiered plan.

      Appellants           argue    that    the       Department        acted    arbitrarily,

capriciously         and    unreasonably         in     approving       the     OMNIA      network

because:      the hospital network did not comply with the statutory

and   regulatory           geographic      access        and    availability            standards

(time and distance standards) for network adequacy; the hospital

network    is    contrary          to    the     public      interest;        the       Department




1
  The ten hospitals are Capital Health System, Inc., Centrastate
Medical Center, Holy Name Medical Center, Inc., The Community
Hospital Group, Inc., t/a JFK Medical Center, Kennedy Health,
Our Lady of Lourdes Health Care Services, Inc., St. Francis
Medical Center, Inc., Trinitas Regional Medical Center, Valley
Health System, and Virtua Health, Inc.    An eleventh hospital,
St. Luke's Warren Hospital, Inc., withdrew its appeal on May 24,
2016.



                                                 3                                        A-1211-15T3
failed to conduct a meaningful analysis of the hospital network;

and the approval was not supported by substantial evidence.

    After evaluating these contentions in light of the record

and the applicable law, we affirm the Department's decision in

all respects.

                                          I.

    The Department is vested with the authority to administer

and enforce the insurance laws of this State.                         N.J.S.A. 17:1-1.

It has "a statutory obligation to protect the interests of New

Jersey's insurance consumers and to regulate and oversee the

operations of the insurance industry."                    N.J.S.A. 17:1C-19(a)(1);

see Richardson v. Standard Guar. Ins. Co., 371 N.J. Super. 449,

464 (App. Div. 2004) (citing N.J.S.A. 17:1C-19(a)(1)); In re

Markel   Ins.    Cos.,    319     N.J.    Super.        23,   29    (App.     Div.    1999)

(insurance companies subject to strict regulatory control of the

Department).

    Among       other    things,     the          Legislature       has     granted     the

Department      the    authority     to       regulate        fully    insured       health

benefit plans sold in commercial markets, including the OMNIA

plan offered by Horizon, a health service corporation.                           N.J.S.A.

17:48E-44.        In     accord    with           its   statutory     authority,        the

Department      issues    licenses       to       carriers     seeking      to   transact

health   insurance       business    in       the       State,     N.J.S.A.      17:48E-4;


                                              4                                   A-1211-15T3
reviews    insurance       products        and    rates      for     compliance            with

existing regulations, N.J.S.A. 17:48E-13, -13.1; monitors the

financial solvency of licensees to ensure product availability

in   the   marketplace,     N.J.S.A.       17:48E-37;        responds         to     consumer

complaints and inquiries; and educates consumers about insurance

products and issues.         See, e.g., N.J.S.A. 26:2S-4 (carrier shall

disclose to subscriber terms and conditions of health benefits

plan).

      Under     the   Health   Care    Quality         Act   (the    HCQA),          N.J.S.A.

26:2S-1 to -28, the Department is also charged with reviewing

"managed care plans."          N.J.S.A. 26:2S-2 defines a "managed care

plan" to mean

            a health benefits plan that integrates the
            financing and delivery of appropriate health
            care   services   to   covered   persons  by
            arrangements with participating providers,
            who are selected to participate on the basis
            of   explicit   standards,   to   furnish  a
            comprehensive set of health care services
            and financial incentives for covered persons
            to use the participating providers and
            procedures provided for in the plan.

      Tiered     benefit    plans,    like       the    OMNIA      plan       that    is   the

subject    of    this     appeal,     fall       within      this    broad         statutory

definition, and have been offered over the past several years by

a number of New Jersey carriers, including Horizon.                                  Under a

two-tiered      benefit    plan,     the    carrier       provides        a    network       of

providers in both the preferred tier, (Tier 1), where consumers


                                            5                                        A-1211-15T3
pay less than the standard level of cost-sharing, and the non-

preferred (Tier 2), standard cost-sharing tier.              If the consumer

elects to use a Tier 1 provider, the cost-share is lower than

the standard cost-share for a Tier 2 provider.

     As defined in N.J.S.A. 26:2S-2, the term "carrier" includes

a "health service corporation" like Horizon.                 In setting up a

tiered benefit network, the carrier "may establish criteria and

standards for providers of health care services with which it

desires   to   contract,   and   may       establish   its   own    contracting

criteria for the providers as it shall determine[.]"                   N.J.S.A.

17:48E-10(d).    Once the carrier determines its proposed network,

it   submits    an   application   to       the   Department       seeking   its

approval.

     N.J.S.A. 26:2S-18 grants the Department the authority to

promulgate regulations to carry out the purposes of the HCQA.

In this regard, N.J.A.C. 11:24A-4.10(a) states:

            A carrier shall maintain an adequate network
            . . . of [primary care providers (PCPs)],
            specialists and other ancillary providers to
            assure that covered persons are able to
            access services in-network and take full
            advantage of the in-network benefits levels
            when the policy or contract specifies that
            there is a differential between the in-
            network and out-of-network benefits levels
            for one or more covered services . . . .

As applied to an application for approval of a tiered network,

the Department has interpreted this regulation to require the



                                       6                               A-1211-15T3
Department to review each tier to determine the "adequacy of the

provider network with respect to the scope and type of health

care benefits provided by the carrier, the geographic service

area   covered   by    the   provider   network    and   access   to   medical

specialists[.]"       N.J.S.A. 26:2S-18.

       Under the Department's regulations, the carrier must meet

specific time and distance standards for the various types of

providers as to each plan offered.                N.J.A.C. 11:24A-4.10(b).

With respect to hospitals or "institutional providers," N.J.A.C.

11:24A-4.10(b)(3) provides that:

                For    institutional   providers,    the
           carrier shall maintain contracts or other
           arrangements acceptable to the Department
           sufficient to meet the medical needs of
           covered persons, and maintain geographic
           accessibility   of   the  services   provided
           through institutional providers, subject to
           no less than the following:

                i.   The carrier shall have a contract
           or arrangement with at least one licensed
           acute care hospital with licensed medical-
           surgical,    pediatric,   obstetrical    and
           critical care services in any county or
           service   area that is no greater than
           [twenty] miles or [thirty] minutes driving
           time, whichever is less, from      [90%] of
           covered persons within the county or service
           area.

                ii. The carrier shall have a contract
           or arrangement with surgical facilities,
           including acute care hospitals, licensed
           ambulatory    surgical   facilities,    and/or
           Medicare-certified     physician      surgical
           practices   available  in   each   county   or



                                        7                              A-1211-15T3
service area that are no greater than
[twenty] miles or [thirty] minutes driving
time, whichever is less, from [90%] of
covered persons within the county or service
area.

     iii. The carrier shall have a contract
or   otherwise  agree   to  cover medically
necessary trauma services at a reasonable
cost with all Level I or II trauma centers
designated by the Department of Health and
Senior Services, with the provision of
benefits at the in-network level.

     iv. The carrier shall have contracts or
arrangements   for   the  provision    of   the
following specialized services at in-network
benefit levels (if covered by one or more of
the carrier's health benefits plans in
network, and determined to be medically
necessary),   so   that   services   will    be
available   within   [forty-five]   miles    or
[sixty]   minutes   average    driving    time,
whichever is less, of [90%] of covered
persons within each county or service area:

     (1) At least one hospital         providing
regional perinatal services;

     (2) A    hospital     offering     tertiary
pediatric services;

     (3) In-patient    psychiatric   services
for adults, adolescents and children;

     (4) Residential       substance       abuse
treatment centers;

     (5) Diagnostic cardiac catheterization
services in a hospital;

     (6) Specialty out-patient centers for
HIV/AIDS, sickle cell disease, hemophilia,
and cranio-facial and congenital anomalies;
and




                       8                           A-1211-15T3
                (7) Comprehensive                          rehabilitation
           services.

      According     to     the      Department,       its    analysis    of     network

adequacy is an "iterative and continual process," because it is

"rare that a network submission is complete or adequate upon the

initial filing."         Thus, the Department frequently asks carriers

for   additional    information         necessary      to    complete    the    network

adequacy review.         If the carrier successfully demonstrates that

its proposed tiered benefit network is "adequate" under N.J.A.C.

11:24A-4.10(b)(3),        the       Department      will    approve    the    carrier's

plan.   Once a network is approved, the Department continues to

monitor the adequacy of the network and if a network deficiency

is detected, it takes corrective action.                    See N.J.S.A. 26:2S-16;

N.J.A.C. 11:24A-2.7.

                                            II.

      Beginning in January 2014, Horizon offered its subscribers

a tiered benefit plan known as the Advance Tiered Network ("the

Advance plan").          The network had 87,211 subscribers and was

comprised of thirty-one hospitals in Tier 1, and thirty-seven

hospitals in Tier 2.            There was one Tier 1 hospital located in

every   county     in    New       Jersey   under    the     Advance    plan,    except

Somerset and Cumberland counties.                 Appellants were participating

providers in the Advance plan network:                         four hospitals were

designated   as     Tier       1    (Kennedy,       Lourdes,    St.     Francis,      and



                                             9                                  A-1211-15T3
Trinitas), and the other six hospitals were designated as Tier 2

(Capital,    Centrastate,        Holy    Name,   JFK     Medical   Center,      Valley

Health, and Virtua).

      On June 25, 2015, Horizon submitted its application to the

Department for network adequacy approval of the OMNIA two-tiered

provider network.2         OMNIA's hospital network was comprised of

thirty-five hospitals in Tier 1 and thirty-two hospitals in Tier

2 (including all ten appellants).                There is one Tier 1 hospital

located     in   each    county     in    New    Jersey,     except      Warren      and

Burlington counties.            At the time of the application, Horizon

projected that 250,000 consumers would enroll in the OMNIA plan,

which would represent approximately 6.6% of its total statewide

market-share.3

      Over the course of the next three months, the Department

reviewed the adequacy of Horizon's OMNIA network pursuant to

N.J.S.A.    26:2S-18     and    N.J.A.C.       11:24A-4.10.        The   application

ultimately comprised thousands of pages of documents, including:

spreadsheets     of     PCPs,    specialists,      and    hospitals;      enrollment

projections by geographic area; and geo-access reports detailing

time and distance requirements to designated Tier 1 providers


2
    The OMNIA plan was intended to replace the Advance plan.
3
  Horizon    provides      health   benefits       to    more   than     3.8   million
members.



                                          10                                   A-1211-15T3
for the projected enrollment in the geographic service areas of

concern.

      Initially, Horizon only submitted its proposed physician

network to the Department for review, not its proposed hospital

network.     As a result, by letter dated August 25, 2015, the

Department asked Horizon to provide the completed General Acute

Care Hospital tables ("hospital tables"), in addition to other

information regarding physicians and specialists.

      On September 3, 2015, the Department again asked Horizon to

submit a completed copy of the hospital tables for the OMNIA

plan.     The Department stated that it assumed that the OMNIA and

Advance hospital networks were identical, but if they were not,

Horizon should provide a comparison of the networks under the

plans.      Horizon      provided   the    Department         with   the    completed

hospital    tables    for    both   plans       on   that     same   date    and,    on

September 11, 2015, Horizon submitted information regarding the

proposed     networks      compliance      with      the      adequacy     standards.

Horizon    explained      that    the   OMNIA     and   Advance      networks    were

similar in that they each included a Tier 1 hospital in all but

two     counties   and      met   geographic         access     requirements,       but

differed in that the Tier 1 hospitals in the Advance plan were

"mostly small systems," while the Tier 1 hospitals in the OMNIA

network were "the largest systems in the State."




                                          11                                 A-1211-15T3
    Based on its review, the Department found a substantive

deficiency in the OMNIA Tier 1 hospital network; obstetrical

services in the Burlington County area only reached 88% of the

projected     membership,      not    the     90%   required    under    N.J.A.C.

11:24A-4.10(b)(3)(i).          By     email    dated    September     15,      2015,

Horizon committed to curing this deficiency, and indicated that

it wanted the "latitude" to proceed under one of two options,

including     the     option   it     ultimately     implemented,       that     is,

applying Tier 1 benefits for Tier 2 obstetrical services in

Burlington County.         Based on this commitment, the Department

concluded "that the OMNIA Network met the time and distance

requirements of N.J.A.C. 11:24A-4.10 and qualified for statewide

approval."     The Department further found that

             [w]ith regard to the acute care hospital
             requirements      at      N.J.A.C.      11:24A-
             4.10(b)[(3)(1)], the OMNIA Network satisfied
             the adequacy standard with [thirty-five]
             hospitals   in   Tier   1    and   [thirty-two]
             additional in-network hospitals in Tier 2.
             This means that the OMNIA Network has at
             least one acute care hospital with medical-
             surgical,    pediatric,     obstetrical,    and
             critical care services, within [twenty]
             miles or [thirty] minutes driving time for
             90[%] or more of the OMNIA plans' projected
             enrollment in each county or service area.

    In   a    final    decision      issued    on   September   18,     2015,   the

Department's Chief of the Office of Managed Care, wrote that the

Department had completed its review of Horizon's




                                        12                                A-1211-15T3
           application to establish the OMNIA Network.
           This network is approved [statewide] as of
           September 15, 2015.      On that date, the
           Department advised the Centers for Medicaid
           and Medicare Services that it was revising
           the    QHP     [qualified    health   plan]
           certification to indicate that the OMNIA
           network was approved.

                Overall, any change in operations from
           those    descriptions   filed   with   this
           application are subject to prior review and
           approval by the Department.   Horizon shall
           be subject to all provisions of N.J.S.A.
           26:2S-1 et seq. and N.J.A.C. 11:24A-1 et
           seq. . . . .4

     On   November   19,   2015,   appellants   filed   their   notice   of

appeal from the Department's September 18, 2015 final decision.

Appellants also filed a motion for a stay of that decision with

the Department.      On November 30, 2015, the Department denied

appellants'   motion,      and   issued   a   comprehensive     forty-page

written   decision    that       thoroughly   explained   its     decision

approving Horizon's application and determining that the OMNIA

plan met all applicable network adequacy requirements.5




4
  On September 30, 2015, Horizon provided the Department with
additional information about the OMNIA plan, including updated
hospital tables adding two new Tier 1 hospitals, and responses
to the Department's August 25, 2015 request for more information
about physicians and specialists.
5
  Pursuant to Rule 2:5-1(b), we have treated the Department's
November 30, 2015 decision as its findings of fact and
conclusions of law concerning the Horizon application.



                                     13                           A-1211-15T3
      On December 7, 2015, we denied appellants' emergent motion

for   a    stay   of   Horizon's   implementation      of    the    OMNIA    tiered

network plan, but granted appellants' motion for acceleration.

                                     III.

      Established precedents guide our task on appeal.                 Our scope

of review of an administrative agency's final determination is

limited.      In re Stallworth, 208 N.J. 182, 194 (2011).                         "An

appellate court affords a 'strong presumption of reasonableness'

to    an   administrative     agency's      exercise    of    its    statutorily

delegated responsibilities."          Lavezzi v. State, 219 N.J. 163,

171 (2014) (quoting City of Newark v. Nat. Res. Council, Dep't

of Envtl. Prot., 82 N.J. 530, 539, cert. denied, 449 U.S. 983,

101 S. Ct. 400, 66 L. Ed. 2d 245 (1980)).              "Particularly in the

insurance field, the expertise and judgment of the [Department]

may be allowed great weight."            In re Comm'r's Failure to Adopt

861 CPT Codes, 358 N.J. Super. 135, 149 (App. Div. 2003).                       "The

party challenging agency action bears the burden of overcoming

these presumptions."       Ibid.

      Moreover, "[a]n agency's interpretation of its own rule is

owed considerable deference because the agency that drafted and

promulgated the rule should know the meaning of that                         rule."

N.J. Healthcare Coal. v. N.J. Dep't of Banking & Ins., 440 N.J.

Super. 129, 135 (App. Div.) (quoting In re Freshwater Wetlands




                                      14                                    A-1211-15T3
Gen.    Permit       No.    16,   379    N.J.    Super.     331,    341-42     (App.    Div.

2005)), certif. denied, 222 N.J. 17 (2015).                          A reviewing court

"may    not    second-guess         those       judgments     of    an    administrative

agency which fall squarely within the agency's expertise."                                 In

re Stream Encroachment Permit, Permit No. 0200-04-0002.1 FHA,

402 N.J. Super. 587, 597 (App. Div. 2008).

       "An agency's determination on the merits 'will be sustained

unless       there     is    a    clear     showing        that     it    is     arbitrary,

capricious, or unreasonable, or that it lacks fair support in

the record.'"         Saccone v. Bd. of Trs. of Police & Firemen's Ret.

Sys., 219 N.J. 369, 380 (2014) (quoting Russo v. Bd. of Trs.,

Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)).                                    In

determining whether agency action is arbitrary, capricious, or

unreasonable, an appellate court must examine:

              (1) whether the agency's action violates
              express or implied legislative policies,
              that is, did the agency follow the law; (2)
              whether the record contains substantial
              evidence to support the findings on which
              the agency based its action; and (3) whether
              in applying the legislative policies to the
              facts, the agency clearly erred in reaching
              a conclusion that could not reasonably have
              been made on a showing of the relevant
              factors.

              [Stallworth, supra, 208 N.J. at 194 (quoting
              In re Carter, 191 N.J. 474, 482-83 (2007)).]

We     are    not,    however,      in    any        way   "bound    by    the    agency's

interpretation of a statute or its determination of a strictly



                                                15                                 A-1211-15T3
legal issue."       Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85,

93 (1973).

      Applying these principles, and for the reasons that follow,

we   discern   no    reason       to   disturb     the        Department's      decision

approving the OMNIA plan.

                                         A.

      Appellants argue that the OMNIA network did not meet the

network   adequacy        requirements      set    forth       in    N.J.A.C.      11:24A-

10(b)(3), because at the time of approval Horizon did not have

"signed agreements" with all of the Tier 1 hospitals, thereby

making it impossible for the Department to determine if the

hospital network complied with the regulatory standards.                               We

disagree.

      N.J.A.C. 11:24A-10(b)(3) provides that "[f]or institutional

providers,     the    carrier       shall      maintain        contracts      or    other

arrangements acceptable to the Department sufficient to meet the

medical     needs    of     covered    persons,         and    maintain       geographic

accessibility of the services[.]"                      (emphasis added).               The

carrier   shall      have    a    "contract       or    other       arrangement"      with

certain   specific        providers,     including        acute       care    hospitals,

trauma    centers,     and       specialists      within       a    certain    time   and

distance from 90% of the covered subscribers.                        N.J.A.C. 11:24A-

10(b)(3)(i)-(iv).




                                         16                                     A-1211-15T3
       Horizon was statutorily authorized to enter into contracts

with   the       hospitals    or       "participating"          providers.           N.J.S.A.

17:48E-10;       N.J.A.C.    11:24A-4.15.            The    contracts         required      the

hospitals "to accept agreed-upon payments for specified services

as payment in full, thus relieving the subscriber of any further

financial burden and, in turn, require[d] Horizon to pay each

participating provider directly, this doubtlessly to encourage

greater     participation         in    the     network."         Somerset      Orthopedic

Assocs., P.A. v. Horizon Blue Cross & Blue Shield of N.J., 345

N.J. Super. 410, 413-14 (App. Div. 2001).

       It   is    undisputed       that    at      the   time    of    the    Department's

approval,         Horizon     had       automatically           renewable           contracts

("Network        Hospital    Agreements")           in    place       with    all    of     the

hospitals participating in the OMNIA network, including all the

Tier 1 hospitals, as well as appellants and the other hospitals

in Tier 2.        As the Department explained in its November 30, 2015

decision, it was "important to note that . . . all of the Tier 1

and Tier 2 hospitals participating in the OMNIA Network were

already      contracted      with       Horizon      and    considered         in-network.

Establishment        of     the     OMNIA       Network     did       not     require       re-

contracting with these hospitals."

       Thus,     contrary    to     appellants'          assertions,         Horizon      fully

complied with N.J.A.C.              11:24A-10(b)(3).             At the time of the




                                              17                                     A-1211-15T3
Department's approval of the OMNIA plan, Horizon had standard

contracts in place with all of the provider hospitals in the

network,    under    which          the    hospitals       agreed       to   participate          in

Horizon's health services plan and to receive payment directly

from   Horizon      on       a    set-fee       basis.         The    existence        of     these

contracts   was     sufficient             to    enable    the       Department       to    ensure

adequate consumer access to necessary medical care and providers

so that the benefits provided under the OMNIA plan were not

illusory.

       Further,     the          Department       properly       found       that     "N.J.A.C.

11:24A-4.10 does not require carriers to have contracts with

network providers that specif[y] a particular cost-sharing tier

for consumers in order to meet network adequacy.                                      The rules

merely    provide        that       the    carrier        have    a    contract        or     other

arrangement      acceptable           to    the       Department."           The      Department

explained    that        a       carrier    could,       for     example,       satisfy        this

requirement by:          contracting with a provider for inclusion in a

network at a specific cost-sharing tier; entering into a general

contract    that    is       not     network      or     plan-specific          and    does      not

specify    the    cost-sharing             for    consumers,          thereby      requiring        a

hospital to participate in all of its networks without regard to

tier assignments; and applying Tier 1 cost-sharing for consumers

at certain facilities and/or providers to expand access or meet




                                                 18                                        A-1211-15T3
network adequacy standards.               Thus, the Department found that the

general      contracts         between    Horizon     and     the    in-network       OMNIA

providers      met       the    regulatory    requirement.           The    Department's

interpretation of its own rule is owed considerable deference.

N.J.    Healthcare             Coal.,    supra,     440     N.J.     Super.      at   135.

Therefore, we reject appellants' contention on this point.

                                              B.

       Appellants next argue that at the time of the approval the

OMNIA       Tier    1    hospital       network     did    not     meet    the   adequacy

standards,         set    forth     in    N.J.A.C.        11:24A-4.10(b)(3)(i),         for

hospital       obstetrical         services    in     Burlington      County.         This

contention lacks merit.

       As     noted      above,     N.J.A.C.       11:24A-4.10(b)(3)(i)          requires

carriers to have "a contract or arrangement" with at least one

licensed acute care hospital with obstetrical services "in any

county or service area that is no greater than [twenty] miles or

[thirty] minutes driving time, whichever is less, from [90%] of

covered persons within the county or service area."                           During its

review, the Department initially determined that the OMNIA Tier

1 hospital network was deficient in that obstetrical services in

Burlington County reached only 88% of the projected membership,

not 90% as required by the rule.




                                              19                                  A-1211-15T3
    Although the OMNIA hospital network did not initially meet

the adequacy requirements, Horizon responded to the Department's

determination by committing to apply Tier 1 cost-sharing for

obstetrical services at Virtua, a Tier 2 hospital located in

Burlington County.              Thus, contrary to appellants' contention,

there was no longer a deficiency in the OMNIA network because at

the time of the Department's approval, Horizon had an agreement

with Virtua -- a licensed Tier 2 hospital located within twenty

miles    or    thirty    minutes    driving       time    of    90%    of    the    persons

covered -- to provide obstetrical services to Burlington County

subscribers.           N.J.A.C. 11:24A-4.10(b)(3)(i).                 That arrangement

clearly met the regulatory requirements for network adequacy,

curing    the        previous     inadequacy      prior        to   the      Department's

approval.      Ibid.

                                           C.

    Appellants          next    contend    that    the    OMNIA       Tier    1     hospital

network       failed     to      meet     the     network       adequacy           standards

established by the Department for trauma centers.                                 Again, we

disagree.

    The Department of Health has designated three hospitals in

New Jersey as Level I trauma centers (UMDNJ-University Hospital,

Robert        Wood      Johnson      University          Hospital,           and      Cooper

Hospital/University            Medical    Center),       and    seven       hospitals      as




                                           20                                       A-1211-15T3
Level II trauma centers (Hackensack University Medical Center,

St. Joseph's Hospital and Medical Center, Jersey City Medical

Center,     Morristown      Memorial    Hospital,        Capital     Health,      Jersey

Shore Medical Center, and AtlantiCare Regional Medical Center).

N.J.A.C.     11:24A-4.10(b)(3)(iii)              provides     that   "[t]he    carrier

shall have a contract or otherwise agree to cover medically

necessary trauma services at a reasonable cost with all Level I

or II trauma centers designated by the Department of Health and

Senior    Services,    with    the     provision        of    benefits    at   the   in-

network level."

       Horizon   fully       satisfied           this    requirement.          Horizon

contracted with the ten trauma centers to place them in-network;

eight trauma centers were designated as Tier 1 providers (RWJ,

Cooper,     Jersey   City    Medical    Center,         Hackensack,      Jersey   Shore

Medical Center, Morristown Memorial, St. Joseph's Hospital, and

AtlantiCare); and two trauma centers were designated as Tier 2

providers (Capital Health and UMDNJ).

       Contrary to appellants' contention, and as the Department

expressly found, "[n]othing in the regulation requires that all

trauma centers be placed in the most preferred tier, only that

they   be   in-network."        It     is    undisputed       that   Horizon      has   a

contract with the ten trauma centers to provide benefits at the

"in-network      level"        as      required          by     N.J.A.C.       11:24A-




                                            21                                 A-1211-15T3
4.10(b)(3)(iii).      Therefore, the Department properly found that

the OMNIA network was adequate for trauma services.6

                                     D.

     Appellants assert that before determining whether the OMNIA

network was adequate, the Department was required to consider

and make a specific finding that the public interest would be

served by approving Horizon's proposal.          Appellants contend that

OMNIA's    two-tiered   hospital   network    "endangers"   them    and   the

other hospitals that Horizon selected for Tier 2, and interferes

with the "continuity of patient care."          Appellants also complain

that Horizon was not "transparent" with regard "to the OMNIA

plan's    tiering   decisions,"    which   "makes   informed   health     care

choices impossible."     These contentions lack merit.

     The    Department's    role    in     approving   a   health   service

corporation's proposed tiered benefit network is limited by the

HCQA to the establishment of standards for the "adequacy of the

provider network with respect to the scope and type of health

care benefits provided by the carrier, the geographic service

area covered by the provider network[,] and access to medical


6
  It is also important to note that N.J.A.C. 11:4-37.3(b)(2)
specifically requires a health benefits plan, like the OMNIA
network, to "provide that the cost sharing applied to the
covered person for emergency care shall be the same regardless
of whether the services were rendered by network or out-of-
network providers."



                                     22                             A-1211-15T3
specialists,      when    appropriate[.]"            N.J.S.A.       26:2S-18.         The

Department established these required network adequacy standards

when   it   promulgated        N.J.A.C.        11:24A-4.10.       As    discussed      in

detail above, the Department carefully applied these standards

and determined that the OMNIA network was adequate.

       It is well established that an administrative agency, like

the Department, may "only act reasonably within the scope of its

delegated authority."           Jersey Cent. Power & Light Co. v. Melcar

Util. Co., 212 N.J. 576, 600 (2013).                    Thus, "an agency may not

issue a regulation that is outside 'the fair contemplation of

the delegation of the enabling statute,' or that is otherwise

'inconsistent with [its] legislative mandate.'"                     N.J. Healthcare

Coal., supra, 440 N.J. Super. at 136 (citation omitted) (quoting

N.J. State League of Municipalities v. Dep't of Cmty. Affairs,

158 N.J. 211, 222-23 (1999)).

       Turning    to    the    arguments       raised    by    appellants      in    this

portion of their brief, there is no provision in any of the

governing     statutes        that   requires      the    Department     to     make    a

specific finding that a tiered benefit network is "in the public

interest"     before     it    can   be   approved.           Indeed,   none    of    the

statutory     provisions        cited     by     appellants      that   mention       the

"public     interest"    relate      to   network       adequacy.       For    example,

appellants       cite     N.J.S.A.        17:1C-19,       which      provides        that




                                           23                                  A-1211-15T3
"establishing a dedicated funding mechanism for the operations

of   the   New     Jersey      Real    Estate       Commission,"              to     enable      the

Department       to     "maintain       an     adequate          level          of     financial

oversight" is "in the public's interest."                           Other laws cited by

appellants       require     the     Department      to    issue         a    certificate         of

authority,        N.J.S.A.         17:48E-4(a),           and       a        certificate          of

incorporation, N.J.S.A. 17:48-5, to a health service corporation

if the Department is satisfied that the issuance "would not be

contrary to the public interest."                  See Radiological Soc. of N.J.

v.   Sheeran,         175    N.J.     Super.      367,        384       (App.        Div.      1980)

("Commissioner         has    been    given       broad       powers"         under       N.J.S.A.

17:48A-3 "to 'supervise' a medical service corporation so that

its 'condition or methods of operation are not such as would

render     its     operations         hazardous       to        the          public       or     its

subscribers'"), certif. denied, 87 N.J. 311 (1981).

      However, the HCQA contains no similar requirement.                                       Thus,

the Department is not currently statutorily authorized to review

Horizon's    selection        of     network      providers         under      the     amorphous

"public policy" standard asserted by appellants.

      That   having         been     said,   we     recognize           that       "the     public

interest     is       an     added     dimension         in     every          administrative

proceeding . . . , and, in a sense, the public is an omnipresent

party in all administrative actions."                           City of Hackensack v.




                                             24                                           A-1211-15T3
Winner, 82 N.J. 1, 30 (1980).                 However, the public interest is

plainly     served      when    an      administrative       agency     follows         the

governing statutes and regulations, conducts a prompt and timely

review     of    an     applicant's         proposal,     and    renders      a      fully

supported, thoughtful final decision that withstands appellate

review.    That is the case here.

    Appellants' other arguments on this point also lack merit.

The Legislature has not authorized the Department to review a

carrier's       hospital     selection       criteria      for   a   tiered       benefit

network,    except      to     ensure    that     subscribers        have    sufficient

access to care under the plan because the network is adequate.

See Radiological Soc. of N.J., supra, 175 N.J. Super. at 384

(Commissioner         "has   not     been    given   the    power     to     become      so

involved in Blue Shield's activities that he [or she] controls

the way the plan operates").

    There is also no statutory or regulatory procedure for the

Department       to    determine      the     financial     impact     of     the     tier

designation on a hospital, or to compel carriers to include, for

example, all faith-based or urban hospitals in Tier 1.                         In fact,

"the Legislature specifically recognized the right of Horizon to

enter into provider contracts wherein it could exercise some

leverage as to price in return for direct payment."                            Somerset

Orthopedic Assocs., supra, 345 N.J. Super. at 420.                          Nor, as the




                                             25                                   A-1211-15T3
Department correctly points out, does it have the authority to

require Horizon to allow appellants to apply for Tier 1 status.

The Legislature only requires carriers to grant pharmacies and

pharmacists "the right to participate as a preferred provider or

as a contracting provider, under the same terms and conditions

currently   applicable     to   all   other    preferred    or   contracting

providers[.]"   N.J.S.A.    17:48-6j(2).         The   Legislature   has   not

extended that right to hospitals.

    Contrary to appellants' next contention, the HCQA does not

require the Department to consider possible "continuity of care

issues" when it reviews an application for approval of a tiered

benefit network.    However, because provider networks are fluid,

N.J.S.A.    26:2S-9.1    already      protects    covered    persons    under

certain situations when their in-network physician or hospital

leaves the network.      This statute provides for varying lengths

of covered treatment (post-operative, oncology, psychiatric, and

obstetrical), including services in an acute care hospital, in

the event the in-network physician "is no longer employed by or

under contract with the carrier[.]"           Ibid.

    Moreover, before purchasing a tiered product like OMNIA,

the consumer has the ability to review the hospitals and health

care providers in each network tier.             N.J.S.A. 26:2S-4 and -5.




                                      26                             A-1211-15T3
Thus, consumers are fully aware what hospitals and providers

they can use when they select a tiered benefit network.

      There is also no requirement in the HCQA that a carrier

publicly disclose the criteria it used to evaluate the hospitals

for   inclusion       in,     or     exclusion       from,     a     particular        tier.

Instead,     N.J.S.A.       26:2S-5       requires      carriers      to    disclose       to

subscribers       specific        information     about      the    provider       network,

including     a     directory        of    participating           providers.          OMNIA

complied with this requirement in the present case.                              Therefore,

we reject appellant's contention on this point.

                                            E.

      Finally, appellants assert that the Department conducted a

rushed review of Horizon's application, did not fully explain

its decision, and improperly failed to permit their input.                                 We

disagree.

      The    record     reflects          that    the     Department's           review    of

Horizon's     application           was    both     extensive         and       deliberate.

Horizon     submitted       its    application       on    June     25,    2015     and   the

Department did not complete its review and approve the OMNIA

network     until   September        18,    2015.         During    this        period,   the

Department     obtained       the     necessary      information           to    conduct     a

meaningful review of the adequacy of the hospital network under

N.J.S.A.     26:2S-18        and     N.J.A.C.       11:24A-4.10,          including       the




                                            27                                      A-1211-15T3
hospital tables and geo-access reports.                        It posed questions to

Horizon      and   reviewed        the    carrier's         responses.           While       the

Department's September 18, 2015 final decision did not detail

the   agency's      findings       of     fact       and   conclusions       of       law,   it

subsequently       rendered        a     forty-page         written    decision          fully

explaining the factual and legal basis for its approval of the

OMNIA network.

      Contrary to appellants' contention, the fact that an entity

may   be    impacted     by   an    agency       decision      does   not,       in    and   of

itself, give rise to a right to notice and participation in the

administrative process.                Elizabeth Fed. Sav. & Loan Ass'n v.

Howell, 24 N.J. 488, 505 (1957).                       Moreover, an administrative

agency must conduct a "contested case" hearing only when "the

legal rights, duties, obligations, privileges, benefits[,] or

other      legal   relations       of     specific         parties    are    required        by

constitutional right or by statute to be determined by an agency

by decisions, determinations, or orders, addressed to them or

disposing of their interests, after opportunity for an agency

hearing[.]"            N.J.S.A.          52:14B-2.            Appellants          have       not

demonstrated       the   existence        of     a    constitutional        or    statutory

right to a contested case-type hearing concerning a carrier's

application for approval of a tiered benefit network.




                                            28                                        A-1211-15T3
       As for the balance of any of appellants' arguments not

expressly discussed above, they are without sufficient merit to

warrant discussion in a written opinion.                      R. 2:11-3(e)(1)(D) and

(E).

                                           IV.

       In     sum,     we    conclude      that     the       Department's      decision

approving Horizon's application to establish the OMNIA network

was accomplished in strict accordance with the current statutes

and     regulations         applicable     to     its        review.      Under        these

circumstances, appellants' contention that the HCQA should be

amended to reflect their view of how tiered benefit networks

should be implemented can only be addressed by the Legislature.

"We do not pass judgment on the wisdom of a law or render an

opinion on whether it represents sound public policy.                               That is

the prerogative of our elected representatives."                             Caviglia v.

Royal       Tours    of     Am.,   178    N.J.    460,       476    (2004)     (citations

omitted).           Stated    simply,     "courts       do    not   act   as    a    super-

legislature."          Trautman ex re. Trautman v. Christie, 211 N.J.

300, 307 (2012) (quoting Newark Superior Officers Ass'n v. City

of Newark, 98 N.J. 212, 222 (1985)).

       Having       determined     that    the     record       fully     supports        the

Department's decision that the OMNIA network was adequate under

N.J.S.A. 26:2S-18 and N.J.A.C. 11:24A-4.10(b)(3), and that its




                                           29                                       A-1211-15T3
determination   was    neither        arbitrary,   capricious,     nor

unreasonable, our task is complete.

    Affirmed.




                                 30                          A-1211-15T3
