Forrest Chen Acupuncture Servs., P.C. v GEICO Ins. Co. (2007 NY Slip Op 50874(U))

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 (Alice Fisher Rubin, J.), entered August 8, 2005. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff, a licensed acupuncture health care provider, submitted claims based, inter alia, on acupuncture treatments provided assignor in 2001. In April 2001, defendant paid the claims at a reduced rate, with the explanation that, in the absence of a provision in the Workers’ Compensation Fee Schedule for such treatments, defendant was authorized to approve benefits based on what it had determined to be “a reasonable and customary fee for physical therapy.” Plaintiff sued to recover the unpaid balance, and moved for summary judgment arguing that defendant’s reduction in benefits was not authorized. In its cross motion for summary judgment, defendant insisted that the regulations and opinions of the New York State Insurance Department entitled defendant, in the absence of a fee schedule for acupuncture treatments provided by a licensed acupuncturist, to substitute therefor fee schedules promulgated “for similar procedures under schedules already adopted or established by the superintendent,” in this case, physical therapy. In reply, the plaintiff did not controvert defendant’s claim that physical therapy was a sufficiently similar procedure to merit application of the relevant fee schedules. The court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.

On appeal, plaintiff claims, inter alia, that it was entitled to summary judgment and that [*2]the denials of claims issued by defendant were insufficient because they failed to set forth a sufficiently detailed factual basis and medical rationale for defendant’s conclusion that the fee charged by plaintiff for acupuncture services exceeded the compensation rate for physical therapy as set forth in the fee schedule. For the
reasons set forth below, we are of the opinion that the compensation analysis adopted by the defendant is applicable to the claims herein, and that the order should be affirmed.

Insurance Law § 5102 (a) (1) defines “basic economic loss” to include “all necessary expenses incurred for . . . professional health services” subject to the limitations of Insurance Law § 5108. The latter statute limits the amounts to be charged by providers of health services, and states that the charges for services specified in Insurance Law § 5102 (a) (1) “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board . . . except where the insurer . . . determines that unusual procedures or unique circumstances justify the excess charge” (Insurance Law § 5108 [a]). The statute also authorizes the Superintendent of Insurance to “promulgate rules and regulations implementing and coordinating the provisions of” the No-Fault Law and the Workers’ Compensation Law with respect to charges for the professional health services specified in Insurance Law § 5102 (a) (1), “including the establishment of schedules for all such services for which schedules have not been prepared and established by the chairman of the workers’ compensation board” (Insurance Law § 5108 [b]).

Responsibility for administering the Insurance Law rests with the Superintendent of Insurance (Insurance Law § 301), who has “broad power to interpret, clarify, and implement the legislative policy” (Ostrer v Schenk, 41 NY2d 782, 785 [1977]). It is a well-established principle of law that the Superintendent’s interpretation of its regulations, “if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005], quoting Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]; Matter of Medical Socy. of
State of N.Y. v Serio, 100 NY2d 854, 864 [2003]; see also Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

Part 68 (also known as Regulation 83) of the New York Insurance Department Regulations governs the charges for professional health services. The regulations provide that the “existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board . . . are hereby adopted by the Superintendent of Insurance with appropriate modification so as to adapt such schedules for use pursuant to the provisions of section 5108 of the Insurance Law” (11 NYCRR 68.1 [a]). The fee schedules for professional health services referred to in Insurance Law § 5102 (a) (1), for which schedules have not been prepared and established by the Workers’ Compensation Board, may be established by the Superintendent, and are made part of
Appendix 17-C of the regulations (11 NYCRR 68.2). Appendix 17-C does not contain a fee schedule for acupuncture services performed by a licensed acupuncturist.

The New York State Department of Insurance has stated that medically necessary acupuncture services rendered by a licensed acupuncturist are covered expenses, and are eligible for reimbursement under Insurance Law § 5102 (a) (1) (see Ops Gen Counsel NY Ins Dept 04-0[*3]1-01). After the health services at issue herein were provided and the claims based thereon were submitted, the Superintendent promulgated fee schedules for acupuncture services provided by chiropractors licensed to administer acupuncture and by doctors certified to administer acupuncture. At the time plaintiff provided its services, however, there were no fee schedules for acupuncture services and there remain no schedules for licensed acupuncturists. Where, as here, a professional health service has been performed which is reimbursable under Insurance Law § 5102 (a) (1), but such service is performed by a type of provider which is not included in the fee schedules established by the Workers’ Compensation Board, and if the Superintendent of Insurance has not adopted or established a fee schedule applicable to the particular type of provider, “then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR 68.5 [b]).

Defendant invoked its option to apply a rate “for similar procedures under schedules already adopted or established by the superintendent (11 NYCRR 68.5 [b] [emphasis added]), and plaintiff did not rebut defendant’s contention below that physical therapy is a sufficiently “similar procedure” to entitle defendant to impose a lesser rate based on the fee schedules for such services. Accordingly, the order granting defendant’s cross motion for summary judgment and denying plaintiff’s motion for summary judgment is affirmed.

Pesce, P.J., Golia and Belen, JJ., concur.
Decision Date: April 26, 2007