SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered October 4, 2005. The order denied defendant’s motion to sever the causes of action and granted plaintiff’s cross motion for summary judgment.

Order modified by denying plaintiff’s cross motion for summary judgment without prejudice to renewal upon the completion of discovery; as so modified, affirmed without costs.

Plaintiff commenced this action to recover first-party no-fault benefits as the assignee of five assignors. The claims arose out of four separate accidents, and defendant moved to sever the claims into separate actions pursuant to CPLR 603. Plaintiff cross-moved for summary judgment. By order entered October 3, 2005, the court below granted plaintiff’s cross motion and denied defendant’s motion as moot.

In State Farm Mut. Auto Ins. Co. v Mallela (4 NY3d 313 [2005]), the Court of Appeals held that fraudulently incorporated medical corporations were not entitled to reimbursement of no-fault benefits. The Court noted that 11 NYCRR 65-3.16 (a) (12), which states that “[a] provider of health care services is not eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement,” specifically “excluded from the meaning of basic economic loss’ payments made to unlicensed or fraudulently licensed providers, thus rendering them ineligible for reimbursement” (Mallela, 4 NY3d at 320). The defense that a provider is fraudulently licensed and hence ineligible for reimbursement of no-fault benefits under 11 NYCRR 65-3.16 (a) (12) is a nonwaivable defense and is therefore not subject to the 30-day preclusion rule (see First Help Acupuncture P.C. v State Farm Ins. Co., 12 Misc 3d 130[A], 2006 NY Slip Op 51043[U] [App [*2]Term, 2d & 11th Jud Dists]; see also Allstate Ins. Co. v Belt Parkway Imaging,
P.C., ___ AD3d ___, 2006 NY Slip Op 07279 [1st Dept]; Metroscan Imaging P.C. v GEICO Ins. Co., 13 Misc 3d 35 [App Term, 2d & 11th Jud Dists 2006]). Defendant’s opposition papers suffice to raise issues as to who really operated and controlled plaintiff (see Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]). Consequently, so much of defendant’s discovery requests as seek information regarding whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101). Accordingly, plaintiff’s cross motion for summary judgment was premature pending the completion of discovery (see CPLR 3212 [f]; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90, supra) since the opposition papers set forth that facts essential to justify opposition may exist but cannot be stated (see CPLR 3212 [f]). In view of the foregoing, the court below should have denied said cross motion without prejudice to renewal upon the completion of discovery.

Defendant’s answer asserts, inter alia, that plaintiff was fraudulently incorporated, thereby indicating that the five claims are likely to raise common issues of law or fact (cf. Radiology Resource Network, P.C. v Fireman’s Fund Ins. Co., 12 AD3d 185 [2004]). Since defendant did not otherwise show prejudice to a substantial right, it was not an improvident exercise of discretion for the court below to deny defendant’s motion to sever (see e.g. McCrimmon v County of Nassau, 302 AD2d 372 [2003]).

Pesce, P.J., Golia and Belen, JJ., concur.
Decision Date: January 8, 2007

Civil Court of the City of New York, Kings County

56900/2005

Sylvia G. Ash, J.

Plaintiff brought this action seeking recovery of first party no-fault benefits for medical services rendered to its assignor in connection with injuries sustained as a result of an automobile accident. Plaintiff is a health care provider and defendant was the no-fault insurance carrier at the time the automobile accident occurred. The amount at issue is $2,859.46. A trial on the matter was conducted by this Court on November 16, 2006. Based on the testimony and evidence adduced at trial, this Court makes the following findings of fact and conclusions of law.

The parties stipulated to the Plaintiff’s prima facie case. The only issue presented to the Court is whether or not the Defendant established the defense of lack of medical necessity. The Plaintiff presented no witnesses.

To sustain its burden of proof, the Defendant called Dr. Antoinette Perrie, D.C., L.Ac. as its chief and only witness. The parties stipulated that Dr. Perrie may testify as an expert in the field of chiropractic medicine. Dr. Perrie’s peer review report was also stipulated into evidence.

It is well settled that a health care provider’s proof of a properly completed claim form is sufficient to establish a prima facie case for recovery, thereby shifting the burden to the Defendant to show that it issued a timely denial within thirty days and/or a request for verification within ten days of receiving the claim form, (A.B. Med. Servs. PLLC v. Lumbermens Mutual Casualty Co., 4 Misc 3d 86 [App Term, 2d and 11th Jud Dists 2004]; Amaze Med. Supply Inc. V. Eagle Insurance Co., 784 NYS2d 918; Insurance Law §5106; NYCRR §65.15). It is equally well settled that where the Defendant submits a timely denial indicating the lack of medical necessity as its basis, and where said denial is supported by sufficiently detailed peer review, the burden is then shifted to the Plaintiff to establish that there was in fact a medical necessity to provide the services rendered (Choicenet Chiropractic v. Travelers Prop. Cas. Corp. (2003 NY Slip Op 50697[U], Dec. Jan. 23, 2003; NYLJ March 7, 2003 [App.Term, 2d & 11th Jud Dists.). [*2]

In the instant case, the medical supplies at issue are:

– Cervical Philadelphia Collar.

– LSO Lumbar-Sacral-Orthosis.

– Lumbar Cushion.

– Bed Board.

– Egg Create Mattress.

– Thermophore.

– Ems Unit.

– EMS Accessory Kit.

– Massager.

– Infra-Red Heating Lamp.

Defendant’s medical expert, Dr. Perrie, testified that after a review of Plaintiff’s MRI reports, medical supplies prescriptions and bills, and Plaintiff’s medical records (see pages 2 and 3 of Dr. Perrie’s peer review report dated August 14, 2004), she determined that the medical supplies prescribed to Plaintiff were not medically necessary at the time they were prescribed. Dr. Perrie testified that in her 25 years of medical practice, she had never prescribed any of the aforementioned medical supplies to a patient with Plaintiff’s complaint. Dr. Perrie further testified that given the age of the Plaintiff at the time of the accident, 75 years old, she would not have prescribed the medical supplies at issue nor would she have sent the Plaintiff to a chiropractor, she would have sent him to an orthopedic specialist instead. Dr. Perrie also questioned the timing of the prescription of the medical supplies which were prescribed to Plaintiff 2 days after the accident. Dr. Perrie stated that she would have recommended bed rest and a course of treatment for Plaintiff instead of prescribing the medical supplies at issue.

On cross examination, Dr. Perrie testified that she examined Plaintiff on August 11, 2004 and had a diagnosis of Plaintiff however, she did not include her findings in her peer review report dated August 14, 2004, because she did not remember Plaintiff or whether she had examined him. Dr. Perrie stated that the purpose of her August 11, 2004 examination of Plaintiff was to determine whether he needed further treatment. Upon further questioning, Dr. Perrie testified that she did not know whether the medical supplies prescribed were necessary or effective because she never used said supplies in her practice. The Court questions how Dr. Perrie could determine that the medical supplies in questioned were not medically necessary or effective if she had never prescribed the usage of said supplies in her 25 years of practice. Clearly Dr. Perrie has no first hand knowledge of the usefulness or effectiveness of these supplies as they relate to the injuries complained of by Plaintiff. The Court also questions Dr. Perrie’s failure to include her diagnosis of her examination of Plaintiff in her peer review report, even though said report was prepared two days after she examined the Plaintiff. The fact that Dr. Perrie stated that she did not remember the Plaintiff or remember whether she had examined him is noteworthy. [*3]

At trial, the defense that a claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory. Therefore, at trial, if the Defendant, as in the case at bar, provides an insufficient factual basis or medical rational for its peer review report, the Court will afford the peer review report minimal weight, and the Defendant may fail to sustain its burden of proof as was the case herein. Jacob Nir, M.D. v. Allstate Insurance Company, 7 Misc 3d 544 [NY city Civ. Ct. 2005]; A.B. Medical Services., PLLC v. New York Central Mutual Fire Ins. Co., 7 Misc 3d 1018(A) [NY City Civ. Ct. 2005].

In the case at bar, there was no testimony establishing that the treating physician’s decision to order the medical supplies was a deviation from the established standards of medical practice and procedure as they relate to the injuries complained of. Although Dr. Perrie testified that she would not have prescribed the medical supplies at issue and that she would have ordered a different course of treatment for the Plaintiff, Dr. Perrie did not submit any factual evidence or proof that her proposed course of treatment was the established standard of medical practice and procedure as related to the injuries complained of by the Plaintiff. In fact, Dr. Perrie testified that in the 25 years of her practice she had never prescribe any of the medical supplies at issue and she could not state whether said medical supplies were necessary or effective because she had never prescribed them for usage to her patients. In Ultimate Med. Supplies v. Lancer Ins. Co., 7 Misc 3d 1002[A] [Civ.Ct., Kings. Co. 2004], Defendant’s medical Doctor testified that based on her experience, none of the medical equipment prescribed were necessary. The Court found it clear that the Doctor admitted to never having prescribed any of the subject medical equipment, thus the Court held that the Doctor’s opinion was biased against the prescribing Doctor so as to make the peer review a nullity and not credible.

A no-fault insurer defending a denial of first party benefits on the ground that the billed for services or equipment/supplies were not medically necessary must show that the services or supplies/equipment provided were inconsistent with generally accepted medical/professional practices. The opinion of the insurer’s expert, standing alone, is insufficient to carry the insurer’s burden of proving that the services or supplies/equipment were not medically necessary. Expo Medical Supplies, Inc. v. Clarendon Insurance Company, 12 Misc 3d 1154(A), 819 NYS2d 209, 2006 WL 1341418; City Wide Social Work & Psychological Servs. v. Travelers Indem. Co., 3 Misc 3d 608 [Civ.Ct., Kings Co., 2004]; Ultimate Med Supplies v. Lancer Ins. Co., Supra.

Based on the above facts, the Court finds that Defendant failed to meet its burden of establishing lack of medical necessity. Hence, the burden never shifted back to the Plaintiff to establish that the prescribed supplies were in conformity with established medical practices and procedures.

Accordingly, judgment shall be entered in favor of the Plaintiff in the amount of

$2,859.46, plus statutory interest, costs, and attorneys fees.

This constitutes the decision and order of this Court.

[*4]DATED: January 3, 2007

___________________________________

SYLVIA G. ASH, J.C.C.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Milagros A. Matos, J.), entered November 17, 2005. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by a corporate officer of plaintiff, and various documents annexed thereto. The affidavit executed by plaintiff’s corporate officer stated in a conclusory manner that the documents attached to plaintiff’s motion papers were plaintiff’s
business records. In opposition, defendant argued, inter alia, that the affidavit by plaintiff’s corporate officer failed to lay a proper foundation for the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. Plaintiff appeals from the denial of its motion for summary judgment.

Inasmuch as the affidavit submitted by plaintiff’s corporate officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., ___ Misc 3d ___, 2006 NY Slip Op 26483 [App Term, 2d & 11th Jud Dists]). Accordingly, plaintiff’s motion for summary judgment was properly denied.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, January 3, 2007

APPEARANCES OF COUNSEL

Saiber Schlesinger Satz & Goldstein, LLC, New York City (Agnes I. Rymer and David J. D’Aloia of counsel), and McDonnell & Adels, P.C., Garden City (Martha S. Henley of counsel), for appellant. Gary Tsirelman P.C., Brooklyn, for respondent. Eliot Spitzer, Attorney General, New York City (Robert H. Easton and Benjamin N. Gutman of counsel), for Howard B. Mills III, amicus curiae. Michael A. Taromina, Paterson, New Jersey, for Acupuncture Society of New York, amicus curiae.

{**15 Misc 3d at 105} OPINION OF THE COURT

Memorandum.

Order reversed without costs and matter remanded to the court below for a new calculation of interest in accordance with the decision herein.

In this action to recover overdue assigned first-party no-fault benefits, the parties stipulated to settle the principal amount owed on all claims for which defendant’s denials were timely and for which defendant issued no denials, as well as the statutory interest and attorney’s fees due thereon. Unable to agree on the date interest accrued on the claims for which defendant issued untimely denials, the parties stipulated to submit the question to the court below. The plaintiff sought interest from 30 days after the claims’ submission, while defendant insisted that interest accrued only from the date plaintiff commenced the action. The court found for plaintiff and defendant appeals.

An insurer is obligated to “pay or deny” a claim within 30 calendar days of the receipt of [*2]proof of claim (11 NYCRR 65-3.8 [c]).^[FN*] Interest accrues when the payment of no-fault benefits is “overdue” (11 NYCRR 65-3.9 [a]), and benefits are overdue only if not “paid” within 30 calendar days of when the insurer receives a claim or verification (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a]; e.g. Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]; see generally 70A NY Jur 2d, Insurance § 1801). The effect of a denial on interest is set forth in 11 NYCRR 65-3.9 (c) which{**15 Misc 3d at 106} states that an “applicant” must request arbitration or commence an action “within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations” and bars interest “until such action is taken.”

“[I]nterest . . . [is a] prescribed sanction[ ] only in late payment circumstances, not as to untimely denials of claims” (Presbyterian Hosp. in City of N.Y., 90 NY2d at 278; see Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338, 339 [1994]). Where, as here, there is no payment and an untimely denial, interest accrues 30 days from the date the claim is submitted (11 NYCRR 65-3.8 [a] [1]; 65-3.9 [a]; Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501 [1994]). Interest is thereafter stayed only where the claimant fails to submit the claim to arbitration or to commence an action within 30 days after receipt of the untimely denial of claim and resumes when either action is taken (11 NYCRR 65-3.9 [c]; Massapequa Gen. Hosp. v Travelers Ins. Co., 104 AD2d 638, 640 [1984]; State Farm Mut. Auto. Ins. Co. v Pfeiffer, 95 AD2d 806 [1983]).

Noting that 11 NYCRR 65-3.9 (a) addresses both “applicant” and “assignee,” the court below construed the absence of a reference to an assignee in 11 NYCRR 65-3.9 (c) to manifest the intent of the Superintendent of Insurance to exclude assignees from the requirement that an “applicant” seek arbitration or commence an action within 30 days of the receipt of the denial of claim form or be barred from interest “until such action is taken.” However, in an amicus brief, the Superintendent states that in promulgating 11 NYCRR 65-3.9 (c), the Department of Insurance had no intent to distinguish eligible injured persons from their assignees when it provided that interest on denied claims is tolled until the “applicant” seeks arbitration or commences an action, notwithstanding what it characterizes as a “redundant” reference to assignees in 11 NYCRR 65-3.9 (a). “In matters of statutory and regulatory interpretation . . . legislative intent is the great and controlling principle, and the proper judicial function is to discern and apply the will of the [enactors]” (Matter of ATM One v Landaverde, 2 NY3d 472, 476-477 [2004] [internal quotation marks omitted]). As the Legislature granted the Superintendent “broad power to interpret, clarify, and implement the legislative policy” in the no-fault arena (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 863-864 [2003] [internal quotation marks omitted]; see Insurance Law §§ 301, 5103 [d]; § 5106 [a]; § 5108 [b]),{**15 Misc 3d at 107} when the Superintendent “properly craft[s] a rule within the scope of his [or her] authority, that rule has the force of law and represents the policy choice of this State” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005]). Further, an agency’s interpretation of a regulation it promulgated “is entitled to deference” (Matter of 427 W. 51st St. Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d 337, 342 [2004] [internal quotation marks omitted]). Accordingly, [*3]deference must be accorded the Superintendent’s expression of intent herein with respect to the no-fault regulations, in light of the Superintendent’s “special competence and expertise with respect to the insurance industry” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d at 864 [internal quotation marks omitted]) unless, according to the normative rules of construction, the purported intent is “unreasonable or irrational” (Matter of Rodriguez v Perales, 86 NY2d 361, 367 [1995]) or so “conflicts with the plain meaning of the promulgated language” that the courts are obligated to disregard it (Matter of Visiting Nurse Serv. of N.Y. Home Care v New York State Dept. of Health, 5 NY3d 499, 506 [2005]).

To the extent that an issue of regulatory construction is presented, in the first instance we must consider the text’s “plain meaning” (Matter of Jansen Ct. Homeowners Assn. v City of New York, 17 AD3d 588, 589 [2005]). Plaintiff and, in an amicus brief, the Board of Advisers of the Acupuncture Society of New York, contend that the purported significance of the use of the terms “applicant” and “assignee” in 11 NYCRR 65-3.9 (a) and the use of only the term “applicant” in 11 NYCRR 65-3.9 (c) was intentional, invoking the rule of construction that the “failure of the Legislature to include a matter within the scope of an act may be construed as an indication that its exclusion was intended” (McKinney’s Cons Laws of NY, Book 1, Statutes § 74). However, it is also well settled that “a statute or ordinance must be construed as a whole and that its various sections must be considered together and with reference to each other” (Matter of Notre Dame Leasing v Rosario, 2 NY3d 459, 464 [2004] [internal quotation marks omitted]) and “are to be so interpreted as to give effect to every part thereof . . . and any construction which deprives any part of a statute of effect and meaning, when it is susceptible of another interpretation giving effect to every part, is avoided” (McKinney’s Cons Laws of NY, Book 1, Statutes § 231, Comment). The aforementioned rule applies equally to the construction of regulations.{**15 Misc 3d at 108}

A review of the use of “applicant,” “eligible injured person” and “assignee” in the no-fault regulations reveals that, while they are often employed interchangeably and occasionally redundantly, context invariably yields content. Many regulations refer to “applicant” generically, where eligible injured persons and their provider-assignees are clearly meant (e.g. 11 NYCRR 65-3.2 [b]; 65-3.3 [a]; 65-3.8 [b]; 65-4.2 [b] [1] [i]). Other regulations refer to “applicant” when only an eligible injured person can be meant (11 NYCRR 65-3.8 [g]), and still others address, variously, an “eligible injured person or such person’s attorney” (11 NYCRR 65-3.6 [a]) and an “applicant and such person’s attorney” (11 NYCRR 65-3.6 [b]) when provider-assignees are also contemplated. Still other regulations refer only to “applicant” when either an eligible injured person or both eligible injured persons and their assignees are meant, depending on the remedy provided therein (11 NYCRR 65-3.5 [e], [l]). These citations are merely illustrative of the categories discussed (e.g. 11 NYCRR 65-3.8 [b] [2] [“applicant” means the eligible injured person in one clause and both the eligible injured person and his or her assignee in another clause]).

Indeed, the Superintendent, whose interpretation of the Insurance Department’s regulations, as noted, is entitled to deference, acknowledges that the terms “applicant” and “assignee” are used elsewhere in the regulations where “applicant,” employed generically, and in lieu of “claimant” (Insurance Law § 5106 [a]), would have sufficed (e.g. 11 NYCRR 65-3.10 [a]; 11 NYCRR 65-4.8 [b]). The Superintendent urges that such is the case with 11 NYCRR 65-3.9 (a) (see McKinney’s Cons Laws of NY, Book 1, Statutes § 231, Comment [“It is recognized . . . that the drafters of statutes do not always use the most apt words to express their intent; . . . that words [*4]are frequently used in a statute which are not necessary, but are to some extent superfluous”]).

There is an additional reason why it is not reasonable to suppose the Insurance Department intended to omit reference to assignees in 11 NYCRR 65-3.9 (c). The interest provision, presently at 24% per annum, is punitive in nature (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986]) and “designed to inflict an economic sanction or penalty on those insurers who do not comply” (Cardinell v Allstate Ins. Co., 302 AD2d 772, 774 [2003]). As the No-Fault Law is in derogation of the common law and “must be strictly construed” (Presbyterian Hosp. in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210, 211{**15 Misc 3d at 109} [1994]), the regulations must be interpreted in a manner conducive to the legislative goal of deterring dilatory responses to claims (Brunner v Allstate Ins. Co., 79 AD2d 491, 494 [1981]). Indeed, if interest is a penalty provision and a key mechanism of the Legislature’s mandate “to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of . . . accidents” (Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]), the imposition of a disparate application of the penalty depending on whether the applicant is an eligible injured person or a provider/assignee would contravene that goal.

The construction adopted by the court below creates the anomalous result that, rather than acting promptly to resolve a dispute, assignees only may decline to act on a claim upon which a mandatory punitive interest penalty is imposed (St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]), for as long as the statute of limitations for breach of contract has yet to run (CPLR 213 [2]), and receive interest at a rate more than twice what is provided for ordinary breach of contract actions (CPLR 5004). The regulations do not permit eligible injured persons to delay arbitration or suit for such a purpose (11 NYCRR 65-3.9 [c]) and there is no rationale discernable in purposes of the No-Fault Law to support such a result.

The regulations, read as a whole in accordance with the rules of construction, the deference to be accorded the Superintendent’s assertion of intent, and the undesirable consequences of exempting assignees from the limitation imposed by 11 NYCRR 65-3.9 (c), lead to the conclusion that the reference to “applicant” in 11 NYCRR 65-3.9 (c) includes an eligible injured person’s assignee. Accordingly, the matter is remanded to the court below for a calculation of the statutory interest due in accordance with the decision herein.

Pesce, P.J., Golia and Belen, JJ., concur.

Footnotes

Footnote *: Although the claims herein predate the amendments to the no-fault regulations effective April 5, 2002, as the regulations at issue were not modified to any material extent, they are cited as presently promulgated.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, First District (Margaret C. Reilly, J.), entered July 14, 2005. The order, insofar as appealed from as limited by defendant’s brief, granted plaintiff’s motion for summary judgment.

Order, insofar as appealed from, affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was granted. The sole issue raised on appeal is whether defendant proffered sufficient evidence to demonstrate that there was a triable issue of fact as to whether the automobile accident in which plaintiff’s assignor was allegedly injured was staged and, thus, not a covered event (see Central Gen. Hosp. v Chubb Group of Ins.
Cos., 90 NY2d 195 [1997]). In opposition to plaintiff’s motion, defendant submitted an affidavit by its claims representative wherein she stated that she has reviewed defendant’s file. The file reveals that defendant has investigated plaintiff’s claim and pursuant to such investigation defendant believed that the accident was an intentional loss because plaintiff’s assignor and the driver of the vehicle were involved in multiple accidents within a short period of time. Such affidavit was insufficient to demonstrate the existence of a triable issue of fact (see Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists]; see also A.B. Med. Servs PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50 [App Term, 2d & 11th Jud Dists 2005]). Accordingly, plaintiff’s motion for summary judgment was properly granted.

Rudolph, P.J., McCabe and Lippman, JJ., concur. [*2]
Decision Date: January 2, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Anna Culley, J.), entered June 6, 2005. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

Plaintiff commenced the instant action seeking to recover first-party no-fault benefits for medical services rendered to its assignor in the sum of $3,836.20. Where a billing provider seeks to recover no-fault benefits for services which were not rendered by it or its employees, but rather by a treating provider who is an independent
contractor, it is not a “provider” of the medical services rendered within the meaning of 11 NYCRR 65-3.11 (a) and is therefore not entitled to recover “direct payment” of assigned no-fault benefits from the defendant insurer (Health & Endurance Med. P.C. v State Farm Mut. Auto. Ins. Co., 12 Misc 3d 134[A], 2006 NY Slip Op 51191[U] [App Term, 2d & 11th Jud Dists]; Craig Antell, D.O., P.C. v New York Cent. Mut. Fire Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50521[U] [App Term, 1st Dept]; A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc 3d 36 [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 8 Misc 3d 132[A], 2005 NY Slip Op 51111[U] [App Term, 2d & 11th Jud Dists]). In the case at bar, plaintiff’s claim form states that the treating professionals were independent contractors. Under the circumstances, plaintiff’s motion for summary judgment was properly denied.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.
Decision Date: January 2, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal and cross appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered September 27, 2005. The order denied plaintiff’s motion for summary judgment and, in effect, granted defendant’s cross motion to the extent of severing and dismissing three of plaintiff’s five claims (in the sums of $425.44, $101.10 and $404.40).

Cross appeal by defendant dismissed as abandoned.

Order, insofar as reviewed, modified by granting plaintiff’s motion for summary judgment as to its claims for $269.60 and $33.70 and matter remanded to the court
below for a calculation of statutory interest and an assessment of attorney’s fees thereon; as so modified, affirmed without costs.

In this action to recover first-party no-fault benefits for health care services provided plaintiff’s assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Defendant’s admissions of receipt cured the deficiencies, if any, in plaintiff’s proof of mailing (Fair Price Med. Supply Corp. v ELRAC Inc., 12 Misc 3d 119 [App Term, 2d & 11th Jud Dists [2006]; A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). The burden shifted to defendant to demonstrate a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The record supports the determination of the court below that, with respect to the claims [*2]in the sums of $425.44, $101.10, and $404.40, defendant validly (see New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2006]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2005]) sought verification of the assignor’s social security number, a request we find appropriate in that such information must be provided on the statutory NF-2 application for no-fault benefits form, “and made the requisite follow-up requests” (Delta Diagnostic Radiology, P.C. v American Mfrs. Mut. Ins. Co., 12 Misc 3d 145[A], 2006 NY Slip Op 51439[U] [App Term, 2d & 11th Jud Dists]). Plaintiff’s failure to produce the verification requested merited defendant’s refusal to pay the claims, and for that matter, to take any action on the claims, rendering plaintiff’s lawsuit thereon premature (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004] [“A claim need not be paid or denied until all demanded verification is provided . . . [and when a claimant] fails to respond to a verification request . . . any claim for payment . . . is premature”]; see also A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50, 54 [App Term, 2d & 11th Jud Dists 2005]), thereby warranting the claims’ severance from the remainder of the action and their dismissal (Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005]).

However, we find that plaintiff should have been granted summary judgment as to the remaining claims for $269.60 and $33.70. Although defendant issued timely denials on the ground of lack of medical necessity based on a report of an independent medical examination (IME), the denial forms contained no facts satisfying the statutory requirement that the insurer state the reason for the denial “fully and explicitly” on the claim denial form (Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95, 96 [App Term, 9th & 10th Jud Dists 2004]), and to the degree necessary to “promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated” (New York University Hosp. Rusk Inst. v Hartford Acc. & Indem. Co., 32 AD3d 458 [2006] [quotation marks and citation omitted]). A timely denial does not avoid the preclusion sanction “where said denial is factually insufficient, conclusory or vague” (A.B. Med. Servs. PLLC v GEICO Cas. Ins. Co., 12 Misc 3d 30, 31 [App Term, 2d & 11th Jud Dists 2006]; see also Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004]). While an insurer is not required to attach a peer review report to its denial of claim form (see 11 NYCRR 65-3.8 [b] [4]), where the peer review is not attached the form itself must set forth, with the requisite particularity, the factual basis and medical rationale for the denial (e.g. A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]), or at the very least, the insurer must supply claimant with a peer review report within the same period within which the denial is due. The same rules apply to denials based on an IME report (Contempo Med. Care, P.C. v Travelers Indem. Ins. Co., 12 Misc 3d 139[A], 2006 NY Slip Op 51338[U] [App Term, 2d & 11th Jud Dists]). Defendant failed to submit to plaintiff the IME report within the statutory claim determination period. Since the said period was not otherwise tolled as to the two aforementioned claims (SZ Med. P.C. v Clarendon Natl. Ins. Co., 12 Misc 3d 144[A], 2006 NY Slip Op 51428[U] [App Term, 2d & 11th Jud Dists), defendant is precluded from asserting the defense (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, supra; see also A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U], supra). Absent any defense to the two claims that survived the preclusion sanction, plaintiff is awarded summary judgment thereon and the matter is remanded to the court below for a calculation of the [*3]statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., and Belen, J., concur.

Weston Patterson, J., concurs in part and dissents in part in a separate memorandum.

Weston Patterson, J., concurs in part and dissents in part and votes to deny the motion for summary judgment as to all but plaintiff’s first three claims in the following memorandum:

While I agree with the majority that defendant properly refused to pay plaintiff’s first three claims, I disagree with the majority’s decision to grant plaintiff summary judgment on its remaining claims. In my view, defendant’s timely denials of those claims provided adequate notice of the reasons for the denials.

Defendant’s denial forms state, in pertinent part:
“The Service(s) Submitted Were Rendered Beyond Denial, Based On An Independent Medical Examination.”
In a sworn supporting affidavit, Morton Nussbaum states:
“1. That on November 17, 2003 I saw Andrea Campbell for a chiropractic independent examination. The following was found:” (emphasis added).
Following these forms is a copy of a detailed independent medical examination (IME) report prepared by Dr. Nussbaum indicating no chiropractic disability.

Unlike the cases cited to by the majority (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43 [App Term, 2d & 11th Jud Dists 2004]), here, it is clear from the denial of claim forms that Dr. Nussbaum’ s IME report was attached to the denials. The denial forms specifically refer to additional findings, which were contained in a copiously detailed report following the denials. Under these circumstances, it cannot be said that defendant’s denial of claim forms were factually insufficient to apprise plaintiff of the reasons for the denials.
Decision Date: January 2, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Arlene Bluth, J.), entered December 2, 2005. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.

Order affirmed without costs

Plaintiff commenced this action to recover assigned first-party no-fault benefits for medical supplies furnished to its assignor. Plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. The court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment. The instant appeal by plaintiff ensued.

A provider establishes a prima facie entitlement to summary judgment 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 is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). A plaintiff ordinarily establishes the submission of the claim form by demonstrating proof of proper mailing, which gives rise to the presumption that the claim form was received by the addressee. The presumption may be created either by proof of actual mailing, or by proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Here, the affidavit of plaintiff’s corporate officer and the proof annexed thereto were insufficient to establish that plaintiff mailed the claim to defendant since “there is no evidence that th[e] claim was mailed to [defendant] under that certified mail receipt number” (New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, [*2]548 [2006]). Moreover, plaintiff’s attorney’s affirmation was not based on personal knowledge that the claim was actually mailed to defendant and, as such, is unsubstantiated hearsay and has no probative value (see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud
Dists 2004]). Thus, plaintiff failed to establish its prima facie entitlement to summary judgment.

The affidavit of defendant’s claim representative and the printout annexed thereto established that defendant never received the subject claim from plaintiff. Since plaintiff failed to rebut defendant’s contention that it never received the claim by establishing the mailing of same, the lower court’s order denying plaintiff’s motion for summary judgment and granting defendant’s cross motion for summary judgment should be affirmed.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.
Decision Date: December 28, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Dolores L. Waltrous, J.), entered August 16, 2005. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff failed to establish a prima facie entitlement to summary judgment since it did not adequately establish that it submitted its claim form to defendant (see A.B. Med. Servs. v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50387[U] [App Term, 2d & 11th Jud Dists]). Here, the affidavit of plaintiff’s corporate officer and the proof of
mailing annexed thereto were insufficient to establish that plaintiff mailed its claim to defendant (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]). Moreover, plaintiff’s attorney’s affirmation was not based on personal knowledge that the claim was actually mailed to defendant and, as such, is unsubstantiated hearsay and has no probative value (see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]). Furthermore, plaintiff’s attempt to demonstrate defendant’s receipt of the claim in question by attaching to its moving
papers a delay letter from defendant is unavailing since said letter did not specifically refer to the claim at issue in that it did not set forth the amount of the claim (see Impulse Chiropractic, P.C. v Travelers Ins. Co., ___ Misc 3d ___, 2006 NY Slip Op 52371[U] [App Term, 2d & 11th Jud Dists]). Therefore, since plaintiff failed to establish its prima facie entitlement to summary judgment, the lower court properly denied its motion.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.

[*1]

District Court of Nassau County, First District, December 28, 2006

APPEARANCES OF COUNSEL

Freiberg & Peck, New York City, for defendant. Robert E. Dash, Syosset, for plaintiff.

OPINION OF THE COURT

Gary F. Knobel, J.

The motion by the defendant for an order inter alia compelling the plaintiff to provide discovery responses is granted to the extent that (1) the plaintiff shall provide responses to all outstanding discovery demands by January 31, 2007, and (2) the parties shall appear for depositions in room 5 of the Supreme Court courthouse, 100 Supreme Court Drive, Mineola, New York, on or before February 28, 2007, at 9:30 a.m.; the plaintiffs shall be deposed first, to be immediately followed by an individual produced by the defendant with personal knowledge of the facts.

This is an action to recover $3,905.03 in no-fault benefits provided by the plaintiff to its assignor in the form of, inter alia, nerve conduction studies. The defendant concluded that these tests were medically not necessary and consequently refused to reimburse the plaintiff for the testing and services it provided to its assignor.

The defendant does not dispute that the plaintiff is entitled to disclosure of the assignor’s no-fault file which the defendant has in its possession since these records are material and necessary to the prosecution of plaintiff’s claim (see, Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 408 [1968]; Beutel v Guild, 5 AD3d 1087 [2004]; Scott v Albord, 289 AD2d 389 [2001]; Hinrichs v Tonnssen, 128 Misc 2d 196 [1985]). The defendant contends, however, that based upon this court’s holding in Westbury Med. Care, P.C. v Lumbermans Mut. Ins. Co. (5 Misc 3d 838 [2004, Asarch, J.]), it cannot produce the no-fault file without a valid authorization from the assignor complying with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Notwithstanding this minor issue, the parties could not resolve their dispute over a narrow question which is discussed daily between practitioners in this field but apparently has not been officially reported upon in New York: does the plaintiff have to [*2]pay the defendant for the cost incurred by the defendant in copying its no-fault file? The defendant has demanded a $95 fee for copying the file even though it has not disclosed how many pages the file contains. The plaintiff’s attorney maintains that the plaintiff is entitled to have the file reproduced at no charge, arguing that “the only firm that requests a payment for the no-fault file is defendant’s counsel.” However, plaintiff’s counsel did not cite in his brief any analogous precedent which would directly support its argument. Plaintiff’s attorney also argues that if this court imposes a fee upon the plaintiff to obtain its assignors’ no-fault file “it will set a precedent on both the plaintiff’s and defendant’s bar to charge each other for the cost of reproduction of documents” (see, Fletcher v Atex Inc., 156 FRD 45, 50 n 4 [1994]).

The court has broad discretion to set the terms and conditions of discovery (Castagnazzi v Schlecker, 159 AD2d 533 [1990]). CPLR 3103 (a) permits a court to “make a protective order . . . regulating the use of any discovery device. Such order shall be designed to prevent unreasonable annoyance, expense . . . or other prejudice to any person.” A CPLR 3103 protective order is equally available in the District Court (as well as all lower courts) pursuant to section 1101 (c) of the Uniform District Court Act (and the applicable lower court act) (see, Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:6, at 560).

Appellate courts have required a party to pay a reasonable cost for the reproduction of medical records, regardless of whether a party or nonparty is in possession of those records (Colon v City of New York, 285 AD2d 523, 524 [2001] [defendants to reproduce plaintiff’s medical records at a cost to the plaintiff at 25c per page]; McCrossan v Buffalo Heart Group, 265 AD2d 875, 876 [1999] [nonparty health care provider cannot charge more than 75c per page for paper copies of records pursuant to Public Health Law § 18 (2) (e)]; Badach v Caggiano, 255 AD2d 919 [1998] [plaintiffs to pay for half the cost of obtaining duplicate copies of records and reports of treating and examining physicians which were acquired by the defendant through the authorizations provided by the plaintiffs]; Castagnazzi v Schlecker, 159 AD2d 533 [1990] [plaintiff to pay a reproduction fee of 25c per page plus $50 to the defendant for a duplicate copy of hospital records he obtained pursuant to the authorizations of the plaintiff]; Matter of McDonald v State Univ. of N.Y., Downstate Med. Ctr. [Univ. Hosp.], 129 AD2d 798 [1987] [petitioner must either pay the fee sought by the appellant for the reproduction of the medical records, or photocopy the record herself; if the latter option is chosen, she must pay a reasonable sum for the time spent by a hospital employee in supervising the copying]). Indeed, the rule in the Second Department—that “the party seeking discovery of documents . . . should pay the cost of their [reproduction]”—is based upon the principle that “each party should shoulder the initial burden of financing his own suit” (Rubin v Alamo Rent-A-Car, 190 AD2d 661, 663 [1993]; see also, Schroeder v Centro Pariso Tropical, 233 AD2d 314 [1996]; Lipco Elec. Corp. v ASG Consulting Corp., 4 Misc 3d 1019[A], 2004 NY Slip Op 50967[U] [2004]; Siegel, NY Prac § 353, at 578 [4th ed 2005]). However, the Legislature contemplated that the party who ultimately prevails on the merits is permitted at that later time to tax as disbursements the [*3]expenses incurred in connection with disclosure and recover them from the losing side (see, e.g., CPLR 8301 [a] [1], [9]; Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:5, at 559). The court can also exercise its protective powers under CPLR 3103 (a) in cases where there is a disparity in the parties’ economic resources, or where the expense of the disclosure greatly exceeds the small monetary recovery sought by the party (see, Connors, Practice Commentaries, supra at 559, 561).

After applying these principles to the facts and contentions at bar, the court concludes that the plaintiff has failed to demonstrate any basis upon which there should be a deviation here from the precedent and general rule in this department. Accordingly, the court directs the defendant to immediately inform the plaintiff’s attorney of the actual number of pages contained in the assignor’s no-fault file, and also directs the plaintiff to (1) provide the defendant’s attorney, by January 31, 2007, with a HIPAA authorization executed by plaintiff’s assignor (see, Westbury Med. Care, P.C. v Lumbermans Mut. Ins. Co., supra), and (2) exercise in writing to defendant’s attorney by January 31, 2007 four options: (a) to inspect the no-fault file at defendant’s counsel’s office and designate the pages to be reproduced at 25c per page, or (b) to inspect the no-fault file at the Supreme Court courthouse on the day designated for the depositions of the parties and photocopy in the courthouse the file or the designated portions thereof, or (c) to have the defendant photocopy the no-fault file at a cost to the plaintiff of 25c per page, and furnish the reproduced file to plaintiff’s attorney by February 7, 2007, or (d) to pay the defendant the sum of $95 to photocopy and reproduce the no-fault file.