Elite Med. Care, P.C. v Travelers Prop. & Cas. Ins. Co. (2006 NY Slip Op 51397(U))

Civil Court, Kings County

047034/2004

Genine D. Edwards, J.

This is a bench trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by Elite Medical Care, P.C. (“plaintiff”) as assignee of Dan Teper (“assignor”) against Travelers Property and Casualty Insurance Company (“defendant”) pursuant to the New York Insurance Law and the No-Fault regulations. Plaintiff billed defendant a total of $5,155.47 for medical treatment rendered to its assignor. The treatment was provided from January 2002 through July 2002.

At the outset, defendant made a motion to dismiss plaintiff’s complaint because the NF-3 forms (proof of claim) were defective. Defendant contended that there was an issue regarding the relationship of a health service provider and the plaintiff. Defense counsel stated that according to New York State information, Ahmed Salem (a named health care provider on several of the NF-3 forms) is the owner of plaintiff, but Mr. Salem allegedly admitted under oath that he is not the owner. Defendant also argued that the NF-3 forms were not pleadings and could not be amended as of right. Plaintiff responded by indicating that the subject treatment was performed in 2002 predating the 2004 NF-3 form. This Court reserved its decision on defendant’s motion.

The applicable insurance regulations regarding direct payment of no-fault benefits establishes that “an insurer shall pay benefits upon assignment directly to providers of health care services ” 11 NYCRR 65-3.11(a). Pursuant to this regulation defendant asserted that the plaintiff is not a “provider”. In support of this contention defendant alleged that the NF-3 forms submitted by plaintiff did not identify the relationship between the plaintiff and the treating physicians.

Defendant also argued that there is contradictory evidence regarding Mr. Salem’s relationship with the plaintiff.

Defendant is correct. No-fault benefits must be paid directly to providers of services. A.B. Medical Services PLLC v. Liberty Mutual Insurance Company, 9 Misc 3d 36 (2nd Dept. 2005); Rockaway Boulevard Medical P.C. v. Progressive Insurance, 9 Misc 3d 52 (2nd Dept. 2005); A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C. v. Countrywide Insurance Company, 10 Misc 3d 249 (NY Civ. Ct Kings County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1061(A) (NY Civ. Ct Queens County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1069(A) (NY Civ Ct Queens County 2005). [*2]

If it is demonstrated that the billing entity or its employees are not the actual health care providers then they are not entitled to payment of no-fault benefits directly from the insurance company. A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C., supra; Rockaway Boulevard Medical P.C., supra; Health and Endurance Medical P.C. v. State Farm Mutual Automobile Ins., 2006 NY Slip Op. 51191(U) (App. Term 2nd & 11th Jud. Dists. 2006); Boai Zhong Yi Acupuncture Services v. Allstate Insurance Co., 2006 NY Slip Op. 51288(U) (App. Term 2nd & 11th Jud. Dists. 2006). Moreover, this defense cannot be waived and is not subject to preclusion for failure to timely deny. Rockaway Boulevard Medical P.C., supra; M.G.M. Psychiatry Care P.C. v. Utica Mutual Insurance Company, 2006 NY Slip Op. 51286(U) (App. Term 2nd & 11th Jud. Dists. 2006).

However, as in Multiquest PLLC, 10 Misc 3d 1061(A), supra, the defendant herein failed to provide any competent evidence that Mr. Salem was an independent contractor and not plaintiff’s employee. In addition, the defendant predicated its motion to dismiss upon the insufficiency of the NF-3 forms, without proving that it requested verification of the information provided therein. Rockaway Boulevard Medical P.C., supra. Hence, defendant’s motion must fail.

Turning to the trial, the plaintiff proffered the testimony of Viktoria Beylana, an employee of Maugust, Inc. Plaintiff hired Maugust Inc. to handle its billing and collection matters. Ms. Beylana testified that she received all of the medical paperwork from the plaintiff then prepared and mailed the bills. She also handled plaintiff’s incoming mail, denials and verification requests. Ms. Beylana responded to denials by submitting further information to the insurance company. Ms. Beylana identified nine bills and two letters to the defendant, which were marked into evidence. She had no knowledge as to the employment relationship of the health care providers and the plaintiff. Plaintiff’s counsel never questioned Ms. Beylana about an assignment of benefits form nor did Ms. Beylana identify same. Absolutely no evidence was presented regarding assignment of benefits. Upon the plaintiff resting, the defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case.

The insurance regulations prescribe when a health care provider may receive direct payment from an insurer. 11 NYCRR 65-3.11(b). Specifically, the provider must have a properly executed assignment. 11 NYCRR 65-3.11(b)(2)(i). It is axiomatic that such assignment must be proved before the provider is entitled to receive “assigned” no-fault benefits. A.B. Medical Services PLLC Daniel Kim’s Acupuncture P.C. D.A.V. Chiropractic P.C. v. State Farm Mutual Automobile Insurance Company, 4 Misc 3d 141(A) (App. Term 9th&10th Jud. Dists. 2004); Siegel, M.D. v. Progressive Casualty Ins. Co., 6 Misc 3d 888 (NY Civ. Ct Kings County 2004); Vista Surgical Supplies, Inc. v. Utica Mutual Insurance Co., 7 Misc 3d 833 (NY Civ. Ct Kings County 2005); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct Kings County 2004); Multiquest, PLLC, 10 Misc 3d 1069(A), supra. In the instant case, the plaintiff did not introduce evidence of a “properly executed assignment”. Thus, plaintiff failed to prove a prima facie case of entitlement to no-fault benefits.

This Court is aware of the many summary judgment decisions that have found that the defendant waives its right to raise the deficiencies in the assignment of benefits forms when the denial was untimely and/or did not allege such defects. Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564 (2nd Dept. 2005); Nyack Hospital v. Encompass Insurance Company, 23 AD3d 535 (2nd Dept. 2005); Chiropractic Neurodiagnostics, P.C. v. Travelers Indemnity Co., 11 Misc 3d 644 (NY Civ. Ct New York County 2006); SZ Medical P.C. v. Country -Wide Insurance Company, 2006 NY Slip Op. 26194 (App. Term 2nd & 11th Jud. Dists. 2006); Delta [*3]Diagnostic Radiology, P.C. v. Progressive Casualty Insurance Co., 11 Misc 3d 136(A) (App. Term 2nd & 11th Jud. Dists. 2006); Hospital for Joint Diseases v. Allstate Insurance Company, 21 AD3d 348 (2nd Dept. 2005); Multiquest PLLC, 10 Misc 3d 1061(A), supra. However, those decisions discuss deficiencies in the forms. This Court is faced with rendering a decision in a bench trial of a no-fault action where there is lack of proof of an assignment. To be certain, a broad interpretation of a “technical defect” in the claim forms as discussed in Chiropractic Neurodiagnostics, P.C., supra, does not include the scenario where, at trial, there is no proof of an assignment at all.

Certainly, this Court is not being called upon to assume or speculate that an assignment existed in this matter. Accordingly it is,

ORDERED that, judgment should be entered in favor of defendant and the complaint is dismissed.

This constitutes the decision and order of the Court.

Dated: July 13, 2006 __________________________________

Genine D. Edwards, J.C.C.