[*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

Nassau District Court

13569/05

Randy Sue Marber, J.

Plaintiff moves, pursuant to CPLR §3212, for an order granting it summary judgment in the amount of $1,934.10 demanded in its complaint on the ground of defendant’s willful failure to comply with a discovery stipulation. Non-responsive opposition is submitted by defendant.

A review of the moving papers shows that this action was commenced by a summons and complaint on May 26, 2005 for unpaid bills for medical services rendered to its assignor on December 8, 2004 and submitted to defendant no-fault carrier in the amount of $1,934.10. Defendant acknowledged receipt of plaintiff’s bill on December 30, 2004 and issued its denial dated January 10, 2005 for the stated reason, “NoFault (sic) benefits for the above named provider are denied because the provider failed to substantiate the necessity for the medical services rendered. Please see attached report on[sic] Edward Weiland on 1/5/05 of[sic] which this denial is based.” An Answer was interposed on July 21, 2005, together with various discovery demands. Plaintiff responded to defendant’s demands on August 16, 2005, and on that date served its Notice for Discovery and Inspection on defendant.

On October 31, 2005, the parties entered into a stipulation, which was not “so ordered” wherein it was agreed that defendant would produce all outstanding discovery on or before 60 days of the date of the stipulation, which states: “Failure by defendant to do so will result in defendant being precluded from offering such’ evidence at the time of trial.” The Court interprets “such” evidence as meaning that requested in the outstanding discovery. Plaintiff’s attorney identifies in her affirmation, the discovery demanded to be “plaintiff’s Notice for Discovery and Inspection”. Defendant failed to so respond within said 60 days and plaintiff [*2]brought on the within motion.

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 50825U, [Nassau Dist Ct, 2006]).

The stipulation in this case is not against good morals or sound public policy, and therefore, will be enforced by this Court.

Defendant has responded to the within motion, but has failed to provide any of the demanded discovery. Its opposition relates to timely denial of the claims based on a peer review. An affirmed copy of the peer review report of Edward Weiland, M.D. is provided with defendant’s opposition, together with an affidavit of Phyllis Faraguna, a claims representative for defendant and a person with personal knowledge of the preparation and mailing of the denial of claims. Plaintiff’s attorney, in her Reply affirmation, asserts that Ms. Faraguna’s affidavit is improper and insufficient as she is not the individual handling this claim and does not state the source of her “personal knowledge” with regard to this claim. The Court has reviewed the affidavit and concludes that it contains sufficient factual information describing how defendant’s regular office practices and procedures for mailing denials are geared as to ensure the likelihood that the denial of claim is always properly addressed and mailed. Further, there is no sworn statement from plaintiff that the denial of claim was never received, and in fact, annexes to its moving papers a copy of Dr. Weiland’s report which was attached to defendant’s denial of claim form.

As stated in AVA Acupuncture P.C. v. Elco Administrative Services Co., 10 Misc 3d 1079(A), Slip Copy, 2006 WL 286854 (NY City Civ. Ct.,2006):

“It is also worthy of note that, although the Second Department in Hospital for Joint Diseases v. Nationwide Mutual Ins. Co. (284 AD2d 374) found the defendant’s proof of mailing to be inadequate (id., at 374), it reversed the lower court’s granting of the defendant’s motion for summary judgment, but let stand the lower court’s denial of the plaintiff’s motion for summary judgment. One might suspect, therefore, that a showing on mailing insufficient to support granting a party’s motion for summary judgment might, nonetheless, be sufficient to warrant denial of the other party’s summary judgment motion (See Hospital for Joint Diseases v. New York City Transit Authority, 16 AD3d 376, 376-77 [2d Dept 2005].)”

While plaintiff has established by proof that it submitted to defendant claim forms, setting [*3]forth the fact and the amount of the loss sustained, it has failed to prove that payment of no-fault benefits was overdue, and therefore, has not established a prima facie case, sufficient to grant it summary judgment.

A review of the documents exchanged between the parties as indicated in the moving papers before the Court reveal that there is sufficient documentation already in the parties’ possession to enable a trial to go forward without the precluded evidence covered in plaintiff’s Notice for Discovery and Inspection.

Accordingly, that portion of plaintiff’s motion seeking an order precluding defendant from offering any evidence is granted only with regard to information demanded in its discovery notices not previously by defendant, or already in plaintiff’s possession.

So Ordered:

Dated: May 30, 2006

DISTRICT COURT JUDGE

cc: Robert E. Dash, Esq.

Law Office of Karen C. Dodson

—[*1]

In an action to recover no-fault insurance benefits under certain insurance contracts, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Cozzens, J.), dated July 21, 2005, as granted the defendant’s motion to vacate a judgment of the same court entered December 8, 2004, which is in favor of the plaintiffs and against it in the principal sum of $43,425.51, upon the defendant’s failure to appear or answer, and to extend its time to answer.

Ordered that the order is affirmed insofar as appealed from, with costs.

Service upon the defendant was effectuated through delivery of the summons and complaint upon the Deputy Secretary of Insurance pursuant to Insurance Law § 1212. Although the defendant’s motion to vacate the default judgment was made pursuant to CPLR 5015 (a) (1), under the circumstances of this case, it may be treated as a motion made under CPLR 317 as well (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 142-143 [1986]). A defendant served with a summons other than by personal delivery or to an agent designated under CPLR 318 may obtain relief pursuant to CPLR 317 upon a showing that it did not receive notice of the summons in time to defend, and has a meritorious defense (see Marine v Federal Ins. Co., 293 AD2d 721 [2002]). Unlike [*2]a motion to vacate under CPLR 5015 (a) (1), it is unnecessary for a defendant seeking relief under CPLR 317 to demonstrate a reasonable excuse for its default (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., supra at 141; Marinoff v Natty Realty Corp., 17 AD3d 412, 413 [2005]; Rifelli v Fireside Homes Corp., 152 AD2d 629, 631 [1989]; Simon & Schuster v Howe Plastics & Chems. Co., 105 AD2d 604, 605 [1984]). The defendant met its burden of showing that it did not receive actual notice of the summons in time to defend (see Marine v Federal Ins. Co., supra; cf. Kaperonis v Aetna Cas. & Sur. Co., 254 AD2d 334 [1998]; Board of Mgrs. of Landings at Patchogue Condominium v 263 Riv. Ave. Corp., 243 AD2d 668 [1997]; Fleetwood Park Corp. v Jerrick Waterproofing Co., 203 AD2d 238, 239 [1994]; Anchor Sav. Bank v Alpha Developers, 143 AD2d 711, 713-714 [1988]) and that its defenses are meritorious (see 11 NYCRR 65-3.8; Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]; Presbyterian Hosp. in City of N.Y. v General Acc. Ins. Co. of Am., 229 AD2d 479 [1996]). Accordingly, the Supreme Court providently exercised its discretion in vacating the default judgment and extending the defendant’s time to answer. Miller, J.P., Ritter, Luciano, Spolzino and Dillon, JJ., concur.