—[*1]

Spain, J. Appeal from an order of the Supreme Court (McNamara, J.), entered June 1, 2005 in Albany County, which, inter alia, partially granted plaintiff’s motion for summary judgment.

Plaintiffs commenced this action as the assignees of the no-fault insurance claim rights of 15 individuals to whom plaintiffs provided psychological treatment following automobile accidents. Asserting that defendant had failed to timely deny coverage or seek verification of the insurance claims, plaintiffs moved for summary judgment. Defendant cross-moved for sanctions pursuant to 22 NYCRR part 130 and for severance of the claims. Supreme Court granted summary judgment with respect to the third, a portion of the seventh, tenth, eleventh and thirteenth causes of action and otherwise denied plaintiffs’ motion. The court denied defendant’s cross motion for sanctions and severance. On defendant’s appeal, we affirm.

“[A]n insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; see Insurance Law § 5106 [a]; 11 NYCRR former 65.15 [g]; 65-3.8; LaHendro v Travelers Ins. Co., 220 AD2d 971, 972 [1995]). A plaintiff may obtain summary judgment on a cause of action to recover first-party no-fault benefits by “submitting evidentiary proof that the prescribed statutory billing forms had been [*2]mailed and received, and that payment of no-fault benefits was overdue” (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2004]; see Insurance Law § 5106 [a]).

Defendant asserts that plaintiffs failed to provide adequate proof that the claim forms were properly mailed and, thus, did not establish a prima facie case of entitlement to benefits. Plaintiffs supplied direct proof of actual mailing by producing signed and stamped mailing certificates (see Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). In addition, plaintiffs’ officer, Jonathan Kogen, provided an affidavit stating—based on his review of plaintiffs’ business records and his own personal knowledge—that plaintiffs mailed the claim forms to defendant and that none were returned as undeliverable. This “proof of proper mailing gives rise to a presumption that the item was received by the addressee” (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2001]). Defendant has not submitted proof to rebut this presumption; indeed, defendant does not deny receipt of the claims and, in fact, its papers in opposition include evidence that claims were received on dates which correspond to those in the mailing receipts produced by plaintiffs. Accordingly, we hold that plaintiffs met their prima facie burden of proof with regard to mailing of the claim forms.

Defendant also asserts that plaintiffs failed to establish a valid assignment of benefits because the assignor’s signature on the assignment forms was not properly authenticated. Upon receipt of the allegedly defective assignments, defendant had 10 days to request verification (see 11 NYCRR 65-3.5 [a]; former 65.15 [d]). “[F]ailure to object to the adequacy of . . . claim forms within 10 days of receipt constitute[s] a waiver of any defenses based thereon, including the alleged lack of a valid assignment of benefits” (Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005], lv denied 5 NY3d 713 [2005]; see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535, 535-536 [2005]; Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348, 348-349 [2005]; but see Siegel v Progressive Cas. Ins. Co., 6 Misc 3d 888 [2004]). Inasmuch as defendant failed to request verification of the assignments at issue within the 10-day period proscribed by regulation, its objection to the assignments was waived.

Next, we are unpersuaded by defendant’s arguments that summary judgment was premature because discovery was incomplete. In opposition to the prima facie case established by plaintiffs, defendant “did not make the required showing that ‘further discovery may raise a triable issue of fact’ ” (Williams v General Elec. Co., 8 AD3d 866, 867 [2004], quoting Mitchell v Atlas Copco N. Am., 307 AD2d 635, 636 [2003]; see Herba v Chichester, 301 AD2d 822, 823 [2003]). Indeed, it is undisputed that defendant did not send timely delay notices or claim denials; thus, defendant is precluded from raising any defense to payment of the claims unless such denial is based on lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra at 282). Defendant’s remaining argument in opposition to summary judgment—that plaintiffs committed fraud by misrepresenting Kogen as a “treating doctor” although he did not personally provide or supervise the psychological services rendered by plaintiffs, and that such fraud falls within the narrow “lack of coverage” exception, obviating the need for a timely denial—has been rejected by this Court (see Valley Psychological v Liberty Mut. Ins. Co., 30 AD3d 718 [2006] [decided herewith]).

Defendant asserts that Supreme Court abused its discretion in failing to sanction plaintiffs for asserting frivolous causes of action because several of the claims asserted had been paid or settled. Sanctions pursuant to 22 NYCRR part 130 should be awarded for taking legal actions which are completely without merit in law, are undertaken primarily to delay the [*3]resolution of the litigation or assert false material statements of fact (see 22 NYCRR 130-1.1 [c]; Ireland v GEICO Corp., 2 AD3d 917, 919 [2003]; Mountain Lion Baseball v Gaiman, 263 AD2d 636, 639 [1999]). That level of misconduct has not been established here. The record reveals that plaintiffs voluntarily withdrew one of the allegedly frivolous claims and the others were not dismissed because Supreme Court found issues of fact existed as to whether payment had been made or a settlement had been reached. Under these circumstances and absent proof of actual payment or settlement, we find no basis to interfere with Supreme Court’s sound discretion (see Northern Adirondack Cent. School Dist. v La Plante Co., 229 AD2d 764, 766 [1996]; Golden v Barker, 223 AD2d 769, 770 [1996]).

Finally, we discern no abuse of discretion in Supreme Court’s decision not to sever the claims (see CPLR 603; State Farm Fire & Cas. Co. v Dayco Prods., Inc., 19 AD3d 923, 924-926 [2005]; Hempstead Gen. Hosp. v Liberty Mut. Ins. Co., 134 AD2d 569, 570 [1987]).

Cardona, P.J., Carpinello, Mugglin and Lahtinen, JJ., concur. Ordered that the order is affirmed, with costs.

—[*1]

Kane, J. Appeal from an order of the County Court of Albany County (Breslin, J.), entered May 16, 2005, which affirmed an order of the City Court of the City of Albany dismissing the claim.

Plaintiff alleges that it provided psychological testing and psychotherapy to a woman after her involvement in a motor vehicle accident. It is undisputed that the woman was injured in an accident involving a vehicle insured by defendant, thus invoking coverage by defendant. As assignee of the woman’s no-fault insurance claims, plaintiff submitted to defendant two bills for services rendered. Defendant denied both claims, but those denials were issued more than 30 days after the claims were received. Plaintiff filed a commercial claim in Albany City Court seeking payment. At trial, defendant asserted a defense of provider fraud, alleging that plaintiff submitted fraudulent bills because its principal licensed psychologist did not provide active and personal supervision over the employees providing services to plaintiff’s assignor as required by workers’ compensation schedules.^[FN*] City Court determined that defendant’s assertion of a fraud [*2]defense was not precluded by its untimely denial, then dismissed the claim based on the fraud defense (195 Misc 2d 540 [2002]). Upon plaintiff’s appeal, County Court affirmed. Plaintiff now appeals to this Court.

Because defendant’s untimely denial precluded it from asserting the defense raised here, plaintiff was entitled to judgment in its favor. While our review of this City Court claim is limited to whether “substantial justice has . . . been done between the parties according to the rules and principles of substantive law” (UCCA 1807; see Sten v Desrocher, 8 AD3d 915, 915 [2004]), the misapplication of substantive law in this case mandates a reversal. The law requires an insurer to accept or deny a claim for no-fault benefits within 30 days after the claimant provides proof of the claim (see Insurance Law § 5106 [a]; 11 NYCRR former 65.15 [g]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). An insurer that fails to deny a claim within the 30-day period is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra at 282; Loudermilk v Allstate Ins. Co., 178 AD2d 897, 898 [1991]; Ultra Diagnostics Imaging v Liberty Mut. Ins. Co., 9 Misc 3d 97, 98 [2005]). Untimely disclaimers, however, do not preclude an insurer from denying liability “on a strict lack of coverage ground” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 198 [1997]).

Defendant successfully argued in City Court and County Court that its fraud defense asserted a lack of coverage thereby rendering its untimely denials irrelevant. We disagree. In contrast to fraudulent conduct such as staging an automobile accident, which results in no coverage at all—thus not requiring a timely denial—coverage is not extinguished by allegations, or even proof, that a medical services provider unilaterally schemed to defraud the insurer by providing unnecessary or excessive treatment—thus requiring a timely denial to avoid preclusion of the defense (see Ultra Diagnostics Imaging v Liberty Mut. Ins. Co., supra at 99-100; Fair Price Med. Supply Corp. v Travelers Indem. Co., 9 Misc 3d 76, 78-79 [2005]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [2004]). In fact, the Court of Appeals expressly noted that the fraud exception from preclusion for untimely denials does not apply to a defense that the provider’s treatment was excessive, as that defense does “not ordinarily implicate a coverage matter” (Central Gen. Hosp. v Chubb Group of Ins. Cos., supra at 199, 202). Because the defense raised here was analogous to an argument that the treatment was excessive or unnecessary, it does not implicate coverage and therefore required a timely denial. Since defendant’s fraud defense was precluded, substantial justice was not meted out according to the substantive law, requiring reversal and remittal for City Court to determine the amount of judgment to be entered in plaintiff’s favor (see UCCA 1807).

Crew III, J.P., Peters, Carpinello and Lahtinen, JJ., concur. Ordered that the order is reversed, on the law, with costs, and matter remitted to the City Court of the City of Albany for further proceedings not inconsistent with this Court’s decision.

Footnotes

Footnote *: Medical providers must comply with workers’ compensation payment schedules to qualify for payment under the no-fault law (see Insurance Law § 5108; 11 NYCRR 68.1)

Supreme Court, Nassau County

005513/05

Law Office of Kenneth M. Mollins, P.C.

Franklin, Gringer & Cohen, P.C.

Attorneys for Plaintiff Long Island Radiology

425 Broad Hollow Road, Suite 215

Melville, NY 11747

Sonnenschein, Nath & Rosenthal, LLP

Attorneys for Defendant Allstate

1221 Avenue of the Americas

New York, NY 10020

and –

Steve Levy, Esq.

Attorney for Defendant Allstate

8000 Sears Tower

Chicago, IL 60606

Rivkin Radler, LLP

Attorneys for Defendant State Farm

EAB Plaza

Uniondale, NY 11556

O’Melveny & Myers, LLP

Attorneys for Defendant GEICO

Times Square Tower

7 Times Square

New York, NY 10036

Stern & Montana, LLP

Attorneys for Defendant American Transit

Trinity Centre — 115 Broadway

New York, NY 10006

Short & Billy, P.C.

Attorneys for Defendant Progressive

217 Broadway, Suite 300

New York, NY 10007

and-

Conrad O’Brien Gellman & Rohn, P.C.

Attorneys for Defendant Progressive

1515 Market Street, 16th Floor

Philadelphia, PA 19102-1916

Cozen & O’Connor

Attorneys for Defendant One Beacon

1900 Market Street

Philadelphia, PA 19103

Thomas P. Phelan, J.

Motion by defendants, and cross-motion by plaintiff, for summary judgment on the issue of whether no-fault insurers may raise lack of medical necessity as a basis to deny claims for reimbursement to radiologists seeking payment for MRI tests provided to no-fault patients pursuant to prescriptions, is determined as follows.

Plaintiff’s further request for class certification pursuant to CPLR 901 and 902 and related relief is denied as premature. [*2]

By order dated November 29, 2005, this Court granted defendants’ motion dismissing the complaint for failure to comply with CPLR 3013. The cross-motion by plaintiff for an order directing that the proposed amended complaint be deemed served in place and stead of the original complaint was granted. The largely undisputed fact pattern underlying this case is as follows.

Plaintiff is a radiology office that performs MRI testing for persons involved in motor vehicle accidents and allegedly eligible for no-fault benefits. MRI testing is done pursuant to a prescription issued by the injured person’s independent treating physician. For payment plaintiff receives an assignment of no-fault benefits from the injured person, and submits claims directly to one of the defendants. Defendants deny numerous claims for payment on the ground of an alleged “lack of medical necessity.”

On this motion defendants argue that in the context of the no-fault statute and the regulations thereunder, “medical necessity” is a prerequisite for payment. They conclude therefore, that they have every right to deny plaintiffs’ claims on the ground of “lack of medical necessity.” This Court agrees with defendants’ argument, but not their conclusion.

The no-fault statute embodied in Insurance Law §5102(a)(1) defines the “basic economic loss” for which the statute was designed to provide payment as “All necessary expenses incurred for: (I) medical, hospital, . . . surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services . . .” Like the no-fault law, the regulations promulgated thereunder expressly state that basic economic loss comprises medical expenses which are “necessary” [11 NYCRR 65-1.1].

The purpose of the no-fault law was to “remove the vast majority of claims arising from vehicular accidents from the sphere of common-law tort litigation, and to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of such accidents” [Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214(1996) citing L 1973, ch13; Governor’s Mem. approving L 1073, ch 13, 1973 NY Legis Ann at 298].

Overall, the no-fault law is a compromise: prompt payment for basic economic loss to injured persons regardless of fault, in exchange for a significant limitation on litigation [Pommells v Perez, 4 NY3d 566, 570-71 (2005); see also Oberly v Bangs Ambulance Inc., 96 NY2d 295, 298 (2001)(No fault legislation was adopted to assure prompt and full compensation for economic loss, and non-economic loss for serious injury)].

To implement the legislative aim of curtailing delay and reducing expense, the regulations are written to encourage prompt payment of claims, to discourage investigation by insurers, and to penalize delays [Dermatossian v New York City Transit Authority, 67 NY2d 219, 225(1986)].

The court system is inundated with no-fault claims litigation [Vladimir Zlatnick, [*3]M.D.,P.C. v Geico, 2 Misc 3d 347(Civ Ct, Queens Cty, 2003); Ostia Medical P.C. v Geico, 1 Misc 3d 907(A)(Dist. Ct, Nassau Cty, 2003); see Karen B. Rothenberg and Jennifer R. Rapaport, No-Fault: The Litigation Epidemic, N.Y.L.J., 1/5/2004, p.4, col. 4]. As one court has noted, neither insureds nor insurers benefit from uncertainties engendered by scores of judges retrospectively attempting to exercise medical/professional judgment in these no-fault cases [Citywide Social Work & Psy. Serv., PLLC, v Travelers Indemnity Co., 3 Misc 3d 608 (Civ Ct., Kings Cty, 2004)].

One of the primary defenses litigated by the insurers is the alleged “lack of medical necessity.” The various plaintiffs in such cases present a prima facie case by proof of submitted claims (setting forth the fact and amounts of the losses sustained) and overdue payments [All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131(A)(N.Y.Sup.App. Term 2006); Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 11 Misc 3d 136 (A)(N.Y.Sup.App. Term 2006); A.B. Medical Services PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128 (A) (N.Y.Sup. App. Term 2005)].

The burden then shifts to the insurer, who must prove that its denial was timely and that the medical services or supplies in question were not medically necessary [Nir v Allstate Ins. Co., 7 Misc 3d 544, 546 (Civ Ct., Kings Cty., 2005); Healing Hands Chiropractic, PC v Nationwide Assurance Co., 5 Misc 3d 975(Civ Ct., N.Y.Cty, 2004)]. To withstand summary judgment, the insurer’s proof must set forth a sufficiently detailed factual basis and medical rationale for the claim’s rejection [Nir at 546; AB. Medical Services PLLC ; Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A)(N.Y.Sup, App. Term, 2003)].

Most of the cases do not address the legal issue of the availability of the “lack of medical necessity” defense where the medical supplier or diagnostic tester is not the treating physician, but instead complies with the instructions found in a prescription from the treating physician. As noted in this Court’s earlier decision, only two courts squarely consider the issue, and they reach different conclusions.

In West Tremont Medical Diagnostics v Geico, [8 Misc 3d 423, 427 (Civ. Ct., Richmond Cty, 2005)], the Court noted in dicta, that this defense should not be available to insurers in connection with claims made by diagnostic centers. There, the Court expressly held, after trial, that the defendant insurer had failed to meet its burden of proof on the defense of lack of medical necessity.

The court’s broader reasoning was expressed as follows:

There is nothing in the No-Fault statute that indicates that the treating physician needs to get pre-approval testing before referring the patient for MRI’s or any other diagnostic modalities. Therefore, to deny First Party benefits, on the basis of lack of medical necessity, to the diagnostic center that does not come to a diagnosis based upon a physical examination of the patient can be found to be in derogation of the purpose [*4]and intent of the Insurance No-Fault Benefits statute which is expedient payment of benefits to automobile victims. . . . Therefore, in a matter, such as the instant case, wherein the usual and customary medical procedure was utilized by the examining physician in referring a patient involved in a motor vehicle accident for radiological tests after a physical examination, and the patient assigned her rights to the diagnostic radiological establishment for reimbursement of No-Fault benefits, the affirmative defense of lack of medical necessity should not be available as the diagnostic center does not make an independent medical evaluation of the patient and the denial of benefits to the diagnostic establishment is in derogation of the intent of the Insurance Law §5106.

This Court understands that West Tremont is being appealed to the Appellate Term, and the record herein includes the amicus brief (annexed to defendants’ reply papers) filed by the Attorney General’s office on that appeal.

By contrast, in Precision Diagnostic Imaging P.C. v Travelers Ins. Co.[8 Misc 3d 435 (Civ.Ct.,NYCty, 2005)], the Court found the no-fault statute clearly and unambiguously mandates that “claimants may only be reimbursed for necessary’ medical services.”Therefore, the Court reasoned that there was no need to look to the legislative purpose or history of the statute, expressly rejected the dicta in West Tremont, and concluded that “the defense of medical necessity is available against all medical providers” (Precision Diagnostic at 439). The Court further noted that “to permit medical providers to receive reimbursement even when the insurer has proven that the service was not medically necessary would encourage fraud, rather than combat it (Id.). As defendant in Precision Diagnostic had provided prima facie evidence that the test was not medically necessary and plaintiff failed to submit in opposition evidentiary proof in admissible form, defendant was awarded summary judgment dismissing plaintiff’s claim.

This Court acknowledges that to require insurers to make reimbursements without regard to medical necessity would inflate costs and encourage fraud. In view of the plain language of the no-fault statute and the regulations thereunder, this Court agrees with defendants that “lack of medical necessity” is a defense which must be available to insurers in no-fault cases. However the inquiry does not end here. A remaining and critical issue presented is: against whom may the defense be raised?

On this issue, the statute and the regulations are silent. Troubling is the fact that radiologists perform tests that are prescribed by others. In Omega Diagnostic Imaging, P.C. v State Farm Mut. Auto Ins. Co. [8 Misc 3d 715 (Civ. Ct., Kings Cty, 2005)], the insurer challenged a prescription by a chiropractor for an MRI of the injured party’s knee . While not couched in terms of the availability of the “lack of medical necessity defense,” the Court in Omega Diagnostic expressed concerns similar to those of plaintiff herein. The Omega Diagnostic Court considered “whether there is a legal duty imposed on the medical supplier or provider to investigate the authority of the author of the prescriptions it fills in order to receive [*5]first party no-fault benefits for the services it provides.” The Court found no legal authority on point, and concluded that it was not unreasonable for plaintiff therein to perform the MRI prescribed by the licensed chiropractor therein.

It is this Court’s opinion that the results in West Tremont and Omega Diagnostic comport with the underlying intent of the no-fault statute, that claims be processed quickly and efficiently, and that economic losses be fully compensated. As noted in West Tremont, there is no statutory or regulatory pre-approval requirement for radiology tests requested by treating physicians in no-fault cases. Furthermore it makes no sense to argue “lack of medical necessity” against radiologists, because they do not assess medical necessity. Radiologists neither examine the no-fault patient, nor render a pre-test diagnosis. Any diagnostic opinion is based on the radiological test. To require radiologists to render a pre-test diagnosis would cause significant delay in treating the injured.

As suggested in Omega Diagnostic, a radiologist should not be required to investigate every prescription for radiology tests in order to receive no-fault payments for tests admittedly performed.

Overall, this Court finds, that where a prescription for a radiology test has been provided by a treating physician or licensed medical provider in a no-fault case, the prescription should render a challenge on the grounds of “lack of medical necessity” unavailable against the radiologist. The prescription establishes medical necessity for the purposes of the radiologist.

The insurers’ recourse should lie against the treating physician or medical provider. An insurer who can prove that a radiology test is unnecessary or duplicative, should be able to challenge through subrogation the treating physician or medical provider who prescribed the test [see generally Pavone v Aetna Cas.& Sur. Co., 91 Misc 2d 658 (Sup Ct., Monroe Cty, 1977).

Based on the foregoing, defendants’ motion for summary judgment is denied, and that branch of plaintiff’s cross-motion for summary judgment is granted.

Plaintiff additionally cross-moves for class certification pursuant to CPLR 901 and 902, identifying the proposed class as:

all radiologists and radiology practices that have been denied no-fault benefits in the last six (6) years for MRI’s performed where said denial is based on lack of medical necessity, peer review or any other denial however worded based on the tests’ lack of medical necessity. (Mollins affirmation in support of cross-motion, par. 9.)

“In determining whether to grant class certification, plaintiffs must satisfy five prerequisites under CPLR 901(a) by competent evidence in admissible form (citations omitted)” [Feder v Staten Island Hosp., 304 AD2d 470 (1st Dept. 2003); see, Hazelhurst v [*6]Brita Products Co., 295 AD2d 240, 241(1st Dept. 2002)]. Specifically, the prerequisites are:

1. the class is so numerous that joinder of all members, whether otherwise required or permitted is impracticable;

2. there are questions of law or fact common to the class which predominate over any questions affecting only the individual members;

3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;

4. the representative parties will fairly and adequately protect the interests of the class; and

5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

[CPLR 901(a); Small v Lorillard Tobacco Co. Inc., 94 NY2d 43, 54 (1999)]. The prerequisites of CPLR 901(a) are to be liberally construed [Wilder v May Dept. Stores Co., 23 AD3d 646 ( 2nd Dept. 2005); Tosner v Town of Hempstead, 12 AD3d 589( 2nd Dept. 2004)].

In addition, the Court must also consider the five factors set forth in CPLR 902, which are:

1. the interest of members of the class in individually controlling the prosecution or defense of separate actions;

2. the impracticability or inefficiency of prosecuting or defending separate actions;

3. the extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

4. the desirability or undesirability of concentrating the litigation of the claim in the particular forum; and

5. the difficulties likely to be encountered in the management of a class action.

The decision whether to certify a class action is vested in the sound discretion of the trial court (Small at 52; Wilder at 649), and any error should be resolved in favor of allowing the class action [Wilder at 649; Kidd v Delta Funding Corp., 289 AD2d 203 ( 2nd Dept 2001)]. Class certification must be based upon a proper factual record [Klein v Robert’s American Gourmet Food, Inc., 28 AD3d 63 (2nd Dept. 2006)]. [*7]

In this case the Court agrees with defendants that some discovery is needed before certification can be resolved [see Dougherty v North Fork Bank, 301 AD2d 491 (2nd Dept. 2003); Negrin v Norwest Mortgage, Inc., 293 AD2d 726 (2nd Dept. 2002)]. As to the very first prerequisite of numerosity, plaintiffs state “the number of denials in New York State for MRI’s based on lack of medical necessity from all of these Defendants probably exceeds a few hundred thousand” (Mollins affirmation in support of cross-motion, par. 17). The evidentiary basis for this statement is not identified. Similarly, the factual basis for plaintiff’s assertion that it will adequately protect the interests of the class is not provided, and the record contains little information regarding plaintiffs’ attorney’s qualifications to represent a class.

Based on the foregoing, that branch of plaintiff’s cross-motion which seeks class certification is denied without prejudice to renewal.

The parties are reminded that a certification conference is scheduled to be held before the undersigned on June 16, 2006 at 10:30 A.M.

This decision constitutes the order of the court.

Dated: JUNE 7, 2006 THOMAS P. PHELAN

J.S.C.

APPEARANCES OF COUNSEL

[*1]

Supreme Court, Appellate Term, Second Department, June 7, 2006

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (Todd M. Hellman of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn (Darya Klein of counsel), for respondent.

{**12 Misc 3d at 91} OPINION OF THE COURT

Memorandum.

Order reversed without costs, plaintiff’s motion for summary judgment denied and defendant’s cross motion to dismiss the complaint or, in the alternative, compel responses to its discovery demands granted to the extent of directing that plaintiff shall respond to those discovery demands which seek information regarding whether plaintiff was fraudulently incorporated, within 30 days of the date of the order entered hereon, or within such other reasonable period as the parties stipulate to in writing.

In this action to recover $1,400 in first-party no-fault benefits for health care services rendered to its 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 2003]). Contrary to defendant’s contention, plaintiff’s affidavit was sufficient to establish that it mailed the claims to defendant, and its remaining contentions have no merit. The burden then shifted to defendant to show a [*2]triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In February 2003 defendant conducted a preclaim independent medical examination of plaintiff’s assignor after which defendant’s examiner determined that the assignor needed no more acupuncture as of that date. Defendant subsequently denied each claim, by denials dated March, April and May 2003, based on a February report finding the lack of medical necessity. Defendant annexed an unsworn copy of said report to its opposition papers which is in inadmissible form and is, therefore, insufficient to warrant denial of plaintiff’s motion for summary judgment (see A.B. Med. Servs. PLLC v Electric Ins. Co., 7 Misc{**12 Misc 3d at 92} 3d 130[A], 2005 NY Slip Op 50542[U] [App Term, 2d & 11th Jud Dists 2005]). Moreover, defendant’s June 2003 general denial of claim form is fatally defective since numerous portions thereof are blank/incomplete (see e.g. Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]). Accordingly, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Nevertheless, the defense that plaintiff, a provider of health care services, is not eligible for reimbursement of no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) is not subject to preclusion (see A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504[U] [App Term, 2d & 11th Jud Dists 2006]). Moreover, summary judgment should be denied where the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated (see CPLR 3212 [f]).

In Mallela (4 NY3d 313 [2005], supra), the Court of Appeals found that insurers may withhold payment of first-party no-fault benefits provided by fraudulently licensed medical service corporations to which patients have assigned their claims. Consequently, we find that discovery requests seeking corporate information to determine whether the owners of a medical service corporation are improperly licensed are germane to the question of whether said corporation is eligible for reimbursement. Pursuant to 11 NYCRR 65-3.16 (a) (12),

“[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 necessary to perform such services in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”

The Education Law provides that only persons licensed or certified can practice acupuncture in the State of New York (see Education Law § 8212). The Business Corporation Law provides that each shareholder, director or officer of the corporation must be licensed to practice the profession for which the corporation was organized (see Business Corporation Law § 1503 [b]; § 1507).

We find that defendant’s papers establish that so much of defendant’s discovery requests as seek information regarding{**12 Misc 3d at 93} whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101) and, thus, said papers set forth that facts essential to justify opposition may exist but cannot now be stated. Consequently, plaintiff’s motion for summary judgment is premature pending the completion of discovery (see CPLR 3212 [f]). It is noted that plaintiff did not oppose the cross motion in the court below. Accordingly, plaintiff’s motion for summary judgment is denied and defendant’s cross motion is granted to the extent of compelling plaintiff to respond to defendant’s discovery demands which seek information regarding the ownership, control and licensing of plaintiff corporation, within 30 days of the date of the order entered hereon. [*3]

Golia, J.P. (concurring with the result only): While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

Rios and Belen, JJ., concur; Golia, J.P., concurs in a separate memorandum.

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 (Lila Gold, J.), entered August 4, 2005. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion to compel depositions to the extent of directing plaintiff to produce an individual with personal knowledge of its billing and distribution procedures.

Order affirmed without costs.

In this action to recover first-party no-fault benefits for medical supplies furnished to its assignor, plaintiff provider 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]). The burden then shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

All the claims were denied based on excessive billing as well as the results of an investigation which had revealed that the injuries alleged were not related to the motor vehicle accident. In opposition to plaintiff’s motion, defendant submitted, inter alia, an accident analysis report (referred to as a “low impact study”) accompanied by an affidavit of the technical consultant/accident reconstructionist who prepared the report, which may constitute a proper basis for a denial (see Careplus Med. Supply Inc. v Kemper Auto & Home Ins. Co., 8 Misc 3d 127[A], 2005 NY Slip Op 50958[U] [App Term, 2d & 11th Jud Dists]; Ocean Diagnostic Imaging P.C. v New York Cent. Mut. Fire Ins. Co., 7 Misc 3d 132[A], 2005 NY Slip Op [*2]50607[U] [App Term, 2d & 11th Jud Dists]; Ocean Diagnostic Imaging P.C. v New York Cent. Mut. Fire Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50525[U] [App Term, 2d & 11th Jud Dists]). These submissions were sufficient to demonstrate that its defense of lack of a nexus between the accident and the injuries claimed was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff’s motion for summary judgment was properly denied. In addition, defendant raised a triable issue of fact as to excessive billing. As a result, the court below properly directed plaintiff to produce for deposition an individual with personal knowledge of its billing and distribution procedures.

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

Golia, J., concurs in a separate memorandum.

Golia, J., concurs with the result only, in the following memorandum:

I agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: June 5, 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 (Ellen M. Spodek, J.), entered March 25, 2005. The order denied plaintiff’s motion for summary judgment.

Order modified by granting plaintiff’s motion to the extent of granting partial summary judgment to plaintiff in the sum of $1,050 and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees thereon, and for all further proceedings on the remaining claim; as so modified, affirmed without costs.

In an action to recover assigned first-party no-fault benefits, a plaintiff provider generally establishes its 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 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]). In the instant case, plaintiff’s moving papers were insufficient to establish the mailing of the appended claim forms to defendant. However, said deficiency was cured by defendant’s acknowledgment of receipt of both of plaintiff’s claims in the affidavit of its claims adjuster (see Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005]). Accordingly, plaintiff established its prima facie entitlement to summary judgment and the burden shifted to defendant to demonstrate the existence of a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Defendant established that it timely denied both claims. It asserted that the claim for $525 was denied based upon the peer review report of Dr. Corcoran. Said peer review report, which was annexed to the denial of claim form, set forth a factual basis and medical rationale for [*2]Dr. Corcoran’s opinion that the medical equipment was medically unnecessary and, as such, was sufficient to raise a triable issue of fact (see Amaze Med. Supply Inc. v Travelers Prop. Cas. Corp., 7 Misc 3d 128[A], 2005 NY Slip Op 50452[U] [App Term, 2d & 11th Jud Dists]).

In the court below, and on appeal, plaintiff asserted that defendant may not use an explanation of benefits form in lieu of the prescribed denial of claim form in denying the claim for $1,050. It is well settled that a claim can only be properly denied on the prescribed denial of claim form (see 11 NYCRR 65-3.8 [c] [1]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 16 [1999]). Since the record herein fails to establish that defendant submitted a copy of the required denial of claim form, defendant is precluded from raising any defense as to said claim (see Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, supra).

Accordingly, the order is modified by granting plaintiff partial summary judgment as to its $1,050 claim and the matter is remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claim.

Pesce, P.J., Rios and Belen, JJ., concur.
Decision Date: June 2, 2006

Nassau Dist Ct

28582/04

Randy Sue Marber, J.

Plaintiff moves for an order pursuant to CPLR §3212 awarding the plaintiff summary judgment for $7,951.28, the amount demanded in the complaint on the grounds that defendant failed to pay or deny its claims within thirty days, and that defendant is precluded from offering any evidence at time of trial in accordance with an April 21, 2005 stipulation. Defendant opposes the motion and cross-moves for summary judgment on the ground that plaintiff failed to rebut defendant’s proof that services were not medically necessary, plaintiff’s failure to cooperate and where the services rendered constitute concurrent care, which cross-motion plaintiff opposes. Defendant also raises the issue of fraud.

Plaintiffs’ assignor, Shani Myles, allegedly was involved in a motor vehicle accident on January 2, 2004. On multiple dates from January 5, 2004 through April 28, 2004 plaintiff rendered acupuncture “health services” to its assignor in the total amount of $7,951.28. All of said claims were timely submitted and defendant has acknowledged receipt of same. Delay letters were sent to plaintiff upon defendant’s receipt of each bill, claiming that it was investigating the circumstances of the accident, as well as plaintiff’s patient’s eligibility for No-Fault benefits under its policy of insurance. Subsequent letters sent on April 21, 28 and May 6, 2004 indicate that payment was delayed “pending receipt of additional documents and/or testimony recently requested of you in a certified letter from defendant’s Special Investigative Unit.” (copies of the request for additional documents and/or testimony requested [*2]are not included). An Examination Under Oath of Dr. Ahmed Halima, the owner of plaintiff was conducted on July 23, 2004. An unsigned but certified copy of his transcript is included with defendant’s cross-motion papers. . The Court of Appeals has determined that an unsigned but certified deposition transcript of a party can be used by the opposing party as an admission in support of a summary judgment motion ( Newell Co. v Rice, 236 AD2d 843, 844, lv denied 90 NY2d 807).

Plaintiff instituted the within law suit by service of a summons and complaint upon defendant on November 17, 2004. Defendant interposed its Answer on December 16, 2004. Plaintiff annexed to its moving papers, an affidavit of service by mail which states that on January 31, 2005, plaintiff served defendant with its Demand for a Verified Bill of Particulars as to the Affirmative Defenses, plaintiff’s Demand for Experts and Notice for Discovery and Inspection.

Plaintiff asserts that on April 21, 2005, the parties entered into a stipulation, which was not “so ordered” wherein it was agreed that defendant would respond to plaintiff’s written interrogatories and Demand for Discovery and Inspection within 60 days of the date of the stipulation, and in the event of defendant’s failure to respond to plaintiff’s demands, Judgment will be entered against defendant upon the filing of an affidavit of non-compliance. The stipulation likewise states: “Furthermore, Plaintiff agrees to fully respond to defendant’s discovery demands or same’ will be precluded.” Defendant failed to so respond within said 60 days and plaintiff brought on the within motion. Copies of plaintiff’s Demands are annexed to its moving papers. No affidavit of service of, or copy of purported written interrogatories is annexed. Said stipulation of service also includes that it served plaintiff’s Response to Defendant’s Demand for Bill of Particulars, Response to Notice for Discovery & Inspection, Response to Demand for Expert Discovery and Response to Demand for Proof of Filing, Index Number. Copies of said Responses are not included. Defendant, however, has raised no objection with regard to its receipt of same.

As stated by the Court of Appeals in In re Petition of New York L.& W.R.Co., 98 NY 447, 453 (1885), which case is still cited today:

Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only binds them, but which the courts are bound to enforce. They may stipulate away statutory, and even constitutional rights. They may stipulate for shorter limitations of time for bringing actions for the breach of contracts than are prescribed by the statutes, such limitations being frequently found in insurance policies. They may stipulate that the decision of a court shall be final, and thus waive the right of appeal; and all such stipulations not unreasonable, not against good morals, or sound public policy, have been and will be enforced.

(See also, Morse v. Morse Dry Dock & Repair Co., 249 AD 764, 291 NYS 995 [2nd Dept 1936]; Tepper v. Tannenbaum, 83 AD2d 541, 441 NYS2d 470 [1st Dept 1981]; Celtic Medical P.C. v. Liberty Mutual Insurance Co. 11 Misc 3d 1092[A], 2006 NY Slip Op [*3]50825U, [Nassau Dist Ct, 2006]).

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]; Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]) and even in the absence of opposing papers. A motion for summary judgment shall be supported by an “affidavit by a person having personal knowledge of the facts”, shall recite all the material facts and it shall show that there is no defense to the cause of action or that the defenses have no merit (CPLR §3212[b]). Once the moving party meets his burden, the burden then shifts to the non-moving party to allege such evidentiary facts that raise a genuine and material controversy as to the issue(s) before the Court. Where the opposing party fails to meet his burden and the Court finds no triable issues, the motion will be granted (Iandoli v. Lange, 35 AD2d 793 [1st Dept 1970]). Where the Court determines that a triable issue of fact exists, denial of the motion is the proper course of action (Moskowitz v. Garlock, 23 AD2d 943 [3d Dept 1965])

Plaintiff bases its lawsuit on the ground that it timely submitted its claim forms to defendant which neither paid nor denied them within thirty days in accordance with the Rules and Regulations governing the payment of no-fault benefits (see Insurance Law §5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 [2004]; A.B. Med. Servs. PLLC v. Lumbermens Mut. Cas. Co., 4 Misc 3d 86, 781 NYS2d 818 [App Term, 2d & 11th Jud Dists 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]). The Court finds that plaintiff has established its prima facie case.

Defendant claims that it extended its time to pay or deny plaintiff’s claims by issuing its delay letters. It has been held that letters from the insurance company to the a claimant, stating that payment was delayed pending completion of the insurance company’s investigation, did not toll the 30-day statutory period for paying or denying the claim (see Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11, 699 NYS2d 77; Ocean Diagnostic Imaging, P.C. v. Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 806 NYS2d 446 {8 Misc 3d 1026(A)} ; Melbourne Med., P.C. v. Utica Mut. Ins. Co., 4 Misc 3d 92, 781 NYS2d 819). Therefore, there was no tolling of defendant’s obligation to pay or deny plaintiff’s claims within thirty days of receipt and its subsequent denial of claim forms were untimely.

By its failure to timely issue its Denial of Claim forms, defendant is precluded from proving lack of medical necessity of the services, as well as concurrent care, the reasons given in its November 30, 2004 Denials. While concurrent care is not permitted under the Workers Compensation Law, contrary to defendant’s contention, case law has considered it under the No Fault Law (see, Universal Acupuncture Pain Servs PC v. Lumbermens Mut. Cas. Co., 195 Misc 2d 352, 195 Misc 2d 352, 758 NYS2d 795 [Civ Ct Queens County].

In addition to the reasons for denial set forth in its Denial of Claim forms as indicated [*4]above, in its opposition papers, defendant raises for the first time that the proof of claim forms submitted by plaintiff are improper. Having failed to include this reason in a timely denial of the claim, however, defendant is precluded from raising this defense (see Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 282, 683 NE2d 1, 660 NYS2d 536 [1997]).

Lastly, defendant also raises questions as to whether plaintiff is fraudulently incorporated in violation of Business Corporation Law §1507 and whether the actual profits from the practice are channeled to the non-physician management company to which it pays a set fee of $40,000 to $43,000 a month. Defendant bases its fraud defense upon the unsigned but duly certified deposition of the plaintiff’s owner, Dr. Ahmed Halima. An unsigned but certified deposition transcript of a party can be used by the opposing party as an admission in support of a summary judgment motion (Newell Co. v Rice, 236 AD2d 843, 844, lv denied 90 NY2d 807). Dr. Halima testified that the management company provides two administrative support persons as well as a receptionist, a technician and two billing persons; it owns the EMG and NCV testing machine as well as CPT testing equipment. His testimony indicates that he does not know who prepares the bills or what form is used for billing, and that he knew little about what is actually being performed at his facility. It is well settled that despite an untimely denial, an insurer is not precluded from raising the issue of coverage such as a breach of a condition precedent of the terms of the insurance contract (Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 274, 683 NE2d 1, 660 NYS2d 536.

In addition, the Court notes that proper licensing of a medical provider is a condition precedent to payment (Valley Physical Med. and Rehab v. NY Central Mutual Ins., 193 Misc 2d 675, 753 NYS2d 289 (App.Term 2nd Dept 2002). The Court of Appeals has ruled that under New York State’s No-Fault Insurance Laws, insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises (State Farm Automobile Ins. Co. v. Robert Mallela, 4 NY3d 313, 827 NE2d 758, 794 NYS2d 700). The Mallela III Court followed the Superintendent of Insurance’s promulgation prohibiting the reimbursement of benefits on behalf of unlicensed or fraudulently licensed providers (11 NYCRR 65-3.16(a)(12) (effective April 4, 2002). Accordingly, Mallela III ruled that medical providers fraudulently incorporated are therefore not entitled to reimbursement. While defendant has failed to provide sufficient proof of fraudulent incorporation to award it summary judgment, the question of the fraudulent incorporation raises questions of fact which would preclude summary judgment to the plaintiff.

Accordingly, both plaintiff’s motion and defendant’s cross-motion for summary judgment are denied.

So Ordered:

DISTRICT COURT JUDGE

Dated: June 1, 2006 [*5]

CC: Belesi & Conroy, P.C.

Melli, Guerin & Wall, P.C.

Civil Court of the City of New York, Kings County

46907/2005

Sylvia G. Ash, J.

Plaintiff, a health care provider, rendered medical services to the assignors in connection with injuries sustained as a result of separate automobile accidents that occurred in September of 2003. At the time of the alleged accidents, Defendant was the first-party no-fault carrier responsible for payment of any claims properly submitted. Plaintiff brought this action to recover first-party no-fault benefits for the medical services rendered to its assignors. A trial on this matter was conducted jointly.^[FN1]. The trial commenced on February 6, 2006 and was heard on consecutive days until its conclusion on February 9, 2006. At issue as to assignor Reggie Delmar, is $484.44. At issue as to assignor Mario Rodriguez is $968.88, for a total of $1,453.32. Based on the credible evidence adduced at trial this Court makes the following findings of fact and conclusions of law.

In accordance with the applicable no-fault rules, Plaintiff submitted the required no-fault claim forms indicating the fact and amount of the loss sustained for each of its assignors, and Defendant timely denied said claims based on the fact that the alleged automobile accidents were not covered.^[FN2]. For each of its assignors Plaintiff submitted claims for the following services, Inclinometry Range of Motion procedures (code 95851), and Manual Muscle Testing procedures (code 95831). Defendant denied said claims. As a basis for its denial of each of these claims Defendant asserted two reasons. First, for the Inclinometry Range of motion procedures, Defendant contends that the “procedure is not listed in the NY state fee schedule for this provider specialty. If reported with an evaluation and management service, this procedure is [*2]inclusive.” Second, for the Manual Muscle Testing procedures, Defendant contends the “procedures referenced by the provider’s office were used more than what is normally expected per visit.” (See Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

In light of the parties stipulating to Plaintiff’s prima facie case, and Defendant’s timely denial of the claims submitted, the only remaining issue for this Court to determine is whether the Defendant met its burden by demonstrating that Plaintiff was not entitled to recover for the claims submitted based on the fact that the procedures were not listed in the fee schedule for the provider, and based on the fact that the procedures were used more than what is expected per visit.

To contain the cost of providing medical services to patients treated under New York’s No-Fault law, the state legislature set limits on the fees health care providers may charge patients who sustain injuries in the use or operation of a motor vehicle. The legislature controlled costs by incorporating into the no-fault scheme the fee schedules established by the Worker’s Compensation Board for industrial accidents. Worker’s Compensation fee schedules were divided into various sections, including Medicine, Physical Therapy, Anesthesia, Surgery, Radiology, and Pathology in the medical fee schedule. Each of these sections lists a variety of medical procedures and assigns to each procedure a number known as a Current Procedural Terminology Registry Code (hereinafter “CPT code”). Each procedure listed in the fee schedule is assigned a number representing its “unit value.” To determine the maximum fee a provider may charge for any given procedure, the unit value assigned to that procedure is multiplied by a dollar amount conversion factor. Conversion factors are provider specific. Hence, the conversion factors apply only t the category of health care provider and type of treatment for which they were established (see Introna v. Allstate Insurance Co., 890 F.Supp.161).

The Worker’s Compensation fee schedules are adjusted by the superintendent of the Insurance Department (see Insurance Law §5108). One adjustment made by the superintendent is for health services not set out in the schedules. When a charge for a reimbursable service has not been scheduled by the superintendent, although a fee schedule has been set for the profession of the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule subject to review by the insurer (see 11 NYCRR 68.6(a); Studin v. Allstate Insurance Co, 152 Misc 2d 221).

During trial in the instant matter, Plaintiff submitted bills indicating that, Inclinometry Range of Motion procedures (CPT code 95851), and Manual Muscle Testing procedures (CPT code 95831), were performed on the assignors. In its post-trial memorandum of law on this issue, Plaintiff demonstrated by using a chart, the precise method for calculating the charges for the expenses. Specifically, Plaintiff indicated that it did in fact locate the procedures that were performed on the assignors within the Worker’s Compensation schedule, under CPT codes, 95851 and 95831. Plaintiff using the “comparable procedures” method then billed the insurer at a rate comparable for a physical therapists rate for providing these services. Defendant failed to [*3]introduce any evidence on this issue at trial or in its post-trial memorandum of law to establish that the services rendered were in fact not scheduled services, or as the defendant stated in its denial “…not listed in the NY state fee schedule for this provider specialty.”

In addition to reviewing the record and the post-trial memoranda of the parties, the Court conducted an investigation of the fee schedule. Both of the above-referenced procedures listed in the bills submitted by the Plaintiff in this case were in fact listed in the schedule (see Worker’s Compensation Board Fee Schedule of medicine Fees, Page 32). Pursuant to the chart utilized by Plaintiff in its post-trial memorandum of law, the court is satisfied that Plaintiff billed the insurer at the appropriate physical therapist rate of the services rendered, and as such, is entitled to recovery for the expenses. Defendant offered no proof to the contrary, and as such, has failed to maintain this defense.

The Court will now address Defendant’s contention that the “procedures referenced by the provider’s office were used more than what is normally expected per visit,” (see Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively). It is the Court’s position that this defense amounts to one of lack of medical necessity. It is well settled that where Defendant’s timely denial raises the lack of medical necessity defense but fails to support same with an Independent Medical exam (hereinafter “IME”), a peer review, an IME report, or other supporting documentation that is factually sufficient and non-conclusory, this defense will fail )Amaze Med. Supply Inc. v. Allstate Ins. Co., 3 Misc 3d 43 [App Term 2d & 11th Jud Dists. 2004]. As such, Defendant failed to preserve this defense for trial. Assuming arguendo Defendant had preserved this defense for trial, Defendant failed to call any expert witnesses at trial to testify regarding this issue. Nor did Defendant attempt to introduce any documents into evidence regarding this issue. As such, Defendant’s argument fails in its entirety as there is absolutely no basis in the record upon which the Court could make the determination that the procedures referenced by the Plaintiff in its claim forms were “..more than what is normally expected per visit” (see Joint exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

Based on the foregoing, judgment is to be entered in favor of the Plaintiff in the amount of $1,453.32, plus statutory interest and reasonable attorney fees.

This constitutes the decision and order of this Court.

DATED:Brooklyn, NY

May 30, 2006

_____________________________

SYLVIA G. ASH

JUDGE, CIVIL COURT

Footnotes

Footnote 1: This matter was tried jointly with index numbers 46906/05, 46927/05, 46933/05, and 48354/05.

Footnote 2:The parties stipulated on the record to Plaintiff’s prima facie case and that Defendant issued timely denials. [*4]

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 (Edgar Walker, J.), entered March 15, 2005. The order conditionally granted defendant’s motion to strike the complaint, denied plaintiff’s cross motion for summary judgment and awarded defendant $50 in costs.

Appeal from so much of the order as conditionally granted defendant’s motion to strike the complaint and awarded it $50 in costs dismissed.

Order, insofar as it denied plaintiff’s cross motion for partial summary judgment, affirmed without costs.

In this action to recover assigned first-party no-fault benefits, defendant moved for an order striking the complaint or, in the alternative, either precluding plaintiff from offering testimony at trial or compelling plaintiff to respond to its demand for a bill of particulars and demand for discovery and inspection. Plaintiff cross-moved for summary judgment, which motion defendant opposed. Thereafter, the court below denied plaintiff’s cross motion for summary judgment, granted defendant’s motion to strike, “without opposition,” unless plaintiff complies with defendant’s combined demands, within (60) days, and awarded defendant $50 in costs.

A review of the record indicates that plaintiff failed to establish its prima facie entitlement to summary judgment since the claim forms stated that the named treating providers were independent contractors, for whom plaintiff billing provider is not entitled to recover direct payment of assigned no-fault benefits (see e.g. 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]). [*2]Plaintiff did not cure this defect by annexing copies of W-2 forms for said health care providers to its cross motion, since the W-2s do not conclusively establish that the health care providers were employed by plaintiff on the date the services were rendered. Consequently, plaintiff’s cross motion for partial summary judgment was properly denied.

Furthermore, since plaintiff did not submit any papers in opposition to defendant’s motion, said motion was granted on default and no appeal lies therefrom (see Super Laundry Equip. Corp. v Ditmar Bakr Laundromat, 232 AD2d 476 [1996]; Smith-Reyes v Moreland, 5 Misc 3d 132[A], 2004 NY Slip Op 51424[U] [App Term, 2d & 11th Jud Dists]). Accordingly, the appeal from so much of the order as conditionally granted defendant’s motion and awarded defendant $50 costs is dismissed.

Pesce, P.J., Rios and Belen, JJ., concur.
Decision Date: May 30, 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

(Eileen Nadelson, J.), entered January 11, 2005, and from a judgment entered thereon on January 18, 2006. The order granted plaintiff’s motion for summary judgment. The judgment awarded plaintiff the principal sum of $1,200.

Appeal from order dismissed.

Judgment reversed without costs, order entered January 11, 2005 vacated and plaintiff’s motion for summary judgment denied.

The appeal from the order must be dismissed because the right to appeal directly therefrom terminated with the entry of judgment (see Matter of Aho, 39 NY2d 241 [1976]). The issues raised on appeal from said order are brought up for review upon the appeal from the judgment (see CPLR 5501 [a] [1]).

In an action to recover assigned first-party no-fault benefits, a plaintiff provider establishes a prima facie entitlement to summary judgment by proof of submission of statutory claim forms setting forth the fact and 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]). While plaintiff’s moving papers were insufficient to establish submission of the claim forms (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2001]), said deficiency was cured by defendant’s acknowledgment of receipt in its denial of claim forms (see Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005]).

In opposition to plaintiff’s motion, defendant’s submissions, consisting of, inter alia, the [*2]report of its special investigator, were sufficient to raise an issue of fact as to whether plaintiff is a fraudulently incorporated medical corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). In Mallela, 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 (cf. Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2005]).

Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether plaintiff was a fraudulently licensed medical corporation, plaintiff’s motion for summary judgment should have been denied.

Pesce, P.J., Rios and Belen, JJ., concur.
Decision Date: May 30, 2006