Advanced Recovery Equip. & Supplies, LLC v Maya Assur. Co. (2018 NY Slip Op 50022(U))

Reported in New York Official Reports at Advanced Recovery Equip. & Supplies, LLC v Maya Assur. Co. (2018 NY Slip Op 50022(U))

Upon the foregoing cited papers, the Decision/Order on defendant’s motion for summary judgment, dismissing the complaint, is as follows:

This is an action to recover assigned no-fault benefits for Durable Medical Equipment rented to plaintiff’s assignor for the period of June 25, 2016 through August 5, 2016. Defendant seeks an order dismissing this action based upon plaintiff’s alleged failure to submit the claims at issue pursuant to the proper fee schedule as set forth in 11 NYCRR §65-3.8(g). It appears that this specific issue is a case of first impression for the Court.

In support of its motion, defendant submits the affidavits of Silas Catwell, Jr., a claims manager employed by plaintiff and Jeffrey Futoran, a Certified Professional Coder, together with supporting documentation. Mr. Catwell’s affidavit establishes as follows: On August 9, 2016, defendant received a bill from plaintiff in the amount of $1,045.50 for dates of service June 25, 2016 through July 22, 2016 for rental of a water circulating cold pad with pump under treatment code E0218. On September 15, 2016, defendant mailed a partial denial of said bill, paying a total of $613.50 and denying the remainder of $432.00 based upon the fee schedule. On August 9, 2016, defendant received a bill from plaintiff in the amount of $2,380.00 for dates of service June 25, 2016 through July 22, 2016 for rental of a CPM device under treatment code E0936. On September 15, 2016, defendant mailed a partial denial of said bill, paying a total of $85.00 and denying the remainder of $2,295.00 based upon the fee schedule. On August 9, 2016, defendant received a bill from plaintiff in the amount of $504.00 for dates of service July 23, 2016 through August 5, 2016 under treatment code E0218. On September 14, 2016, defendant mailed a partial denial of said bill, paying a total of $36.00 and denying the remainder of $468.00 based upon the fee schedule. On August 9, 2016, defendant received a bill from plaintiff in the amount of $1,190.00 for dates of service July 23, 2016 through August 5, 2016 E0936. On September 14, 2016, defendant mailed a complete denial of said bill based upon the fee schedule. In sum, plaintiff submitted a total of $5,119.50 in bills, 734.50 of which was paid, leaving $4,385.00 in dispute.

As discussed in Viviane Etienne Med. Care, P.C. v. Country-Wide Ins. Co., 25 NY3d 498 (2015)”Where an insurer fails to pay or deny a claim within the requisite 30 days under the statute and regulations following its receipt of the proof of claim, the insurer is subject to ‘substantial consequences,’ namely, preclusion ‘from asserting a defense against payment of the claim.'” The Court notes that under this standard, all four of defendant’s denials are untimely on their face. However, as discussed in East Coast Acupuncture, P.C. v. Hereford Ins. Co., 51 Misc 3d 441 (NY Civ. Ct. 2016), for all medical services rendered on or after April 1, 2013, 11 NYCRR § 65-3.8(g) was amended as follows: “(1) Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:…(ii) for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.” Based upon the most recent interpretations of 11 NYCRR § 65-3.8(g) a fee schedule defense, for services after April 1, 2013, is not precluded if it is not asserted within 30 days of receipt of the claim. The burden remains on the insurer to establish that the provider billed in excess of the fee schedule.

In support of its interpretation of the fee schedule, supporting the above denials, defendant submits the affidavit of Jeffrey Futoran. Mr. Futoran’s affidavit interprets the fee schedule as follows: The fee schedule allowances for Durable Medical Goods are found in 12 NYCRR §442. Specifically, 12 NYCRR §442.2(b) reads as follows:

The maximum permissible monthly rental charge for such equipment, supplies and services provided on a rental basis shall not exceed the lower of the monthly rental charge to the general public or the price determined by the New York State Department of Health area office. The total accumulated monthly rental charges shall not exceed the fee [*2]amount allowed under the Medicaid fee schedule.

For codes E0936 and E0218, Mr Futoran acknowledges that neither code is listed in the New York State Medicaid Program Durable Medical Equipment (DME) fee schedule and as such neither item has a Maximum Reimbursement Amount (MRA). He alleges that the NYS Dept. Of Health has established a rental fee for all equipment without a listed MRA in the Medicaid DME fee schedule. Defendant submits three written communications which Mr. Futoran claims support this position, however the court finds such claims dubious as all are out of context and contradictory. The three communications offered by movement fail to provide context i.e. the specific inquiries being responded to. The first communication is an undated response from a representative of the Workers Compensation Board Policy and Research Bureau which cites the Medicaid Provider Manual. The second and third letters are from Joanne Criscione, a senior attorney with the Bureau of Health Insurance Programs, in response to similar queries by two different law firms. Her first communication dated July 3, 2014, states that “The Department of Health’s Office of Health Insurance Programs has established a Medicaid reimbursement policy for DME rental of items that have not been assigned an MRA. For DME items that do not have an MRA, the rental fee is calculated at 1/6th of the equipment provider’s acquisition cost.” Her second communication clarifying her earlier letter. Specifically, she states “Your correspondence advises that insurance carriers are characterizing my letter to Mr. Levy as ‘setting’ or ‘establishing’ a reimbursement rate applicable to Workers Compensation claims, while your reading of my letter is that it merely states the Medicaid reimbursement policy as that policy is described in the Medicaid Provider Manual and Policy Guidance.’ Please be advised that your reading of my letter is correct.” Thereafter, she specifically states that the July 3, 2014 letter “was not a determination by a Department of Health are office establishing the reimbursement rate applicable to Work Compensation claims, nor do I have any authority to do so.” In fact, defendant has not submitted any determination by a Department of Health area office which establishes the applicable reimbursement rate. Additionally, pursuant to 12 NYCRR §442.2(g) “The Medicaid provider manual and the policy guidance for durable medical equipment are not included as part of the durable medical equipment fee schedule used in workers’ compensation cases except to the extent such documents contain the Medicaid durable medical equipment fee schedule.”

As there is no MRA under the Medicaid fee schedule and the New York State Department of Health area office has not determined a monthly rental charge for either of the DME items at issue, the sole limiting factor is the monthly rental charge of said items to the general public. As such, defendant has failed to sustain its burden that the provider billed in excess of the fee schedule.

Defendant’s motion is hereby denied in its entirety. This constitutes the decision and Order of the Court.