IAV Med. Supply, Inc. v Progressive Ins. Co. (2010 NY Slip Op 50433(U))

Civil Court of the City of New York, Richmond County

23541/08

Kim Dollard, J.

This is an action by the plaintiff medical provider, to recover no-fault benefits for medical services provided to Orlando Lainez-Rodriguez, plaintiff’s assignor, arising from an automobile accident that occurred on June 16, 2008.

A trial was held before the undersigned on December 15, 2009. The parties had stipulated that the plaintiff established its prima facie case by having submitted the claims in dispute to the defendant, and that the defendant mailed timely denials of the claims. The only issue before the court was the question of medical necessity of the medical services provided to the assignor.

Defendant presented two witnesses in support of their case. Dr. Jonathan Lown was called to testify on the issue of medical necessity. His testimony was based upon the findings of Dr. Harold A. Schechter who performed a peer review of this case and prepared peer review reports. Defendant also called Karen Waldenheimer, a representative of Progressive Insurance Company. The purpose of Ms. Waldenheimer’s testimony was to lay a foundation for the peer review reports, and to admit the peer review reports into evidence.

Plaintiff objected to admission of the of the peer review reports into evidence through Ms. Waldenheimer’s testimony. Plaintiff further objected to the testimony of Dr. Lown on the grounds that defendant did not comply with CPLR 3101(d). The court heard the testimony of both witnesses, and reserved decision on the issues raised by plaintiff. Both sides submitted briefs to the court as to the admissibility of the peer review reports and the testimony of Dr. Lown.

CPLR 3101(d) – EXPERT TESTIMONY

CPLR 3101(d)(1)(i) states: “Upon request, each party shall identify each person whom the party expects to call as an expert witness at trial and shall disclose in reasonable detail the subject matter on which each expert witness is expected to testify, the substance of the facts and opinions on which each expert is expected to testify, the qualifications of each expert witness and a summary of the grounds for each expert’s opinion.”

Plaintiff claims that the disclosure notice provided by defendant is insufficient and vague, and therefore Dr. Lown should not have been permitted to testify and at trial and his testimony should be stricken.

Defendant, at the outset, states that plaintiff never requested any expert witness

disclosure, rendering its objection to the disclosure notice improper. The disclosure notice was given to plaintiff by defendant on its own volition. Further, defendant maintains that the disclosure notice is in full compliance with the statute. Additionally, defendant states that plaintiff neither objected to the Notice of Trial filed with the court, wherein defendant indicated that discovery was complete, nor did plaintiff make a motion to vacate the Notice of Trial.

The Expert Disclosure states in relevant part, “1. Defendant intends to call Jonathan Lown, MD,… to testify on Dr. Harold A. Schechter’s peer review report; see copies of Dr. Schechter’s peer reviews and Dr. Lown’s CV annexed hereto.”

A determination regarding whether to preclude a party from introducing the testimony of an expert witness at trial based on the party’s failure to comply with CPLR 3101(d)(1)(i) is left to the sound discretion of the court. (see Hubbard v Platzer, 260 AD2d 605; Lyall v City of New York, 228 AD2d 566; McGlauflin v. Wadhwa 265 AD2d 534). In the case at bar, the expert witness disclosure statement is not so inadequate or inconsistent with the expert’s testimony as to have been misleading, or to have resulted in prejudice or surprise. (see Gagliardotto v. Huntington Hosp., 25 AD3d 758, 759; Andaloro v. Town of Ramapo, 242 AD2d 354, 355; Rabinowitz v. Elimian, 55 AD3d 813, 814). Accordingly, preclusion is not warranted herein. (see Rowan v. Cross County Ski & Skate, Inc., 42 AD3d 563; Young v. Long Is. Univ., 297 AD2d 320; Abramson v. Pick Quick Foods, Inc., 56 AD3d 702, 703). The court will not strike Dr. Lown’s testimony upon these grounds.

ADMISSIBILITY OF PEER REVIEW REPORTS

AS A BUSINESS RECORD UNDER CPLR 4518(a)

CPLR 4518(a) permits the introduction of a business record as an exception to the hearsay rule. Pursuant to Rule 4518(a), “Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter….” To admit a record under the CPLR 4518(a) business records exception for the truth of its contents, the four foundational elements must be satisfied. It must be shown that the [*3]document or record was made in the regular course of business; that it was the regular course of such business to make the record; that the record was made at the time of the act or occurrence recorded or within a reasonable time thereafter, and that the person who made the record had actual knowledge of the event recorded or received the information from someone within the business who had actual knowledge and was under a business duty to report the event to the maker of the record or if the statement of an outsider within the business record satisfies an independent hearsay exception. (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:1). To make this showing requires testimony from a sponsoring witness, someone from within the particular business such as the author, a records custodian or other employee who can testify as to the nature of the record keeping practices of the business (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:2; Prince, Richardson on Evidence, § 8-306 [Farrell 11th Ed.] ); Kaiser v. Metropolitan Transit Authority, 170 Misc 2d 321, 323).

As a rule, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (Standard Textile Co. v National Equip. Rental, 80 AD2d 911).Defendant contends that Karen Waldenheimer, as a representative of Progressive Insurance Company, is competent to lay a foundation for the admission of Dr. Schechter’s peer review reports on the basis that she worked with and was familiar with peer review reports and that defendant relies upon peer review reports in making its determinations regarding the medical necessity of services rendered. Essentially, defendant is claiming that the peer review reports are business records of defendant. Defendant relies primarily upon the holding in People v. Cratsley, 86 NY2d81 wherein the court held that

The testimony of a mentally retarded rape victim’s counselor established the requisite foundation under the business records exception to the hearsay rule (CPLR 4518) for the admission of an IQ test report, prepared by a psychologist at the time of the victim’s admission to a sheltered workshop that provided opportunity and support for adults who are mentally retarded….Through the counselor’s testimony, the People established that the report was prepared for the workshop and in conformity with its procedures. That the psychologist was not himself a workshop employee does not, under these facts, defeat admission, because he was acting on behalf of the workshop and in accordance with its requirements when he prepared the report. Although the counselor could not relate the psychologist’s specific recordmaking practices, she was able to state that the report conformed with the statutory and regulatory requirements with which she was familiar. Coupled with her testimony that no client was accepted into the workshop program without such a report, and that the reports were routinely relied on by the workshop in making determinations regarding its clients, the evidence was sufficient to establish that the report, prepared at the time the examination was conducted, [*4]was made in the regular course of business and that it was the regular course of business te prepare such reports.

While it is true that Dr. Schechter may have been acting on behalf of defendant, his peer review reports may not be accepted into evidence through Ms. Waldenheimer. The court in Cratsley, supra made it clear that the admission of the report in that case was permissible under the facts presented in that case. The facts herein do not justify the same conclusion.

Additionally, as plaintiff points out, Dr. Schechter is not an employee of Progressive Insurance Company and was hired by a third party to prepare the reports. Further, Ms. Waldenheimer did not testify that she was familiar with Dr. Schecter’s business practices or exactly when Dr. Schecter prepared the reports.

The peer review reports are not accepted into evidence.

TESTIMONY OF DR. LOWN

The final issue before this court is the admissibility of Dr. Lown’s testimony notwithstanding that the peer reports are not in evidence. Dr. Lown was qualified as an expert, and presented his opinion testimony as an expert. Further, he was subject to full cross-examination.

“It is well settled that, to be admissible, opinion evidence must be based upon one of

the following: first, personal knowledge of the facts upon which the opinion rests: second,

where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and materials in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is of the kind accepted by the profession as a basis in forming an opinion and the out-of-court material is accompanied by evidence establishing its reliability.” (Wagman v Bradshaw at 292AD2d84, 86-87; Velen Medical Supply Inc. v. Travelers Ins. Co. 20 Misc 3d 781,783).

The identical issue was presented to the court in SK Medical Services, P.C. v. New York Central Mutual Fire Insurance Co., 12 Misc 3d 686. Similarly, in that no-fault case, the doctor who prepared the peer review report was not available to testify on the issue of medical necessity of services rendered to plaintiff’s assignor. Defendant presented another doctor to testify to the same facts and opinions that were set forth in the peer review doctor’s report. The court held, that there was no legitimate basis to preclude the doctor from testifying. “Each of defendant’s denials of claim, which asserted lack of medical necessity as a defense, was timely issued (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]), contained the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664), and, with [*5]the inclusion of the peer review report upon which it was based, promptly apprise[d] the claimant[s] with a high degree of specificity of the ground . . . on which [it was] predicated’ (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; see also, Nyack Hosp., 11 AD3d at 664; Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 153). Defendant therefore preserved its right to defend the claims at trial on the ground of lack of medical necessity for the reasons stated in the peer review reports.”SK Medical Services, P.C. v. New York Cent. Mut. Fire Ins. Co., supra.

The Appellate Term in both the First and Second Departments has also addressed the issue before the court. In Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A), an action to recover assigned, first party no-fault benefits, plaintiff moved to preclude defendant’s expert’s testimony on the ground that the expert did not personally undertake the peer review underlying defendant’s denial of the two claims at issue. The court held “This was error, since the expert would be subject to full cross-examination and his testimony as to lack of medical necessity would be limited to the basis for denial set forth in the original peer review report” (see generally General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co. 14 Misc 3d 139(A)).

The same conclusion was reached in Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 24 Misc 3d 134(A); see also Dilon Medical Supply Corp. v. New York Cent. Mut. Ins. Co. 18 Misc 3d 128(A) where the Appellate Term, Second Department held that “Defendant, having preserved the defense of lack of medical necessity by timely denying the claims based upon peer reviews (see New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832), the issue before the court was whether the rationale for the conclusion in the peer review reports, upon which defendant’s denial of claim forms was based, was correct. Since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services would be limited to the basis for the denials as set forth in

the original peer review reports, the expert witness should have been permitted to testify. (see Spruce Med. Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143(A); Home Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A)). In the instant case, the peer review reports had been provided to plaintiff prior to trial. In fact, a review of the court file reveals a summary judgment motion that had been filed by plaintiff, although subsequently withdrawn, which included a copy of the peer review reports. Additionally, the peer review reports were attached to the CPLR 3101(d) Expert Disclosure notice. Plaintiff was well apprised of defendant’s position regarding lack of medical necessity. Dr. Lown’s testimony and opinion, based upon the findings in the peer review reports is admissible and accepted by this court.

Accordingly, upon due consideration of all the testimony and documentary evidence before the court, the court finds as follows:

The medical expert who testified in this matter is wholly credible, and the defendant [*6]has proven a prima facie case that the services provided to the assignor were not medically necessary herein. Plaintiff has failed to overcome this and has failed to put forth any expert testimony in rebuttal. (see Be Well Medical Supply, Inc. v. New York Central Mutual Fire Insurance Mutual Fire Insurance Co., 18 Misc 3d 139 (A))

Accordingly, judgment for the defendant. Case dismissed.

The foregoing shall constitute the Decision and Order of the Court.

Dated: March 15, 2010

KIM DOLLARD

Judge, Civil Court

ASN by__________ in Court