Source: http://jtnylaw.com/category/mallela-issues/page/3/
Timestamp: 2019-01-21 00:24:15
Document Index: 267139304

Matched Legal Cases: ['§ 238', '§ 238', '§ 238', '§ 238', '§ 5102', '§ 5109', '§ 145']

Public Health Law 238-a defense?
Stephen Matrangalo, DC, PC v Allstate Ins. Co., 2011 NY Slip Op 50517(U)(App. Term 1st Dept. 2011)
“Public Health Law § 238-a prohibits a practitioner from making a referral to a health care provider where the referring practitioner (or immediate family member of such practitioner) has a “financial relationship” with the health care provider (Public Health Law § 238-a[1][a]). A “financial relationship” is defined in section 238(3) of the Public Health Law as “an ownership interest, investment interest or compensation arrangement.” Critically, a “compensation arrangement” means “any arrangement involving any remuneration between a practitioner, or immediate family member, and a health care provider” (Public Health Law § 238-a[5][a]), but does not include “payments for the rental or lease of office space” if there is a lease that meets specific enumerated requirements, i.e., is in writing, for a term of at least one year, with a rent consistent with fair market value and not based upon the volume or value of any referrals, and would be commercially reasonable even if no referrals were made (Public Health Law § 238-a[5][b][i]).”
To simplify this, let me ask the following question: What makes this any different than precludable provider fraud? Is there coverage? Yes. Is PHL 238-a an explicit condition precedent to coverage set forth in the policy? No. Is PHL 238-a a Mallela based violation? Probably not.
So, absent proof of a timely denial, the court should not have reached the merits of the case. That is the law, as nutty as it may seem.
An unproven Mallela defense will cost State Wide millions
The Rabiner cases
I just saw this on No-Fault Paradise and thought it was an interesting decision for a few reasons. First, the court left open the issue as to whether a Mallela defense must be proven by clear and convincing evidence. See, State Farm Mut. Auto. Ins. Co. v. Robert Mallela 4 N.Y.3d 313 (2005)(“In the licensing context, carriers will be unable to show “good cause” unless they can demonstrate behavior tantamount to fraud. Technical violations will not do.”). Second, I found the following statement interesting: “To the extent that defendant sought to establish at trial that the management company hired by plaintiff was the entity that actually operated the plaintiff’s corporations, the record is devoid of facts establishing any of the indicia of ownership by one other than plaintiff’s licensed professional.“
I am curious what this “indicia” is that is necessary to substantiate a Mallela defense. It also looks like a Mallela defense is not as easy to substantiate at trial as many on the defense bar, who throw around the word Mallela, would like us all to believe.
I wonder how much compounded interest is out there in these cases since there was no toll. My guess is probably close to the one million dollar mark.
I also am curious to see what is now going to become of the rest of the Rabiner claims that are pending, e.g., Allstate v. Belt Parkway. While this decision is not res judicata against Allstate in the aforementioned case, it probably should have some bearing on how aggressive Allstate wants to be in prosecuting these pending actions. Good job to Dave Barshay on behalf of his client.
This case can be cited as: Parkway MRI, P.C. v State Wide Ins. Co, 2010 NY Slip Op 52232(U)(App. Term 2d Dept. 2010)
Ins Law 5109 and the failure to promulgate regulations thereto is not fatal to a Mallela defense
Allstate Ins. Co. v Belt Parkway Imaging, P.C., 2010 NY Slip Op 08783 (1st Dept. 2010)
“Section 5109(a) states, “The superintendent, in consultation with the commissioner of health and the commissioner of education, shall by regulation, promulgate standards and procedures for investigating and suspending or removing the authorization for providers of health services to demand or request payment for health services as specified in” Insurance Law § 5102(a)(1). However, the Superintendent of Insurance has issued no regulations pursuant to § 5109(a). Thus, if — as defendants contend — only the Superintendent can take action against fraudulently incorporated health care providers, then no one can take such action. In light of the [*2]fact that “[t]he purpose of the regulations of which [11 NYCRR] 65-3.16(a)(12) is a part was to combat fraud” (Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407, 409 [2006]), this would be an absurd result, and we reject it (Statutes § 145).”
While ultimately unsuccessful, this case shows that there is no want of creative thinking within the no-fault bar.
Geico v. Vista Medical Diagnostic (the complaint and Rico pattern act rider)
I think i fixed the bugs. Please let me know if you can download on explorer.
I have finally relented and am posting the relevant documents I downloaded from Pacer.
Geico v. Vista Medical Diagnostic
Rico Pattern Act
Mallela based discovery
B.Y., M.D., P.C. v Lancer Ins. Co., 2010 NY Slip Op 50493(U)(App. Term 2d Dept. 2010)
“However, defendant seeks discovery, inter alia, to support its defense that B.Y. is ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded (see New Era Acupuncture, P.C., 24 Misc 3d 134[A], 2009 NY Slip Op 51396[U]). As a result, discovery of certain items requested by defendant is not palpably improper, and B.Y. did not demonstrate that such information was privileged. Consequently, defendant is entitled to production of the documents and information demanded in items 1 through 7, 9, 10, 12 through 16, 19, 41, and 42 of its notice for discovery and inspection, and to responses to questions 1, 6 through 9, and 23 through 25 of its “demand for verified written interrogatories” insofar as the information sought relates to B.Y. (see CPLR 3101 [a]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]; Midwood Acupuncture, P.C. v State Farm Fire & Cas. Co., 21 Misc 3d 144[A], 2008
NY Slip Op 52468[U] [App Term, 2d & 11th Jud Dists 2008]; Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U] [App Term, 2d & 11th Jud Dists 2008]).”
The “good cause” standard does not regulate Mallela based discovery matters. As we all know, no-fault matters brought in court are subject to the full scope of CPLR 3101. But here is the unresolved question: what factual presentation is necessary to allow this type of broad based corporate structure discovery? Since One Beacon, it is rare that one sees a Mallela discovery-based case, where the application for discovery based sanctions is denied.
I do not think the good cause standard was proper. I also do not think baseless allegations, without a sufficient evidentiary presentation, should allow this type of discovery. Some articulated threshold standard is necessary, so the bar can have some clarity on this issue. And so we wait.
Interesting Mallela case from the Appellate Term, Second Department
May a physician who does not practice acupuncture bill for the services of an acupuncturist he or she hires? That almost sounds like a question that I would start one of my appellate briefs with.
The Appellate Term, Second Department says “no” in Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co., 2010 NY Slip Op 50262(U)(App. Term 2d Dept. 2010).
You can read the case if you want, but it follows the logic of Justice Dollard’s opinion in St. Paul Travelers Ins. Co. v Nandi, 15 Misc 3d 1145(A)(Sup. Ct. Queens Co. 2007). I like the “c.f.” to Healthmakers Med. Group, P.C. v Travelers Indem. Co., 13 Misc 3d 136(A)(App. Term 1st Dept. 2006).
I will pass on offering my opinion on this one. You cannot have my opinion on every PIP issue now. I do not accept Pay Pal, sorry.
Mallela as a defense to a malpractice action
Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLC v Comprehensive Mental Assessment & Med. Care, P.C., 2010 NY Slip Op 20007 (Sup. Ct Nassau Co. 2010)
This case represents many things. I find it interesting because it proves a point that many of us say to ourselves when nobody is listening, i.e., that the best plaintiff’s attorneys are those who were former defense attorneys, or hired former defense attorneys. Thus, we have this case, a matter where a plaintiff no-fault law firm is alleging a Mallela violation as a defense to a malpractice claim brought against it. I find the strategy ironic, yet am compelled to find it somewhat ingenious.
Behind the irony that this case offers, it should be remembered that the above scenario happens frequently in malpractice cases, when the former plaintiff attorney has to step into the shoes of the defendant he once sued because of the “case within a case” rule, that malpractice actions invoke.
And while many defense attorneys might find some joy in this decision, you should probably remember the following: if you as a “defense attorney” ever get hit with a malpractice claim, then you would be forced to turn “plaintiff attorney” and engage in a practice that is probably as unsavory as the said “plaintiff attorney” using Mallela as a defense. This would mean that you would be impeaching the denial you defended, the mailing of the same, the proof in support of the denial and the processes your then former client had in place, in order to defeat that malpractice claim.
As to the substance of this lawsuit, the only thought I have is that we all should have malpractice insurance or reserves put away for these occurrences.