Source: http://nynofaultlaw.blogspot.com/2006/10/
Timestamp: 2018-04-25 20:25:27
Document Index: 520694185

Matched Legal Cases: ['§ 176', 'Sui Generis', 'art 51', '§ 5102', '§ 5102', '§ 5102', 'in fine']

It's No-Fault of NY: October 2006
So am I the only one who dressed up as a no-fault-related character for Halloween? Three guesses as to which doctor I am portraying as a zombie...
And, yes, Dr. Butcher, M.D. is a real movie title.
Posted by Damin J. Toell, Esq. at 12:33 PM 1 comment: Links to this post
Sources tell me that a decision in Fair Price v. Travelers should be expected early next year. What do you think the decision will be? You can let us know by clicking below or commenting to this post.
Do you think that Fair Price v. Travelers will be overturned?
Posted by Erik B. Lutwin, Esq. at 11:23 PM No comments: Links to this post
The reader is directed to the October 13, 2006 edition of the New York Law Journal for an article entitled 'The Thicket of First-Party No-Fault Benefits Actions' by The Hon. Shlomo S. Hagler of the Civil Court, New York County. I recommend it highly.
Judge Hagler was also the author of the decision in Inwood Hill Med. v Allstate Ins. Co., 2004 NY Slip Op 50565(U) (Civ. Ct., New York Cty., 2004). I still give copies of the decision to new associates as a primer on no-fault.
In other news, Fair Price Medical Supply Corp., a/a/o Nivelo v Travelers is still in the briefing stage before the Appellate Division, Second Department. Respectfully, the Appellate Term decision in Fair Price Med. Supply Corp. v Travelers Indem. Co., 2005 NYSlipOp 25343 (App. Term, 2d Dep't, 2005) is a perhaps the most frustrating example of that Court overreaching in applying the preclusion rule. In short, the idea that no-fault requires a carrier to pay a claim where the very submission of such constitutes a Class E felonly (see Penal Law § 176.15, as the bill in Fair Price was $1,628.98) simply cannot be correct, and requiring carriers to seek restitution after the fact is, as dissenting Judge Joseph G. Golia points out, "[c]old comfort indeed." Moreover, services never rendered cannot have treated any injuries that were causally related to a covered incident, and thus preclusion cannot apply. Indeed, given that (the relevant portion of) no-fault only covers necessary medical expenses, unrendered services are not subject coverage. It would make no sense to hold that Central General v. Chubb allows a carrier to avoid preclusion where services are rendered but does not treat an injury causally related to a loss, but requires preclusion where no services are rendered at all - the latter has more fatal defects than the former in terms of coverage, not fewer. There simply is "no contractual relationship" with respect to unrendered services. Zappone v. Home Ins. Co., 55 N.Y.2d 131, 137 (1982).
The preclusion rule is designed to penalize carriers for stalling in their duty to pay or deny a claim within 30 days, but penalizing a carrier for failing to realize through psychic powers that a claim was false in its entirety serves no public policy. Indeed, it hurts the public by raising insurance premium rates and providing an incentive for criminal activity.
But I digress. Perhaps I will post a larger analysis of Fair Price once the time for oral argument comes closer.
Posted by Damin J. Toell, Esq. at 12:18 PM 2 comments: Links to this post
(With apologies for the title to Ortolani/Oliviero/Newell.)
Further punctuating yesterday's post, the Appellate Term, 2d Dep't posted an opinion today in SpineAmericare Med., P.C. v State Farm Mut. Auto. Ins. Co., 2006 NYSlipOp 52035(U) (App. Term, 2d Dep't, October 5, 2006). Therein, the Court held that "plaintiff's moving papers were insufficient to establish the mailing of the appended forms to defendant. Plaintiff's corporate officer did not state that he actually mailed the claims to the defendant nor did he describe his office's standard practice or procedure designed to ensure that items are properly addressed and mailed." Id., citing to New York & Presbyt. Hosp. v Allstate Ins. Co., 29 A.D.3d 547 (2d Dep't, 2006). Once again, there was no mention of an "ensured compliance with" requirement, although perhaps it was unnecessary to mention same, as there was no description of the practice or procedure, anyway.
Posted by Damin J. Toell, Esq. at 4:53 PM No comments: Links to this post
Posted by Damin J. Toell, Esq. at 12:05 PM No comments: Links to this post
On May 30, 2006, the Appellate Term, 2d Dep't, dismissed the plaintiff's appeal of the February 7, 2006 order in AVA Acupuncture P.C. v ELCO Admin. Servs. Co., 2006 NY Slip Op 50158(U) (Civ. Ct., Kings Cty., 2006). For whatever reason, on October 4, 2006 (and just published online today), the App. Term reiterated the previous dismissal.
It is perhaps a shame that Ava Acupuncture was untimely in their appeal. Judge Battaglia's February 7 order is quite interesting, and it tackles two recurring no-fault disputes: the level of proof required to create a presumption of the mailing of a no-fault denial of claim form (NF-10) by a carrier and the issue of the lack of a fee schedule for acupuncture performed by a licensed acupuncturist.
Click here to toggle viewing the rest of the post...
Taking them in order, the specific dispute on proof of mailing in Ava Acu. was whether a presumption of mailing could be created by the affidavit of one who, although having knowledge of the standard practice and procedure of mailing by an office, was not in a supervisory position with regard to same. The problematic App. Term case law, relied upon by the plaintiff in Ava Acu., was Contemp. Med. Diag. & Treatment, P.C. v Government Employees Ins. Co., 2005 NY Slip Op 50254(U) (App. Term, 2d Dep't, 2005 and Gribenko v Allstate Ins. Co., 2005 NYSlipOp 52201(U) (App. Term, 2d Dep't, 2005).
The Court in Contemp. Med., in holding that the defendant carrier failed to prove the mailing of its denial, noted that the affidavit of the claims examiner "was conclusory and failed to specify either that it was the duty of the claims examiner to ensure compliance with said office procedures or that the claims examiner had actual knowledge that said procedures were complied with." Out of sympathy to the Court, I'll decline to criticize the use of a preposition to end a sentence. However, there is a bigger problem. Shortly after the sentence I've just quoted, the App. Term cited generally to Residential Holding Corp. v. Scottsdale Ins. Co., 286 A.D.2d 679 (2d Dep't, 2001). The problem is, though, Residential Holding says nothing about proof of mail coming from a deponent whose position it is to ensure compliance with the relevant practices and procedures. The App. Div. formulated the rule as being that "[t]he presumption [of mailing] may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed." Id. at 680, citing to Tracy v. William Penn Life Ins. Co., 234 A.D.2d 745 (3d Dep't, 1996) and Pardo v. Central Coop. Ins. Co., 223 A.D.2d 832 (3d Dep't, 1996).
The App. Term seemingly compounded the error in Gribenko by noting, when holding that the plaintiff had failed to create a presumption of the mailing of its claim forms, "the affidavits [did not] state that it was the duty of the affiants to ensure compliance with said office procedures or that the affiants had actual knowledge that said office procedures were complied with." 2005 NYSlipOp 52201(U), citing to Contemp. Med.
Subsequent to Gribenko, the Appellate Division issued its decision in New York & Presbyt. Hosp. v. Allstate Ins. Co., which quoted Residential Holding directly and held that "[t]he presumption [of mailing] may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed." 29 A.D.3d 547 (2d Dep't, 2006). Since that time, the App. Term has, curiously and without explicitly mentioning it, dropped the "ensure compliance with" rule from Contemp. Med. and Gribenko. Interestingly, the last time that the App. Term cited to Contemp. Med. or Gribenko, they found simply that "[t]he affidavit submitted by defendant's no-fault specialist was sufficient to establish that defendant followed a standard office practice or procedure designed to ensure that denial of claim forms were properly addressed and mailed," and failed to address the "ensured compliance with" rule at all. A.M. Med. Servs., P.C. v New York Cent. Mut. Ins., 2006 NYSlipOp 51662(U) (App. Term, 2d Dep't, 2006).
In Ava Acu., Judge Battaglia eloquently described the "ensured compliance with" issue and proof of mailing in general, and ultimately (and understandably) concluded that such a requirement did, indeed, exist. Judge Battaglia also found the affidavit submitted by the defendant carrier to be conclusory, anyway, so presumably the same result would have been reached whether or not the requirement existed. So, too, on appeal, the App. Term could have avoided even tackling the issue by finding it to be insufficient under any standard. Nevertheless, it would have been nice to have the App. Term explicitly disavow Gribenko, as plaintiffs' attorneys still argue for it throughout the Civil Courts with some success. See, e.g., Judge George Silver's opinion in Y&J Intertrade v. Utica Mut. Ins. Co., 236 N.Y.L.J. 41 (Civ. Ct., Kings Cty., 2006).
As for the second interesting portion of the Ava Acu. decision, the issue of the lack of a fee schedule for acupuncture performed by an acupuncturist has been a troubling one for some time. This is especially true in Civil Court, Kings County in acupuncture cases where plaintiff's counsel is the Law Offices of Gary Tsirelman, attorneys for Ava Acu. In short, Mr. Tsirelman's clients, along with many other acupuncturists, would have it that licensed acupuncturists are allowed to charge a rather substantial amount per modality, usually somewhere in the neighborhood of $120. However, there is a fee schedule for acupuncture rendered by chiropractors and physicians, and the resultant fees, at the high end, are about $43. Unfortunately for the acupuncturists, the Insurance Department issued an opinion letter on October 6, 2004 in which they opined that "licensed acupuncturists do not have a right to reimbursement at the prevailing regional fee rate in effect" prior to the physician and chiro fee schedules being put into effect, and that "it would be consistent with the regulation for an insurer to limit the reimbursable fee for necessary services provided by a licensed acupuncturist to the rates established for doctors and chiropractors performing a similar service."
Although he avoided doing so in Ava Acu., Judge Battaglia later tackled this issue on the merits in Power Acupuncture P.C. v State Farm Mut. Auto. Ins. Co., 2006 NY Slip Op 50393(U) (Civ. Ct., Kings Cty., 2006). I'm not quite sure how he pulled it off, but he both acknowledged the October 6, 2004 opinion letter and concluded that it "was wrong" for State Farm to reduce the bills submitted to a lower "fee [that] was calculated according to the...Schedule for Medical Fees." Id. I'm still mystified by the Power Acu. decision, and especially in light of the fact that Ava Acu. had its appeal dismissed, I hope that State Farm chose to prosecute an appeal in that matter.
1 The title of the post explained: it's a cheap pun, as Ava Acu. is owned by Valentina Anikeyeva. Actually, given that she is married to Andrey Anikeyev, I might have more approrpiately titled the post 'Dissed Mrs.,' but that misses (mrs.?) the point. Then again, I could have gone neutral - and also avoided embarrassing myself in case the pair has split - and called it 'Dissed Ms.' I chose not to use this version, as it removed the subtle reference to 'Swiss Miss,' but I digress. For more fun adventures with the Anikeyevas, I direct the reader to Circle Intl. Group, Inc. v Anikeyeva, 2005 NY Slip Op 50979(U) (Sup. Ct., Kings Cty., 2005).
Posted by Damin J. Toell, Esq. at 7:36 PM No comments: Links to this post
Posted by Damin J. Toell, Esq. at 10:22 AM No comments: Links to this post
Your humble affirmant is currently knee-deep (quite literally, were you to see my office) entrenched in the ever-ongoing litigation between various no-fault insurance carriers and the medical facilities purportedly owned by Dr. Robert Scott Schepp, M.D.: Deajess Medical Imaging, P.C., Boston Post Road Medical Imaging, P.C., and Preferred Medical Imaging, P.C. As noted recently on this blog in "Carothers, Part CLXXXVI," those 3 Schepp facilities eventually became Andrew Carothers, M.D., P.C. The Schepp facilities have recently filed suit against approximately 25 insurance carriers seeking a declaration that, inter alia, they were and are in compliance with the "Business Corporate Law" [sic] and thus entitled to no-fault reimbursement. The suit is Deajess Medical Imaging, P.C., et al., v. AIG Insurance Company, et al. (Sup. Ct., Nassau Cty., Index No. 013569/06). The action is related to a previously-commenced Nassau Cty. action, AIU v. Deajess, which is described in the prior post here concerning Carothers.
Anyway, I say all of this in apology for the lack of substantial updates thus far this week. The irony is not lost on me that I am unable to make posts of any value while holed up at my computer, yet am able to do so when engaging in a more vigorous schedule of appearances.
Your condolences for my plight will be accepted by PayPal, etc. ;)
Posted by Damin J. Toell, Esq. at 12:15 PM No comments: Links to this post
For what it's worth, the appeal in Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090(U) (Sup. Ct., Nassau Cty., 2006) is set to be heard before the Appellate Division, 2d Dep't on November 2, 2006.
Oh, and Happy Monday to all. ;) There seem to be quite a few silent readers out there, so please drop a line (or anonymous comment, if need be) and inform us as to whether or not you found this prior week's posts to be useful/readable/etc.
Edit @ 2:22PM - I've realized I might've had my settings goofed up for commenting. If you tried and failed previously, give it another shot. :)
Posted by Damin J. Toell, Esq. at 9:32 AM 2 comments: Links to this post
I've spoken with a number of attorneys who have expressed confusion to me as to whether a plaintiff's prima facie burden for a summary judgment motion (the subject of most Appellate Term decisions) differs from the applicable burden at trial. According to the App. Term, 2d Dep't, they are identical.
As to motions, the landmark App. Term decision on the matter is Amaze Med. Supply v Eagle Ins. Co., 2003 NY Slip Op 51701(U) (App. Term, 2d Dep't, 2003). As per the most recent App. Term decisions, the rule has now boiled down to the following: "In an action to recover first-party no-fault benefits, a plaintiff establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue." Delta Diagnostic Radiology, P.C. v Country-Wide Ins. Co., 2006 NYSlipOp 51877(U) (App. Term, 2d Dep't, 2006) (citations omitted).
In Damadian MRI in Canarsie, P.C. v General Assur. Co., 2006 NYSlipOp 51048(U) (App. Term, 2d Dep't, 2006), the Court was called upon to determine the plaintiff's burden at trial, and they held that "[i]t is well settled that a health care provider establishes its prima facie entitlement to judgment as a matter of law by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue." (Citations omitted).
Thus, although methodology of proof will necessarily differ due to the procedural mechanics of each, plaintiff maintains the same burden at trial as it does when seeking summary judgment.
Posted by Damin J. Toell, Esq. at 12:04 PM No comments: Links to this post
As implied yesterday, the decision in West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 2006 NYSlipOp 51871(U) (App. Term, 2d Dep't, 2006) will be interesting in light of the decision just a few months prior in Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090(U) (Sup. Ct., Nassau Cty., 2006). I know my posts are getting a bit long as of late, so I'll provide a cut for quicker readability of the front page here.
Indeed, in Long Is. Radiology, Justice Phelan made explicit his understanding that West Tremont was under appeal. Moreoever, West Tremont is not binding authority upon the Supreme Court, the latter being a court of original jurisdiction. See, e.g., Westchester Med. Ctr. v. Liberty Mut. Ins. Co., 2006 NY Slip Op 50382U (Sup. Ct., Nassau Cty., 2006).
Nevertheless, at the very least, a split amongst courts has been presented to the Appellate Division, as Long Is. Radiology is currently under appeal. See, e.g., App. Div. Motion No. 2006-05943.
In his decision, Justice Phelan explains the background of the case as follows:
Plaintiff is a radiology office that performs MRI testing for persons involved in motor vehicle accidents and allegedly eligible for no-fault benefits. MRI testing is done pursuant to a prescription issued by the injured person's independent treating physician. For payment plaintiff receives an assignment of no-fault benefits from the injured person, and submits claims directly to one of the defendants. Defendants deny numerous claims for payment on the ground of an alleged "lack of medical necessity."
On this motion defendants argue that in the context of the no-fault statute and the regulations thereunder, "medical necessity" is a prerequisite for payment. They conclude therefore, that they have every right to deny plaintiffs' claims on the ground of "lack of medical necessity." This Court agrees with defendants' argument, but not their conclusion. 2006 NY Slip Op 51090(U).
The final sentence is not as hopeful for the carriers as it might appear. Although it was found that carriers could, indeed, defend the claims on the basis of a lack of necessity, it was held that they cannot do so against the radiology facilties directly. Instead, "[a]n insurer who can prove that a radiology test is unnecessary or duplicative, should be able to challenge through subrogation the treating physician or medical provider who prescribed the test." Id.
The Supreme Court based its holding upon the following rationale:
It is this Court's opinion that the results in West Tremont and Omega Diagnostic comport with the underlying intent of the no-fault statute, that claims be processed quickly and efficiently, and that economic losses be fully compensated. As noted in West Tremont, there is no statutory or regulatory pre-approval requirement for radiology tests requested by treating physicians in no-fault cases. Furthermore it makes no sense to argue "lack of medical necessity" against radiologists, because they do not assess medical necessity. Radiologists neither examine the no-fault patient, nor render a pre-test diagnosis. Any diagnostic opinion is based on the radiological test. To require radiologists to render a pre-test diagnosis would cause significant delay in treating the injured.
Under this rationale, if a no-fault patient (who we will assume is a layperson with no medical training) paid for her medical treatment out-of-pocket and then submitted timely and proper claims thereafter seeking reimbursement for same, a carrier could never defend on the basis of a lack of medical necessity. One can imagine the formulation of the argument: it makes no sense to argue "lack of medical necessity" against lay patients, because they do not assess medical necessity; that's why they go to doctors in the first place. This is an absurd conclusion that cannot stand without taking the entirety of the no-fault scheme down with it.
It also seems odd to your affirmant that the Court would give an ultimate finding that would, if implemented, double the amount of litigation in certain massive categories of no-fault claims while, as a predicate, recognizing that "[t]he court system is inundated with no-fault claims litigation." Id. Presumably, if the Long Is. Radiology decision became the rule, the court system would then be inundated with both no-fault claims litigation and subrogation claims litigation.
Can Long Is. Radiology withstand appeal? I either can't imagine so, don't want to imagine so, or both. To the extent that West Tremont is a factor, it should serve as a succinctly damning argument in favor of reversal. The Appellate Term said it all when they noted that "while it may be argued that a diagnostic center is in no position to establish the medical necessity of a prescribed MRI, it is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor. If a claim is not assigned, and is submitted to the insurer directly by the eligible injured person, the insurer may assert a defense of lack of medical necessity which, if established, will shift the burden to the eligible injured person to provide his or her own evidence of medical necessity. If the defense may be asserted against the eligible injured person, it follows that it may be asserted against the provider as well." 2006 NYSlipOp 51871(U). Vague appeals to the underlying goals of no-fault, which could easily be molded to reach any conclusion under the sun,1 pale in comparison to the actual law.
Really, it's a shame that radiologists don't independently assess medical necessity and yet still face the lack thereof as a defense. It's also a shame that doctors also usually don't assess whether a patient's injuries were the result of an intentional collision,2 yet the appellate courts of this state have repeatedly held that they still must face the defense that such a thing occurred. See, e.g., Central General v. Chubb, 90 N.Y.2d 195 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751 (2d Dep't, 2002).
Does a no-fault fact pattern get any more heartbreaking than the following?:
On August 31, 2000, Aferdita Suljovic, a passenger in a vehicle operated by her husband, was injured when her husband intentionally caused the vehicle to go over an embankment while he exited the driver's side of the vehicle. Mr. Suljovic was indicted, inter alia, for attempted murder and ultimately pleaded guilty to assault in the second degree.[3]
Mrs. Suljovic was hospitalized at Westchester Medical Center (hereinafter WMC). As her assignee, WMC sought to recover no-fault benefits from the defendant, Mr. Suljovic's automobile insurer, for the services it rendered. The defendant issued a denial of coverage on the grounds, insofar as relevant to this appeal, that the occurrence was not an "accident" within the meaning of the no-fault endorsement in the policy and that Mrs. Suljovic's injuries did not arise out of the "use or operation" of a motor vehicle. Westchester Med. Ctr. v. Travelers Prop. Cas. Ins. Co., 309 A.D.2d 927, 928 (2d Dep't, 2003).
The poor woman was almost murdered in a horrific manner and the hospital did the very thing hospitals are supposed to do. To be sure, the hospital had no part in the attempted murder, and it would have been cruel (and possibly some other things) for them to have refused to treat as soon as they found out her injuries were the result of an intentional act. But do they get reimbursed through no-fault? No. "The assault, committed through the use of a vehicle, was an intentional act, not an accident. Consequently, the...cause of action should have been dismissed." Id. The ability of a no-fault claimant or her assignees to assess a potential defense their claims has no relationship to the properness of a carrier employing such defenses. If the claims do not qualify, and the carrier has proven such in accordance with the applicable laws for proving a defense, that is the end of the judicial inquirty.
No-fault isn't just something where money gets tossed around for equitable reasons. It is based upon a contract, the terms of which are promulgated by the government. The contract has provisions. Those provisions are to be followed. The contract does not provide reimbursement for unnecessary services. The contract does not get changed around depending on whether those provisions would kinda sorta stink a little bit for an assignee of one of the parties thereto. Is this a revelatory stance? I think not, given decisions such as Westchester Med. Ctr. v. Travelers. And while the Appellate Term, 2d Dep't is no stranger to such wholesale no-fault contract re-writing,4 as I said yesterday, recent decisions appear to reverse that trend, or at least provide some balance. And, really, regardless of which party one is representing in a no-fault suit, is strict adherence to the laws and regulations really that bad of an idea?
MRI facilities giving a no-fault patient three MRIs a week after an accident are in no more of a sympathetic position than Mrs. Suljovic and Westchester Medical Center, and, in reality, are surely far less sympathetic. To hold that medical necessity defenses should be unavailable as against such MRI facilities due to unfairness is simply untenable in light of the result in Westchester Med. Ctr. and innumerable similar Appellate Division holdings. Well, it ain't keeping it real, at least.
1. Really, does requiring subrogation against the referring provider after losing a no-fault suit shorten or lengthen the claim procedure? One could argue for the opposite result of Long Is. Radiology without changing the rationale.
2. Though maybe psychologists can if they broach that subject.
[3. Presumably, Justice Phelan would have the carrier subrogate against Mrs. Suljovic's incarcerated husband.]
4. "While the holding of the majority results in a plenary trial on the issue of lack of medical necessity, the insurer will have no evidence to present on the issue of 'medical necessity,' as the eligible injured person never appeared for the IME and consequently the company never examined that person. The eligible injured person would not be entitled to summary judgment but the insurer has no possibility to defend at trial. This, of course, ignores 11 NYCRR 65-1.1 (d) which provides that "No action shall lie against the Company..." Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins., 7 Misc. 3d 18, 25 (App. Term, 2d Dep't, 2004), dissent of Golia, J.
Posted by Damin J. Toell, Esq. at 10:18 PM No comments: Links to this post
Much thanks for Nicole L. Black, Esq., she of the Sui Generis blawg, not only for pointing out to us that we are linked in a post today on PointofLaw.com, but also apparently for providing the method by which we got noticed in the first place.
Also a hearty welcome to the 3 people in the world that will read the PointofLaw.com post and be unable to resist checking out "a blog on New York no-fault auto law." ;)
Posted by Damin J. Toell, Esq. at 2:46 PM No comments: Links to this post
The Appellate Term, 2d Department has been in engaging in some rather groundbreaking decision-making as of late: the application of "real" law (as opposed to solipsistic citation to prior no-fault decisions that had no particular basis in law on their own). For your consideration, we present the decision in West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 2006 NYSlipOp 51871(U) (App. Term, 2d Dep't, 2006). The "real" rule of law in question: "[I]t is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor." Id., citing to Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121 (1975).
In the trial court opinion, Judge Judith R. McMahon held that "in a matter, such as the instant case, wherein the usual and customary medical procedure was utilized by the examining physician in referring a patient involved in a motor vehicle accident for radiological tests after a physical examination, and the patient assigned her rights to the diagnostic radiological establishment for reimbursement of No-Fault benefits, the affirmative defense of lack of medical necessity should not be available as the diagnostic center does not make an independent medical evaluation of the patient and the denial of benefits to the diagnostic establishment is in derogation of the intent of the Insurance Law 5106." West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 8 Misc. 3d 423, 427 (Civ. Ct., Richmond Cty., 2005). In sum, a carrier cannot deny MRI bills based upon a lack of medical necessity. This conclusion was based on that most vague and useless of arguments: that "the purpose and intent of the Insurance Law No-Fault Benefits statute which is expedient payment of benefits to automobile victims." Id.
The meat of the App. Term's rationale for overruling the Civil Court's order is as follows:
Under the Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law art 51), more commonly known as the No-Fault Law, "first party benefits" are available to reimburse persons for "basic economic loss" resulting from injuries "arising out of the use or operation of a motor vehicle" (Insurance Law § 5102 [b]). Insurance Law § 5102 (a) (1) defines "basic economic loss" as including, inter alia, "[a]ll necessary expenses incurred for: (i) medical, hospital . . ., surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services" and "(iv) any other professional health services." The Mandatory Personal Injury Protection Endorsement (11 NYCRR 65-1.1 [d]) defines "medical expenses" as consisting of "necessary expenses" for the services which are enumerated in the statute. Nowhere in the statutory or regulatory scheme is there any suggestion that services rendered by diagnostic centers or, for that matter, medical equipment suppliers, laboratories, or radiological facilities, all of which rely upon prescriptions or referrals from treating or examining medical providers, be exempt from the requirement that said services be "medically necessary." While it may be argued that a diagnostic center is in no position to establish the medical necessity of a prescribed MRI, it is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor (see Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121 [1975]). If a claim is not assigned, and is submitted to the insurer directly by the eligible injured person, the insurer may assert a defense of lack of medical necessity which, if established, will shift the burden to the eligible injured person to provide his or her own evidence of medical necessity. If the defense may be asserted against the eligible injured person, it follows that it may be asserted against the provider as well. Moreover, "[t]o permit medical providers to receive reimbursement even when the insurer has proven that the service provided was not medically necessary would encourage fraud, rather than combat it . . . . In fact, the construction urged by plaintiff would require insurers to pay for MRIs of the entire spine when the insured suffered a broken toe, or for full body scans for broken arms" (Precision Diagnostic Imaging, P.C. v Travelers Ins. Co., 8 Misc 3d 435, 439 [2005]). 2006 NYSlipOp 51871(U).
This makes sense for a number of reasons, not the least of which is that the limitation of basic economic loss in § 5102 to "necessary [medical] expenses" doesn't have a subsection containing an exemption for instances where it would stink for the provider. To be sure, no one ever wants to write in a general exception to the laws and regulations when application of same would stink for the carrier.
Also, I think the end result of such a rule would be even worse than what the Civil Court posed in Precision Diagnostic: a no-fault applicant could have a single examination by a physician at which everything under the sun was prescribed, and then the resulting tens of thousands of dollars of no-fault claims would not be defensible on the basis of lack of necessity.
Indeed, I think the Court of Appeals has actually already decided the matter, anyway. The factual basis of Central General v. Chubb, 90 N.Y.2d 195 (1997) was as follows:
Central General Hospital provided medical treatment to Pamela Mandresh on four separate occasions for injuries allegedly sustained in an automobile accident. Chubb insured the automobile Mandresh was driving at the time she was allegedly injured. The hospital submitted standard requests for payment of no-fault billings totaling $ 2,403.50. Chubb rejected them on the grounds that the injuries were not related to the accident and the treatments were excessive. Chubb insists that Mandresh's injuries were sustained in a separate work-related accident about a year prior to the automobile accident. Id. at 198.
Although there was an allegation by Chubb that Ms. Mandresh had treated with the same physician for both injuries, this appears to be unrelated to the services rendered by the hospital. Either way, when a patient presents injuries and a given explanation to a physician, unless the injuries are somehow so blatantly unrelated that they cannot possibly have arisen as explained, the physician is in no position to determine the causality of the injuries. Nevertheless, the Court of Appeals concluded that "an insurer...may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident." If Judge McMahon's conclusion in the West Tremont trial decision was the correct rule, Central General should have held that carriers are precluded from raising the defense of lack of causality (unless the medical provider was actually a personal witness to the event that caused the injuries, I suppose).
Possibly more later on the potential effects of the App. Term's decision in West Tremont on the pending litigation in Long Is. Radiology v. Allstate Ins. Co., 12 Misc. 3d 1167A (Sup. Ct., Nassau Cty., 2006).
Posted by Damin J. Toell, Esq. at 11:16 AM No comments: Links to this post
As Matthew S. Lerner, Esq. of the New York Civil Law blawg recently posted1, Judge Peter Paul Sweeney of Civil Court, Richmond County has issued an opinion on the proper calculation of attorney's fees. See Marigliano v NY Cent. Mut. Fire Ins. Co., 2006 NY Slip Op 26395 (Civ Ct., Richmond Cty., 2006).
Judge Sweeney (now sitting once again in Civil Court, Kings County, and in fine spirits concerning the move as per conversations between His Honor and the undersigned yesterday) adopted the interpretation of the attorney's fees portions of the Regulations opined upon by the NYS Insurance Department on October 8, 2003. As the Ins. Dep't concluded therein:
The minimum amount of attorney's fees awarded to an assignee health provider who has prevailed in a court action brought against a No-Fault insurer is based upon the aggregate amount of payment required to be reimbursed based upon the amount awarded for each bill which had been submitted and denied. The minimum attorney fee amount of $60 is not due and owing for each bill submitted as part of the total amount of the disputed claim sought in the court action.
In Marigliano, plaintiff favored a calculation whereby each individual bill would be entitled to a separate fee calculation, each with its own $60/$850 boundaries (actually, plaintiff probably argued for a minimum of $80, but that's a recurring issue for a future post on No-Fault Urban Legends). Given that there were three (3) assignors in the suit, the Court's ruling will result in three (3) separate fee calculations, with the same $60/$850 bounds. Without having seen the underlying briefs, I am guessing that plaintiff's preferred calculation would have led to attorney's fees in excess of $1,200. Using the calculation set forth by the Ins. Dep't, attorney's fees probably didn't even exceed $850 (although the theoretical maximum for fees in a suit with three separate assignors would actually be $2,550, it is unlikely that the bills for each assignor reach that level).
This has been a pressing issue for some time, and I almost hope that the plaintiff appeals so that we can get a an on-point determination from the Appellate Term. Plaintiffs often break up very small bills into multiple causes of action in a Complaint in order to multiply their attorney's fees (and plaintiff's counsel in Marigliano is certainly no exception). Any bill lower than $300 will bring in attorney's fees at the $60 minimum, so sometimes plaintiffs will have 20+ causes of action per assignor, each with bills of around $150, in order to greatly boost the fees. Whereas using the calculation on which the Ins. Dep't has opined might not even result in fees that hit the $850 ceiling, using the plaintiffs' preferred calculation can far exceed $850, as seen in my rough guesses re: Marigliano above. It's obviously very frustrating when negotiating on behalf of a carrier that is otherwise dead in the water on their defense in a given action - a carrier either must face paying the full amount of the bills plus interest, fees (with a calculation likely done by the plaintiff and accepted by the clerk, anyway), and costs or give in to a demand that flouts regulatory limits. This often hardly constitutes a "settlement."
I am inclined to believe that if the Appellate Term of the 2d Dep't hears this matter, faced with a very clear opinion letter from the Insurance Department and no contrary and on-point Appellate Division holdings, they will be likely to uphold the Civil Court determination and memorialize the opinion letter as binding common law. In the absence of contrary Appellate Division holdings, the Appellate Term appears to favor adopting the opinions of the Ins. Dep't, as seen on the matter of whether providers can be reimbursed for services performed by independent contractors. See A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc. 3d 36 (App. Term, 2d Dep't, 2005).2 The Appellate Term also seems concerned of late with systemic abuses by no-fault medical providers and their attorneys, another factor weighing in the carriers' favor. See, e.g., the fairly recent scheduling of sanctions hearings by the Appellate Term for Marylou A. Paolucci, Esq. and Alden Banniettis, Esq.3 Of course, the Appellate Term is highly unpredictable, and I have surely been wrong before.
1. The post at bar is a modified version of a comment I posted to the subject New York Civil Law post.
2. However, the Appellate Term has never paid any attention to Ins. Dep't opinions that conflict with established appellate case law. For example, the Appellate Term has never given any weight to the January 11, 2000 opinion letter that medical necessity may be part of a plaintiff's prima facie burden (even where a carrier is precluded from raising the lack of medical necessity as a defense), as this is surely contradicted by the seminal Court of Appeals holding in Presbyterian Hospital v. Maryland Casualty Co., 90 N.Y.2d 274 (1997) and numerous appellate decisions holding that a plaintiff need only prove that it submitted claim forms to the carrier on which it stated the fact and amount of the loss sustained and that such claims have not been paid or properly denied.
3. Although the Appellate Term has published a motion decision whereby they declined to sanction Ms. Paolucci, I have not yet seen a decision either way concerning Mr. Banniettis.
Posted by Damin J. Toell, Esq. at 5:30 PM No comments: Links to this post