December 22, 2003

King’S Med. Supply v Allstate Ins. Co. (2003 NY Slip Op 51681(U))

https://www.beynensonlaw.com/case-law/kings-med-supply-v-allstate-ins-co-2003-ny-slip-op-51681u/

Court: Appellate Term, Second Department
Decided: December 22, 2003
Citation: 2003 NY Slip Op 51681(U)
Posture: Summary judgment
Outcome: Provider prevailed
Later treatment: Followed in 4 later decisions (see Cited by)
Issues: Fee schedule
Legal questions: Proving a fee schedule defense (see the maps)

Cite as

King'S Med. Supply v Allstate Ins. Co., 2003 NY Slip Op 51681(U) (App Term, 2d Dept, 9th & 10th Jud Dists 2003)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

Medical equipment reimbursement is governed by the 150-percent-of-cost fee schedule rather than prevailing local rates. The insurer objected that the provider's equipment prices exceeded prevailing rates in its geographic location. The Appellate Term, Second Department, reversed denial of the provider's summary judgment motion, granted the motion, and remanded for statutory interest and attorney fees. Reference to prevailing local fees under 11 NYCRR 68.5 (b) applies only when no applicable fee schedule exists. The 150-percent limitation in 11 NYCRR Appendix 17-C, Part E (b) (1) constitutes such a schedule. The court treated the rule as serving Insurance Law § 5108's cost-containment purpose; challenges to its premises call for remedial legislation.

Reported in New York Official Reports at King’S Med. Supply v Allstate Ins. Co. (2003 NY Slip Op 51681(U))

[*1]

King’s Med. Supply v Allstate Ins. Co.

2003 NY Slip Op 51681(U)

Decided on December 22, 2003

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the Official Reports.

Decided on December 22, 2003

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS

PRESENT:DOYLE, P.J., WINICK and SKELOS, JJ.
NO. 2003-50 S C

KING’S MEDICAL SUPPLY INC., a/a/o Marino Santos, Appellant, – –
against
ALLSTATE INSURANCE COMPANY, Respondent.

Appeal by plaintiff from an order of the District Court, Suffolk County (H. Bergson, J.), entered October 18, 2002, denying its motion for summary judgment.

Order unanimously reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In this action to recover assigned first-party no-fault insurance benefits, defendant insurer objected to plaintiffs claim for medical equipment on the ground that the supplier’s prices exceeded the prevailing rates for such equipment in its “geographic location” (cf. 11 NYCRR 68.5 [b], Reg. No. 83). The Insurance Department regulation permitting reference to “the prevailing fee in the geographic location of the provider” to determine appropriate no-fault compensation pertains only where “the superintendent has not adopted or established a fee schedule applicable to the provider” (id.; e.g. Tucciarone v Progressive Ins. Co., 204 AD2d 864 [1994]). The regulations, however, explicitly limit a provider’s medical equipment claims to 150 percent of cost (11 NYCRR App. 17-C, Part E [b] [1]) which clearly is an applicable fee schedule within the contemplation of 11 NYCRR 69.5 (b) (see King’s Med. Supply v Travelers Prop. Cas. Corp., 194 Misc 2d 667, 673 [2003]). As “[tjhe purpose of [Insurance Law § 51083 and the fee schedules promulgated thereunder [was] ‘to significantly reduce the amount paid by insurers for medical services, and thereby help contain the no-fault premium” (Goldberg v Corcoran, 153 AD2d 113, 118 [1989]), we must assume that the 150 percent rule represents a legislative determination that the net effect of this straightforward, categorical limitation on fees, coupled with suppliers’ marketplace competition to moderate prices (or at least to minimize price disparities), “help[s] contain the no-fault premium” (id.). If the premises underlying this [*2]determination are empirically unsound, the solution is remedial legislation.
Decision Date: December 22, 2003

Legal questions

A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Proving a fee schedule defense

Open the full map

Did the insurer prove that the amount billed exceeded the applicable workers’ compensation fee schedule?

This decision: Court finally rejected the fee schedule defense; provider recovers the disputed amount

Held the insurer could not reduce medical equipment charges to the geographic prevailing rate because the 150%-of-cost rule is the applicable fee schedule, so the provider was granted summary judgment.

Excess shownNot established; openDefense rejectedSplit by chargeThis decisionCites it or cited by itCited or followed

Of the 285 decisions on this question in the Second Department courts and the Court of Appeals, 29 (this one included) are in the same category.

Cited by

A label shows how the later decision treated this one.

S&M Supply Inc. v Progressive Ins. Co. (2005 NYSlipOp 51312(U)) FollowedThe insurer's excessive-charge defenses failed because one denial was untimely and the other lacked admissible proof or a valid regulatory basis.
Careplus Med. Supply Inc. v Allstate Ins. Co. (2005 NYSlipOp 51525(U)) FollowedThe former medical-equipment fee schedule caps reimbursement at 150 percent of cost and does not use local prevailing rates.
Careplus Med. Supply, Inc v Allstate Indem. Co. (2005 NY Slip Op 51527(U)) FollowedThe insurer improperly reduced equipment claims to local prevailing rates under a fee schedule allowing 150 percent of cost.
Careplus Med. Supply Inc. v Allstate Ins. Co. (2005 NYSlipOp 51526(U)) FollowedThe former medical-equipment fee schedule caps reimbursement at 150 percent of cost and does not use local prevailing rates.
Jesa Med. Supply, Inc. v GEICO Ins. Co. (2009 NY Slip Op 29386)The physician's affirmation authenticated the electronic signature on the peer review, supporting the medical-necessity denial.

Similar decisions

Amaze Med. Supply v Allstate Ins. Co. (2004 NY Slip Op 24119)An insurer may not deny equipment fees as exceeding local prevailing rates when the applicable schedule limits reimbursement to 150% of cost.
King’s Med. Supply Inc. v New York Cent. Mut. Fire Ins. Co. (2004 NY Slip Op 51685(U))Failure to attend an IME scheduled before the insurer receives the provider's claim is not a proper basis for denying no-fault benefits.
King’S Med. Supply v Progressive Ins. (2004 NY Slip Op 50311(U))A provider cannot invoke preclusion to avoid a defense raised by its own proof that billed equipment was not prescribed.
Amaze Med. Supply v Eagle Ins. Co. (2004 NY Slip Op 50279(U))A provider cannot invoke preclusion to defeat a defense concerning unprescribed equipment when its own motion papers raise that issue.
Fair Price Med. Supply Corp. v General Assur. Co. (2005 NY Slip Op 50256(U))The insurer's conclusory proof of IME requests and nonappearance failed to raise a triable issue against the provider's claim.