February 19, 2010
Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 50262(U))
https://www.beynensonlaw.com/case-law/quality-med-care-p-c-v-new-york-cent-mut-fire-ins-co-2010-ny-slip-op50262u/
- Decided
- February 19, 2010
- Citation
- 2010 NY Slip Op 50262(U) · 26 Misc 3d 139(A)
- Posture
- Trial
- Outcome
- Insurer prevailed
- Later treatment
- Followed in 3 later decisions (see Cited by)
- Legal questions
- Fraudulent incorporation (Mallela) (see the maps)
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.
Reported in New York Official Reports at Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 50262(U))
| Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. |
| 2010 NY Slip Op 50262(U) [26 Misc 3d 139(A)] |
| Decided on February 19, 2010 |
| Appellate Term, Second 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| This opinion is uncorrected and will not be published in the printed Official Reports. |
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : GOLIA, J.P., PESCE and WESTON, JJ
2008-1585 Q C.
against
New York Central Mutual Fire Ins. Co., Appellant.
Appeal by defendant from a decision of the Civil Court of the City of New York, Queens County (Robert D. Kalish, J.), deemed from the judgment entered pursuant thereto on August 11, 2008 (see CPLR 5520 [c]). The judgment, after a nonjury trial, awarded plaintiff the principal sum of $340.
ORDERED that the judgment is reversed without costs and the complaint is dismissed.
In this action to recover assigned first-party no-fault benefits, the parties stipulated at trial that plaintiff is a lawfully constituted professional service corporation wholly owned by a licensed physician, that the physician was not certified to perform acupuncture at the time the acupuncture services at issue were provided, and that the services were provided by a licensed acupuncturist employed by plaintiff. The parties also stipulated that the sole issue for the Civil Court’s determination was whether plaintiff had standing to commence this action to recover benefits under the no-fault provisions of the insurance policy. In its decision, the Civil Court ruled that a lawfully formed medical professional service corporation owned by a licensed physician may receive reimbursement of no-fault benefits for acupuncture services rendered by an employee who is a licensed acupuncturist notwithstanding that the physician was not certified to perform acupuncture. Defendant appeals from that decision. We deem the appeal to be from the judgment which was subsequently entered in favor of plaintiff (see CPLR 5520 [c]).
Insurance Department Regulations (11 NYCRR) § 65-3.16 (a) (12) states that “[a] provider of health care services is not eligible for reimbursement [of no-fault benefits] if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service[s]” (see e.g. Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 [2006]; Multiquest, P.L.L.C. v Allstate Ins. Co., 17 Misc 3d 37, 38-39 [App Term, 2d & 11th Jud Dists 2007]).
Only someone properly licensed or certified may practice acupuncture in New York State (Education Law § 8212; Great Wall Acupuncture v GEICO Ins. Co., Misc 3d , 2009 NY Slip Op 29467 [App Term, 2d, 11th & 13th Jud Dists 2009]; Lexington Acupuncture, P.C. v State [*2]Farm Ins. Co., 12 Misc 3d 90, 92 [App Term, 2d & 11th Jud Dists 2006]). Physicians are not authorized to practice acupuncture by virtue of their medical licenses; rather, they must satisfy the certification requirements if they are to practice acupuncture (Education Law §§ 8212, 8216 [3]; Education Department Regulations [8 NYCRR] § 60.9). Thus, the certificate of incorporation for a professional service corporation that seeks to obtain reimbursement of no-fault benefits for acupuncture services rendered “shall have attached thereto a certificate or certificates issued by the [Education Department] certifying that each of the proposed shareholders, directors and officers is authorized by law to practice a profession which the corporation is being organized to practice and, if applicable, that one or more of such individuals is authorized to practice [acupuncture]” (Business Corporation Law § 1503 [b]; see e.g. Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58, 60 [App Term, 2d & 11th Jud Dists 2006]; Lexington Acupuncture, P.C., 12 Misc 3d at 92).
Where, as here, a professional service corporation is owned solely by a doctor who is not a
certified acupuncturist at the time the acupuncture services at issue were rendered, such
professional service corporation is not entitled to reimbursement of assigned no-fault benefits for
such services notwithstanding the fact that the acupuncture services were rendered by a licensed
acupuncturist employed by the corporation and that the corporation’s owner subsequently
became a certified acupuncturist (Business Corporation Law § 1503 [b]; § 1507;
Insurance Department Regulations [11 NYCRR] § 65-3.12 [a]; cf. 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]). Accordingly, the judgment is reversed and the complaint dismissed.
Golia, J.P., Pesce and Weston, JJ., conur.
Decision Date: February 19, 2010
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.
On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?
This decision: Provider held ineligible: unlicensed ownership/control or improper formation proved
Held a professional corporation solely owned by a physician not certified in acupuncture was ineligible for reimbursement for acupuncture by its employed licensed acupuncturist, as its formation violated Business Corporation Law requirements.
Of the 61 decisions on this question in the Second Department courts and the Court of Appeals, 20 (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 in this decision
A label shows how this decision treated the case it cites.
- Allstate Ins. Co. v Belt Parkway Imaging, P.C. (2006 NY Slip Op 07279)Insurers may withhold payment of pre-April 4, 2002 claims from fraudulently incorporated providers under 11 NYCRR 65-3.16 (a) (12).
- Multiquest, P.L.L.C. v Allstate Ins. Co. (2007 NY Slip Op 27366)A professional service limited liability company is ineligible for no-fault reimbursement if it violates licensing requirements.
- Great Wall Acupuncture, P.C. v Geico Ins. Co. (2009 NY Slip Op 29467)An insurer may use the chiropractic acupuncture fee schedule to reimburse acupuncture services performed by a licensed acupuncturist.
- Lexington Acupuncture, P.C. v State Farm Ins. Co. (2006 NY Slip Op 26251)The provider's summary judgment motion was premature because discovery could establish fraudulent incorporation and reimbursement ineligibility.
- Midborough Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 26360)An insurer's fraudulent-incorporation defense survives an untimely denial, and discovery into provider ownership and licensing is material.
- Healthmakers Med. Group, P.C. v Travelers Indem. Co. (2006 NY Slip Op 52118(U)) Contrasted (cf., but see)A medical corporation may recover assigned no-fault benefits for licensed nonphysician employees' services billed at their fee schedules.
Cited by
A label shows how the later decision treated this one.
- Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 20493) FollowedThe provider's prima facie case and licensing eligibility remained disputed, precluding a trial limited to excessive fees.
- Total Chiropractic, P.C. v USAA Cas. Ins. Co. (2017 NY Slip Op 50977(U)) FollowedAn insurer's good-faith showing of possible fraudulent incorporation supported discovery into the provider's ownership, operation and control.
- Astoria Wellness Med., P.C. v Progressive Northeastern Ins. Co. (2010 NY Slip Op 51333(U)) FollowedThe insurer's motion for summary judgment dismissing acupuncture claims on licensing grounds was granted, and that ruling was affirmed.
- Lexington Acupuncture, P.C. v General Assur. Co. (2012 NY Slip Op 22047)An insurer may obtain Mallela discovery on sufficient allegations of fraudulent incorporation despite not pleading that defense.
Similar decisions
- 563 Grand Med., P.C. v Allstate Ins. Co. (2005 NY Slip Op 50127(U))A professional corporation lacking authorization to practice acupuncture cannot recover no-fault benefits for acupuncture services.
- Acupuncture Works, P.C. v State Farm Mut. Auto. Ins. Co. (2012 NY Slip Op 51654(U))The insurer established full payment under the applicable acupuncture fee schedule and unrebutted lack of medical necessity for other claims.
- Health Needles Acupuncture, P.C. v Praetorian Ins. Co. (2014 NY Slip Op 51831(U))A letter merely announcing delay pending an assignor's IME and EUO does not toll the time to pay or deny a no-fault claim.
- Flushing Traditional Acupuncture, P.C. v GEICO Ins. Co. (2012 NY Slip Op 51772(U))The insurer established timely denials, full fee-schedule payment for certain acupuncture services and lack of necessity for the remaining services.
- Gentle Acupuncture, P.C. v Tri-State Consumer Ins. Co. (2017 NY Slip Op 50706(U))The insurer lacked expert fee-schedule proof, and the provider's treating acupuncturist raised a factual issue on medical necessity.