To be Lobelled April 14, 2009
I have always said that to understand no-fault, you need to understand bodily injury law. This is typified through instances where the result of an assigned no-fault case can fatally destroy the personal injury case for the assignor.
This issue I think rears its ugly head most often times in the so-called “causation” scenarios, where the defense to the no-fault claim is that the injuries are not causally related to the underlying motor vehicle accident. The question that arises is what happens to the corresponding personal injury claim of the assignor if the insurance carrier succeeds in proving this defense?
This is when one must understand the term: “to be lobelled”. Here is the case:
Lobel v. Allstate Ins. Co. 269 A.D.2d 502 (2d Dept. 2002).
“The defendant moved to dismiss the cause of action to recover no-fault benefits on the ground that it was barred by a prior arbitration proceeding between the plaintiff’s assignee and the defendant, which resulted in a determination that there was no casual connection between the plaintiff’s lower back condition and the subject automobile accident. The defendant demonstrated that the issue in the **489 arbitration proceeding was identical to and decisive of this cause of action. The plaintiff failed to establish the absence of a full and fair opportunity to litigate the issue in the prior matter”.
I think the bolded words speak for themselves.
Oh yes, what about the IME cut-off that is upheld? How does this impact the assignor’s personal injury case? Barnett v. Ives 265 A.D.2d 865 (4th Dept.1994).
In Barnett, the Appellate Division held that an arbitration award which found that an injured person was not longer injured as a result of the accident, whether phrased as a causation or medical necessity determination, is collateral estoppel to the injured person in a personal injury case. As observed from the facts should you pull the case up, it is potentially catosrophic in terms of proving the two most potent 5102(d) categories: (a) Significant Limitation; and (b) Permanent Consequential. Furthermore, even if you can prove Significant Limitation or 90/180, an adervse arbitration ruling would knock out future damages, which many times is the crux of the BI case. It may also call into question the degree of actual injury, which may limit damages for past pain and suffering and past economic injury.
TImely submissions and MVAIC – a real problem April 11, 2009
Bronx Expert Radiology, P.C. v Motor Veh. Acciden Indem. Corp.
2009 NYSlipOp 50621(U)(App. Term 1st Dept. 2009)
“Defendant’s motion for summary judgment should have been granted. Even assuming that plaintiff’s submission of the claims for no-fault benefits to Seminole Casualty Insurance Company was inadvertent and justified plaintiff’s initial delay in submitting the claims to defendant (see 11 NYCRR 65-3.5[l]), plaintiff has failed to provide a “reasonable justification” for the six-month delay between the date it was apprised of Seminole Casualty’s denial of benefits and its submission of the claims to defendant”
The 45-day rule and MVAIC.
It seems a little disconcerting that an agency that our tax dollars supports plays by its own set of rules and appears to be exempt from paying no-fault claims, by operation of law. A scenario that seems to play out here is that MVAIC first declares that you must demonstrate through affidavits that you were not covered by any other source of insurance. This is what we can call the condition-precedent to coverage we see so much of in the decisional law from the Appellate Term, Second Department.
Admittedly, sometimes the condition precedent for being eligible for MVAIC is obvious. Examples of this include when a New York pedestrian, who has no other source of coverage, is run-down by a hit and run vehicle, or where a passenger in an uninsured vehicle who does not have other sources of coverage seeks coverage from MVAIC.
More often, I suspect there are issues as to the possible existence of other sources of coverage, or issues involving whether a policy of insurance may be canceled or ever existed. These are issues that need to be investigated and may take time to sort out.
In many of the above instances, I would think that by the time you sort out whether or not an injured person is qualified, the 45-day time period to submit bills to MVAIC has expired.
Yet, the Courts then come back and say that you did not act diligently enough in demonstrating a reasonable excuse for your late submission. In my survey of all 45-day rule appellate cases, I have yet to find a court that has held that a late submission was excusable. This says a lot, I think. I believe there needs to be special time frames set forth in the MVAIC scenario.
It is a two way street April 10, 2009
In reading the Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 2009 NY Slip Op 02589 (2d Dept. 2009) case that involved the validity of a denial based upon workers compensation primacy, it appeared (at first blush) that the providers obtained a true victory against the carriers. Whereas compensation is somewhat consistent with managed health care, no-fault is the exact opposite. Furthermore, the scope of medical services compensated under no-fault is far greater than the services reimbursed under Workers Compensation. One only needs to ask a certain bunch of attorneys who are fighting this exact issue in the context of whether a Licensed Massage Therapist may receive compensation under no-fault for rendered services inasmuch as the same services are not compensable under Workers Compensation. This same battle arises in the realm of acupuncture that an L.AC performs and services a chiropractor renders outside the chiropractor fee schedule.
But, does this also mean that “priority of coverage” issues may also be subject to the 30-day pay or deny rule? Let me rephrase this statement. Does this mean that a primacy of coverage defense may be adjudicated in court or arbitration against a Claimant, because another insurance carrier might be primary?
Here are two examples. 1) John Doe, a Geico insured, is involved in a motor vehicle accident while occupying an Elrac rental vehicle in New York. Or, 2) John Doe, while in a Elrac vehicle is in an accident in Montana.
Under scenerio “1”, Elrac is primary. Under scerio “2”, Geico is primary. Simply put, the rule in New york is that coverage follows the vehicle, except that when the accident occurs outside NEw York, it follows the person.
Medical provider submits bills to Geico under scenerio #1 and Elrac in scenerio #2. Both of the carriers the bills were submitted to are not the first in line under a priority of payment analysis. Geico in example #1 and Elrac in example #2 timely denies the bills. Now what?
Under conventional wisdom, issues involving primacy of payment must be adjudicated in 5105 mandatory arbitration. See, 65-3.12; SZ Medical, P.C. v. Lancer Ins. Co., 7 Misc.3d 8 (App. Term 2d Dept. 2005). In other words, the secondary carrier must adjust the claim in the normal and ordinary course of business and then seek reimbursement against the primary carrier through intercompany arbitration. The SOL would be three years from the payment, so it cannot be said that the carrier should be too unhappy with this result. Motor Vehicle Acc. Indemnification Corp. v. Aetna Cas. & Sur. Co. 89 N.Y.2d 214 (1997).
Under the current system, money from the secondary insurer would have to be paid out on the front end, but may be recovered on the back end.
Now, because of the Westchester Case, it appears that priority of payment issues may be raised and defended at any time through a timely denial. Thus, next time I receive a denial when there is a primary of payment issue, maybe I actually have a defense? So, you can say this is the other side of the two-way street…
Be careful what you wish for.
The Workers Comp Mess April 4, 2009
Westchester Med. Ctr. v Lincoln Gen. Ins. Co.
2009 NY Slip Op 02589 (2d Dept. 2009)
This case has a few issues. The first issue can be resolved relatively easily. Factually, the carrier apparently failed to indicate to the provider the specific person from whom verification was sought. This defect rendered the EUO scheduling letters and the ensuing denials improper. The cases the Westchester court cited explain this principle quite well. To explain for those unfamiliar with this concept, a delay letter has to say what you are delaying for and who you are seeking the information from. The letters have to be highly specific, lest you wish to be subject to Presbyterian preclusion.
The better issue is the Workers Comp issue. The Court, for the first time that I can remember, is apparently holding that a Workers Comp denial must be timely. The Court fails to consider Workers Comp as a coverage issue. This is problematic, because I believe the law is clear.
In O’Hurley-Pitts v. Diocese of Rockville Centre 57 A.D.3d 633 (2d Dept. 2008), the Court held as follows:
“The Court of Appeals has held that the Workers’ Compensation Board “has primary jurisdiction over the issue of the availability of [workers’ compensation] coverage,” and if a plaintiff fails to litigate that issue before the Board, “the court should not express an opinion as to the availability of compensation but remit the matter to the Board,” since “[t]he compensation claim is a jurisdictional predicate to the civil action” (Liss v Trans Auto Sys., 68 NY2d 15, 21 ; see Botwinick v Ogden, 59 NY2d 909 ; O’Rourke v Long, 41 NY2d 219 ). Accordingly, in considering the defendants’ motion, the Supreme Court should not have entertained their contention that the plaintiff was barred from recovery pursuant to Workers’ Compensation Law § 11. The case must be referred to the Workers’ Compensation Board for a determination as to whether the plaintiff has a valid cause of action for damages or whether he is relegated to benefits under the Workers’ Compensation Law”
The Regulation states the following:
11 NYCRR Sec. 65-3.9(a)(9): “Pursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers’ compensation benefits due to the same accident, the workers’ compensation carrier shall be the sole source of reimbursement for medical expenses.”
I believe the Appellate Division messed up. I just hope a good record was preserved.
LMK will never go away April 4, 2009
LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co.
2009 NY Slip Op 02481 (2009)
Everybody now knows the LMK decision. Many people have posted and blogged about it. I could discuss it here at length, but it would be fruitless. I will share a few observations. First, the decision was poorly written. When I say poorly written, I mean this in the sense that modern no-fault jurisprudence is nuanced. Does anybody remember the entire line of cases which construed interest tolling based upon a definition of the word “Applicant”?
The Court of Appeals, in a cavalier fashion, used the words: “insured”, “claimant”, and “cause of action” all throughout their opinion. These phrases have created hundreds of court decisions from the lower courts up through the Appeals Courts. I will highlight the examples of the internally inconsistent language that the Court of Appeals used in this decision:
1) “the Superintendent stated
“[that provision] makes it clear that the amount of attorneys’ 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.”
2) “For purposes of calculating attorneys’ fees, the Superintendent has interpreted a claim to be the total medical expenses claimed in a cause of action pertaining to a single insured, and not — as the courts below held — each separate medical bill submitted by the provider.”
3) “Thus, this Court accepts the Insurance Department’s interpretation of its own regulation and, upon remittitur, directs Supreme Court to calculate attorneys’ fees based on the aggregate of all bills for each insured”
So now, we have different interpretations of this rule. Does the LMK rule involve each “cause of action” no matter how pleaded? Does this rule involve the “aggregate of all bills” for the insured? Or, does LMK stands for what it means: “Because this interpretation is neither irrational, unreasonable, nor runs counter to the clear wording of the statute, it is entitled to deference.”
I will take option #3. The Appellate Terms will inevitably clean this mess up, and hold that option #3 is the most logical path to follow. But LMK at all levels just goes to show how careful things need to be expressed, or else unintended consequences will be abound.