Civil Court of the City of New York, Kings County

105406 KCV 2005

Lila P. Gold, J.

Plaintiff commenced this action under the No-Fault provisions of the Insurance Law to recover fees in the amount of $2670.39 for medical services provided to its assignor.

Before the court began to hear testimony, Defendant made a pre-trial motion to dismiss, alleging that there was a lack of standing to bring this action. Defendant then asked the court to order the Plaintiff to produce a contract between himself and Advanced Healthcare Solutions, L.L.C., the billing company for Plaintiff, in order to establish Plaintiff’s standing.

Standing is defined as a party’s right to make a legal claim or seek a judicial enforcement of a duty or right. Black’s Law Dictionary (8th ed. 2004), standing (n.). In the case before the court, Andrew Carothers M.D., P.C. has a legal claim to the no-fault benefits by way of an assignment provided to him for services rendered to the assignor (Exhibits 4, 8 & 12).

Furthermore, even though the Plaintiff was willing to show the contract to the court in camera, the court ruled that a contract showing the relationship between the billing company, Advanced Healthcare Solutions, and Andrew Carothers M.D., P.C. has no bearing on the latter’s issue of standing.

Plaintiff proceeded to offer evidence via the presentation of documents and testimony of Octavio Rodriguez, an office manager of Advanced Heathcare Solutions, L.L.C. in order to establish a prima facie entitlement for payment of the no-fault benefits.

To establish a prima facie case, a plaintiff is required to submit proof that it timely sent its claim for no-fault benefits to the defendant, that defendant received the claim and that defendant failed to pay or deny the claim within thirty days. (See Amaze Medical Supply Inc. v. Allstate Insurance Company, 3 Misc 3d 133A [App Term 2nd & 11th Jud Dists 2003]).

In this action Plaintiff’s evidence included the claim form (NF-3) (Exhibits 2, 6 & 10), [*2]the signed Assignment of Benefits form (NF-AOB) (Exhibits 4, 8 &12), proof of mailing (Exhibit 14), together with the a copy of the treating doctor’s referral (Exhibits 3, 7 & 11), and the MRI narrative (Exhibits 5, 9 & 13).

Plaintiff further strengthened its prima facie case by having Defendant’s denial form (NF-10) (Exhibit 25) admitted into evidence for the limited purpose of showing that the claim was received timely by the Defendant and that the denial was timely. (See A.B. Med. Serv., P.L.L.C. v. New York Central Mut. Fire Ins. Co., 3 Misc 3d 136(A); see also Kings Medical Supply, Inc. v. Country-Wide Ins. Co., 5 Misc 3d 767).

At this point Plaintiff rested and Defendant reiterated his position that Plaintiff did not establish a prima facie entitlement to the no-fault benefits. Defendant’s position was that Plaintiff did not lay the proper foundation to have its documents admitted into evidence.

However, the court finds that Plaintiff did in fact lay the proper foundation to submit the documents into evidence, via the testimony of Mr. Rodriguez. “Where an entity routinely relies upon the business records of another entity in the performance of its own business and fully incorporates said information into the records made in the regular course of its business, the subsequent record is admissible notwithstanding that the preparer lacked personal knowledge of the information’s accuracy.” (See Pine Hollow Medical P.C. v. Progressive Casualty Insurance Co., 2006 NY Slip Op 51870U) Since Advance Healthcare Solutions L.L.C. is a billing company whose regular business is to produce bills based on information imparted to them by Plaintiff and maintained these records in the regular course of its business, the proper business record foundation was established to admit the documents into evidence (CPLR 4518[a]). (See Plymouth Rock Fuel Corp. v. Leucadia Inc., 117A.D. 2d 727; see also West Valley Fire District No. 1 v. Village of Springville,264 AD2d 949)

Once Plaintiff established its prima facie entitlement, the burden shifted to the Defendant to substantiate their basis for denying the claim. The Defendant contended that the services provided lacked medical necessity and therefore Defendant was not obligated to pay the claims.

The Defendant did not call a single witness or introduce a single piece of evidence to substantiate the claim of lack of medical necessity. The Defendant relied on the cross examination of Plaintiff’s witness and the introduction of the peer review report by Plaintiff, which was part of the NF-10. Defendant was of the opinion that if a proper business record foundation was established to properly admit Plaintiff’s documents into evidence, then Defendant’s peer review report, which was in evidence as part of the denial form (NF-10) admitted into evidence, was sufficient to meet Defendant’s burden of proof that the medical services provided by Andrew Carothers M.D., P.C. lacked medical necessity.

The Court rejected Defendant’s argument and finds that Plaintiff’s purpose for submitting the peer review report with the NF-10 was for completeness and accuracy of the document presented to the court. Furthermore, the court admitted the NF-10 together with the peer review report for the limited purpose of showing that the claim was received timely by the Defendant [*3]and that the denial was timely. Plaintiff’s inclusion of the peer review along with the NF-10 does not make the peer review available to the opposing party to use for establishing their burden of lack of medical necessity, (See A.B. Med. Serv. P.L.L.C. v. Travelers Property Casualty Corp., 5 Misc 3d 214) rather, to fortify Plaintiff’s prima facie case. (See A.B. Med. Serv., P.L.L.C. v. New York Central Mut. Fire Ins. Co., 3 Misc 3d 136(A)

Accordingly, based on the evidence, the Court concludes that Defendant failed to sustain the burden of proof on the only issue before this court, lack of medical necessity. Judgment should be entered for the plaintiff in the amount of $2670.39, plus interest and attorneys’ fees as provided by the Insurance Law, together with the statutory costs and disbursements in this action.

This opinion constitutes the decision of the Court. A copy of this decision will be mailed to the parties.

Dated:November 14, 2006

____________________________

Lila P. Gold, J.C.C.

Encl: Exhibits submitted to the court.

Civil Court of the City of New York, Kings County

90590/2005

Genine D. Edwards, J.

This is a bench trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by Andrew Carothers, M.D., P.C. (“plaintiff”) as assignee of Stacia Barrow, Neida Campos and Vadim Bondarenko (“assignors”) against Travelers Insurance Company (“defendant”), pursuant to the New York Insurance Law and the No-Fault regulations. Plaintiff billed defendant a total of $3,583.45 for medical treatment rendered to its assignors.

At the outset, the defendant moved to preclude the admission of plaintiff’s bills into evidence, arguing that the bills were defective on their face since the relationship between the provider and treating physician was not noted. This Court reserved its decision.

The case law is clear that the plaintiff will not be entitled to direct payment of no-fault benefits if the alleged medical treatments were provided by an independent contractor. MGM Psychiatry Care P.C. v. Utica Mutual Insurance Company, 12 Misc 3d 137(A) (App. Term 2nd & 11th Jud. Dists. 2006); Rockaway Boulevard Medical P.C., dba Queens Diagnostic Center v. Progressive Insurance, 9 Misc 3d 52 (App. Term 2nd & 11th Jud. Dists. 2005); Elite Medical Care, P.C. v. Travelers Property and Casualty Insurance Company, 12 Misc 3d 1183(A) (N.Y.C. Civ. Ct. Kings County 2006); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1061(A) (N.Y.C. Civ. Ct. Queens County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1069(A) (N.Y.C. Civ. Ct. Queens County 2005). In order to grant the defendant’s motion, the defendant had the burden to demonstrate that the subject services were rendered by an independent contractor. Defendant failed at that burden. The defendant did not proffer one scintilla of evidence that would persuade this Court that the subject services were performed by an independent contractor. Moreover, the fact that the bills did not indicate the relationship between the plaintiff and the treating physician did not compromise the plaintiff’s prima facie showing. Rockaway, supra.

Turning to the evidence adduced at trial, this Court finds that the testimony of Octavio Rodriguez, an employee of Advanced Healthcare Solutions, plaintiff’s billing agent, as well as the documents admitted into evidence establish plaintiff’s prima facie entitlement to no-fault benefits. It should be noted that Advanced Healthcare Solutions relied upon plaintiff’s business records in order to conduct its business, thus, via proper foundation, those records were admitted into evidence pursuant to the business records exception to the hearsay rule. Pine Hollow Medical, P.C. v. Progressive Casualty Insurance Company, 13 Misc 3d 131(A) (App. Term 2nd & 11th Jud. Dists. [*2]2006); Foster Diagnostic Imaging, P.C. v. General Assurance Company, 10 Misc 3d 428 (N.Y.C. Civ. Ct. Kings County 2005).

Instead of offering testimony or documentary evidence in defense of this matter, the defendant relied upon its cross-examination of Mr. Rodriguez. That examination failed to rebut the presumption of medical necessity that attached to the plaintiff’s claim forms. Accordingly, plaintiff’s motion for a directed verdict is granted. Judgment in favor of plaintiff in the following amounts: $912.00 for assignor Vadim Bondarenko; $879.73 for assignor Stacia Barrow and

$1,791.73 for assignor Neida Campos as well as statutory interest and attorney’s fees.

This constitutes the decision and order of the Court.

Dated: November 2, 2006

__________________________________

Genine D. Edwards, J.C.C.

Civil Court of the City of New York, Kings County

112247/04

Delores J. Thomas, J.

Upon the foregoing cited papers, the Decision/Order on this motion and cross-motion is as follows:

In this action brought by a health care provider to recover first-party no-fault benefits for services rendered to its assignors, Reginald Smalls and Kevin Johnson, plaintiff moves for an order granting summary judgment in its favor in the sum of $3,673.07 as to each assignor plus statutory interest and attorney’s fees. Defendant cross-moves for an order pursuant to CPLR 3211 (a) (5) dismissing the action.

To establish a prima facie entitlement to summary judgment, plaintiff must demonstrate that it submitted a proper proof of claim setting forth the fact and amount of losses sustained and that payment of no-fault benefits is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept]). The court finds plaintiff has established its prima facie entitlement to summary judgment.

Defendant contends the issue of timeliness of payment is immaterial in this dispute since [*2]plaintiff treated injuries did not arise from a covered accident. On April 4, 2005, Hon. L.A. Harris, Jr., of the Circuit Court for the County of Henrico, Virginia, granted defendant’s Petition for a Declaratory Judgment awarding it a default judgment and retroactively rescinding an insurance policy it had issued to Anthony Lindo (see Exhibit A annexed to cross-motion). Defendant states that it sought cancellation of the policy after it discovered Lindo made material misrepresentations on the insurance application. Plaintiff seeks to recover benefits under Lindo’s policy. Based on the retroactive cancellation of the policy, defendant asserts the thirty-day rule does not apply and the lack of coverage defense survives (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195). Therefore, defendant argues it is entitled to an order granting its cross-motion dismissing the complaint.

Plaintiff counters that defendant admits coverage existed at the time the assignments were made in July, 2004. It was not until November, 2004 that the policy was rescinded. Furthermore, plaintiff argues defendant has failed to lay a foundation for the documents submitted in support of its position. Plaintiff states that defendant has failed to attach an affidavit by someone with personal knowledge who can “corroborate and lay a foundation for the documents.” Moreover, plaintiff argues New York law, which does not provide for retroactive cancellation of an insurance policy, should apply as it has “a greater interest in protecting its innocent victims against motorists covered by an out of state insurance policy.”

Plaintiff’s contention that defendant’s cross-motion should not be granted because defendant has failed to lay a proper foundation for its evidence is unpersuasive. Defendant’s counsel indicates in her affirmation in support that she possesses knowledge of the facts based on a review of the files and that the documents submitted are true and correct copies. Defendant has submitted sufficient relevant documentary evidence to warrant consideration of its cross-motion.

Therefore, determination of the motion and cross-motion rests in a resolution of the conflict of law dispute between the two jurisdictions. Defendant claims that it properly canceled the policy retroactively under Virginia law. The policy was issued in Virginia based on factors which included that the insured was a Virginia resident, that the vehicle was registered in Virginia, and that it would be garaged in Virginia.

“Where there is a conflict of law relating to an insurance policy, the conflict must be resolved by application of the conflict of law rules relevant to contracts.” (Integon Insurance Company v Garcia, 281 AD2d 480.) Generally, courts now apply the “center of gravity” or “grouping of contacts” inquiry to determine which state has the most significant contacts to the dispute. In Eagle Insurance Co. v Singletary, et al. (279 AD2d 56 [2d Dept]), an action with a similar fact pattern to the instant action, defendant Singletary was injured in New York by a vehicle owned by a Mr. Suleiman who was insured by Integon Insurance Company. Integon did not dispute that there was coverage at the time of the accident. However, Integon denied coverage based on the retroactive cancellation of the policy it obtained under Virginia law after it determined the insured had made material misrepresentation on its insurance application. The Court found: “In sum, on the facts presented, New York’s governmental interests, when balanced against Virginia’s significant

contacts with the contract and legitimate governmental interest in protecting its honest policyholders from bearing the burden of paying claims incurred by dishonest policyholders, is not sufficiently compelling to warrant the application of New York law.” (Id., at 60; citation omitted.) Here too, the Court finds the application of Virginia law is proper. [*3]

Accordingly, plaintiff’s motion for summary judgment is denied and defendant’s cross-motion for an order dismissing the complaint is granted.

This constitutes the decision and order of the Court.

Dated:Brooklyn, New York

October 24, 2006

DELORES J. THOMAS

Judge Civil Court

Civil Court of the City of New York, Kings County

121948/2005

Genine D. Edwards, J.

In this action to recover No-Fault benefits, statutory interest and attorney’s fees, plaintiff makes a motion for summary judgment. Defendant cross-moves for the same relief on the ground that the services allegedly provided by the plaintiff were not medically necessary.

To establish a prima facie case of entitlement to No-Fault benefits the plaintiff must demonstrate that it provided defendant with a claim for services rendered, setting forth the facts and amount of the loss and that the claim was not paid nor denied nor was verification requested. Nyack Hospital v. Metropolitan Property & Casualty Insurance Company 16 AD3d 564 (2nd Dept. 2005); Mary Immaculate Hospital v. Allstate Insurance Company 5 AD3d 742 (2nd Dept. 2004); Careplus Medical Supply Inc. v. General Assurance Company 7 Misc 3d 126(A) (App. Term 9th & 10th Jud. Dists. 2005). If plaintiff’s burden is met then the defendant has the burden of proving that triable issues of fact exist. Montefiore Medical Center v. New York Central Mutual Fire Insurance Company 9 AD3d 354 (2nd Dept. 2004); Liberty Queens Medical, P.C. v. Liberty Mutual Insurance Company, 2002 NY Slip Op. 40420 (U) (App. Term 2nd & 11th Jud. Dists. 2002); A.B. Medical Services PLLC, DAV v. Allstate Insurance Company, 8 Misc 3d 137(A) (App. Term 2nd & 11th Jud. Dists. 2005). Upon such proof, the plaintiff is obligated to rebut such evidence or risk dismissal. A.B. Medical Services, PLLC v. State Farm Mutual Automobile Insurance Company, 7 [*2]Misc 3d 822 (N.Y.C. Civ. Ct. Kings County 2005); Bedford Park Medical Practice P.C. v. American Transit Insurance Co., 8 Misc 3d 1025(A) (N.Y.C. Civ. Ct. Kings County 2005).

In the instant case, the plaintiff demonstrated its entitlement to no-fault benefits in the amounts of $129.28 and $182.86, via appending the defendant’s denial of claim forms to its motion. King’s Medical Supply Inc. v. Country-Wide Insurance Company, 5 Misc 3d 767 (N.Y.C. Civ. Ct. Kings County 2004); Capri Medical, P.C. v. New York Central Mutual Fire Insurance Company, 11 Misc 3d 1073(A) (N.Y.C. Civ. Ct. Kings County 2006); AT Medical P.C. v. Utica Mutual Insurance Company, 11 Misc 3d 142(A) (App. Term 2nd & 11th Jud. Dists. 2006); A.B. Medical Services, PLLC v. New York Central Mutual Fire Insurance Company, 3 Misc 3d 136(A) (App. Term 2nd & 11th Jud. Dists. 2004); Fair Price Medical Supply Corp. v. ELRAC Inc., 12 Misc 3d 119 (2nd Dept. 2006). Also, plaintiff’s burden of proof for the claim in the amount of $297.12 was established since the defendant attached its denial of claim form, indicating that it received the claim, to its cross-motion. Fair Price Medical Supply Corp. v. ELRAC Inc., 12 Misc 3d 126(A) (App. Term 2nd & 11th Jud. Dists. 2006); Vista Surgical Supplies, Inc. v. Metropolitan Property and Casualty Ins. Co., 12 Misc 3d 130(A) (App. Term 2nd & 11th Jud. Dists. 2006).

With respect to the claim for the amount of $129.28, it is clear and plaintiff agrees that payment was made, albeit late. The query is whether plaintiff is still entitled to attorney’s fees. According to Insurance Law §5106, the plaintiff is entitled to recover attorney’s fees when the claim was denied or overdue. Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274 (1997); Function Supply v. Progressive Ins. Co., 9 Misc 3d 1123(A) (N.Y.C. Civ. Ct. Queens County 2005).

Now we move to defendant’s cross-motion. It is clear that Kelly Andre’s affidavit established that all of the subject denials were timely served upon the plaintiff. With respect to the claims in the amounts: $297.17 and $182.86, the defendant denied the claims based upon lack of medical necessity. In support of this contention the defendant attached an admissible peer review report that set forth a competent physician opinion. Thus, the defendant sustained its burden of production of a material issue of fact for trial. Triboro Chiropractic and Acupuncture PLLC v. Electric Insurance Company, 2 Misc 3d 135(A) (App. Term 2nd & 11th Jud. Dists. 2004); Hempstead Turnpike Open MRI and Imaging v. Progressive Insurance Company, 12 Misc 3d 137(A) (App. Term 9th & 10th Jud. Dists. 2006). However, upon review of the subject bills and the corresponding peer review report, this Court is not persuaded that the defendant is entitled to summary judgment. The presumption of medical necessity that attached to the claim forms has not been rebutted by the defendant’s peer review report. Bedford Park Medical Practice P.C., supra.

Accordingly it is hereby,

Ordered that plaintiff’s summary judgment motion is granted only as to the claim for attorney’s fees for the claim amount of $129.28. Judgment should be entered in favor of the

plaintiff in the amount of $60.00. It is further ordered that defendant’s cross-motion for summary judgment is denied. Issues of fact exist regarding the medical necessity of the claims in the amounts of $297.17 and $182.86.

This constitutes the decision and order of the Court.

Dated: October 12, 2006__________________________________

Genine D. Edwards, J.C.C.

[*1]

Civil Court of the City of New York, Richmond County, October 2, 2006

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossmanfass, Muhlstock & Neuwirth, Mineola, for plaintiff. Cambio, Votto, Cassata & Gullo, Staten Island, for defendant.

OPINION OF THE COURT

Peter P. Sweeney, J.

The issue presented in this action to recover assigned first-party no-fault benefits is how attorney’s fees should be calculated in an action that involves multiple assignors and the submission of multiple bills on different dates.

Factual Background:

The trial of this action was scheduled to begin on April 26, 2006. At that time, the parties entered into a written stipulation settling all aspects of the action except for the issue of attorney’s fees. Pursuant to the stipulation, defendant agreed to pay a specified portion of each of the 21 bills that were in dispute. The bills were submitted on behalf of three assignors and each bill was submitted on a different date.

Plaintiff maintains that, for each bill, he is entitled to an attorney’s fee in the amount of $60 or 20% of the amount of the bill, plus interest thereon, subject to a maximum of $850, whichever amount is greater. Defendant maintains that, for each assignor, plaintiff is entitled to an attorney’s fee in the amount of $60 or 20% of the aggregate amount of all the bills that were submitted on behalf of that assignor, plus interest thereon, subject to a maximum of $850.

For the following reasons, the court agrees with defendant.

Discussion:

The no-fault regulation that governs awards of attorney’s fees is 11 NYCRR 65-4.6. 11 NYCRR 65-4.6 (c) provides that “[e]xcept as provided in subdivisions (a) and (b) of this section,^[FN1] the minimum attorney’s fee payable pursuant to this Subpart shall be $60.” 11 NYCRR 65-4.6 (e) provides, in pertinent part, that

“[f]or all other disputes subject to arbitration, subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850. . . .”

On October 8, 2003, the New York State Insurance Department issued an opinion letter interpreting 11 NYCRR 65-4.6 (c) and (e) (Ops Gen Counsel NY Ins Dept No. 03-10-04 [2003]). The precise question addressed by the New York State Insurance Department in the opinion letter was:

“When an assignee No-Fault provider submits bills for health services rendered to an eligible injured person to that person’s insurer, and such bills are either denied or partially paid and the provider thereafter initiates a court action to contest the denials of the multiple bills which results in a payment award to the provider, is the provider entitled to a minimum attorney’s fee of $60 for each denied bill now required to be paid, or is the proper amount of attorney’s fees based upon the aggregate sum of all bills awarded reimbursement by the Court in the single action that was commenced?” (Emphasis added.)

The New York State Insurance Department answered the question as follows:

“The minimum amount of attorney’s fees awarded to an assignee health provider who has prevailed in a court action brought against a No-Fault insurer is based upon the aggregate amount of payment required to be reimbursed based upon the amount awarded for each bill which had been submitted and denied. The minimum attorney fee amount of $60 is not due and owing for each bill submitted as part of the total amount of the disputed claim sought in the court action.” (Emphasis added.)

The Department of Insurance concluded that court-initiated actions to resolve payment disputes come within the purview of 11 NYCRR 65-4.6 (e) since such disputes are “subject to arbitration” in that the provider had the option to seek a resolution of the dispute by submitting it for no-fault arbitration in the first instance. It went on to reason:

“Section 65-4.6(e) makes it clear that the amount of attorney’s fees awarded will be based upon 20% of the total amount of first party benefits awarded. That total amount is derived from the total amount of individual bills disputed in either a court action or arbitration, regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured.” (Emphasis added.)

Pursuant to section 65-4.6 (e), the total amount due the attorney will be derived by calculating 20% of the total claim which is resolved in favor of the applicant, which amount is totaled from the total amount of disputed bills which are submitted on behalf of the applicant. This total amount is subject to a cap of $850. Where 20% of the total claim awarded results in an amount less than $60, the attorney is entitled to the minimum $60 fee pursuant to section 65-4.6 (c). Since the 20% calculation is based upon benefits awarded from the total number of disputed bills [*3]in a court action commenced, an attorney would not be entitled to a $60 fee for each disputed bill which is resolved in favor of the applicant.

It is well settled that an administrative agency’s construction and interpretation of its own regulations is entitled to the greatest weight (Matter of Herzog v Joy, 74 AD2d 372, 375 [1st Dept 1980], affd 53 NY2d 821 [1981]; Matter of Tommy & Tina, Inc. v Department of Consumer Affairs of City of N.Y., 95 AD2d 724, 724 [1983], affd 62 NY2d 671 [1984]). If an administrative agency’s interpretation of one of its own regulations is neither irrational nor unreasonable nor counter to the clear wording of a statutory provision, it should be upheld (Matter of John Paterno, Inc. v Curiale, 88 NY2d 328, 333 [1996]; Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]; see also, Matter of Medical Malpractice Ins. Assn. v Superintendent of Ins. of State of N.Y., 72 NY2d 753, 761-762 [1988]).

11 NYCRR 65-4.6 was promulgated by the Department of Insurance, the administrative agency empowered to implement and interpret the No-Fault Law (see Ostrer v Schenck, 41 NY2d 782 [1977]; Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 863 [2003]; Breen v Cunard Lines S. S. Co., 33 NY2d 508, 511 [1974]; Insurance Law § 301). In the court’s view, its interpretation of 11 NYCRR 65-4.6 was neither irrational, unreasonable nor counter to any statutory provision.^[FN2] Plaintiff’s suggestion that opinion letters issued by administrative agencies carry little weight is without merit (see, e.g. Matter of New York State Assn. of Life Underwriters v New York State Banking Dept., 190 AD2d 338, 342-343 [3d Dept 1993], affd 83 NY2d 353 [1994] [holding that deference had to be given to an opinion letter issued by the New York State Banking Department which interpreted Banking Law § 96 unless the interpretation was irrational or unreasonable]; see also Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co., 9 Misc 3d 73, 75 [App Term, 2d & 11th Jud Dists 2005]; S & M Supply v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50693[U] [App Term, 9th & 10th Jud Dists 2004]; Bronx Med. Servs., P.C. v Lumbermans Mut. Cas. Co., 2003 NY Slip Op 51022[U] [App Term, 1st Dept 2003]).^[FN3]

Plaintiff’s contention that the holdings in Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co. (207 AD2d 338, 339 [2d Dept 1994]) and Hempstead Gen. Hosp. v Insurance [*4]Co. of N. Am. (208 AD2d 501, 501-502 [2d Dept 1994]) are dispositive of the issues before the court is also without merit. At issue in Smithtown Gen. Hosp. and Hempstead Gen. Hosp. was the interplay between 11 NYCRR former 65.17 (b) (6) (iii) and 11 NYCRR former 65.17 (b) (6) (v), the predecessor no-fault regulations to 11 NYCRR 65-4.6 (c) and (e). 11 NYCRR 65.17 (b) (6) (iii) provided: “Except as provided in subparagraphs (i) and (ii) of this paragraph, the minimum attorney’s fee payable pursuant to this section shall be $60.” 11 NYCRR 65.17 (b) (6) (v) provided, in pertinent part, as follows: “For all other disputes subject to AAA and IDA arbitrations, subject to the provisions of subparagraphs (i) and (iii) of this paragraph, the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.”

In both Smithtown Gen. Hosp.^[FN4] and Hempstead Gen. Hosp.^[FN5] the Court interpreted 11 NYCRR 65.17 (b) (6) (iii) and (v) as requiring awards of attorney’s fees to be calculated on a “per claim” basis. Plaintiff contends that since the language of 11 NYCRR 65.17 (b) (6) (iii) and (v) is virtually identical to the language of 11 NYCRR 65-4.6 (c) and (e), the holdings in Smithtown Gen. Hosp. and Hempstead Gen. Hosp. are controlling. The court disagrees. The holdings in Smithtown Gen. Hosp. and Hempstead Gen. Hosp. have little bearing on the precise issue presented here, whether the court should defer to the Department of Insurance’s interpretation of 11 NYCRR 65-4.6. This issue was not before the Court in either Smithtown Gen. Hosp. or Hempstead Gen. Hosp. Indeed, at the time those cases were decided, the Department of Insurance had yet to interpret 11 NYCRR 65-4.6 or the predecessor regulations governing attorney’s fee awards.

Further, defendant correctly points out that the holding in Smithtown Gen. Hosp. is not at all inconsistent with the Department of Insurance’s interpretation of 11 NYCRR 65-4.6. [*5]While the Court in Smithtown Gen. Hosp. held that attorney’s fees should be calculated on a “per claim” basis, the complaint^[FN6] filed in Smithtown reflects that each of the 21 claims at issue in the action was submitted on behalf of a different assignor. The holding is therefore perfectly consistent with the Department of Insurance’s view, as stated in the opinion letter, that attorney’s fee awards should be based on “the total amount of individual bills disputed in either a court action or arbitration, regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured” (Ops Gen Counsel NY Ins Dept No. 03-10-08 [emphasis added]).^[FN7]

For all of the above reasons, the court adopts the Department of Insurance’s interpretation of 11 NYCRR 65-4.6 and holds that for each assignor in the action, plaintiff is entitled to an attorney’s fee in the amount of $60 or 20% of the total amount of the first-party benefits awarded for services provided to that assignor, plus interest thereon, whichever amount is greater, subject to a maximum of $850.

Accordingly, it is hereby ordered that judgment be entered in plaintiff’s favor in accordance with the stipulation of settlement together with interest and attorney’s fees, as provided for under the No-Fault Law and the regulations promulgated thereunder, as well as costs and disbursements.

Footnotes

Footnote 1: Neither of these subdivisions apply in this case.

Footnote 2: The only statutory provision dealing with attorney’s fees under the No-Fault Law is Insurance Law § 5106 (a), which, in pertinent part, provides that “[i]f a valid claim [for first-party benefits] or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations.”

Footnote 3: In Ocean Diagnostic Imaging P.C., S & M Supply and Bronx Med. Servs., P.C., the various Appellate Terms held that the Department of Insurance’s interpretation of a regulation as articulated in an advisory “Circular Letter” is entitled to great deference. The court sees no reason why the Department of Insurance’s interpretation of a regulation as articulated in an opinion letter should be treated differently.

Footnote 4: In Smithtown, the Court stated:

“Concerning attorneys’ fees, once a court action has been commenced, 11 NYCRR 65.17 (b) (6) (v) grants an attorneys’ fee on no-fault insurance claims of 20% of the amount of first-party benefits awarded plus interest, with a ceiling of $850 per claim. Further, pursuant to 11 NYCRR 65.17 (b) (6) (iii), with certain exceptions not here applicable, there is a minimum fee of $60 on each such claim. Here, although the court awarded attorneys’ fees, it failed to follow the formula provided under 11 NYCRR 65.17 (b) (6) (v), incorrectly interpreted the $850 ceiling to apply to the entire action, rather than to each claim, and failed to set a minimum fee of $60 per claim. Accordingly, upon remittitur, the Supreme Court is directed to calculate the attorneys’ fee due in accordance with 11 NYCRR 65.17 (b) (6) (v), and (iii)” (207 AD2d at 339 [emphasis added]).

Footnote 5: In Hempstead General Hosp., the Court stated:

“Once an action to recover no-fault insurance benefits has been commenced, 11 NYCRR 65.17 (b) (6) (v) grants attorney’s fees of 20% of the amount of the first-party benefits awarded, plus interest, with a ceiling of $850 per claim. . . . Further, pursuant to 11 NYCRR 65.17 (b) (6) (iii), with certain exceptions not applicable to this case, there is a minimum fee of $60 per claim. Accordingly, upon remittitur, the Supreme Court is directed to calculate the attorney’s fees due in accordance with 11 NYCRR 65.17 (b) (6) (v) and (iii)” (208 AD2d at 501 [emphasis added]).

Footnote 6: Defendant provided the court with a copy of the complaint in support of its position.

Footnote 7: Whether the holding in Hempstead Gen. Hosp. conflicts with the Department of Insurance’s interpretation of 11 NYCRR 65-4.6 remains unclear.

Civil Court of the City of New York, Richmond County

8104/06

Attorney for Plaintiff, Andrew Carothers, M.D., P.C. (In Both cases):

Gregory Cherchione, Esq.

2444 Broadway, Suite 362

New York, NY 10024

Tel.: (212) 285-3800

Attorneys for Liberty Mutual Insurance Company (In Both Actions):

Burke, Lipton Puleo, McCarthy & Gordon

10 Bank Street, Suite 1040

White Plains, NY 10606

Tel.: (914) 997-8100

Peter P. Sweeney, J.

In this action to recover assigned first-party no-fault benefits, defendant moves for an order changing the venue of this action to Bronx County.

The venue provision of the Civil Court Act that governs transitory actions is Civil Court Act § 301. Civil Court Act § 301[a], as it pertains to the issue at hand, provides that “an action. . . shall be brought in . . .the county in which one of the parties resides at the commencement thereof.” Defendant contends that plaintiff improperly set venue in Richmond because neither plaintiff nor the defendant are residents of Richmond County.

In support of its contention that plaintiff is not a resident of Richmond County, defendant annexed various medical records indicating that plaintiff’s assignor resides in Bronx County. “If the plaintiff is an assignee of the cause of action, the original owner of the cause of action shall be deemed the plaintiff for the purpose of determining proper venue” (Civil Court Act § 305[a] ).

In support of its contention that defendant is not a Richmond County resident, defendant submitted the affidavit of one of its claims managers who stated that “Liberty does not have any claims, sales or offices of any kind in Richmond County, NY All no-fault bills are submitted to the New York State No-Fault office in Suffolk County.” The nearest claims office is in Nassau County. The nearest sales office to Richmond County is located in Kings County at 4201 Avenue M in Brooklyn. The nearest legal office is in New York County.”

Under the Civil Court Act, “[a] corporation . . . shall be deemed a resident of any county wherein it transacts business, keeps an office, has an agency or is established by law ” (Civil Court Act § 305[b]). The issue presented, as the court sees it, is whether defendant’s submissions demonstrated that defendant does not “transact business” within Richmond County within the meaning of (Civil Court Act § 305[b]). The Court holds that they do did not.

Defendant’s submissions did not foreclose the very distinct possibility that defendant issues insurance policies covering Richmond County residents. Likewise, defendant’s [*2]submissions did not foreclose the distinct possibility that defendant engaged in purposeful activity in Richmond County by regularly corresponding, by mail and/or telephone, with its policy holders in Richmond County by delivering insurance policies, sending invoices and seeking and collecting premiums from them. These acts, in the court’s view, would be sufficient to establish that defendant transacts business in Richmond County (see Mingmen Acupuncture Services, P.C. v. American Transit Ins. Co., 183 Misc 2d 270, 280 [Civ. Ct, Bronx County, 1999, Victor, J.]; Neurologic Services, P.C. v. American Transit Ins. Co., 183 Misc 2d 496, 498 [Civil Ct., Bronx County 1999, Ruiz, J.]; see also Rung v. United States Fidelity and Guaranty Co., 139 AD2d 914, 915 [4th Dep ‘t 1988] ). The court respectfully disagrees with the opposite result reached in Quality Medical Healthcare, P.C. v. American Transit Ins. Co., 182 Misc 2d 991 [Sup. Ct., Bronx County, 1999, Brigantti-Hughes, J.].

Accordingly, it is hereby

ORDERED that defendant’s motion is in all respects DENIED.

This constitutes the decision and order of the court.

Dated: September 22, 2006_____________________________

PETER P. SWEENEY

Civil Court Judge

[*1]

Civil Court of the City of New York, Richmond County, June 22, 2006

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff. Bruno Gerbino & Macchia, LLP, Melville, for defendant.

OPINION OF THE COURT

Peter P. Sweeney, J.

This action to recover first-party no-fault benefits presents a novel issue. After receiving each of the disputed claims, defendant made timely requests for additional verification thereby tolling the 30-day period in which it had to pay or deny the claims. When plaintiff did not provide the verification, defendant made an additional request for the verification 28 calendar days later. When plaintiff failed to provide the verification, defendant denied the claims citing plaintiff’s failure to provide the verification as its only defense. The issue presented is whether, under these circumstances, defendant’s denials of claim, all of which were issued more than 30 days after it received the claims, were timely. The court concludes that they were not.

Factual Background

This action involves three claims for first-party no-fault benefits totaling $5,698.45 for electrodiagnostic testing of plaintiff’s two assignors. The trial of the action was scheduled for April 19, 2006. At that time, the parties waived their right to a trial and agreed to submit the matter to the court for resolution based on stipulated facts. The parties stipulated that defendant received each of the claims on February 13, 2003; that on February 25, 2003, defendant requested additional verification of each claim, i.e.—a letter of medical necessity from the referring physician; that on March 25, 2003, defendant made a second request for the same verification; that the requested verification was never provided; and that on January 26, 2004, defendant denied each of the claims citing plaintiff’s failure to provide verification as its only defense. The claim forms, an assignment of benefits for each assignor, defendant’s first and second requests for verification and defendant’s denials of claim were all stipulated into evidence.

Defendant maintains that it properly denied the claims and that it is therefore entitled to judgment dismissing the action.

Plaintiff maintains that while defendant’s initial requests for additional verification were timely and tolled the 30-day period in which defendant had to pay or deny the claims, the toll was eviscerated when defendant failed to send out a follow-up request for the additional verification within the 10-day time period specified in 11 NYCRR 65-3.6 (b). Plaintiff correctly points out that defendant mailed out the second requests only 28 days after the first requests had been [*2]mailed. Plaintiff contends that pursuant to 11 NYCRR 65-3.6 (b), defendant was required to wait at least 30 calendar days before it re-requested the verification.

Discussion

It is well settled that an insurer is required to pay or deny a claim for no-fault benefits within 30 days after the claimant provides proof of the claim (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]) and that its failure to do so will preclude it from raising most defenses to the claim (see Presbyterian Hosp. in City of N.Y., 90 NY2d at 282).

An insurer may extend the 30-day period in which it has to pay or deny a claim by making a request for additional verification of the claim “within 15 business days of receipt [of one] of the prescribed verification forms” (11 NYCRR 65-3.5 [b]; see also Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2d Dept 2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2d Dept 2002]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 700 [2d Dept 2001]). If the verification is not provided 30 calendar days after the original request, “[a]t a minimum . . . the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail” (11 NYCRR 65-3.6 [b]).

In Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co. (233 AD2d 431, 432 [2d Dept 1996], lv denied 90 NY2d 802 [1997]), the Court addressed the consequences of an insurer’s failure to seek additional verification of a claim in compliance with the no-fault regulations then in effect. The defendant in that case timely requested that plaintiff provide a copy of the hospital record of its assignor as additional verification of the claim. When plaintiff did not provide the hospital record within 30 calendar days, defendant did not do any of the follow-up required by 11 NYCRR former 65.15 (e) (2), which, in relevant part, provided:

“At a minimum, if any requested verification has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was originally requested, either by a telephone call, properly documented in the file, or by mail.”

Although plaintiff ultimately provided the hospital record, defendant did not receive it until more than 30 days had elapsed since the claim was submitted. The hospital record indicated that plaintiff’s assignor was intoxicated at the time of accident and based on the record, defendant denied the claim asserting the intoxication of plaintiff’s assignor as a defense.

In affirming the judgment entered in plaintiff’s favor in the court below, the Appellate Division for the Second Department concluded that defendant was precluded from raising intoxication as a defense inasmuch as defendant denied the claim more than 30 days after its receipt. The Court based its decision on the principle that “[w]hen an insurance company fails to comply with its duty to act expeditiously in processing no-fault claims, it will be precluded from raising most defenses” (Presbyterian, 233 AD2d at 432 [citation omitted]). The Court reasoned that by failing to do the follow-up required by 11 NYCRR former 65.15 (e) (2), which it concluded had to be “strictly construed” (Presbyterian, 233 AD2d at 432), defendant did not act diligently in processing the claim (Presbyterian, 233 AD2d at 433 [citations omitted]).

The courts have consistently followed the holding in Presbyterian (see King’s Med. Supply v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U] [App Term, 2d & 11th Jud Dists]; Bronx Med. Servs., P.C. v Windsor Ins. Co., 2003 NY Slip Op 50885[U] [App [*3]Term,1st Dept]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 10 Misc 3d 145[A], 2006 NY Slip Op 50140[U] [App Term, 2d & 11th Jud Dists]).

This case is not on all fours with Presbyterian or the other cases cited above. In all of those cases, when the plaintiff failed to provide the verification that had been requested, the defendant did not do any follow-up whatsoever. Here, defendant did follow up but not within the 10-day period specified in 11 NYCRR 65-3.6 (b). While defendant certainly acted more diligently in processing the claims than the defendant in Presbyterian or the other cases cited above, it did not strictly adhere to the dictates of 11 NYCRR 65-3.6 (b), nonetheless. The court must be guided by the principle that the no-fault regulations are in derogation of the common law and must be strictly construed (Presbyterian, 233 AD2d at 432; Presbyterian Hosp. in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [2d Dept 1996]).

The clear language of 11 NYCRR 65-3.6 (b) required defendant to follow up with the plaintiff for the verification at least once in the 10-day period specified therein. This defendant clearly did not do so. The court finds that when defendant failed to follow up as required by 11 NYCRR 65-3.6 (b), the toll occasioned by defendant’s initial requests for verification dissipated ab initio. Thus, it necessarily follows that defendant’s denials of claim, all of which were issued more than 30 days after defendant received the claims, were untimely as a matter of law. Defendant was precluded from raising most defenses, including the defense asserted in each of its denials.

Having established that it submitted the claims setting forth the fact and the amounts of the loss sustained and that payment of no-fault benefits was overdue, plaintiff is entitled to judgment in the amount sued for (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]).

Accordingly, it is hereby ordered and adjudged that judgment be entered in plaintiff’s favor in the amount of $5,698.45, together with interest and attorneys’ fees as provided for under the No-Fault Law and the regulations promulgated thereunder, as well as costs and disbursements.

[*1]

Civil Court of the City of New York, Richmond County, June 9, 2006

APPEARANCES OF COUNSEL

Sanders, Grossman, Fass & Muhlstock P.C., Mineola, for plaintiff. Bruno, Gerbino & Soriano LLP, Melville, for defendant.

OPINION OF THE COURT

Peter P. Sweeney, J.

In this action to recover assigned first-party no-fault benefits, the issue presented is whether the testimony of the peer expert called by defendant at trial to establish its defense of lack of medical necessity should have been precluded on the ground that he did not prepare the peer review reports upon which defendant relied in denying the claims. The court holds that since the peer review expert, whose identity had been disclosed to plaintiff prior to trial, was limited to testifying to the facts and opinions contained in the peer review reports defendant relied upon in denying the claims, there was no basis to preclude his testimony.

Facts

Plaintiff SK Medical Services, P.C. commenced this action to recover first-party no-fault benefits for medical services provided to three assignors, Mamia Kashia, Zaza Kacharava and Malkhaz Gvaladze. All three assignors were allegedly injured on December 27, 2002, in the same motor vehicle accident. Each assignor appeared at plaintiff’s facility on January 21, 2003 for a “neurodiagnostic consultation” by Dr. Larisa Tsaur. On the same day, Dr. Tsaur performed essentially identical electrodiagnostic testing on each assignor. The tests included nerve conduction velocity studies and electromyography studies.

Plaintiff submitted four bills to defendant, one in the amount of $3,673.07 for services provided to Mamia Kashia, another in the same amount for services provided to Zaza Kacharava and two bills totaling $3,976.66 for services provided to Malkhaz Gvaladze. Along with each bill, plaintiff submitted a copy of the neurodiagnostic consultation report of Dr. Tsaur.

Upon receipt of the bills, defendant retained Dr. Joseph C. Cole to do a peer review for each submission. Dr. Cole prepared three peer review reports, one for each assignor, and recommended that defendant pay only for the neurodiagnostic consultations. He concluded that the extensive electrodiagnostic testing of plaintiff’s assignors, performed less than a month following the accident, was not medically necessary in light of Dr. Tsaur’s clinical findings.

In accordance with Dr. Cole’s recommendations, defendant paid plaintiff for the [*2]neurodiagnostic consultations and denied the remainder of the bills asserting lack of medical necessity as a defense. Each of defendant’s denials included a copy of the peer review report upon which it was based.

The trial of this action took place on March 2, 2006. At the outset of the trial, the parties stipulated that defendant received the NF-3 claim forms (the bills), which included Dr. Tsaur’s neurodiagnostic consultation reports, and that defendant timely denied the claims on the ground of lack of medical necessity based on Dr. Cole’s peer review reports. The NF-3 claim forms, the neurodiagnostic consultation reports and each of defendant’s denials, which included Dr. Cole’s peer review reports, were stipulated into evidence.

At the time of trial, Dr. Cole was not available to testify. To establish its defense of lack of medical necessity, defendant called Peter Gastaldi, D.C. Plaintiff objected and moved to preclude him from testifying. Plaintiff’s counsel maintained that since defendant’s denials of claim were based on Dr. Cole’s peer reviews, defendant was limited to calling Dr. Cole to establish lack of medical necessity. Plaintiff’s counsel further maintained that since defendant never exchanged a copy of Dr. Gastaldi’s peer review report or properly responded to plaintiff’s demand for expert disclosure, Dr. Gastaldi should be precluded from testifying.

Plaintiff’s demand for expert information required defendant to provide

“(a) the name and address of each and every person [defendant] expect[ed] to call as an expert witness at the time of trial of this action; (b) the subject matter on which each expert is expected to testify; (c) the substance of the facts and opinions on which each expert is to testify; (d) the qualifications of each expert; and (e) a summary of the grounds for each expert’s opinion.”

In response, defendant provided Dr. Gastaldi’s name and address but the only information provided as to the particulars of his expected testimony was that he would “be relied upon at trial to provide testimony as to the findings of a lack of medical necessity as set forth in the denial.”

Defendant’s counsel represented that Dr. Gastaldi never prepared a peer review report and that he would testify to the same facts and opinions as set forth in Dr. Cole’s reports. Defendant therefore maintained that plaintiff had no legitimate argument that it would be prejudiced if Dr. Gastaldi were allowed to testify.

The court reserved decision on the motion and permitted Dr. Gastaldi to testify. The court precluded him, however, from testifying to facts or opinions that were not set forth in Dr. Cole’s reports. The court agreed to strike his testimony if plaintiff’s motion were granted.

Discussion

After careful consideration, the court finds that there was no legitimate basis to preclude Dr. Gastaldi from testifying. Each of defendant’s denials of claim, which asserted lack of medical necessity as a defense, was timely issued (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]), contained the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664 [2d Dept 2004]), and, with the inclusion of the peer review report upon which it was based, “promptly apprise[d] the claimant[s] with a high degree of specificity of the ground . . . on which [it was] predicated” (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]; see also, Nyack Hosp., 11 AD3d at 664 [2d Dept 2004]; Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 153 [2d Dept 1986]). Defendant therefore preserved its right to defend the claims at trial on the [*3]ground of lack of medical necessity for the reasons stated in Dr. Cole’s peer review reports.

While it is true that an insurer may not, after repudiating liability, assert new grounds for its refusal to pay a claim (Han-Ki Lee v American Tr. Ins. Co., 304 AD2d 713, 714 [2003]; Lentini Bros. Moving & Stor. Co. v New York Prop. Ins. Underwriting Assn., 53 NY2d 835, 836 [1981]) and must “stand or fall upon the defense upon which it based its refusal to pay” (Beckley v Otsego County Farmers Coop. Fire Ins. Co., 3 AD2d 190, 194 [1957]; see also, King v State Farm Mut. Auto. Ins. Co., 218 AD2d 863, 865 [1995]), permitting Dr. Gastaldi to testify did not violate these principles since Dr. Gastaldi was not permitted to assert any new ground justifying defendant’s refusal to pay the claims. Contrary to plaintiff’s contention, there is no requirement in the no-fault regulations, or under common law, requiring an insurer to exchange a copy of the report of a peer review expert it intends to call at trial. Although 11 NYCRR 65-3.8 (b) (4) requires an insurer upon written demand to provide an applicant, the applicant’s attorney or the applicant’s treating physician with a copy of a peer review report upon which its denial is based, nothing contained in this regulation, nor in any other regulation promulgated under the No-Fault Law, suggests that an insurer is limited to calling the peer expert whose report was exchanged as its expert witness at trial. No plausible argument has been put forth why this court should impose such a limitation. If an insurer wishes to elicit expert testimony at trial to establish the factual basis of a properly asserted defense, it must simply comply with the rules pertaining to expert disclosure.

In this case, contrary to plaintiff’s assertion, defendant sufficiently complied with plaintiff’s demand for expert disclosure. In its response, defendant identified Dr. Gastaldi as a potential expert and indicated that he would “be relied upon at trial to provide testimony as to the findings of a lack of medical necessity as set forth in the denial[s].” As stated above, each of defendant’s denials included the report of Dr. Cole upon which it was based, and Dr. Gastaldi was limited to testifying to the facts and opinions contained therein. Accordingly, defendant’s expert disclosure sufficiently set forth “the substance of the facts and opinions on which” the expert was expected to testify (CPLR 3101 [d] [1] [i]; see, Barrowman v Niagara Mohawk Power Corp., 252 AD2d 946, 946-947 [1998], lv denied 92 NY2d 817 [1998]) and “demonstrable prejudice or surprise” to the plaintiff had not been shown (Rook v 60 Key Ctr., 239 AD2d 926, 927 [1997]).

For all of the above reasons, plaintiff’s motion to preclude is denied.

The court finds Dr. Gastaldi to be a credible witness. His testimony did not go beyond the facts and opinions contained in Dr. Cole’s reports. He gave persuasive testimony that the extensive testing performed on each of plaintiff’s assignors on January 21, 2003 was not medically necessary in light of Dr. Tsaur’s clinical findings. The court credits his testimony in all respects. No witnesses were called by the plaintiff to rebut his testimony. The court therefore finds that defendant established by a preponderance of the credible evidence that the testing at issue was not medically necessary.

Accordingly, it is hereby ordered that judgment be entered in favor of the defendant dismissing the complaint.

Civil Court of the City of New York, Kings County

46907/2005

Sylvia G. Ash, J.

Plaintiff, a health care provider, rendered medical services to the assignors in connection with injuries sustained as a result of separate automobile accidents that occurred in September of 2003. At the time of the alleged accidents, Defendant was the first-party no-fault carrier responsible for payment of any claims properly submitted. Plaintiff brought this action to recover first-party no-fault benefits for the medical services rendered to its assignors. A trial on this matter was conducted jointly.^[FN1]. The trial commenced on February 6, 2006 and was heard on consecutive days until its conclusion on February 9, 2006. At issue as to assignor Reggie Delmar, is $484.44. At issue as to assignor Mario Rodriguez is $968.88, for a total of $1,453.32. Based on the credible evidence adduced at trial this Court makes the following findings of fact and conclusions of law.

In accordance with the applicable no-fault rules, Plaintiff submitted the required no-fault claim forms indicating the fact and amount of the loss sustained for each of its assignors, and Defendant timely denied said claims based on the fact that the alleged automobile accidents were not covered.^[FN2]. For each of its assignors Plaintiff submitted claims for the following services, Inclinometry Range of Motion procedures (code 95851), and Manual Muscle Testing procedures (code 95831). Defendant denied said claims. As a basis for its denial of each of these claims Defendant asserted two reasons. First, for the Inclinometry Range of motion procedures, Defendant contends that the “procedure is not listed in the NY state fee schedule for this provider specialty. If reported with an evaluation and management service, this procedure is [*2]inclusive.” Second, for the Manual Muscle Testing procedures, Defendant contends the “procedures referenced by the provider’s office were used more than what is normally expected per visit.” (See Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

In light of the parties stipulating to Plaintiff’s prima facie case, and Defendant’s timely denial of the claims submitted, the only remaining issue for this Court to determine is whether the Defendant met its burden by demonstrating that Plaintiff was not entitled to recover for the claims submitted based on the fact that the procedures were not listed in the fee schedule for the provider, and based on the fact that the procedures were used more than what is expected per visit.

To contain the cost of providing medical services to patients treated under New York’s No-Fault law, the state legislature set limits on the fees health care providers may charge patients who sustain injuries in the use or operation of a motor vehicle. The legislature controlled costs by incorporating into the no-fault scheme the fee schedules established by the Worker’s Compensation Board for industrial accidents. Worker’s Compensation fee schedules were divided into various sections, including Medicine, Physical Therapy, Anesthesia, Surgery, Radiology, and Pathology in the medical fee schedule. Each of these sections lists a variety of medical procedures and assigns to each procedure a number known as a Current Procedural Terminology Registry Code (hereinafter “CPT code”). Each procedure listed in the fee schedule is assigned a number representing its “unit value.” To determine the maximum fee a provider may charge for any given procedure, the unit value assigned to that procedure is multiplied by a dollar amount conversion factor. Conversion factors are provider specific. Hence, the conversion factors apply only t the category of health care provider and type of treatment for which they were established (see Introna v. Allstate Insurance Co., 890 F.Supp.161).

The Worker’s Compensation fee schedules are adjusted by the superintendent of the Insurance Department (see Insurance Law §5108). One adjustment made by the superintendent is for health services not set out in the schedules. When a charge for a reimbursable service has not been scheduled by the superintendent, although a fee schedule has been set for the profession of the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule subject to review by the insurer (see 11 NYCRR 68.6(a); Studin v. Allstate Insurance Co, 152 Misc 2d 221).

During trial in the instant matter, Plaintiff submitted bills indicating that, Inclinometry Range of Motion procedures (CPT code 95851), and Manual Muscle Testing procedures (CPT code 95831), were performed on the assignors. In its post-trial memorandum of law on this issue, Plaintiff demonstrated by using a chart, the precise method for calculating the charges for the expenses. Specifically, Plaintiff indicated that it did in fact locate the procedures that were performed on the assignors within the Worker’s Compensation schedule, under CPT codes, 95851 and 95831. Plaintiff using the “comparable procedures” method then billed the insurer at a rate comparable for a physical therapists rate for providing these services. Defendant failed to [*3]introduce any evidence on this issue at trial or in its post-trial memorandum of law to establish that the services rendered were in fact not scheduled services, or as the defendant stated in its denial “…not listed in the NY state fee schedule for this provider specialty.”

In addition to reviewing the record and the post-trial memoranda of the parties, the Court conducted an investigation of the fee schedule. Both of the above-referenced procedures listed in the bills submitted by the Plaintiff in this case were in fact listed in the schedule (see Worker’s Compensation Board Fee Schedule of medicine Fees, Page 32). Pursuant to the chart utilized by Plaintiff in its post-trial memorandum of law, the court is satisfied that Plaintiff billed the insurer at the appropriate physical therapist rate of the services rendered, and as such, is entitled to recovery for the expenses. Defendant offered no proof to the contrary, and as such, has failed to maintain this defense.

The Court will now address Defendant’s contention that the “procedures referenced by the provider’s office were used more than what is normally expected per visit,” (see Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively). It is the Court’s position that this defense amounts to one of lack of medical necessity. It is well settled that where Defendant’s timely denial raises the lack of medical necessity defense but fails to support same with an Independent Medical exam (hereinafter “IME”), a peer review, an IME report, or other supporting documentation that is factually sufficient and non-conclusory, this defense will fail )Amaze Med. Supply Inc. v. Allstate Ins. Co., 3 Misc 3d 43 [App Term 2d & 11th Jud Dists. 2004]. As such, Defendant failed to preserve this defense for trial. Assuming arguendo Defendant had preserved this defense for trial, Defendant failed to call any expert witnesses at trial to testify regarding this issue. Nor did Defendant attempt to introduce any documents into evidence regarding this issue. As such, Defendant’s argument fails in its entirety as there is absolutely no basis in the record upon which the Court could make the determination that the procedures referenced by the Plaintiff in its claim forms were “..more than what is normally expected per visit” (see Joint exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

Based on the foregoing, judgment is to be entered in favor of the Plaintiff in the amount of $1,453.32, plus statutory interest and reasonable attorney fees.

This constitutes the decision and order of this Court.

DATED:Brooklyn, NY

May 30, 2006

_____________________________

SYLVIA G. ASH

JUDGE, CIVIL COURT

Footnotes

Footnote 1: This matter was tried jointly with index numbers 46906/05, 46927/05, 46933/05, and 48354/05.

Footnote 2:The parties stipulated on the record to Plaintiff’s prima facie case and that Defendant issued timely denials. [*4]

Civil Court of the City of New York, Kings County

96268 KCV 2004

Delores J. Thomas, J.

In the instant action plaintiff, a medical supplies provider, sues to recover $2,882.85 for medical supplies provided to its assignor Barry Galleh for injuries stemming from an auto accident on March 3, 2004.

At trial, the parties stipulated to plaintiff’s prima facie case and defendant’s timely denial of claim. The parties further agreed that the only issue for trial would be defendant’s defense of lack of medical necessity. The parties also stipulated the following documents into evidence:

Plaintiff’s Exhibits:

1A – Invoice dated May 20, 2002 for $1,532.85

1B – Invoice dated April 10, 2004 for $ 1,350.00

2A – Prescription from Oleg Barshay, D.C. dated March 5, 2004

2B – Prescription from Oleg Barshay D.C. dated April 19, 2004

3 – April 13, 2004 chiropractic report from Oleg Barshay for Barry Galleh

Defendant’s Exhibits:

A1 – NF10 dated May 10, 2004

A2 – NF10 dated June 1, 2004

B1 – Peer Review dated May 5, 2004

B2 – Peer Review dated May 28, 2004

The supplies at issue were: cervical pillow, Philadelphia tracheotomy cervical collar, TLSO Dorso-lumbar surgical supply, lumbar cushion, bed board, egg crate mattress, thermophone, EMS Unit, EMS accessory Kit, EMS belt, massage and an infra-red heating lamp (Exhibit 1A & 1B).

At trial, defendant called Ronald A. Csillag, a doctor of chiropractic [“D.C.”] the person who performed the per review. Dr. Csillag was qualified without objection as an expert in the practice of chiropractics. Dr. Csillag testified that the cervical pillow prescribed for the assignor is usually prescribed for injuries which are chronic in nature. He described the assignor’s injury as being acute and opined that the pillow was not needed and that the patient could have simply been instructed to roll up a towel and use it with the same benefit. In the peer review report, Dr. Csillag indicated that the effectiveness of cervical pillows in whiplash associated disorders is inconclusive and cites as authority several publications, (i.e. Whiplash Associated Disorders, [*2]Spine 1995, 20 (85); 25-73s Clinical Evidence BMJ Publishing Group, page 232-2003).

With regards to the lumbosacral belt and cervical collar, Dr. Csillag testified and wrote in the peer review report that these supplies were unnecessary because these devices work through immobilization and this type of support is not consistent with the trend in the management of lumbar sprains. He also wrote and testified that current scientific research documents the importance of early range of motion as mobility enhances recovery (see Defendant’s Exhibit B-1, pg. 4). Dr. Csillag cited the text, Physical Medicine and Rehabilitation: State of the Art Reviews: Vol. 9(3) October 1995 as supporting authority(Id.). Dr. Csillag further testified that many of the medical supplies were unnecessary because there was no indication from the treating doctor how to use them or to what areas to apply the device. He further opined that the patient was undergoing physical therapy, chiropractic care, acupuncture, message therapy and adjunctive therapy and that the massager, infrared heating lamps, EMS Unit and associated EMS equipment represented a duplication of services.

Plaintiff did not call a witness but as indicated the report of Dr. Barshay was admitted into evidence as Plaintiff Exhibit 3. The Initial Diagnosis portion of the report indicates:

1. Traumatic cervical sprain/strain with cervical myofascitis and possible radicular involvement, complicated by C4-C5 and C5-C6 bulging disc (MRI finding).

2. Traumatic Lumbar sprain/strain with intermittent radiating sciatic neuralgia, concomitant with Lumbar myofascitis (MRI finding pending).

3. Post traumatic cervicogenic headaches.

4. Head and right knee contusion.

5. Multiple intersegmental functional dysarthroses of the cervical thoracic and lumbar vertebral motor units.

The report also list a patient management plan, to wit: “The treatment in this case was directed toward conservative chiropractic management. This consisted of specific vertebral adjustments to correct functional dysarthroses and adjunctive therapy in the form of manual intersegmental traction. To enhance recovery, manual massage therapy and acupuncture by a licensed therapist was incorporated into the treatment plan. The frequency of treatments is 2-3 times a week. The patient was also advised to wear an orthopedic lumbosacral support and cervical collar to minimize pain and prevent a re-injury. A TENS unit was given to the patient and after a two week trial was proven to be effective for pain management.”

Since the only issue for trial was whether the supplies provided to the assignor were medically necessary, defendant bore the burden of proof on this issue (A.R. Medical Art. P.C. v. State Farm Mut. Auto Ins. Co., 11 Misc 3d 1057 [A][Civ. Ct., Kings Co. 2006]; CityWide Social Work & Psychological Servs. v. Travelers Indem. Co. 3 Misc 3d 608 [Civ. Ct., Kings Co., 2004]; Elm Medical P.C. v. American Home Assurance Co., 2003 NY Slip Op. 51357 [U], 2003 WL 22471156 [Civ. Ct., Kings Co., 2003]; Fifth Ave. Pain Control Ctr. v. Allstate Ins. Co., 196 Misc 2d 801 [Civ. Ct., Queens Co., 2003]).

A no-fault insurer defending a denial of first party benefits on the ground that the billed for services or equipment/supplies were not “medically necessary” must show that the services or supplies/equipment provided were inconsistent with generally accepted medical/professional practices. The opinion of the insurer’s expert, standing alone, is insufficient to carry the insurer’s burden of proving that the services or supplies/equipment were not “medically necessary”

[*3](CityWide Social Work & Psychological Servs. v. Travelers Indem. Co. , supra at 609; Ultimate Med. Supplies v. Lancer Ins. Co., 7 Misc 3d 1002 [A] [Civ. Ct., Kings. Co. 2004]).

In United Medical Supplies v. Lancer Ins. Co., supra, plaintiff had supplied its assignor with certain medical equipment (i.e. TENS Unit, LSO, etc) pursuant to a prescription. Defendant denied payment based upon a peer review. At trial, the peer review doctor, Dr. Moshkovski, testified that based upon her experience none of the prescribed durable medical equipment was necessary. She cited no authority other than her own experience. Judge Alice Fisher Rubin found it clear that Dr. Moshkovski admitted to never having prescribed any of the subject medical equipment with the sole exception of ice packs, on no basis other than her own opinion. Thus, the court held that such an opinion was biased against the prescribing doctor so as to make the peer review a nullity and not credible.

The instant case is at opposite with the facts of United Medical Supplies v. Lancer Ins. Co. supra. Here Dr. Csillag opinion as to whether the various medical supplies were necessary was based not only upon his experience but based upon medical authority cited in the peer review reports (Defendant’s Exhibit B, page 4). Dr. Csillag wrote in his report and testified that the type of lumbar support prescribed was no longer used to manage lumar sprains because it immobilized that portion of the body and the current trend in treatment was to allow mobility because mobilization fostered recovery. Dr. Csillag also testified that the massager, infrared heating lamp, EMS unit and associated EMS equipment was a duplication of services available and provided through the physical therapy, chiropractic care, acupuncture, message therapy and adjunctive therapy that the assignor was to have begun as of the April 13, 2004 report.

Considering the testimony of Dr. Csillag at trial coupled with the contents of the peer review reports of May 5, 2004 (Defendant’s Exhibit B1) and May 28, 2004 (Defendant’s Exhibit B2) the Court finds defendant has proven its defense that the supplies were not medically necessary. The burden now shifts to plaintiff to refute defendant’s evidence.

As previously indicated, plaintiff did not call a doctor but relied upon its cross examination of Dr. Csillag and the report of Dr. Barshay. It is undisputed that a chiropractor may prescribe the supplies which are the basis of this litigation (ABC Med. Mgt. v, GEICO Gen. Ins. Co., 3 Misc 3d 181 [Civ. Ct., Queens Co., 2003]) and such may be justified in light of the patient’s overall condition (Id); herein, however, there is no evidence in the record to refute defendant’s expert witness’ testimony (cf A.R. Med. v. State Farm, supra) and to explain why the medical supplies were necessary.

In A.R. Med. v. State Farm, supra plaintiff also did not call the treating doctor; however, in that case the treating doctor had issued a Letter of Medical Necessity, which was stipulated into evidence, in which he clearly set forth the reasoning and purpose for the conduction of the NCV/EMG test that were at issue.

The April 13, 2004 report from Dr. Barshay merely sets forth what the finding of the patient’s examination were, the diagnosis, a management(treatment) plan and a prognosis. This Court has no way of knowing why these supplies were prescribed. Viewing Dr. Barshay’s report (Plaintiff’s Exhibit No. 3), the only portion that may be read as giving any indication of why the supplies were prescribed appears in the Patient Management section where Dr. Barshay indicated, “The patient was also advised to wear an orthopedic lumbosacral support and cervical collar to minimize pain and prevent a re-injury.” In light of the reasoning set forth in the peer [*4]review and the testimony at trial, plaintiff evidence in rebuttal is insufficient to prove medical necessity for the supplies.

Accordingly, judgment for defendant, the summons and complaint are dismissed.

Defendant shall serve a copy of this decision/order with Notice of Entry upon the appropriate clerk and the plaintiff within 15 days after receipt.

This constitutes the decision and order of the Court.

DATED: May 16, 2006

Brooklyn, New York

DELORES J. THOMAS

Judge Civil Court