Upper E. Side Surgical, PLLC v State Farm Ins. Co. (2012 NY Slip Op 50184(U))

District Court of Nassau County, First District

CV-050076-10

REPRESENTATION:

Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP

1111 Marcus Ave., Ste. LL08

Lake Success, NY 11042 (5160248-2929

The Law Firm of Kelly & Sheridan, LLP

150 Broadhollow Road

Melville, NY 11747 (631)547-5900

Terence P. Murphy, J.

The following named papers numbered 1 to 2

submitted on this motion

on November 9, 2011

papers numbered

________________________________________________________________ _____

Notice of Motion w/ supporting documents…………………………….1

Affirmation in Opposition w/ supporting documents…………………2

____________________________________________________________________ _

The defendant, State Farm Mutual Automobile Insurance Company, a no-fault insurance provider, moves for summary judgment dismissing the complaint pursuant to CPLR §3212. The plaintiff is the assignee of Rita Munlyn, a covered person under a policy of insurance issued by the Defendant. For the reasons set forth below, the motion is DENIED on the fee schedule issue and GRANTED on the issue of timely denial of claim.

The within law suit alleges that plaintiff’s assignor was involved in a motor vehicle accident on December 30, 2009 and received health services from plaintiff/assignee at its office based surgery facility on May 6, 2010. There is no dispute that this action is one that falls under the “Comprehensive Motor Vehicle Insurance Reparations Act”, New York’s no-fault insurance law (NY Ins Law, Art. 51 et. seq.). Under such authority, a no fault bill was issued by plaintiff in [*2]the amount of $4,791.39 which defendant claims it timely denied. The basis of Defendant’s denial is that the fees claimed were not in compliance with the New York Workers’ Compensation Board Schedule of Medical Fees and/or Regulation 68, Appendix 17-C, in that the plaintiff is not listed as a Public Health Law Article 28 facility. Defendant claims the only basis for reimbursement to the plaintiff for a facility fee is under the New York Workers’ Compensation Board schedule.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]; Winegrad v. New York University Med. Ctr., 64 NY2d 851 [1985]). Once the movant has demonstrated a prima facie showing of entitlement to judgment, the burden shifts to the party opposing the motion, to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (see Zuckerman v. City of New York, 49 NY2d 557 [1980]).

With respect to timely service, the defendant must demonstrate “either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that the items are properly addressed and mailed” (Residential Holding Corp. v. Scottsdale Insurance Company, 286 AD2d 679 [2d Dept 2001]), or one “geared so as to ensure the likelihood that a notice … is always properly addressed and mailed”(Nassau Insurance Company v. Murray, 46 NY2d 828 [1978]). A no-fault insurance carrier may prove timely mailing of the denial of claim form by submitting an affidavit made by the person who actually prepared and mailed the denial attesting to the preparation and mailing of same, or by submitting an affidavit from an employee with knowledge of its office practice or procedures designed to ensure the denial of claim form was timely generated, addressed and mailed and those procedures were followed in connection with the notice involving plaintiff’s claim (St. Vincent’s Hospital of Richmond v. Government Employees Ins. Co., 50 AD3d 1123 [2d Dept 2008]).

Plaintiff’s bill dated June 2, 2010 for its services rendered on May 6, 2010 was received by defendant on June 7, 2010. The defendant alleges that it timely served its NF-10 denial form in response to the plaintiff’s claim for $4,791.39 on June 21, 2010.

Regarding Defendant’s basis for denying the claim, the Defendant annexes two affidavits. In the first affidavit sworn to August 30, 2011 (Exhibit C), Jerold Greenzang, Defendant’s claims representative in the No-Fault Department, indicates that he is fully familiar with the business practices employed by defendant in the routine and regular course of its receiving, reviewing and processing No-Fault claims. He details the regular course of business of the office and states that the bill in the amount of $4,791.39 was timely denied. The Defendant also provides an affidavit of George Perry, sworn to on January 17, 2011 (Exhibit D), a Claims Support Services Supervisor for the defendant’s Ballston Spa, NY claims office. Mr. Perry outlines in detail the general procedure for how claims are prepared for mailing. These affidavits demonstrate that the denial of claim NF-10 form had been timely mailed pursuant to defendant’s standard office practices and procedures. (See St. Vincent’s Hosp. of Richmond v. Government Employees Ins. [*3]Co., 50 AD3d 1123; Delta Diagnostic Radiology, P.C. v. Chubb Group of Insurance, 17 Misc 3d 16). The plaintiff failed to submit evidence in rebuttal sufficient to raise a triable issue of fact with regard to the mailing and receipt of the denial form.

Defendant further submits an affidavit of Mercy Acuna, sworn to September 3, 2011 (Exhibit F), which indicates that she is a certified professional coder employed by Signet Claim Solutions, LLC. She avers that she was requested to conduct a review of the bills listed from plaintiff in the within action and to indicate whether the correct CPT codes were applied and billed correctly. It was her finding that “Under the NY State Workers’ Compensation Board, facility fees are paid under the PAS (Products of Ambulatory Surgery). A fee cannot be assigned since the facility (Upper East Side Surgical PLLC, 62 E 88th St. New York, NY 10128) is not listed with the NY State Workers’ Compensation Board Ambulatory Surgery Center. If Upper East Side Surgical PLLC can produce documentation that the facility is registered, then reimbursement will be in accordance with The Products of Ambulatory Surgery (PAS) classification system.”

Plaintiff acknowledges in its Affirmation in Opposition that it is not listed, registered or certified with the NY State Workers’ Compensation Board Ambulatory Surgery Center, nor does it hold itself out as an Public Health Law Art. 28 facility.

Plaintiff does assert, however, that there is no requirement in the Regulations that NYS Public Health Law Article 28 licensure is a prerequisite to No-Fault Claims reimbursement. The current applicable law, New York’s Office Based Surgery (OBS) Law passed on July 14, 2007 (Public Health Law § 230-d), requires merely that an office-based surgery facility must obtain and maintain full accredited status by a national-recognized accrediting agency approved by the Commissioner of Health. As to proof of same, Plaintiff provides as its Exhibit A, its certification that it was accredited from 02/27/2010 to 02/27/2011 by the American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF), which included the time period of this claim. Under PHL § 230-d, AAAASF, is one of three accreditation entities which has been approved by the Commissioner. No claim is made by the Defendant that the Plaintiff provider is not in full compliance with the required registrations, certifications or accreditations to conduct its office-based surgery business under the applicable laws of New York, particularly PHL § 230-d..

The Court notes that while there is a movement in the New York State Legislature to amend PHL § 230-d to provide authorization for an office based surgery facility to seek reimbursement for a facility fee if the health plan provides for reimbursement when the service is performed at an ambulatory surgery center or hospital, it has not yet been adopted by the Legislature.

The No-Fault Law was enacted to and allows for recovery of basic economic loss to “eliminate the vast majority of auto accident negligence suits,” and, concomitantly, to decrease premiums (Governor’s Approval Mem, Bill Jacket, L 1973, ch 13, at 31, 1973 McKinney’s [*4]Session Laws of NY, at 2335).

Basic economic loss is defined, as pertinent here, as all necessary expenditures incurred for medical and surgical services (Ins Law § 5102[a][1]), with reimbursement limited to the amount permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents (Ins Law § 5108[a]).

This Court finds that the Plaintiff is not authorized to be reimbursed for the medical/surgical services it provided to its assignor under the “facility fee” schedule in accordance with The Products of Ambulatory Surgery (PAS) classification system because it is not an Art. 28 facility. Plaintiff is, however, entitled to reimbursement under Insurance Law § 5102(a)(1) for the medical/surgical services it provided to its assignor (c.f. Great Wall Acupuncture v. GEICO Gen. Ins. Co., 16 Misc 3d 23 (App. Tm., 2d Dept, 2007)

The next question for the Court to answer is, “What is the rate of reimbursement?”. The facility fees set forth by the NY State Workers’ Compensation Board are specifically set for facilities that are listed with the NY State Workers’ Compensation Board and certified to perform ambulatory surgery services under PHL Art. 28. Plaintiff concedes in its opposition papers that it is not so listed. Therefore, the fees set forth are not applicable to it, nor are there any fees adopted or established applicable to this plaintiff and its status as an office based surgery facility.

Under 11 NYCRR 68, (Regulation 83) 68.5, subd. 1(b):

If a professional health service is performed which is reimbursable under section 5102(a)(1) of the Insurance Law, but is not set forth in fee schedules adopted or established by the superintendent, and:

* * *

(b) if the superintendent has not adopted or established a fee schedule applicable to the 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.

Accordingly, inasmuch as no proof has been submitted that the Superintendent of Insurance has adopted or established a fee schedule applicable to the plaintiff/provider, a question of facts exists as to the amount of the charge for services. Moreover, no proof has been submitted as to the local geographic prevailing fee, which plaintiff provider would be entitled to be reimbursed for its services. While in certain instances, the workers’ compensation fee schedules have been utilized to established local prevailing fees, such is not the case with regard to a facility fee for office based surgery facilities, at least as far as the Court can discern. Thus, a trial of the issue is necessary. [*5]

SO ORDERED:

DISTRICT COURT JUDGE

Dated: February 2, 2012

CC:Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP

Attorneys for the Plaintiff

Kelly & Sheridan, LLP, Attorneys for the Defendant