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December 6, 2019

MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co. (2019 NY Slip Op 29375)

https://www.beynensonlaw.com/case-law/mua-chiropractic-healthcare-pllc-v-state-farm-mut-auto-ins-co-2019-ny-slip-op-29375/

Court
District Court of Suffolk County, Third District
Judge
Hackeling, J.
Decided
December 6, 2019
Citation
2019 NY Slip Op 29375 · 66 Misc 3d 464
Posture
Summary judgment
Outcome
Provider prevailed
Issues
Fee schedule Timeliness and preclusion
Cite as
MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co., 66 Misc 3d 464 (Dist Ct, Suffolk County, 3d Dist 2019)

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.

The insurer's fee schedule defense was precluded because it neither denied the claim nor sought verification within 30 days. The District Court, Suffolk County, granted the provider's cross motion for summary judgment and denied the insurer's motion to dismiss as moot. The court held 11 NYCRR 65-3.8 (g) (1) (ii) invalid under article III, § 1 of the New York Constitution because it removed fee schedule defenses from the preclusion rule established by Insurance Law § 5106 (a). An administrative agency could not circumvent the legislature's 30-day deadline to pay or deny claims by regulation. Consequently, the defense that the provider billed above the workers' compensation medical fee schedule was unavailable.

Reported in New York Official Reports at MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co. (2019 NY Slip Op 29375)

MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co.
2019 NY Slip Op 29375 [66 Misc 3d 464]
December 6, 2019
Hackeling, J.
District Court of Suffolk County, Third District
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, February 26, 2020

[*1]

MUA Chiropractic Healthcare, PLLC, as Assignee of Andrew Lowndes, Plaintiff,
v
State Farm Mutual Automobile Ins. Co., Defendant.

District Court of Suffolk County, Third District, December 6, 2019

APPEARANCES OF COUNSEL

Nicolini, Paradise, Ferretti & Sabella, PLLC, Mineola, for defendant.

Law Offices of Gabriel & Shapiro, LLC, Wantagh, for plaintiff.

{**66 Misc 3d at 465} OPINION OF THE COURT

C. Stephen Hackeling, J.

Plaintiff’s cross motion seeking summary judgment is granted. Defendant’s motion, seeking an order dismissing the within complaint, upon the grounds that the plaintiff billed amounts exceeding the New York State Workers’ Compensation Board medical fee schedule, is denied.

The facts are not in dispute. This sole issue presented for consideration by the court is whether 11 NYCRR 65-3.8 (g) (1) (ii) is inconsistent with the express dictates of the Insurance Law and is therefore constitutionally void, as violative of article III, § 1 of the New York State Constitution.

The court notes that the New York State Attorney General was served with a copy of the plaintiff’s cross motion, pursuant to CPLR 1012 (b), but chose not to intervene to defend the constitutionality of 11 NYCRR 65-3.8 (g) (1) (ii), regarding the fee schedule defense, which provides:

“(g) (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:
[*2]
“(i) when the claimed medical services were not provided to an injured party; or
“(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.”

Article III, § 1 of the New York State Constitution provides: “The legislative power of this state shall be vested in the senate and assembly.”

Section 5106 (a) of the Insurance Law provides:

“(a) Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid{**66 Misc 3d at 466} within thirty days after such proof is supplied.”

This legislative statute establishes the legal doctrine that defenses to claims not raised within 30 days after receipt of a no-fault claim are precluded. The preclusion rule has been consistently recognized and enforced by the Court of Appeals. (See Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].)

In 2013 the New York State Insurance Commissioner, under his rule-making power, promulgated regulation 65-3.8 which purports to remove fee schedule defenses from the statutory “preclusion doctrine.” An administrative agency’s rule-making power is limited and may not circumvent or be contrary to the legislature’s determination. (See NY Const, art III, § 1; Matter of Nicholas v Kahn, 47 NY2d 24 [1979].) Such inconsistent regulations are “preempted” by statutory dictate. (See e.g. Boreali v Axelrod, 71 NY2d 1 [1987].) Removing the fee schedule defense from the statutory preclusion rule via regulation is an unconstitutional overreach, and shall be disregarded by this court as being invalid and in contravention of the historical statutory 30-day time period given to defendants to pay or deny claims (or be subject to preclusion).

Accordingly, the defendant’s fee schedule defense became nonviable 30 days after the claim was received without denial or demand for further verification. The defendant’s motion to dismiss is denied as moot and the plaintiff’s cross motion seeking summary judgment is granted.

Cited in this decision

  • Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co. (2015 NY Slip Op 04787)A provider establishes entitlement to summary judgment on overdue no-fault claims with admissible proof of mailing and receipt of statutory claim forms.
  • Fair Price Med. Supply Corp. v Travelers Indem. Co. (2008 NY Slip Op 04946)An insurer's defense that billed supplies were never delivered is subject to preclusion for an untimely denial.
  • Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co. (2007 NY Slip Op 09067)An insurer that fails to timely seek verification of an assignment cannot later contest its validity when the underlying claim is covered.

Cited by

  • Thrall v State Farm Mut. Auto. Ins. Co. (2023 NY Slip Op50183(U))An injured claimant sufficiently pleaded bad faith and consequential damages from allegedly predetermined IMEs used to deny benefits.

Similar decisions

  • Chirocare Chiropractic Assoc. v State Farm Mut. Auto. Ins. Co. (2016 NY Slip Op 51133(U))The insurer's fee schedule defense did not support dismissal of the entire complaint because it challenged only excess charges.
  • Saddle Brook Surgicenter, LLC v All State Ins. Co. (2015 NY Slip Op 25099)An insurer's late denial does not preclude a fee-schedule defense under 11 NYCRR 65-3.8 (g) (1) (ii).
  • Doctor of Medicine in the House, P.C. v Allstate Ins. Co. (2013 NY Slip Op 23357)The physical medicine fee schedule's eight-unit daily reimbursement limit applies to each provider individually.
  • Surgicare Surgical v National Interstate Ins. Co. (2014 NY Slip Op 24362)An insurer complies with 11 NYCRR 68.6 by paying the applicable local fee-schedule amount for services rendered outside New York. The Civil Court, Bronx County, granted the insurer's motion to dismiss and denied the provider's summary judgment cross motion concerning surgery performed in New Jersey.
  • East Coast Acupuncture, P.C. v Hereford Ins. Co. (2016 NY Slip Op 26042)A fee schedule defense for services rendered after April 1, 2013 is not precluded by a denial issued beyond 30 days.
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