No-Fault Decisions, August 2005

Appellate Term, Second Department Aug 17, 2005 2005 NY Slip Op 51312(U) Provider prevailed

S&M Supply Inc. v Progressive Ins. Co.

The insurer's excessive-charge defenses failed because one denial was untimely and the other lacked admissible proof or a valid regulatory basis. For one assignor, the insurer failed to prove mailing of verification requests, leaving its denial outside the 30-day period under former 11 NYCRR 65.15 (g) (3). For the other, verification tolled that period, but the insurer offered no admissible proof that the provider misrepresented equipment costs. Denials based on average wholesale cost were invalid under then-applicable 11 NYCRR Appendix 17-C, part E (b) (1), which limited reimbursement to 150% of cost. The Appellate Term, Second Department, reversed the order, insofar as appealed from, vacated the subsequent dismissal, granted the provider's cross motion for summary judgment, and remanded for statutory interest and attorney fees.

Appellate Term, Second Department Aug 17, 2005 2005 NY Slip Op 51315(U) Provider prevailed

Amaze Med. Supply Inc. v State Farm Mut. Auto. Ins. Co.

The insurer's IME nonappearance defense failed because it did not establish mailing of the scheduling requests to the assignor. The provider established prima facie entitlement to no-fault benefits for medical supplies by proving claim submission and overdue payment under Insurance Law § 5106 (a). Even assuming a timely denial, the insurer needed admissible proof to rebut that showing. Its counsel and claims representative alleged nonappearance at pre-claim IMEs but showed neither personal knowledge of mailing nor standard office procedures ensuring proper addressing and mailing. The Appellate Term, Second Department, deemed the insurer's appeal from the summary judgment order an appeal from the ensuing judgment and affirmed the judgment for the provider.

Appellate Term, Second Department Aug 17, 2005 2005 NY Slip Op 51316(U) Provider prevailed

A.B. Med. Servs. PLLC v American Tr. Ins. Co.

The insurer failed to prove mailing of IME notices to the assignors, defeating its nonappearance defense to summary judgment. The denial forms established receipt of the medical and chiropractic providers' claims, and unauthenticated assignment signatures were not themselves defective; any assignment defense was also waived by failure to seek verification or identify deficiencies in the denials. Although receipt of notices addressed to the assignors' attorney was effectively conceded, mailing to one assignor was not competently proved, and none was mailed to the other. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted those providers summary judgment, and remanded for interest and attorney fees under Insurance Law § 5106 (a). The acupuncture provider's appeal was dismissed because it raised no issue.

Appellate Term, Second Department Aug 11, 2005 2005 NY Slip Op 25343 Provider prevailed

Fair Price Med. Supply Corp. v Travelers Indem. Co.

An insurer's untimely denial precludes a defense that the provider billed for medical supplies never furnished after a covered accident. The provider established receipt of its claims and overdue payment, and its billing manager's personal-knowledge affidavit proved mailing of requested letters of medical necessity under the verification framework of 11 NYCRR 65.15. The majority distinguished provider fraud affecting the extent of liability from staged-accident defenses implicating coverage, applying Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co. and Central Gen. Hosp. v Chubb Group of Ins. Cos. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment, and remanded for interest and attorney's fees under Insurance Law § 5106 (a); a dissent would have affirmed.

Appellate Term, Second Department Aug 11, 2005 2005 NY Slip Op 51330(U) Insurer prevailed

A.B. Med. Servs. PLLC v Travelers Prop. Cas. Corp.

The insurer's peer reviews supplied a factual basis and medical rationale raising a triable issue of medical necessity. The providers sought summary judgment for assigned no-fault benefits and established submission of claims stating the losses and overdue payment under Insurance Law § 5106 (a). The insurer's opposing peer reviews nevertheless sufficed to require resolution of the necessity of the treatments. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the providers' motion. A separate concurrence agreed only with the result and disputed propositions of law in cases cited by the majority.

Appellate Term, Second Department Aug 11, 2005 2005 NY Slip Op 51331(U) Insurer prevailed

Amaze Med. Supply Inc. v Hereford Ins. Co.

The insurer's peer reviews raised a triable issue of medical necessity by providing a sufficient factual basis and medical rationale. The provider sought summary judgment for no-fault benefits for medical supplies furnished to its assignor. It established prima facie entitlement by showing that it submitted claims stating the fact and amounts of the losses and that payment was overdue under Insurance Law § 5106 (a). The insurer's opposing peer reviews nevertheless required denial of the motion. The Appellate Term, Second Department, affirmed the order denying the provider summary judgment; a separate concurrence agreed only with the result and disagreed with certain propositions in the cited cases.

Trial court, Second Department Aug 30, 2005 2005 NY Slip Op 25356 Insurer prevailed

Multiquest, PLLC v Allstate Ins. Co.

⚠ Not followed by Multiquest, P.L.L.C. v Allstate Ins. Co. (2005 NY Slip Op 52071(U))

An insurer may raise fraudulent incorporation despite an untimely denial, including for claims predating the governing regulation. The Civil Court, Queens County, denied the provider's summary judgment motion and dismissed the action on the insurer's cross motion. Uncontroverted EUO testimony established that a psychologist listed as an owner had neither owned the provider nor consented to that designation; the provider submitted no affidavit or documentary rebuttal. Applying Mallela and 11 NYCRR 65-3.16 (a) (12) to claims predating its April 4, 2002 effective date, the court treated proper licensing as a condition precedent to payment. It also found unrebutted evidence of psychological testing by unlicensed, unsupervised personnel, contrary to Business Corporation Law § 1504 (a) and the fee schedule incorporated by 12 NYCRR 333.2.

Trial court, First Department Aug 30, 2005 2005 NY Slip Op 25357 Insurer prevailed

T & G Med. Supplies, Inc. v National Grange Mut. Ins. Co.

The provider lacked standing because its assignment form contained only the alleged assignor's signature and omitted essential information. The Civil Court, New York County, granted the insurer's motion and dismissed the action. Under 11 NYCRR 65-3.11 (b) (2), the provider had to produce a properly executed assignment identifying the parties and relevant dates. The form omitted the assignor's and assignee's names, the assignee's signature, and the accident and assignment dates. The court treated standing as nonwaivable despite omission of assignment defects from the denial. It distinguished cases applying preclusion for untimely denials because this insurer denied the bill the day after receipt, and found the insurer had established entitlement to summary judgment.

Trial court, Second Department Aug 29, 2005 2005 NY Slip Op 51366(U)

Palisades Safety & Ins. Assn. v Martinez

An insurer's common-law subrogation claim is subject to the same limitations period as the insured's underlying negligence claim. The subrogating insurer sued the alleged tortfeasor and the liability insurer more than three years after the accident. Following Allstate Ins. Co. v Stein, the Supreme Court, Kings County, applied CPLR 214 (5), measured from the injury, rather than from payment of the insured's loss. CPLR 204 (b) did not toll the period during arbitration between the insured and the subrogating insurer because that contractual benefits claim differed from the negligence claim against the defendants. The liability insurer's settlement offer also supplied no basis for tolling. The court granted the defendants' motion under CPLR 3211 (a) (5) and dismissed the action as time-barred.

Trial court, Second Department Aug 12, 2005 2005 NY Slip Op 51281(U) Provider prevailed

RDK Med. P.C. v General Assur. Co.

The master arbitration award lacked competent evidence that the billed services were not rendered and was vacated. The arbitrator upheld an untimely denial based on provider fraud and lack of medical necessity; the master arbitrator sustained only the fraud finding. On review under CPLR 7511 (b), the Civil Court, Kings County, found medical necessity precluded and no support for fraudulent incorporation. Conflicting decisions supplied a reasonable legal hypothesis for treating unrendered services as a coverage defense. Nevertheless, counsel's comparison of seized templates with the provider's reports lacked expert support or a foundation for inferring that services were not performed. Even disregarding hearsay defects, the record lacked competent evidence for that finding. The provider obtained judgment vacating the master award.

Trial court, Second Department Aug 12, 2005 2005 NY Slip Op 51282(U)

Bedford Park Med. Practice P.C. v American Tr. Ins. Co.

The insurer's IME report raised a medical-necessity issue but did not establish entitlement to summary judgment dismissing the provider's claims. The parties stipulated to proper claims and timely medical-necessity denials. The Civil Court, Kings County, found the affirmed report's examination findings sufficient to defeat the provider's motion. For the insurer's cross motion, the court analogized to the serious-injury standard under Insurance Law § 5102 (d). The report did not identify objective tests supporting its findings or explain the significance of shoulder tendinopathy shown on an MRI. Those omissions left the claims' presumption of medical necessity insufficiently rebutted for judgment as a matter of law, despite the provider's failure to submit additional medical evidence. Both summary judgment motions were denied.

Trial court, Second Department Aug 11, 2005 2005 NY Slip Op 51283(U) Split result

Citywide Social Work & Psychological Servs., P.L.L.C. v Allstate Ins. Co.

The provider recovered for record review, but inadequate intake supported denial of the interview, psychological testing, and reporting claims. At trial, proper claim submission and timely denial were stipulated, leaving the insurer to prove lack of medical necessity. The Civil Court, Kings County, credited evidence that no comprehensive accident-focused interview occurred and that appropriate testing could not be selected without it. The court therefore denied payment for the interview, tests, and reporting to the primary physician. It awarded payment for record review because the insurer did not establish a minimum number of records required or that the referral was not a medical record. Applying Insurance Law § 5102 (a) (1), the court directed judgment for that claim with statutory interest and attorney fees.