No-Fault Decisions, September 2006

Appellate Term, Second Department Sep 29, 2006 2006 NY Slip Op 51871(U) Insurer prevailed

West Tremont Med. Diagnostic, P.C. v Geico Ins. Co.

A diagnostic provider performing prescribed MRIs remains subject to a lack-of-medical-necessity defense. After a nonjury trial, the provider obtained judgment because the trial court considered diagnostic centers exempt from that defense when they performed tests ordered by an independent physician. Insurance Law § 5102 (a) (1) and (b) and 11 NYCRR 65-1.1 (d) limit reimbursement to necessary services without such an exemption, and an assignee has no greater rights than its assignor. The insurer's expert gave unrebutted testimony that the three MRIs were unnecessary. Exercising its fact-finding power, the Appellate Term, Second Department, found that testimony sufficient to shift the burden back to the provider, which offered no medical necessity evidence, and reversed and directed judgment dismissing the action.

Appellate Term, Second Department Sep 21, 2006 2006 NY Slip Op 51870(U) Provider prevailed

Pine Hollow Med., P.C. v Progressive Cas. Ins. Co.

⚠ Overruled by Andrew Carothers, M.D., P.C. v GEICO Indem. Co. (2009 NY Slip Op 29155)

A billing company's records may incorporate provider information without the preparer having personal knowledge of its accuracy. At the nonjury trial, a billing-company employee described generating and mailing no-fault applications from provider information. The provider established a business-record foundation under CPLR 4518 (a), including regular maintenance of the underlying information and a business duty to transmit it. Routine reliance and full incorporation supported admissibility; lack of personal knowledge affected weight. The insurer also waived assignment-based defenses by failing to timely object or seek verification after receiving an assignment form and acknowledging the provider's assignee status in its denial. The Appellate Term, Second Department, affirmed the judgment for the provider.

Appellate Term, Second Department Sep 21, 2006 2006 NY Slip Op 51869(U) Insurer prevailed

Empire State Psychological Servs., P.C. v Travelers Ins. Co.

⚠ Not followed by Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co. (2007 NY Slip Op 27173)

The provider failed to prove its prima facie case at trial by offering only the insurer's interrogatory response acknowledging bills. The provider called no witnesses. Its sole exhibit established receipt of several bills and timely denials for lack of medical necessity, but did not establish the fact and amount of loss or overdue payment through prescribed statutory billing forms or their substantial equivalent under 11 NYCRR 65-3.5 (f). Whether assessed on the provider's proof alone or all the trial evidence, the insurer was entitled to judgment as a matter of law under CPLR 4401. The Appellate Term, Second Department, reversed the provider's judgment, granted the insurer's motion, and dismissed the complaint.

Appellate Term, First Department Sep 20, 2006 2006 NY Slip Op 51765(U) Split result

Response Med. Equip. v General Assur. Co.

A provider's attorney has no independent cause of action for statutory attorney's fees. The Appellate Term, First Department, modified the order to award the provider summary judgment on only two claims and dismiss counsel's independent fee claim. One claim's untimely denial precluded the medical-necessity defense under 11 NYCRR 65-3.8 (c); the other lacked competent medical-necessity opposition. The court otherwise found requests first made in reply and inadequate mailing proof insufficient, while verification evidence raised tolling issues on three claims. Admissible peer reviews supported medical-necessity defenses on two of those claims, and an affidavit raised factual issues concerning IME notice mailing on the third. The provider itself could still recover attorney's fees. Summary judgment was denied on the remaining appealed claims.

Appellate Term, Second Department Sep 14, 2006 2006 NY Slip Op 51740(U) Provider prevailed

Triboro Chiropractic & Acupuncture P.L.L.C v Allstate Ins. Co.

The insurer failed to support its concurrent-care fee defense or prove mailing of the pre-claim IME scheduling letters. The provider established its prima facie entitlement to the claims pursued on appeal under Insurance Law § 5106 (a). The insurer offered insufficient admissible evidence that one claim violated the workers' compensation fee schedules because treatment constituted concurrent care. For the remaining claims, timely IME nonappearance denials did not cure the absence of admissible proof of actual mailing or a standard procedure ensuring proper addressing and mailing of scheduling letters. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment on those claims, and remanded for statutory interest and attorney's fees.

Appellate Term, First Department Sep 13, 2006 2006 NY Slip Op 51719(U) Insurer prevailed

IK Med., P.C. v Travelers Prop. Cas. Ins. Co.

The insurers obtained dismissal based on unanswered requests for accident and treatment statements and nonreceipt of other claims. Three claims were timely denied because the assignors failed to respond to repeated requests for statements. That noncompliance was uncontroverted and supported dismissal under 11 NYCRR 65-1.1 (d) and Inwood Hill Med. v General Assur. Co. The insurers also established nonreceipt of two remaining claims, and the provider's opposition failed to raise a triable issue. The Appellate Term, First Department, reversed the order, insofar as appealed from, and granted the insurers' motion for summary judgment dismissing the complaint.

Trial court, Second Department Sep 26, 2006 2006 NY Slip Op 51831(U) Insurer prevailed

Citywide Social Work & Psychological Servs., P.L.L.C. v State Farm Mut. Auto. Ins. Co.

An untimely denial does not preclude a defense that a provider is fraudulently licensed and ineligible for no-fault reimbursement. The District Court, Suffolk County, denied the provider's summary judgment motion on the two remaining causes of action. Under Mallela and 11 NYCRR 65-3.16 (a) (12), evidence of lay ownership raised a triable issue of eligibility despite the provider's prima facie showing. The insurer's late denial precluded medical-necessity and fraudulent-billing defenses; its verification request, made more than ten business days after receipt, did not toll the denial period under 11 NYCRR 65-3.5 (a). The court also deemed the motion premature because discovery concerning corporate ownership and licensing of owners and employees was relevant to reimbursement eligibility.

Trial court, Second Department Sep 22, 2006 2006 NY Slip Op 51798(U) Provider prevailed

Carothers v Liberty Mut. Ins. Co.

The insurer failed to establish improper venue by showing only that it maintained no offices in Richmond County. The insurer sought transfer of the provider's assigned no-fault action to Bronx County, where the assignor resided. Civil Court Act § 301 (a) permits venue where either party resides; under Civil Court Act § 305 (a), the assignor's residence controls for an assignee plaintiff. But Civil Court Act § 305 (b) also deems a corporation resident wherever it transacts business. The insurer's affidavit did not foreclose issuing policies to Richmond County residents or regularly corresponding with them and collecting premiums, activities sufficient to constitute transacting business. The Civil Court, Richmond County, denied the insurer's motion.

Trial court, Second Department Sep 21, 2006 2006 NY Slip Op 26372 Insurer prevailed

Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno, Gerbino & Soriano LLP

An insurer need not show conduct tantamount to fraud before obtaining litigation discovery on a provider's alleged fraudulent incorporation. The Civil Court, Richmond County, distinguished the claims-investigation requirements of 11 NYCRR 65-3.2 (c) from disclosure under CPLR 3101 (a), with protection against abuse under CPLR 3103 (a). Evidence of continuing lay involvement in MRI facilities justified a joint deposition of the provider's sole shareholder on Mallela issues. The court granted the insurers' motions to that extent and denied protective orders barring the deposition. It ordered joint discovery and trial of fraudulent incorporation in specified actions and stayed other proceedings, with discovery exceptions. The motions and cross motions were otherwise denied without prejudice to renewal. The court did not determine whether the provider was fraudulently incorporated.

Trial court, Second Department Sep 5, 2006 2006 NY Slip Op 26381 Provider prevailed

Hempstead Pain & Med. Servs., P.C. v General Assur. Co.

The provider's late claim was excused because it initially submitted the claim to the wrong insurer. Following a trial on stipulated facts and agreed exhibits, the District Court, Suffolk County, awarded the provider judgment with statutory attorney's fees and interest. The insurer had timely denied the claim solely because it was submitted more than 45 days after services were rendered. Its invitation to submit additional information for reconsideration satisfied the advisory requirement of 11 NYCRR 65-3.3 (e), and the provider submitted an excuse that the insurer considered. However, 11 NYCRR 65-3.5 (l) recognized inadvertent submission to the incorrect insurer as justification for delay. The denial was therefore improper, and no other denial grounds had been asserted.