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November 9, 2006

Healthmakers Med. Group, P.C. v Travelers Indem. Co. (2006 NY Slip Op 52118(U))

https://www.beynensonlaw.com/case-law/healthmakers-med-group-p-c-v-travelers-indem-co-2006-ny-slip-op-52118u/

Court
Appellate Term, First Department
Decided
November 9, 2006
Citation
2006 NY Slip Op 52118(U) · 13 Misc 3d 136(A)
Posture
Summary judgment
Outcome
Provider prevailed
Later treatment
Contrasted (cf., but see) in 1 later decision (see Cited by)
Issues
Fraudulent incorporation (Mallela)
Legal questions
Fraudulent incorporation (Mallela) (see the maps)
Cite as
Healthmakers Med. Group, P.C. v Travelers Indem. Co., 13 Misc 3d 136(A), 2006 NY Slip Op 52118(U) (App Term, 1st Dept 2006)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

A medical corporation may recover assigned no-fault benefits for licensed nonphysician employees' services billed at their fee schedules. The Appellate Term, First Department, affirmed the order, insofar as appealed from, denying the insurer summary judgment. The provider was duly formed, its sole shareholder was licensed under Business Corporation Law § 1503 (b), and licensed employees rendered the chiropractic and acupuncture services. The insurer offered no proof of fraudulent licensing under Business Corporation Law § 1507 or ineligibility under 11 NYCRR 65-3.16 (a) (12). Deferring to the Insurance Department's interpretation, the court rejected the contention that employing licensed nonphysicians violated Business Corporation Law § 1506 by engaging in a business outside the corporation's authorized professional services.

Reported in New York Official Reports at Healthmakers Med. Group, P.C. v Travelers Indem. Co. (2006 NY Slip Op 52118(U))

[*1]
Healthmakers Med. Group, P.C. v Travelers Indem. Co.
2006 NY Slip Op 52118(U) [13 Misc 3d 136(A)]
Decided on November 9, 2006
Appellate Term, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on November 9, 2006
APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: McCOOE, J.P. DAVIS, GANGEL JACOB, JJ
570880/05.

Healthmakers Medical Group, P.C. a/a/o Maria Martinez, Plaintiff-Respondent, – –

against

Travelers Indemnity Company, Defendant-Appellant.


Defendant appeals from that portion of an order of the Civil Court, Bronx County (Julia I. Rodriguez, J.), entered October 31, 2005, which denied its motion for summary judgment.


PER CURIAM:

Order (Julia I. Rodriguez, J.) entered October 31, 2005, affirmed, with $10 costs.

Summary judgment dismissal was properly denied. It is uncontroverted that plaintiff was duly formed as a professional medical corporation, and that Dr. Harold James, the sole shareholder of plaintiff corporation, is licensed to practice medicine in accordance with Business Corporation Law § 1503(b). Defendant has not offered any proof to demonstrate that the plaintiff provider is fraudulently licensed in violation of Business Law § 1507, so as to fall within the ambit of 11 NYCRR 65-3.16 (a)(12), proscribing the reimbursement of health care providers who fail to comply with applicable New York State or local licensing requirements. The chiropractic and acupuncture services in question were rendered by duly licensed practitioners employed by plaintiff. Consistent with the position of the New York State Insurance Department, which is accorded great deference (see Matter of Medical Malpractice Ins. Assn. v Superintendent of Ins. of State of N.Y., 72 NY2d 753, 761-62 [1988], cert denied 490 US 1080 [1989]), a medical professional corporation is entitled to payment of assigned no-fault benefits for services performed by properly licensed nonphysician employees, such as chiropractors or acupuncturists, provided that the services are billed in accordance with the applicable fee schedules for the employees rendering the services (see Ops Gen Counsel NY Ins Dept 4-26-02 [No. 02-04-26]). Defendant cites no persuasive authority to support its contention that plaintiff’s employment of licensed nonphysicians constitutes an unauthorized “engage[ment] in any business other than the rendering of the professional services for which it was incorporated” (Business Corporation Law § 1506).

This constitutes the decision and order of the court. [*2]
I concurI concurI concur
Decision Date: November 9, 2006

Legal questions

A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Fraudulent incorporation (Mallela)

Open the full map

On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?

This decision: Alleged conduct legally cannot support the ineligibility defense

Affirmed denial of the insurer's summary judgment, holding that a duly formed medical PC owned by a licensed physician may bill for licensed nonphysician employees; this is not an unauthorized business, and there was no proof of fraudulent licensing.

  • Court of AppealsCt App 2
  • Appellate DivisionApp Div 5
  • Appellate TermApp Term 5
  • Trial courtsTrial 4
2019, Court of Appeals: 1 decision (1 Defense established)2025, Court of Appeals: 1 decision (1 Not a Mallela ground)2021, Appellate Division: 1 decision (1 Defense not established)2018, Appellate Division: 2 decisions (1 Defense not established, 1 Not a Mallela ground)2017, Appellate Division: 1 decision (1 Defense not established)2015, Appellate Division: 1 decision (1 Not a Mallela ground)2013, Appellate Term: 1 decision (1 Defense established)2008, Appellate Term: 1 decision (1 Defense not established)2006, Appellate Term: 2 decisions (1 Triable issue, 1 Not a Mallela ground)2007, Appellate Term: 1 decision (1 Triable issue)2020, Trial courts: 1 decision (1 Triable issue)2007, Trial courts: 1 decision (1 Not a Mallela ground)2006, Trial courts: 2 decisions (2 Defense established)This decision
2010201520202025
Defense establishedTriable issueDefense not establishedNot a Mallela groundThis decision

Of the 16 decisions on this question in the First Department courts and the Court of Appeals, 5 (this one included) are in the same category. One decision in other departments that cites or is cited by this one is on the full map.

Cited by

A label shows how the later decision treated this one.

  • Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 50262(U)) Contrasted (cf., but see)A medical corporation solely owned by a physician uncertified in acupuncture cannot recover no-fault benefits for an employee's acupuncture services.

Similar decisions

  • A.B. Med. Servs. PLLC v Travelers Prop. Cas. Corp. (2005 NY Slip Op 51330(U))The insurer's peer reviews supplied a factual basis and medical rationale raising a triable issue of medical necessity.
  • Health & Endurance Med., P.C. v Liberty Mut. Ins. Co. (2008 NY Slip Op 50864(U))A billing provider cannot recover direct payment of assigned no-fault benefits for services rendered by an independent contractor.
  • Health & Endurance Med. P.C. v State Farm Mut. Auto. Ins. Co. (2006 NY Slip Op 51191(U))A billing provider cannot recover assigned no-fault benefits for services rendered by an independent contractor rather than its employees.
  • Statewide Med. Acupuncture, P.C. v Travelers Ins. Co. (2006 NY Slip Op 51515(U))The insurer obtained discovery of the treating provider's employment status because it bore on the independent-contractor defense.
  • A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co. (2005 NYSlipOp 51111(U))A billing provider cannot recover assigned no-fault benefits for services performed by an independent contractor rather than by it or its employees.
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