Civil Court of the City of New York, Kings County

56900/2005

Sylvia G. Ash, J.

Plaintiff brought this action seeking recovery of first party no-fault benefits for medical services rendered to its assignor in connection with injuries sustained as a result of an automobile accident. Plaintiff is a health care provider and defendant was the no-fault insurance carrier at the time the automobile accident occurred. The amount at issue is $2,859.46. A trial on the matter was conducted by this Court on November 16, 2006. Based on the testimony and evidence adduced at trial, this Court makes the following findings of fact and conclusions of law.

The parties stipulated to the Plaintiff’s prima facie case. The only issue presented to the Court is whether or not the Defendant established the defense of lack of medical necessity. The Plaintiff presented no witnesses.

To sustain its burden of proof, the Defendant called Dr. Antoinette Perrie, D.C., L.Ac. as its chief and only witness. The parties stipulated that Dr. Perrie may testify as an expert in the field of chiropractic medicine. Dr. Perrie’s peer review report was also stipulated into evidence.

It is well settled that a health care provider’s proof of a properly completed claim form is sufficient to establish a prima facie case for recovery, thereby shifting the burden to the Defendant to show that it issued a timely denial within thirty days and/or a request for verification within ten days of receiving the claim form, (A.B. Med. Servs. PLLC v. Lumbermens Mutual Casualty Co., 4 Misc 3d 86 [App Term, 2d and 11th Jud Dists 2004]; Amaze Med. Supply Inc. V. Eagle Insurance Co., 784 NYS2d 918; Insurance Law §5106; NYCRR §65.15). It is equally well settled that where the Defendant submits a timely denial indicating the lack of medical necessity as its basis, and where said denial is supported by sufficiently detailed peer review, the burden is then shifted to the Plaintiff to establish that there was in fact a medical necessity to provide the services rendered (Choicenet Chiropractic v. Travelers Prop. Cas. Corp. (2003 NY Slip Op 50697[U], Dec. Jan. 23, 2003; NYLJ March 7, 2003 [App.Term, 2d & 11th Jud Dists.). [*2]

In the instant case, the medical supplies at issue are:

– Cervical Philadelphia Collar.

– LSO Lumbar-Sacral-Orthosis.

– Lumbar Cushion.

– Bed Board.

– Egg Create Mattress.

– Thermophore.

– Ems Unit.

– EMS Accessory Kit.

– Massager.

– Infra-Red Heating Lamp.

Defendant’s medical expert, Dr. Perrie, testified that after a review of Plaintiff’s MRI reports, medical supplies prescriptions and bills, and Plaintiff’s medical records (see pages 2 and 3 of Dr. Perrie’s peer review report dated August 14, 2004), she determined that the medical supplies prescribed to Plaintiff were not medically necessary at the time they were prescribed. Dr. Perrie testified that in her 25 years of medical practice, she had never prescribed any of the aforementioned medical supplies to a patient with Plaintiff’s complaint. Dr. Perrie further testified that given the age of the Plaintiff at the time of the accident, 75 years old, she would not have prescribed the medical supplies at issue nor would she have sent the Plaintiff to a chiropractor, she would have sent him to an orthopedic specialist instead. Dr. Perrie also questioned the timing of the prescription of the medical supplies which were prescribed to Plaintiff 2 days after the accident. Dr. Perrie stated that she would have recommended bed rest and a course of treatment for Plaintiff instead of prescribing the medical supplies at issue.

On cross examination, Dr. Perrie testified that she examined Plaintiff on August 11, 2004 and had a diagnosis of Plaintiff however, she did not include her findings in her peer review report dated August 14, 2004, because she did not remember Plaintiff or whether she had examined him. Dr. Perrie stated that the purpose of her August 11, 2004 examination of Plaintiff was to determine whether he needed further treatment. Upon further questioning, Dr. Perrie testified that she did not know whether the medical supplies prescribed were necessary or effective because she never used said supplies in her practice. The Court questions how Dr. Perrie could determine that the medical supplies in questioned were not medically necessary or effective if she had never prescribed the usage of said supplies in her 25 years of practice. Clearly Dr. Perrie has no first hand knowledge of the usefulness or effectiveness of these supplies as they relate to the injuries complained of by Plaintiff. The Court also questions Dr. Perrie’s failure to include her diagnosis of her examination of Plaintiff in her peer review report, even though said report was prepared two days after she examined the Plaintiff. The fact that Dr. Perrie stated that she did not remember the Plaintiff or remember whether she had examined him is noteworthy. [*3]

At trial, the defense that a claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory. Therefore, at trial, if the Defendant, as in the case at bar, provides an insufficient factual basis or medical rational for its peer review report, the Court will afford the peer review report minimal weight, and the Defendant may fail to sustain its burden of proof as was the case herein. Jacob Nir, M.D. v. Allstate Insurance Company, 7 Misc 3d 544 [NY city Civ. Ct. 2005]; A.B. Medical Services., PLLC v. New York Central Mutual Fire Ins. Co., 7 Misc 3d 1018(A) [NY City Civ. Ct. 2005].

In the case at bar, there was no testimony establishing that the treating physician’s decision to order the medical supplies was a deviation from the established standards of medical practice and procedure as they relate to the injuries complained of. Although Dr. Perrie testified that she would not have prescribed the medical supplies at issue and that she would have ordered a different course of treatment for the Plaintiff, Dr. Perrie did not submit any factual evidence or proof that her proposed course of treatment was the established standard of medical practice and procedure as related to the injuries complained of by the Plaintiff. In fact, Dr. Perrie testified that in the 25 years of her practice she had never prescribe any of the medical supplies at issue and she could not state whether said medical supplies were necessary or effective because she had never prescribed them for usage to her patients. In Ultimate Med. Supplies v. Lancer Ins. Co., 7 Misc 3d 1002[A] [Civ.Ct., Kings. Co. 2004], Defendant’s medical Doctor testified that based on her experience, none of the medical equipment prescribed were necessary. The Court found it clear that the Doctor admitted to never having prescribed any of the subject medical equipment, thus the Court held that the Doctor’s opinion was biased against the prescribing Doctor so as to make the peer review a nullity and not credible.

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. Expo Medical Supplies, Inc. v. Clarendon Insurance Company, 12 Misc 3d 1154(A), 819 NYS2d 209, 2006 WL 1341418; City Wide Social Work & Psychological Servs. v. Travelers Indem. Co., 3 Misc 3d 608 [Civ.Ct., Kings Co., 2004]; Ultimate Med Supplies v. Lancer Ins. Co., Supra.

Based on the above facts, the Court finds that Defendant failed to meet its burden of establishing lack of medical necessity. Hence, the burden never shifted back to the Plaintiff to establish that the prescribed supplies were in conformity with established medical practices and procedures.

Accordingly, judgment shall be entered in favor of the Plaintiff in the amount of

$2,859.46, plus statutory interest, costs, and attorneys fees.

This constitutes the decision and order of this Court.

[*4]DATED: January 3, 2007

___________________________________

SYLVIA G. ASH, J.C.C.

Civil Court of the City of New York, Kings County

KCV97338/04

Sylvia G. Ash, J.

Plaintiff brought this action seeking recovery of first party no-fault benefits for medical services rendered to its assignor in connection with injuries sustained as a result of an automobile accident. Plaintiff is a health care provider and Defendant was the no-fault insurance carrier at the time the accident occurred. The amount at issue is $810.32. A trial on the matter was conducted by this Court on September 13, 2006. Based on the evidence and testimony adduced at trial, this Court makes the following findings of fact and conclusions of law.

To establish its prima facie case, Plaintiff submitted a Notice to Admit duly served on the Defendant and an Order issued by Judge Eileen N. Nadelson dated December 8, 2005 granting Plaintiff’s motion for summary judgment and dismissing Defendant’s cross-motion to dismiss. The Defendant moved for a Directed Verdict. The Court reserved decision. With regard to Judge Nadelson’s December 8, 2005 Order, the Court notes that this Order is with regard to a different Plaintiff and a different Index Number separate from the case at bar. Therefore, said Order has no bearing on this case.

With regard to Plaintiff’s Notice to Admit, the Court notes that the purpose of a Notice to Admit is to eliminate from the issues in litigation matters which will not be in dispute at trial. Desilva v. Rosenberg, 236 AD2d 508, 645 NYS2d 30 (2d Dept. 1997); Miller v. Hillman Kelly Co. 578 NYS2d 319 {177 AD2d 1036} (4th Dept. 1991). Defendant’s denial of Plaintiff’s claim is based on Plaintiff’s failure to appear for a scheduled EUO pursuant to a subpoena and lack of coverage based on fraud in that the accident was staged. In an action for first-party no-fault benefits, the Plaintiff establishes its prima facie burden by proof that it submitted a claim setting forth the facts, the amount of the loss sustained, and that payment of no-fault benefits is overdue. 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]; Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). The Court finds that Plaintiff established its prima [*2]facie case with the submission of its Notice to Admit.

Generally, an insured seeking to recover for a loss under an insurance policy has the burden of proving that a loss occurred and that the loss was a covered event within the terms of the policy. A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Company, 7 Misc 3d 822, 795 NYS2d 843 [Civ. Ct. Kings County 2005]. Whatever the risk or loss covered, it has long been the insured’s burden to prove coverage under the policy. A.B. Medical Services, id. At 825.

The Plaintiff’s prima facie showing establishes a presumption of coverage. A.B. Medical Services, PLLC, id at 825. Once the Plaintiff makes a prima facie showing, the burden of explanation or of “going forward with the case” falls upon the defendant. Mount Sinai Hosp. v. Triboro Coach Inc., 263 AD2d 11, 699 NYS2d 77 [2d Dept., 1999]. This burden, in effect, allows the Defendant to disprove the presumption of coverage, thus demonstrating its denial of Plaintiff’s complaints. Palmier v. United States Fidelity and Guaranty Company, 135 AD2d 1057 (3rd Dept. 1987). No-fault insurance policies cover only vehicular accidents. A deliberate collision is not a covered accident. State Farm Mutual Automobile Ins. Co. v. Laguerre, 3035 AD2d 490, 759 NYS2d 531 [2nd Dept. 2003]; Allstate Insurance Co. v.Massre, 14 AD3rd 610, 789 NYS2d 206 [2nd Dept. 2005]. When a collision is an intentional act, not an accident, there is no coverage “regardless of whether the intentional collision was motivated by fraud or malice.” Government Employees Ins. Co. v. Shaulskaya, 302 AD2nd 522, 756 NYS2d 79 [2nd Dept. 2003].

The standard of proof to be applied in the staged accident arena is preponderance of the evidence. Universal Open MRI of the Bronx, P.C.v. State Farm Mut. Auto Ins., 12 Misc 3d 1151(A) (N.Y.Civ. Ct. Kings County 2006); V.S. Medical Services, P.C., v. Allstate Insurance Company, 11 Misc 3d 334, (NY Civ. Kings County 2006); A.B. Medical Services, PLLC, supra .

If an insurer has a “founded belief” that the alleged accident was not a true accident, it can deny the claim based on 11 NYCR 65-3.8(e)(2). The insurer has the burden to come forward with proof in admissible form to establish the fact or the evidentiary foundation for its belief that there is no coverage. A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Co., 7 Misc. 3rd 11, 699 NYS2d 55 (2nd Dept.). If this threshold is reached, the burden shifts to the Plaintiff to rebut the Defendant’s case. When all the evidence has been submitted, the finder of fact must determine whether the evidence preponderates in favor of the Plaintiff or the Defendant. V.S. Medical Services, P.C., supra .

At trial Plaintiff did not present any witnesses. Defendant called as its principal and only witness Don Willsey. Mr. Willsey stated he has been a State Farm employee for 12 years and for the last 7 years he has been assigned to the Special Investigation Unit where he investigates no-fault claims that are deemed to be suspicious. Mr. Willsey gave testimony about a list of “suspicious indicators” used by State Farm to determine whether there is a basis to deny a claim which includes but is not limited to:

– Recent purchase of the insurance policy. [*3]

– Vehicle insured is an older model.

– P.O. Box is used for the insured address.

– Failure to cooperate with scheduled E.U.O

– Vehicle and/or claimants have been involved in multiple

accidents in a short period of time.

In addition to the above “suspicious indicators” Mr. Willsey stated that State Farm also relies on information obtained from the National Insurance Crime Bureau and an in-house State Farm Link Chart.. Mr Willsey stated that the following suspicious indicators were present in the case at bar:

– Driver of the insured vehicle was involved in 2

accident over a short period of time.

– Driver of insured vehicle was involved in an

accident on 11/19/05 one month before the alleged

accident in question.

– Passenger in 11/19/05 accident had 3 prior accidents

– Both vehicles involved in the alleged accident

were older model vehicles.

– An insurance claim was previously submitted to

another insurance carrier.

– Driver of insured vehicle did not appear for

scheduled E.U.O.

– Insured appeared for scheduled E.U. but was

not cooperative.

Based on the above, Mr. Willsey stated that it was his opinion that the accident was staged. However, on cross-examination, Mr. Willsey testified that he did not personally investigate the claim, he was not involved in the investigation of the claim, he was not present at the scheduled E.U.O., he did not visit the scene of the accident and he was not involved in the decision to deny the claim.

The Court determines that Defendant failed to come forward with proof in “admissible form” to establish the “fact” or the evidentiary “foundation” to buttress its belief that the injuries alleged by the assignor did not arise from an insured accident. The Defendant failed to proffer admissible evidence to rebut the presumption of coverage that attaches to the Plaintiff’s properly completed claim form. Mr. Willsey has no first hand knowledge of the events concerning the facts and investigation of the claim, and most importantly, he was not privy to the discussions and reasoning which resulted in the denial of the claim. The above “suspicious indicators” used by Defendant as a basis for denial of Plaintiff’s claim, taken together or alone does not sustain defendant’s burden by a preponderance of the evidence. At best, such “suspicious indicators” are speculative and not determinative.

Based upon the foregoing, this Court concludes that the Defendant has failed to come forward with evidence of a staged accident or that the loss giving rise to this action was [*4]intentional, and thus the burden of persuasion was never shifted to Plaintiff. Accordingly, judgment is to be entered in favor of Plaintiff in the amount of $810.32 plus statutory interest and attorney’s fees. This constitutes the Decision and Order of this Court.

DATED: December 22, 2006_________________________________

SYLVIA G. ASH, J.C.C.

Civil Court of the City of New York, Kings County

89030 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 $879.73 for medical services provided to its assignor.

Plaintiff proceeded to offer evidence via the presentation of documents and testimony of Octavio Rodriguez, a billing manager for Advanced Heathcare Solutions, L.L.C., formerly known as Medtrx, 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]).

Mr. Rodriguez testified that it was his duty to generate bills (NF-3) from information sent over a secure internet website from Andrew Carothers, M.D. P.C. Additionally his duties included preparing the envelope with the appropriate label and postage, placing the required documents necessary to process a claim into the envelope, sealing the envelope and bringing it to the post office, where he would receive a proof of mailing which was then scanned into the computer system upon his return to the billing office from the post office.

Plaintiff offered the claim form (NF-3), the signed Assignment of Benefits form (NF-AOB), proof of mailing, together with a copy of the treating doctor’s referral and the MRI narrative into evidence.

Plaintiff further strengthened its prima facie case by having Defendant’s denial form (NF-10) admitted into evidence for the limited purpose of showing that the claim was received timely by the Defendant.(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 made a motion for a directed verdict as, in his opinion, 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.

This motion was denied. The court finds that Plaintiff did in fact lay the proper [*2]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 claim.

However, the Court finds that before the issue of medical necessity is reached, the Defendant must overcome the fatal defects contained in the NF-10. Namely, the NF-10 was untimely on its face, as it denied the claim on May 2, 2005 after receiving the bill on March 14, 2005. Additionally, the NF-10 is factually insufficient, conclusory and vague in explaining the reason for denial of benefits. (See Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 779 NYS2d 715) The claim was denied for failure to establish medical necessity and the denial failed to set forth with sufficient particularity the factual basis and medical rationale for its denial based on lack of medical necessity. (See A.B. Med. Servs. P.L.L.C. v. GEICO Cas. Ins. Co., 2006 NY Slip Op 26133)

To overcome these defects, Defendant called Ms. Michelle Cusano, a Litigation Team Leader for the Defendant, Progressive Insurance Company. She testified that her duties were to review claim files in preparation for litigation. It was her testimony that the NF-10 was timely since a verification request was sent thereby tolling the deadline for the denial. It was her contention that the verification was answered on April 12, 2005 and therefore the NF-10, sent on May 2, 2005, was timely.

She further testified that the NF-10 was not factually insufficient, conclusory or vague in explaining the reason for the denial since it was accompanied by a peer review report which set forth the reason for denial with sufficient particularity and medical rationale. It was her testimony that since she saw the NF-10 and the peer review report in the file and under the general office procedure of mailing, it would have been placed in the claims file contemporaneously with their mailing. Therefore, she deduced that it was mailed together.

Ms. Cusano testified that although she was not the person who was responsible to mail the verification request and it was not even her duty to ensure that the request was sent, she knew that it was sent because she had previously worked in the processing department in the late 1990’s and at that time it was her responsibility to generate the verification requests. She described the procedure she would take in detail; attempting to establish the mailing of the [*3]verification request.

On cross examination, Ms. Cusano stated that the person in the processing department would print three copies of a verification request. One copy was sent to the mail room to be mailed to the person whom they needed verification from; the second copy was placed in a 30-day box, which would be used to monitor whether or not an answer to the request was received; and the third copy was placed in the claim file. It was that third copy, coupled with the fact that the verification request was answered, which led Ms. Cusano to the conclusion that the verification request was properly mailed.

When asked of whom the verification was requested, Ms. Cusano told the court that it was Dr. Kleyman. Plaintiff maintained that if three copies are printed; one copy to Dr. Kleyman, the second copy placed in the 30-day box, and the third copy in the claims file, then the Plaintiff, Andrew Carothers M.D. P.C. was not mailed a verification request. Only then did Ms. Cusano state that sometimes a forth copy is printed.

Plaintiff then asked Ms. Cusano if at the time of her employment in the processing department and now relating to the general office practice, whether she would fill in all the relevent boxes on the NF-10; she answered, “yes.” When asked if a verification request was sent and received, would those boxes be filled in on the NF-10; again she answered, “yes.” When shown that boxes No.28 (Date final verification requested) & #

29 (Date final verification received) on the NF-10 were blank she responded that the boxes were obviously left blank in error.

Within thirty days of receiving a claim, the insurer shall either pay or deny the claim in whole or in part (see 11 NYCRR 65.15 [g] [3]). This 30-day period may be extended by a timely demand by the insurance company for further verification of a claim (see 11 NYCRR 65.15 [d] [1]). Since the Court finds that the mailing of the verification request had not been proven, the 30-day period was not extended and therefore the denial was untimely on its face. Thus, Plaintiff demonstrated a prima facie showing of entitlement to judgment as a matter of law with evidence that their claims were neither denied nor paid within the requisite time period. (see Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3])

Moreover, even if Defendant timely issued the denial within 30 days of its receipt of the claim a proper denial of claim must include 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) The denial of claim form issued by Defendant in this action, even if timely, was fatally defective in that it omitted items of requested information, and thus was incomplete (see 11 NYCRR 65-3.4[c][11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664; Nyack Hosp. v Metro. Prop. & Cas. Ins. Co., 16 AD3d 564).

Additionally, Ms. Cusano’s testimony relating to the general office procedure regarding mailing was vague and conclusory, lacking knowledge of the procedure designed to ensure that items are properly addressed and mailed. (See Hospital for Joint Diseases v. Nationwide Mutual Ins. Co., 284 AD2d 374; Residential Holding Corp. v. Scottsdale Ins. Co., 286A.D. 2d 679) The [*4]portion of her testimony relating to the mailing of the NF-10 strengthened Plaintiff’s prima facie case, that the bills were actually mailed, but did nothing to establish her knowledge of the actual mailing procedures. She admitted that it was not part of her duty to oversee the mailing procedures or to ensure that a peer review report was sent together with the NF-10. Furthermore, she stated that at the time that she worked in the processing department, it was not the general office procedure to mail the peer review reports together with the NF-10s.

Moreover, Defendant’s witness Ms. Cusano could not establish that the peer review report was actually sent to Plaintiff and the NF-10 did not state that a peer review report was attached, rather it merely stated that “Based on the results of an independent peer review, medical justification and/or necessity cannot be established for the services billed. Therefore, your request for reimbursement is denied.”

Although Ms. Cusano described the general office procedure in mailing the verification request and the peer review report, she based her knowledge of the actual mailing of those documents solely on the fact that they were contained in the claim file that she reviewed for litigation purposes. This was not sufficient to constitute proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (see Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 [2001]). Nor did her testimony state that it was her duty to ensure compliance with said office procedures or that she had actual knowledge that said office procedures were complied with (see Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137A, 800 NYS2d 344, 2005 NY Slip Op 50254U [App Term, 2d & 11th Jud Dists]). Inasmuch as Defendant herein failed to establish by competent proof that the verification request was mailed and that the peer review report was mailed together with the NF-10, they did not make the requisite showing to establish that a proper denial was sent. (See Gribenko v. Allstate Ins. Co., 2005 NY Slip Op 52201U; Accessible and Advance Medical P.C. v. Allstate Ins. Co., 2006 NY Slip Op 51599U)

It is apparent to the Court that there are numerous conflicting decisions relating to proper testimony regarding the standard general office procedure of mailing. It is this Courts opinion that for the sake of judicial economy and for the sake of dispensing with the constant mailing issues arising in these cases, the Insurance Companies should produce the proper witnesses from the mailing room, who could testify that it is their duty to ensure that items are properly addressed and mailed or it is their duty to ensure compliance with said general office procedures or that they have actual knowledge that the mailing procedure, as part of the standard general office procedure, is followed.

Although the Court allowed Defendant to call Dr. Hadhoud, the author of the peer review report upon which the denial was based, to testify regarding the necessity of the services rendered, the issue of medical necessity need not have been reached.

The Court finds that, as a matter of law, even if Defendant’s doctor would persuasively testify that the medical service provided lacked medical necessity, this testimony would not cure the legal insufficiency of the proffered untimely denial.

Therefore, judgment should be entered for the plaintiff in the amount of $879.73, plus [*5]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:December 21, 2006

____________________________

Lila P. Gold, J.C.C.

[*1]

Civil Court of the City of New York, Queens County, December 13, 2006

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola (Joaquin J. Lopez of counsel), for plaintiff. Melli, Guerin & Melli, P.C., New York City (Kevin Addor of counsel), for defendant.

OPINION OF THE COURT

Bernice D. Siegal, J.

Plaintiff, a health care provider, commenced the within action to recover reimbursement from defendant insurer for services rendered to plaintiff’s assignors including Victoria Orlando,^[FN1] pursuant to New York State’s No-Fault Insurance Law. At trial, the parties stipulated to the following facts:

Plaintiff had mailed and defendant had received eight separate bills, together with an assignment of benefits, as per the following: a claim in the amount of $235.90 for services from February 17, 2004 to March 11, 2004, mailed on March 30, 2004; a claim in the amount of $67.40 for services from April 7, 2004 to April 15, 2004, mailed on May 10, 2004; a claim in the amount of $33.70 for services on April 20, 2004, mailed on June 1, 2004; a claim in the amount of $101.10 for services from May 4, 2004 to May 26, 2004, mailed on June 17, 2004; a claim in the amount of $122.13 for services from November 24, 2003 to November 26, 2003, mailed on December 24, 2003; a claim in the amount of $202.20 for services from December 3, 2003 to December 18, 2003, mailed on January 13, 2004; a claim in the amount of $235.90 for services from December 22, 2003 to January 14, 2004, mailed on February 12, 2004; and a claim for $202.20 for services from January 20, 2004 to February 5, 2004, mailed on March 10, 2004—the total sum of the above eight claims being $1,200.53.

It was further stipulated that the defendant had failed to deny any of the claims and that the claims remain unpaid. After the stipulation was duly noted for the record, both sides rested. However, despite the acquiescence by defendant as to the principal amounts due and owing, two issues of law were presented, along with a third asserted by defendant in its posttrial memorandum of law: (1) what are the statutory attorney’s fees due plaintiff; (2) what is the statutory interest due plaintiff; and (3) when does the statutory interest accrue.

The relevant provisions governing interest, under the relevant no-fault regulations, are 11 NYCRR 65-3.8 (a) (1) and 65-3.9 (a) and (c).

11 NYCRR 65-3.8 (a), as is pertinent hereto, provides that “(1) No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim . . .  .”

Section 65-3.9 (a) provides as follows:

“All overdue mandatory and additional personal injury protection benefits due an . . . assignee shall bear interest at a rate of two percent per month, calculated on a pro rata basis using a 30-day month. When payment is made on an overdue claim, any interest calculated to be due in an amount exceeding $5 shall be paid to the . . . applicant’s assignee without demand therefor.”

Section 65-3.9 (c) provides, as is relevant hereto, that “[i]f an applicant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form . . . , interest shall not accumulate on the disputed claim . . . until such action is taken.”

The relevant provisions governing attorney’s fees, under the relevant regulations, are the following.

11 NYCRR 65-3.10, which provides, in pertinent part, as follows:

“(a) A applicant or an assignee shall be entitled to recover their attorney’s fees, for services necessarily performed in connection with securing payment, if a valid claim or portion thereof was denied or overdue. . . . If such a claim was overdue but not denied, the attorney’s fee shall be equal to 20 percent of the amount of the first-party benefits and any additional first-party benefits plus interest payable pursuant to section 65-3.9 of this subpart, subject to a maximum fee of $60.”

However, pursuant to Insurance Law § 5106 (a), such attorney’s fees are “subject to limitations promulgated by the superintendent [of the New York State Department of Insurance].” The regulation setting forth those limitations is 11 NYCRR 65-4.6 which, as is relevant to the matter at bar, provides that:

“(c) Except as provided in subdivisions (a) and (b) of this section [those sections dealing with claims that were neither denied nor overdue or which were resolved prior to arbitration], the minimum attorney’s fee payable pursuant to this subpart shall be $60 . . .

“(e) . . . the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the . . . court, subject to a maximum fee of $850.”

The dispute between the parties is not so much as to the applicability of the foregoing provisions, but rather the manner in which they are to be applied: the plaintiff provider contending that the statutory interest and attorney’s fees awarded should be based upon each individual claim as submitted through an NF-3 proof of claim; the defendant insurer arguing that the measure of the statutory interest and attorney’s fees be determined by the aggregate of bills which are the subject of the within no-fault action and that interest should be calculated from the date of the commencement of the arbitration or lawsuit. [*2]

Proceeding backwards from the third issue presented—when does the interest accrue—the court acknowledges case law wrestling with the interpretation of 11 NYCRR 65.15 (h) (3) (the predecessor to section 65-3.9 [c]), such as the meaning of “applicant” vis-à-vis an “assignee” provider and whether a distinction should be made between timely denials and late denials (see Tsai Chao v Country-Wide Ins. Co., 11 Misc 3d 1090[A], 2006 NY Slip Op 50794[U] [Nassau Dist Ct 2006]; East Acupuncture, P.C. v Allstate Ins. Co., 8 Misc 3d 849 [Civ Ct, Kings County 2005]). However, the patently clear and unambiguous language in section 65-3.9 (c) referring to “the receipt of a denial of claim form” as a key element in determining the date of accrual thereunder shows the defendant’s argument to be wholly disingenuous, especially in view of the fact that defendant had stipulated at trial that there were no denials. Clearly, then, the defendant’s contention on this issue is totally without merit and whatever interest accruing in this case is to be calculated, pursuant to 11 NYCRR 65-3.8, from 30 days after receipt of the particular claim.

With respect to the other issues presented, the court notes that the language of the aforementioned provisions refer to “claim” in the singular. However, the question remains whether a “claim” refers to each bill submitted or, as argued by the defendant, to the aggregate of the bills for which a provider seeks reimbursement through a single court action.^[FN2]

With respect to interest, the clear implication found in appellate case law in the Second Department is that statutory no-fault interest is payable as per each claim as per each particular NF-3 submitted for payment (see New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2d Dept 2006]; Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 [2d Dept 1994]). Furthermore, this court finds such interpretation to be the most logical and reasonable, especially where, as here, the plaintiff’s complaint seeks to recover upon several different claims, each of which has a different date upon which interest begins to accrue (i.e., 30 days from receipt of the particular NF-3).

The case law, however, regarding the manner in which the attorney’s fees provisions are to be applied appears less clearly settled. The Appellate Division in Smithtown Gen. Hosp. v State Farm (supra), in reversing a decision regarding attorney’s fees, held that the lower court “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” (207 AD2d at 339). Following the Smithtown case insofar as awarding attorney’s fees for each claim set forth in separate causes of action, as opposed to the entire action, are the decisions in Willis Acupuncture, P.C. v Government Empls. Ins. Co. (6 Misc 3d 1002[A], 2004 NY Slip Op 51702[U] [Civ Ct, Kings County 2004]) and A.M. Med. Servs. P.C. v New York Cent. Mut. Fire Ins. Co. (NYLJ, July 24, 2006, at 25, col 1 [Civ Ct, Queens County]).

On the other hand, the court notes a recent decision holding contra to Smithtown—Marigliano v New York Cent. Mut. Fire Ins. Co. (13 Misc 3d 1079 [Civ Ct, Richmond County 2006]), citing an October 8, 2003 opinion letter issued by the New York State Department of Insurance (which opinion letter was also cited by the defendant in its memorandum). The court found such opinion not inconsistent with the Smithtown decision which dealt with multiple claims of several assignors, rather than of one assignor, as is the case herein and in Marigliano. The opinion letter states that

“[the] total amount [of attorney’s fees] is derived from the total amount of individual bills disputed in . . . a court action . . . , 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. 03-10-04 [2003]).

Courts have recognized opinions of governmental agencies responsible for the administration of a statute, such as opinion letters from the New York State Department of Insurance, to be entitled to great deference

“[w]here the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom . . . [unless] the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent [in which case] there is little basis to rely on any special competence or expertise of the administrative agency and its interpretative regulations are therefore to be accorded much less weight.” (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980]; see also Matter of KSLM-Columbus Apts., Inc. v New York State Div. of Hous. & Community Renewal, 5 NY3d 303 [2005]; Matter of New York Life Ins. Co. v State Tax Commn., 80 AD2d 675 [3d Dept 1981].)

The same principle has similarly been applied to an agency’s interpretation of its own regulations (see Matter of Howard v Wyman, 28 NY2d 434 [1971]; Matter of Visiting Nurse Serv. of N.Y. Home Care v New York State Dept. of Health, 5 NY3d 499 [2005]; Matter of 427 W. 51st St. Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d 337 [2004]; Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co., 9 Misc 3d 73 [App Term, 2d & 11th Jud Dists 2005]). However, “[A]lthough the interpretation of regulations made by the agency responsible for their administration is generally to be accorded deference, an agency is not thereby freed of the obligation to read those regulations reasonably and rationally” (Matter of Mutual Redevelopment Houses v New York City Water Bd., 279 AD2d 300, 301 [1st Dept 2001]; see also Howard v Wyman, supra; Kurcsics v Merchants Mut., supra; KSLM-Columbus Apts. v New York State Div. of Hous. & Community Renewal, supra; 427 W. 51st St. Owners Corp., supra).

Notwithstanding the Marigliano court’s well-written decision in support of the October 8, 2003 opinion letter, this court respectfully disagrees and finds the opinion letter unpersuasive for several reasons.

Firstly, the court finds that, upon reading the opinion letter in question, there is nothing contained therein indicative of the Insurance Department’s involvement in issuing such opinion of “knowledge and understanding of underlying operational practices or [entailing] an evaluation of factual data and inferences to be drawn therefrom . . . [or reliance] on any special competence or expertise” rather than being a matter of “pure statutory reading and analysis, [which in the latter instance is] to be accorded much less weight” (Kurcsics, supra at 459).

Secondly, whether or not involving a matter reliant upon the agency’s expertise, the court finds the interpretation offered by the defendant herein, as well as by the Superintendent in the opinion letter and by the court in Marigliano, to be unreasonable. In the letter in question, the [*3]term “total,” a word not found in section 65-4.6 (e), is inserted as a qualifier of the term “first-party benefits” without any clear and apparent explanation for doing so, aside from creating a basis for the Department’s interpretation. Perhaps the most compelling argument against the supposed “reasonableness” of such interpretation, making the awarding of statutory attorney’s fees applicable to the aggregate of claims in a no-fault action, whether or not pertaining to only one or more than one assignor, is that it runs counter to a bedrock principle of the No-Fault Law itself, i.e., Insurance Law article 51, the Comprehensive Motor Vehicle Insurance Reparations Act, specifically, in Insurance Law § 5106 (a): “Payments of first party benefits and additional first party benefits shall be made as the loss is incurred” (emphasis added). As the Court of Appeals has expressed it, “the goals of the speedy payment objective of the No-Fault Law . . . a driving force behind . . . the no-fault . . . insurance laws, focus on avoiding prejudice to insureds by providing for prompt payment or disclaimers of claims.” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 284 [1997]; see also Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854 [2003]; Dermatossian v New York City Tr. Auth., 67 NY2d 219 [1986].)

The interpretation sought by the Superintendent also would force a provider to wait until all treatment is concluded before billing an insurance company—an interpretation plainly running afoul of other insurance regulations. As was also said by the court in A.M. Med. Servs. (supra at 25, col 1),

“such standard [proffered by the defendant herein and the Department of Insurance] not only flies in the face of the regulatory policy of promoting prompt payment of claims, but also provides carriers with a disincentive to settlement, and encourages the undesirable effect of increasing the existing tsunami that is pending no-fault litigation in this county.”

Moreover, there is the unambiguous, explicit language of the Appellate Division in the Smithtown decision. (See Visiting Nurse Serv. of N.Y., supra at 506; Oberly v Bangs Ambulance, 96 NY2d 295 [2001].) This court cannot ignore the plain fact that the statutory “proof of claim” form refers to an NF-3 (or functional equivalent) which, while often enumerating a number of medical services provided over more than one date, relates to a single bill, there also often being more than one NF-3 upon which a no-fault complaint seeks recovery. The court also finds significant the fact that, despite years of opportunity to advocate the amending of the no-fault regulations set forth above to either clarify or redefine the term “claim” as it relates to the application of interest and attorney’s fees, the Insurance Department has failed to do so, while a number of no-fault provisions have been amended (e.g., 11 NYCRR 65-3.10^[FN3] and 65-4.6^[FN4]— the very subject of the opinion letter—have, together, been amended several times since 2001). [*4]

Therefore, this court, following Smithtown and its progeny, finds that the statutory attorney’s fees shall be awarded as per each NF-3 herein, rather than upon the total principal awarded by the court.

Accordingly, judgment is awarded to plaintiff provider in the principal aggregate amount of $1,200.53, with interest accruing on each of the eight claims at the rate of 2% per month in accordance with section 65-3.9 (a), each said amount of interest accruing 30 days from the date of submission of each such claim.

Plaintiff shall further be awarded attorney’s fees as to each NF-3 herein pertaining to assignor Victoria Orlando, equal to 20% of the amount set forth in each such NF-3 plus interest, provided that each such fee is not less than the statutory minimum of $60 nor in excess of the statutory maximum of $850.

Footnotes

Footnote 1: Prior to trial, the claims with respect to all assignors other than Victoria Orlando had been settled between the parties.

Footnote 2: It is worth noting that the defendant argues in favor of aggregating the claims without any justification except it would have to pay more for interest and attorney’s fees, but the court notes that the bills themselves represent, with the exception of one NF-3, bills for services rendered over a period of a month and, nothing to the contrary in defendant’s memorandum, appear to be a reasonable and rational billing practice.

Footnote 3: Section filed Aug. 2, 2001; amendment filed Jan. 17, 2003, eff Feb. 5, 2003 (amended [a]).

Footnote 4: Section filed Aug. 2, 2001; amendments filed Apr. 11, 2002 as emergency measure; July 9, 2002 as emergency measure; Oct. 4, 2002 as emergency measure; Nov. 27, 2002 as emergency measure; Jan. 17, 2003 as emergency measure; Jan. 17, 2003, eff. Feb. 5, 2003 (amended [b], [e]).

Civil Court of the City of New York, Kings County

24656/05

Arlene P. Bluth, J.

Upon the foregoing cited papers and after argument, plaintiff moves for summary judgment pursuant to CPLR § 3212. For the following reasons, plaintiff’s motion is granted.

In this action, plaintiff Capri Medical, P.C. seeks to recover first-party No-Fault benefits in the amount of $4,204.33 and statutory interest, costs, and attorneys’ fees for medical services it allegedly rendered to its assignor, Nail Abusov. In its moving papers, plaintiff submits following five bills which are the subject are this lawsuit: $1,593.37 (for date of service 4/9/03); $1,566.40 (for date of service 3/26/03); $302.17 (for date of service 3/19/03); $302.17 (for date of service 4/2/03); and $440.22 (for date of service 4/24/03). Plaintiff also submits the affidavit of its billing manager, Yelena Medvedik, who asserts that she personally mailed out the subject bills to defendant and [*2]that defendant issued “unreasonable and untimely denials” in response thereto.

The Court finds that plaintiff has established a prima facie entitlement to summary judgment as a matter of law by submitting proof in admissible form that the prescribed statutory claim forms, setting forth the facts and amounts of the losses sustained, were submitted to defendant, and that payment of no-fault benefits is overdue. See NYCRR § 65-3.8(c); D.A.V. Chiropractic, P.C. v Amer. Transit Ins. Co., 7 Misc 3d 133(A) [App Term, 2d and 11th Jud Dists 2005]; Triboro Chiropractic and Acupuncture P.L.L.C. ex rel. Tacopino v. Electric Ins. Co., 2 Misc 3d 135(A) [App Term, 2d & 11th Jud Dists 2004]. The burden now shifts to defendant to raise a triable issue of fact.

In opposition to this motion, defendant Auto One Insurance Company contends that it timely denied plaintiff’s claims on the ground of lack of medical necessity. However, defendant’s opposition fails to establish by competent evidence that it timely mailed the denials in question. “Proof of proper mailing requires evidence of actual mailing or. . .a standard office practice or procedure designed to ensure that items are properly addressed and mailed.'” See Comprehensive Mental v. Lumbermans Mut. Ins. Co., 4 Misc 3d 133(A) [App Term, 9th & 10th Jud Dists 2004]. The affidavit of Travis Miller is deficient in several respects. First, Mr. Miller states that he is “currently employed as Line Unit Supervisor,” but he does not explain what that means or what his job entails. Second, while he states that he has worked for defendant since August 2002, he does not state in what capacity he was employed prior to becoming Line Unit Supervisor.

As for his attempt to establish that defendant timely mailed the denials of the subject claims, he does not state that he personally mailed the denials, nor does he make clear how he knows that the denials in this case were timely mailed. Mr. Miller also does not establish that it is his duty to ensure compliance with defendant’s mailing procedures. See Boai Zhong Yi Acupuncture Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 12 Misc 3d 135(A), 820 NYS2d 841 [App Term, 2d &11th Jud Dists 2006]; Contemp. Med. Diag. & Treatment, P.C. v. GEICO, 6 Misc 3d 137(A), 800 NYS2d 344 [App Term, 2nd & 11th Jud Dists 2005]. He “merely state[s] that the claims were timely denied without asserting personal knowledge of the mailing or setting forth sufficient facts to create a presumption of mailing.”Prestige Med. & Surg. Supply, Inc. v Clarendon Natl. Ins. Co., 13 Misc 3d 127(A) [App Term, 2d &11th Jud Dists 2006]. Fair Price Med. Supply Corp. v Liberty Mut. Ins. Co., 12 Misc 3d 145(A) [App Term, 2d &11th Jud Dists 2006]. The Court further notes that Mr. Miller’s affidavit fails to make any reference to the $302.17 bill for date of service March 19, 2003.

Defendant also submits the affidavit of its Mailroom Supervisor, Jay Santiago, who describes defendant’s procedures for mail collection first by mailroom personnel from bins throughout the office, and then by the United States Postal Service. However, in the absence of competent proof that defendant timely generated denials of the subject bills and deposited them for pickup, Mr. Santiago’s affidavit is unavailing. Therefore, defendant has failed to meet its burden, and plaintiff is entitled to summary judgment.

Accordingly, plaintiff’s motion is granted, and plaintiff is awarded judgment in the amount of $4,204.33 plus statutory interest, costs, and attorneys’ fees.

This is the Decision and Order of the Court.

Dated:

ARLENE P. BLUTH

Judge, Civil Court

ASN by______ on _______

Civil Court of the City of New York, Queens County

000013/2005

Thomas D. Raffaele, J.

After a bench trial, which was held before this Court on November 20, 2006, the Court finds as follows:

In this action, plaintiff provider-assignee seeks recovery of first-party no-fault benefits for medical services provided to assignor Krzysztof Wielgosz. The parties stipulated to the fact that the plaintiff had established its prima facie case, and that the insurer had timely denied the bills in question, with the only issue remaining for trial being the insurer’s defense of lack of medical necessity. The insurer, rather than presenting the live testimony of its peer-review expert, neurologist Daniel J. Feuer, M.D., submitted for the Court’s consideration the transcript of his deposition for admission pursuant to CPLR §3117(a)(4). Said deposition was noticed approximately three months following the filing of a notice of trial in this matter. Defense counsel conceded that he did not move to strike the notice of trial prior to noticing the deposition. Plaintiff’s providing physician, Dr. Deepika Bajaj, provided live rebuttal testimony at the trial.

IDefendant was not authorized to take the deposition of its expert after the notice of trialwas filed.

Initially, the Court finds that defendant Progressive, absent a court order issued following a motion demonstrating “unusual or unanticipated conditions,” was not entitled to notice or to conduct a pretrial examination of their expert peer-review witness. The Uniform Civil Rules for the New York City Civil Court (22 NYCRR §208.17) provide that: [*2]

(c) Within 20 days after service of such notice of trial, any party may move to strike the action from the calendar or to keep it from being placed thereon. The affidavit in support of the application must specify the reason the action is not entitled to be on the calendar.

(d) After any action has been placed on the trial calendar pursuant to this rule, no pretrial examination or other preliminary proceedings may be had, except that if some unusual or unanticipated conditions subsequently develop which make it necessary that further pretrial examination or further preliminary proceedings be had, and if without them the moving party would be unduly prejudiced, the court may make an order granting permission to conduct such examination or proceedings and prescribing the time therefor. Such an order may be made only upon motion on notice showing in detail, by affidavit, the facts claimed to entitle the moving party to relief under this subdivision.

Defendant conceded on the record that no such application was ever made. Where a moving party demonstrates that “unusual or unanticipated conditions” have developed after the filing of a notice of trial which make it necessary that further pretrial examinations or proceedings be conducted in order to prevent undue prejudice to the movant, the trial court may, in its discretion, grant permission to conduct such additional discovery (see 22 NYCRR 208.17 [d]; see generally 22 NYCRR 202.21). Appellate courts have held that “unusual or unanticipated conditions” contemplates a condition which is “not in the control of the party seeking further discovery and . . . [causes] actual rather than potential prejudice” to third-party defendant (Audiovox Corp. v Benyamini, 265 AD2d 135, 140 [2d Dept. 2000]), such as where a plaintiff suddenly is required to undergo surgery after the notice of trial is filed, (see e.g. David v Guardian Life Ins. Co. of Am., 2005 NY Slip Op 25332, 2 [App. Term, Second Dept. 2005]) . In the case at bar, defendant has known that the deposed witness was expected to be called at trial since September of 2005, when the physician conducted his peer review on defendant’s behalf. Defendant failed to conduct a deposition of the doctor during the pretrial disclosure process. A notice of trial was filed on March 6, 2006. No motion to strike the notice of trial was ever made. The defendant noticed and conducted the peer review doctor’s examination before trial on June 5, 2006, three months after the notice of trial was filed. Plaintiff’s counsel by timely letter advised defense counsel that he objected to the post-notice of trial deposition. Clearly, the defendant failed to comply with the procedures set forth under 22 NYCRR 208.17[d]), nor did defendant show that any “unusual or unanticipated conditions” developed so as to justify further pretrial disclosure after the filing of the notice of trial (see Parker Chapin Flattau & Klimpl, LLP v Bamira, 2005 NY Slip Op 51208U, 2 [App. Term 1st Dept. 2005]).

II.Defendant’s expert’s opinion was based on documents not in evidence and thereforeinadmissible.

Defendant nonetheless claims that the late deposition testimony may be used pursuant to CPLR §3117(a)(4).

CPLR §3117(a)(4) provides that:

the deposition of a person authorized to practice medicine may be used by any [*3]party without the necessity of showing unavailability or special circumstances, subject to the right of any party to move pursuant to section 3103 to prevent abuse.

However, even if the transcript itself is admissible pursuant to the above CPLR section, the contents thereof are subject to further scrutiny on the ground of the competence of the expert’s testimony, or lack thereof. In the case at bar, even assuming, arguendo, that there were conditions justifying the taking of the deposition of defendant’s expert subsequent to the filing of the notice of trial, the Court finds that the opinions expressed in the deposition were based upon documents which were not introduced into evidence at the deposition. Moreover, there was no evidence in the record of their reliability based upon the familiarity of the deposed witness with the procedures for the keeping of such records. Therefore, to admit the opinions at trial would be violative of the Second Department’s rule in Wagman v Bradshaw, 292 AD2d 84 [2d Dept. 2002]).

In Wagman, the Second Department held that:

It is well settled that, to be admissible, opinion evidence must be based on one of the following: first, personal knowledge of the facts upon which the opinion rests; second, where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and material in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is accompanied by evidence establishing its reliability.

(Wagman v Bradshaw, supra at 86-87 [2d Dept. 2002]).

In Astrel v Yarborough, 2006 NY Slip Op 5302, 1 [2d Dept. NY App. Div. 2006], the Second Department recently reaffirmed this rule, holding that “[g]iven the absence of evidence as to the reliability of those out-of-court medical records, the Supreme Court providently exercised its discretion in granting the defendant’s motion” [to preclude the physician’s testimony] (see DeLuca v Ding Ju Liu, 297 AD2d 307 [2d Dept. 2002]).

The Second Department, in Jemmott v Lazofsky, (5 AD3d 558, 560 [2d Dept. 2004]), held that a trial court erred in (a) admitting two MRI reports of the plaintiff’s knee and permitting a doctor to offer redirect testimony regarding their contents, since the reports were prepared by other health care professionals who did not testify at the trial and the MRI film was not admitted into evidence and (b) permitting the plaintiff’s attorney to cross-examine the defendant’s medical expert witness regarding an MRI film of the plaintiff’s back and the accompanying MRI report, as neither the MRI film nor the report were admitted into evidence, and directed a new trial on the issue of damages (see also D’Esposito v Kepler, 14 AD3d 509, 510 [2d Dept. 2005]); Wierzbicki v Mathew, 8 AD3d 476, 477 [2d Dept. 2004]; see also Sunnyside Plus v Allstate Ins. Co., 2005 NY Slip Op 25110 [Civil Ct. Queens Co., 2005, Dunbar, J.]).

In the matter before this Court, the deposition transcript of the peer-review physician indicates that neurologist Daniel J. Feuer, M.D. relied upon the following records:

[A] report of EMG testing of the upper extremeties by Dr. Bajaj dated 8/11/05, an EMG of the lower extremeties by Dr. Bajaj dated 8/11/05, a chronic pain assessment report dated 8/3/05, a report of MRI of the left knee dated 8/1/05, psychological evaluation dated 7/27/05 and a report of consultation of Dr. Cohen [*4]dated 8/8/05. (See transcript, p. 10, lines 3-9).

Dr. Feuer’s opinion was based upon a lack of documentation of “any consistent radicular or neuropathic complaints referable to the upper extremities which would support the necessity for this testing,” (see transcript p. 13, lines 12-15), along with “inconsistent findings reported in this case” (see transcript, p. 14, lines 9-10). The records referenced were not certified or authenticated (see CPLR §§4518, 3122-a). The EMG and MRI studies were not authenticated at the deposition or at trial using the expedited method provided by CPLR §4532-a, nor were all of the records utilized by the peer-review physician authenticated by Dr. Bajaj at trial. There was no testimony from the peer-review doctor or anyone else as to the reliability of such out-of-court records. As a result, Dr. Feuer’s opinion was based partly if not totally upon records which were not in evidence, and their reliability was not established. Thus, under Wagman and its progeny, it would be error for this Court to consider expert opinion based upon these records.

III.Strong policy reasons militate against permitting a trial by pretrial examination alone.

While not dispositive on this trial, the Court is constrained to discuss the following policy considerations:

The purpose of a trial is a search for the truth rather than an exercise in gamesmanship or a contest of strategies (see Finn v Morgan, 46 AD2d 229, 234 [2d Dept. 1974]; Ward v Kovacs, 55 AD2d 391 [2d Dept. 1977]). The court has a judicial responsibility to formulate rules of procedure to protect the integrity of the truth-finding process. A practice which hinders the search for truth is not one which ought to function under the broad imprimatur of the courts.

A deposition contains no more than testimonial evidence of the party-deponent and is merely the vehicle by which this evidence comes before the trier of fact. CPLR. §3117 confers upon the deposition no special qualities rendering its use immune to ordinary rules of trial practice. Thus, the discretionary power to control the use of live witnesses applies with equal force to control the use of a deposition. (See Feldsberg v Nitschke, 49 NY2d 636 [1980] leave denied 50 NY2d 1059 [1980]).

A trial court sitting as a trier of fact has discretion to require live testimony, rather than a transcript which is handed up for the Court’s later perusal, particularly where, as here: (a) the defendant’s entire case relies upon the testimony of a peer-review expert who will opine as to the medical necessity of the service at issue, and (b) where the expert’s opinion is entirely based upon his review of some records provided to him by an insurance carrier or its intermediary vendor.It is of great value to the court sitting as the trier of fact to observe the demeanor of the witnesses during their testimony in order to assess their credibility. Depriving the court of the opportunity to view the witness’ demeanor during testimony is a serious departure from accepted court standards, and should not be entertained lightly. Likewise, it is the cornerstone of the court’s search for truth that all testimony be subjected to the rigors of cross-examination. Neither the physician’s testimony at the deposition, which plaintiff’s counsel objected and did not appear for, nor the testimony at trial, where the defendant decided not to have the doctor appear for, was subjected to cross-examination. These venerable devices, intended to promote the ends of justice for litigants appearing before the Court, cannot function as intended when parties rely principally, if not exclusively, upon an out-of-court perusal of a transcript of a deposition.

Further adding to the repugnancy of the process is the fact that these depositions are taken after a notice of trial was filed. Plaintiff’s counsel must then choose whether to attend an [*5]unsanctioned deposition and delay the disposition of the case, or risk a waiver of his right to challenge the use of such deposition at trial. Given the legion of no-fault cases in Queens County, the Court cannot countenance additional delays through the use of a procedure which contravenes the Uniform Rules for the New York City Civil Court, strains judicial resources, and delays the administration of justice.

To permit this practice to proliferate would be tantamount to encouraging the defendants to submit a second summary judgment motion where the first has already been considered, and to capriciously label it a “trial.” Indeed, such a “trial” fails to put the defendants to their burden of proof by presenting live testimony in support of its defense.

IV.The deposition of Dr. Feuer does not satisfy the defendant’s burden of demonstrating a lack of medical necessity.

Even were this Court to consider Dr. Feuer’s deposition in support of the defendant’s medical-necessity defense, it would not, in any event, sustain the defendant’s burden of proof in this regard.

As a general proposition, the court sitting as trier of fact is free to assess and reject even uncontradicted expert opinion, (see West Tremont Med. Diagnostic, P.C. v GEICO Ins. Co., 2006 NY Slip Op 51871U, 2 [App. Term 2d Dept. 2006]; 58A NY Jur. 2d, Evidence and Witnesses §676). The insurer bears both the burden of production and the burden of persuasion with respect to medical necessity of the treatment or testing for which payment is sought. (See Kings Medical Supply, Inc. v Country-Wide Ins. Co., 5 Misc 3d 767 [Civ. Ct. Kings County 2004]; Nir v Allstate Ins. Co., 2005 NY Slip Op 25090, 2 [Civ. Ct. Kings Co. 2005]). In the trial context, few decisions clarify defendant’s burden of proof, or what evidence may be sufficient to establish that the services were medically unnecessary. Trial courts have held that, at a minimum, defendant must establish a factual basis and medical rationale for the lack of medical necessity of plaintiff’s services (see A.B. Med. Servs. P.L.L.C. v NY Cent. Mut. Fire Ins. Co., 2005 NY Slip Op 50662U, 2 [Civil Ct. Kings Co. 2005]; A.R. Med. Art, P.C. v State Farm Mut. Auto. Ins. Co., 2006 NY Slip Op 50260U, 2 [Civil Ct. Kings Co. 2006] ; Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090U, 3 [Sup. Ct. Nassau Co., 2006]; Citywide Social Work & Psy. Serv. P.L.L.C. v Travelers Indemnity Co., 3 Misc 3d 608 [Civil Ct. Kings Co. 2004]; Inwood Hill Medical P.C. v Allstate Ins. Co., 3 Misc 3d 1110[A] [Civil Ct. Kings Co. 2004]). If defendant at trial provides an insufficient factual basis or medical rationale for its peer review report at trial, the court may afford the peer review report minimal weight, and defendant may fail to sustain its burden of proof. A peer review report’s medical rationale is insufficient if it is unsupported by or controverted by evidence of medical standards. A peer review report’s factual basis may be insufficient if it fails to provide specifics of the claim, is conclusory, or otherwise lacks a basis in the facts of the claim (see e.g Amaze Medical Supply v Allstate Ins. Co., 3 Misc 3d 43, 2004 NY Slip Op 24119 [App. Term 2d Dept. 2004]). For example, a defendant may not establish lack of medical necessity if the only reason for the denial was that the peer review doctor did not have enough information in the claim file upon which a determination could be made (see Park Neurological Servs. v Geico Ins., 4 Misc 3d 95, 2004 NY Slip Op 24210 [App Term, 2d Dept. 2004]). Hence, a peer review may be insufficient if it is based upon merely a lack of evidence which was available, but inexplicably not supplied to the peer-review doctor by the insurance company. One court has held that a peer review report may [*6]be insufficient if the peer review doctor merely reviewed records, rather than examined the insured patient, in preparing the peer review report (see Alliance Medical Office, P.C. v Allstate Ins. Co., supra; see also Fifth Avenue Pain Control Center v Allstate Ins. Co., supra.). For example, the medical rationale may be insufficient if not supported by evidence of the “generally accepted medical/professional practice” (Citywide Social Work & Psy. Serv. P.L.L.C. v Travelers Indemnity Co., supra at 608 ). “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Citywide Social Work & Psy. Serv. P.L.L.C. v Travelers Indemnity Co., supra at 616). Alternatively, if the plaintiff offers evidence that its medical services were consistent with generally accepted medical practice, the defendant’s peer review report may be afforded less weight and defendant may fail to sustain its burden of proof at trial (see Elm Medical P.C. v American Home Assurance Co., 2003 NY Misc. LEXIS 1337, 2003 NY Slip Op. 51357U [Civil Ct. Kings Co. 2003] [Defendant peer review doctor’s conclusion that the electrodiagnostic testing was not “properly documented” did not contradict plaintiff’s testimony of medical necessity and defendant failed to carry its burden]).

Instructive in this context is Nir v Allstate Ins. Co., (2005 NY Slip Op 25090, 3 [Civil Ct. Kings Co. 2005]), in which defendant’s doctor recommended denial of plaintiff’s claim because, in his opinion, the diagnostic testing performed by plaintiff Dr. Nir was done prematurely. During testimony, the peer review doctor cited only a review of Dr. Nir’s medical reports as the basis for his peer review report. He did not physically examine the patient before writing the peer review report. He cited no medical authority, standard, or generally accepted medical practice as a medical rationale for his findings. Finally, defendant was not able to explain how the tests could be medically unnecessary when the tests did in fact yield positive findings of nerve damage. Such scant factual basis and medical rationale was held not to sustain defendant’s burden of proof.

This court finds that, even if admissible, the opinion by the defendant’s peer-review physician contained in the deposition transcript on the issue of lack of medical necessity is lacking in a factual basis, unsupported by cogent medical rationale as to generally accepted medical/professional practice, wholly conclusory, and based almost entirely upon his review of records which were not in evidence. By failing to appear in court, the Court is foreclosed from determining whether there were records available which were not provided to the peer-review doctor which would have been relevant to his review. When compounded by the court’s inability to observe the doctor’s demeanor and the lack of cross-examination, an opinion of this qualitative nature is essentially of little value to the court in rendering a just decision. Despite the fact that Dr. Feuer claims to have reviewed Dr. Bajaj’ records of examinations on both 7/21/05 and 8/11/05, he selectively fails to mention that, contrary to his testimony, Dr. Bajaj did in fact find consistent radicular or neuropathic complaints in the upper extremities. On rebuttal during trial, Dr. Bajaj, who did appear before the Court, testified as to her findings of weakness and spasms on the left upper extremity indicating a denervation and nerve damage related to the C6-C7 region, thereby efficaciously rebutting and contravening Dr. Feuer’s deposition testimony.Based upon all of the foregoing, the Court renders judgment after trial in the full amount prayed for by the plaintiff, along with statutory interest, costs and attorneys’ fees. The Clerk of the Court is directed herein to enter judgment accordingly.

This constitutes the opinion, decision, and order of the Court. [*7]

___________________________

Hon. Thomas D. Raffaele

Judge, Civil Court

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.