April 6, 2022

Healthplus Surgery Ctr., LLC v American Tr. Ins. Co. (2022 NY Slip Op 02252)

https://www.beynensonlaw.com/case-law/healthplus-surgery-ctr-llc-v-american-tr-ins-co-2022-ny-slip-op02252/

Court: Appellate Division, Second Department
Decided: April 6, 2022
Citation: 2022 NY Slip Op 02252 · 204 AD3d 646
Posture: Summary judgment
Outcome: Split result
Issues: Fee schedule Medical necessity
Legal questions: Lack of medical necessity · Proving a fee schedule defense (see the maps)

Cite as

Healthplus Surgery Ctr., LLC v American Tr. Ins. Co., 204 AD3d 646 (2d Dept 2022)

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.

The insurer proved fee-schedule overbilling but failed to support its medical-necessity defense with a factual basis and medical rationale. The Appellate Division, Second Department, modified the order to grant summary judgment dismissing the first cause of action above $1,724.22 and the third above $12,924.78, otherwise affirming denial of dismissal. The peer reviews offered only conclusory opinions that the injuries were degenerative and chronic and conservative treatment would suffice. The insurer's expert nevertheless established the reimbursement limits under Insurance Law § 5108 (a) and (c) and 11 NYCRR 68.6 (a) (1), and the provider raised no triable issue on those limits.

Reported in New York Official Reports at Healthplus Surgery Ctr., LLC v American Tr. Ins. Co. (2022 NY Slip Op 02252)

Healthplus Surgery Ctr., LLC v American Tr. Ins. Co.

2022 NY Slip Op 02252 [204 AD3d 646]

April 6, 2022

Appellate Division, Second Department

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

As corrected through Wednesday, June 1, 2022

[*1]

Healthplus Surgery Center, LLC, Respondent,
v
American Transit Insurance Company, Appellant.

Law Offices of Peter C. Merani, P.C., New York, NY (Adam Waknine of counsel), for appellant.

Baker & Cantin, P.C., Rego Park, NY (Elyse R. Ulino of counsel), for respondent.

In an action to recover no-fault benefits, the defendant appeals from an order of the Supreme Court, Queens County (Chereé A. Buggs, J.), entered October 31, 2019. The order denied the defendant’s motion for summary judgment dismissing the complaint.

Ordered that the order is modified, on the law, by deleting the provision thereof denying those branches of the defendant’s motion which were for summary judgment dismissing so much of the first cause of action as sought reimbursement greater than $1,724.22 and so much of the third cause of action as sought reimbursement greater than $12,924.78, and substituting therefor a provision granting those branches of the motion; as so modified, the order is affirmed, with costs payable to the defendant.

The plaintiff, a medical provider, commenced this action to recover assigned first-party no-fault benefits for medical services rendered. The defendant moved for summary judgment dismissing the complaint, arguing that the services lacked medical necessity and the amount sought exceeded the amount permitted by the applicable fee schedule. The Supreme Court denied the motion, and the defendant appeals.

The defendant failed to establish, prima facie, that the services provided were not medically necessary (see Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 143 AD3d 768 [2016]). The peer review reports submitted by the defendant did not establish a factual basis and medical rationale for the determination that there was a lack of medical necessity for the services, as each doctor merely set forth a conclusory opinion that the alleged motor vehicle injuries were degenerative and chronic, and conservative treatment would suffice (see Eagle Surgical Supply, Inc. v Mercury Cas. Co., 36 Misc 3d 131[A], 2012 NY Slip Op 51286[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In light of the defendant’s failure to meet its prima facie burden, we need not consider the sufficiency of the opposing papers on that issue (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Allstate Ins. Co. v Buffalo Neurosurgery Group, 172 AD3d 967 [2019]).

The defendant nevertheless established, prima facie, that the bills for the services provided were in excess of the proper fee schedule (see Insurance Law § 5108 [a], [c]; 11 NYCRR 68.6 [a] [1]). The defendant’s expert stated in an affidavit that if the services were determined to be [*2]medically necessary, the plaintiff would be entitled to a reimbursement of only $1,724.22 of the $2,586.34 claimed in the first cause of action, and only $12,924.78 of the $25,849.56 claimed in the third cause of action. As the plaintiff failed to raise a triable issue of fact in opposition to this showing, the Supreme Court should have granted those branches of the defendant’s motion which were for summary judgment dismissing so much of the first cause of action as sought reimbursement greater than $1,724.22 and so much of the third cause of action as sought reimbursement greater than $12,924.78 (see Allstate Ins. Co. v Buffalo Neurosurgery Group, 172 AD3d 967 [2019]; AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2007]). Brathwaite Nelson, J.P., Chambers, Roman and Zayas, JJ., concur.

Legal questions (2)

Questions 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.

Lack of medical necessity

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Did the insurer’s proof establish lack of medical necessity, and did the provider’s evidence rebut it?

This decision: Insurer's medical-necessity proof failed (conclusory, no factual basis or rationale, inadmissible, not credited)

Held the insurer's peer review reports insufficient because each doctor merely gave a conclusory opinion that the injuries were degenerative and chronic and conservative treatment would suffice, without a factual basis and medical rationale.

Unrebutted, insurer prevailsProvider's rebuttal sufficientInsurer raised triable issueInsurer's proof insufficientTrial error, new trialThis decisionCites it or cited by itCited or followed

Of the 617 decisions on this question in the Second Department courts and the Court of Appeals, 109 (this one included) are in the same category.

Proving a fee schedule defense

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

This decision: Insurer proved the billed amount exceeded the applicable fee schedule

Held the insurer's expert affidavit established that the bills exceeded the applicable fee schedule, limiting recovery to the calculated amounts, and the provider raised no triable issue, so the excess was dismissed.

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, 147 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C. (2016 NY Slip Op 06680) FollowedThe insurer's affirmed peer review supported a default judgment despite lacking an original signature.
Eagle Surgical Supply, Inc v Mercury Cas. Co. (2012 NY Slip Op 51286(U)) FollowedThe insurer's peer review report lacked a factual basis and medical rationale because it merely asserted insufficient documentation.
Allstate Ins. Co. v Buffalo Neurosurgery Group (2019 NY Slip Op 03749) FollowedThe insurer established a fee-schedule defense but failed to show that the assignor's spinal fusion surgery was medically unnecessary.
AVA Acupuncture, P.C. v GEICO Gen. Ins. Co. (2007 NY Slip Op 27371) FollowedAn insurer may use the workers' compensation fee schedule for chiropractors to reimburse acupuncture performed by a licensed acupuncturist.

Cited by

American Tr. Ins. Co. v Beach Med. Rehabilitation, P.C. (2026 NY Slip Op 03771)The insurer failed to raise a triable issue on timely denials or causation in its action for de novo review of no-fault claims.
Pak Hong Sik, MD, Med. Care, P.C. v Mid-Century Ins. Co. (2024 NY Slip Op 50804(U))The provider's challenge to the insurer's fee-schedule defense was raised for the first time on appeal and was not considered.

Similar decisions

Healthplus Surgery Ctr., LLC v Global Liberty Ins. Co. of N.Y. (2020 NY Slip Op 03772)The provider's expert affidavit raised factual issues on medical necessity and reimbursement for a surgical device under New Jersey's fee schedule.
Brooklyn Chiropractic & Sports Therapy, P.C. v A. Cent. Ins. Co. (2013 NY Slip Op 50904(U))The insurer established lack of medical necessity for one claim and outstanding verification for two, but obtained no dismissal of twelve others.
New York & Presbyt. Hosp. v American Tr. Ins. Co. (2007 NY Slip Op 09376)The insurer raised a factual issue by showing a timely denial based on bills submitted more than 45 days after the last medical service.
Elite Med. NY, P.C. v American Tr. Ins. Co. (2013 NY Slip Op 51738(U))The insurer established lack of medical necessity for two claims and outstanding verification that rendered the third claim premature.
Sama Physical Therapy, P.C. v American Tr. Ins. Co. (2016 NY Slip Op 51359(U))The insurer established proper recoding of physical therapy services but failed to justify Ground Rule 11 reductions on three claims.