Matter of Global Liberty Ins. Co. v Therapeutic Physical Therapy, P.C., 2017 NY Slip Op 01833 (1st Dept. 2017)
“Respondent sought recovery for physical therapy services provided to its assignor before April 1, 2013, and petitioner insurer disclaimed parts of the claim on the ground that it had already reimbursed a different provider for “eight units” for services on some of the same dates. Respondent checked the box on the prescribed disclaimer form indicating that it was relying on a “fee schedule” defense, specifically the “eight unit rule.” The lower arbitrator held that respondent was precluded from asserting its defense because the disclaimer was insufficiently specific in that the other provider was not named. Respondent appealed to the master arbitrator, arguing that it adequately preserved its defense. The master arbitrator, without addressing the issue of preservation, incorrectly found that the lower arbitrator had “considered the fee schedule defense” and “determined that [r]espondent failed to provide evidence as to the other provider.”
The master arbitrator’s award was arbitrary, because it irrationally ignored the controlling law presented on the preservation issue (Matter of Global Liberty Ins. Co. v Professional Chiropractic Care, P.C., 139 AD3d 645, 646 [1st Dept 2016]; see generally Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 ) — namely, that an insurer adequately preserves its fee schedule defense “by checking box 18 on the NF—10 denial of claim form to assert that plaintiff’s fees [were] not in accordance with the fee schedule” (Megacure Acupuncture PC v Lancer Ins Co., 41 Misc 3d 139[A], 2013 NY Slip Op 51994[U], *3 [App Term, 2d Dept 2013] [internal quotation marks omitted] [alteration in original]; Surgicare Surgical v National Interstate Ins. Co., 46 Misc 3d 736, 745-746 [Civ Ct, Bronx County 2014], affd sub nom. Surgicare Surgical Assoc. v National Interstate Ins. Co., 50 Misc 3d 85 [App Term, 1st Dept 2015]). Accordingly, we remand the matter to the extent indicated.”
So the arbitrator and master arbitrator are nameless, but you can look them up if you are curious – this was an e-filed case. I remember this case vividly. I appeared at the arbitration. The lower arbitrator told me she follows the Maslow rule which states that the disclaimer must set forth a prima facie defense. I told the lower arbitrator (who I never met before) that she was wrong, and I remember she was indignant at my comment. Perhaps I came off too strong. I was furious and stated that I did not care what she did because I will take the case up to the Appellate Division. She followed through on her promise and I followed through on mine. Man did I eat my words because the Master Arbitrator gave me the Petrofsky treatment and Justice Tapia said he thought the lower arbitrator’s analysis was spot on. I was starting to feel as though I did not understand the law anymore. Sometimes you read affirmations and opinions and you get the feeling that perhaps it is you, not them.
Again, the loss of Norman Dachs (prior to his illness) could be felt in the master arbitration system, as the master failed to address controlling case law on the box #18 issue.
As happens all too frequently, it took the Appellate Division to straighten this out If I only had Geico’s resources and volume, I would probably own half the docket at the Appellate Division, First Department (kidding, well kind of… not really).
The lesson here is that if you feel you have a solid legal argument, do not let AAA or a Supreme Court judge let you down. You will win some and lose some. Just make sure your papers are in order.
Easy Care Acupuncture, P.C. v ELRAC, Inc., 2017 NY Slip Op 50234(U)(App. Term 1st Dept. 2017)
(1) “Plaintiff-provider established prima facie that its no-fault claims in the amount of $2,958.13 were overdue, since they were not “denied or paid” within the prescribed 30—day period (see Viviane Etienne Med. Care, P.C. v Country—Wide Ins. Co., 25 NY3d 498, 507 ).”
(2) “Nor may defendant assert the defense of excessive fees for the acupuncture services rendered in 2010, inasmuch as it failed to timely and properly mail the denial of claim form to plaintiff assignee”
(3) “In addition, the conclusory assertions in the adjuster’s affidavit were insufficient to raise a triable issue as to whether certain services provided were outside the scope of acupuncture treatment”
Gary Tsirelman: the expert in acupuncture. What else do you want me to say here? Elrac got badly shut out on this appeal.
Acupuncture Healthcare Plaza I, P.C. v Metlife Auto & Home, 2017 NY Slip Op 50207(U)(App. Term 2d Dept. 2017)
I am unsure what was supposed to be accomplished with this appeal. I hope the carrier demands a refund of their legal bill on this case.
“[t]he parties stipulated that plaintiff had established its prima facie case and that defendant had timely denied the claims at issue.”
“After the trial court marked as exhibits documents which included two pages of a workers’ compensation medical fee schedule, the claim forms and the denial of claim forms, the trial began and plaintiff immediately rested. Defendant then stated that it did not have a witness to testify regarding the fee schedule. Defendant asked the court to take judicial notice of the workers’ compensation fee schedule and rested. The Civil Court granted judgment to plaintiff, stating only that defendant had failed to proffer a witness. It is unclear whether the court took judicial notice of the workers’ compensation fee schedule.”
Now we all know this was affirmed, right? Now you do.
“While a court is permitted to take judicial notice of, among other things, the workers’ compensation fee schedule (see CPLR 4511 [b]; LVOV Acupuncture, P.C. v GEICO Ins. Co., 32 Misc 3d 144[A], 2011 NY Slip Op 51721[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; see also Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 20 ), the party seeking to have the court take judicial notice should provide the court with sufficient information to comply with the request (see CPLR 4511 [b]; Megacure Acupuncture, P.C. v Clarendon Natl. Ins. Co., 33 Misc 3d 141[A], 2011 NY Slip Op 52199[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]) and demonstrate that it “has given each adverse party notice of [its] intention to request it” (CPLR 4511 [b]). Even if the Civil Court had taken judicial notice of the workers’ compensation fee schedule, the fee schedule does not, in and of itself, establish that [*2]defendant properly utilized the codes set forth within the workers’ compensation fee schedule to calculate the amount which plaintiff was entitled to recover for each service rendered (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 ; Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]; cf. Natural Acupuncture Health, P.C. v Praetorian Ins. Co., 30 Misc 3d 132[A], 2011 NY Slip Op 50040[U] [App Term, 1st Dept 2011]). In addition, defendant also proffered no evidence to prove that the claim at issue in the fifth cause of action had been properly reduced by virtue of a $200 deductible.”
The Court cited Natural Acupuncture Health with a “c.f.” A review of the record shows that the carrier presented the affidavit of a claims representative demonstrating why certain codes were paid at a certain amount. With a prima facie stip, all the carrier had to do was either (1) Bring down a claim rep; or (2) Hire an expert coder to explain why the reduction was correct. In scenario two, you would lose the $200 deductible argument, but that was clearly now the crux of this case. Just a silly appeal.
Bronx Acupuncture Therapy, P.C. v Hereford Ins. Co., 2017 NY Slip Op 50101(U)(App. Term 2d Dept. 2017)
I recall prior to heading to a miscellaneous part in Supreme Court with guest visits to Civil Court, Judge Cohen found that a by-report code required compliance in order to make a code compesnsable or a billing overdue. I believed he was wrong and the Appellate Term confirms.
“The record reflects that plaintiff submitted three claim forms to defendant which included charges for 21 sessions of moxibustion, under code 97039, which is described as “Unlisted modality (specify type and time if there was constant attendance)” and for one session of acupressure, under code 99199, which is described as “Unlisted special service, procedure or report.” The workers’ compensation fee schedules do not assign a relative value to either of those codes, but instead have assigned them a “By Report” designation, which requires a provider to furnish certain additional documentation to enable the insurer to determine the appropriate amount of reimbursement. Plaintiff did not provide such documentation with its claim forms and defendant did not, within 15 business days of its receipt of the claim forms, request “any additional verification required by the insurer to establish proof of claim” (11 NYCRR 65-3.5 [b]). As defendant failed to demonstrate upon its motion that it had requested any additional verification from plaintiff seeking the information it required in order to review plaintiff’s claims for services billed under codes 97039 and 99199 of the workers’ compensation fee schedules, defendant was not entitled to summary judgment dismissing so much of the complaint as sought [*2]to recover for services rendered under those codes”
The famous by-report. The Court properly held that a by-report is verification issue. This should not shock anyone; yet, I still see denials and argument based upon the failure to adhere to the by-report guidelines.
Easy Care Acupuncture, PC v MVAIC, 2016 NY Slip Op 51556(U)(App. Term 1st Dept. 2016)
“While the record reflects that defendant properly paid a portion of the submitted claims for acupuncture services pursuant to the workers compensation fee schedule (see Akita Med. Acupuncture, P.C. v Clarendon Ins. Co., 41 Misc 3d 134[A], 2013 NY Slip Op 51860 [U] [App Term 1st Dept 2013]), triable issues remain with respect to the claims denied in whole or part by defendant on the stated basis that the maximum payment had already been made for the billed codes (see TC Acupuncture, P.C., v Tri-State Consumer Ins. Co., 52 Misc 3d 131[A], 2016 NY Slip Op 50978[U] [App Term, 1st Dept 2016]; Sunrise Acupuncture PC v Tri-State Consumer Ins. Co., 42 Misc 3d 151[A], 2014 NY Slip Op 50435 [U] [App Term 1st Dept 2014]). Defendant’s submission reveals the existence of triable issues of fact as to whether defendant partially exhausted the coverage by payments to another provider, and whether those payments were proper under the insurance department regulations. Defendant’s failure to deny the claim within 30 days does not preclude a defense that the coverage limits have been exhausted (see New York & Presbyt. Hosp. v Allstate Ins. Co., 12 AD3d 579 ).”
Starting backwards, the court questioned the priority of payment regimen. Second, the Court found issues of fact as to the fee schedule reductions. What really happened here?
Renelique v American Tr. Ins. Co., 2016 NY Slip Op 51526(U)(App. Term 2d Dept. 2016)
“[d]efendant also submitted an affidavit executed by its no-fault examiner, who described how the fees for the services at issue had been calculated by multiplying the appropriate “relative value” by the appropriate “conversion factor.” Plaintiff’s remaining argument with respect to the coding expert’s affidavit and the specific argument made by plaintiff with regard to CPT code 99244 were not raised in the Civil Court, and are therefore not properly before this court.
With respect to plaintiff’s final argument, which involves CPT code 20553, we find that defendant made a prima facie showing that it had used the assigned relative value for that code to calculate the sum to which plaintiff was entitled to be reimbursed.”
The Court held that an affidavit of a claims representative who averred that a “relative value” multiplied by the “conversion factor” is sufficient to prove the compensable amount.
Liberty Chiropractic, P.C. v 21st Century Ins. Co., 2016 NY Slip Op 51409(U)(App. Term 2d Dept. 2016)
“Plaintiff properly argues on appeal that defendant failed to establish its defense, that the fees charged exceeded the amounts set forth in the workers’ compensation fee schedule, as a matter of law (see Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). For example, defendant failed to demonstrate that it had used the correct conversion factor in calculating the reimbursement rate. In addition, defendant sought to demonstrate that plaintiff was not entitled to any payment for services rendered by plaintiff on specific dates because defendant had already paid another provider, Harvard Medical, P.C., for eight units of physical medicine procedures and/or modalities, the full number of units permitted by Physical Medicine Ground Rule 11, for each of those dates. However, the documents relied upon by defendant were attached to the motion papers without authentication, foundation or even discussion. Even if we were to take the documents at face value, they show only that Harvard Medical, P.C. had billed for a total of three units for each of the applicable dates.”
This was one is interesting and necessitates some discussion. Has the Court agreed that a chiropractor is limited to 8 units, even when CMT is performed? Unsure. What authentication is necessary to prove the other 8 units? Discussion in the affidavit that we received billings from other provider and paid 8 units per diem? Does the Court require proof that the others units were actually paid? Unsure, but probably yes.
High Quality Med. Supplies, Inc. v Mercury Ins. Group, 2016 NY Slip Op 51444(U)(App. Term 2d Dept. 2016)
“In SK Prime Med. Supply, Inc. v State Farm Mut. Auto. Ins. Co. (43 Misc 3d 133[A], 2014 NY Slip Op 50630[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]), this court noted that the “NYS Medicaid DME Services Fee Schedule” has been adopted as the Durable Medical Goods Fee Schedule for Workers’ Compensation (12 NYCRR 442.2 [a]). However, contrary to defendant’s argument on appeal, that is not a basis to hold that “the billing for durable medical equipment that is not included within the fee schedule is not compensable.” Indeed, 11 NYCRR 68.5 specifically addresses reimbursement for healthcare services not set forth in fee schedules”
I suppose I was unavailing here. 68.5 played out to the insurance carrier’s detriment.
Okay, tell me you did not see this one coming? But as long as “Avanguard” is the law of the land in New York, New Jersey will still be a lucrative market for no-fault providers. And, I do not see how you can apply Avanguard to New Jersey in light of this regulation. But greater and shiftier minds than mine will certainly try I am sure.
PROPOSED RULE MAKING: NO HEARING(S) SCHEDULED
Charges for Professional Health Services
I.D. No. DFS-39-16-00007-P
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action: Amendment of section 68.6 (Regulation 83) of Title 11
Statutory authority: Financial Services Law, sections 202 and 302; Insurance Law, sections 301, 2601, 5221 and art. 51 Subject: Charges for Professional Health Services.
Purpose: Limit reimbursement of no-fault health care services provided outside NYS to highest fees in fee schedule for services in NYS. Text of proposed rule: Section 68.6 is amended to read as follows:
Section 68.6 Health services performed outside New York State.
(a)(1) If a professional health service reimbursable under [section 5102(a)(1) of the] Insurance Law section 5102(a)(1) is performed outside [New York] this State, the [permissible charge] amount that the insurer shall reimburse for [such] the service shall be the prevailing fee in the
geographic location of the provider with respect to services:
(i) that constitute emergency care;
(ii) provided to an eligible injured person that is not a resident of this State, or
(iii) provided to an eligible injured person that is a resident of this State who is outside this State for a continuous period of at least fourteen days for reasons unrelated to the treatment.
(2) For purposes of this subdivision, emergency care means all medically necessary treatment of a traumatic injury or a medical condition manifesting itself by acute symptoms of sufficient severity such that absence of immediate attention could reasonably be expected to result in: death; serious impairment to bodily functions; or serious dysfunction of a bodily organ or part. Emergency care shall include all medically necessary care immediately following an automobile accident, including immediate pre-hospitalization care, transportation to a hospital or trauma center, emergency room care, surgery, critical and acute care. Emergency care extends during the period of initial hospitalization until the patient is discharged from acute care by the attending physician. Emergency care shall be presumed when medical care is initiated at a hospital within 120 hours of the accident.
(b) If a professional health service reimbursable under Insurance Law section 5102(a)(1) is performed outside this State with respect to an eligible injured person that is a resident of this State, the amount that the insurer shall reimburse for the service, except as provided in subdivision (a) of this section, shall be the fee set forth in the region of this State that has the highest value in the fee schedule for such services.
(c) Notwithstanding anything else in this subdivision, an insurer shall not reimburse an amount for a service that exceeds the amount that the provider is legally permitted to charge under the laws of the jurisdiction where the services are provided.
Text of proposed rule and any required statements and analyses may be obtained from: Hoda Nairooz, New York State Department of Financial Services, One State Street, New York, NY 10004, (212) 480-5595, email: email@example.com
Data, views or arguments may be submitted to: Same as above.
Public comment will be received until: 45 days after publication of this notice.
This rule was not under consideration at the time this agency submitted its Regulatory Agenda for publication in the Register.
Regulatory Impact Statement
1. Statutory authority: Sections 202 and 302 of the Financial Services Law, and Sections 301, 2601, 5221, and Article 51 of the Insurance Law. Insurance Law Section 301 and Financial Services Law Sections 202 and 302 authorize the Superintendent of Financial Services (the “Superintendent”) to prescribe regulations interpreting the provisions of the Insurance
Insurance Law Section 2601 prohibits insurers from engaging in unfair
claim settlement practices and requires insurers to adopt and implement
reasonable standards for the prompt investigation of claims arising under
Insurance Law Section 5221 specifies the duties and obligations of the
Motor Vehicle Accident Indemnification Corporation with respect to the
payment of no-fault benefits to qualified persons.
Article 51 of the Insurance Law contains the provisions authorizing the
establishment of a no-fault reparations system for persons injured in motor
vehicle accidents, and Section 5108 specifically authorizes the Superintendent
to adopt or promulgate fee schedules for health care benefits payable
under the no-fault system.
2. Legislative objectives: Chapter 892 of the Laws of 1977 recognize
the necessity of establishing schedules of maximum permissible charges for professional health services payable as no-fault insurance benefits in order to contain the costs of no-fault insurance. To that end, in accordance with Insurance Law section 5108(b), the Superintendent adopted those fee schedules that are promulgated by the Chairman of the Workers’ Compensation Board (the “Chairman”). In addition, the Superintendent, after consulting with the Chairman and the Commissioner of Health, established fee schedules for those services for which schedules have not been prepared and established by the Chairman.
3. Needs and benefits: The current rule provides that the maximum permissible charge for health care services rendered outside this State to a person eligible for New York no-fault benefits shall be the prevailing fee in the geographic location of the provider. The proposed rule limits insurers’ reimbursement of no-fault health care services provided outside the State at the election of a New York State eligible injured person to the fees set forth in the region of this State that has the highest value in the fee schedule for those services. An exception to the proposed amendment would be when the health care services constitute emergency care, are
provided to an eligible injured person who does not reside in this State, or are provided to an eligible injured person who is a resident of this State and who is outside the State for a continuous period of at least 14 days for reasons unrelated to the treatment. In such cases, the current rule will continue to apply.
There has been no uniform interpretation of the prevailing fees outside the State. As a result, no-fault claimants are being referred to certain health care providers outside New York, usually in New Jersey, who take advantage of the absence of specific fee schedules and submit excessive
charges under exaggerated claims, well above the corresponding New York State fee schedules applicable to those health care services rendered. Since basic personal injury protection coverage under no-fault is only $50,000, the higher the bills, the sooner the injured person will find coverage exhausted. This results in no-fault benefits available to injured persons being depleted more quickly, to their detriment.
Representatives of both the insurance industry and the medical profession have conveyed to the Department that amending the current regulation is necessary in order to close these loopholes that have resulted in increased no-fault claim bills. In addition, numerous arbitrators that serve
on the Department’s no-fault arbitration panel have indicated that this issue has generated a significant number of disputes due to the significant disparity between the excessive fees being charged by out of state health care providers and those permitted under the current rule. By setting a maximum fee that out-of-state health care providers may receive as reimbursement for no-fault-related health services, this amendment should lead to reduced arbitration and litigation costs for insurers and self insurers, which are typically passed to consumers in the form of higher premiums, as well as help to stem the rapid depletion of no-fault benefits
available to eligible injured persons.
4. Costs: This rule imposes no compliance costs upon state or local governments. However, the rule will impact out-of-state health care providers who will now be reimbursed for health services pursuant to the applicable fee schedule prescribed in the proposed rule.
5. Local government mandates: This rule does not impose any requirement upon a city, town, village, school district, or fire district. However, local governments who are self-insurers for no-fault coverage shall only be required to reimburse out-of-state health care providers at the rates
prescribed in the proposed rule, rather than the subjective prevailing rate in the geographic location of the out-of-state provider.
6. Paperwork: This rule does not impose any additional paperwork on any persons affected by the rule.
7. Duplication: This rule will not duplicate any existing state or federal rule.
8. Alternatives: In order to effectuate the cost savings goals of New York’s no-fault laws, the Department has determined that there are no other viable alternatives to this rule.
9. Federal standards: There are no minimum federal standards for the same or similar subject areas. The rule is consistent with federal standards or requirements.
TC Acupuncture, P.C. v Tri-State Consumer Ins. Co., 2016 NY Slip Op 50978(U)(App. Term 1st Dept. 2016)
(1)”Defendant made a prima facie showing of entitlement to partial summary judgment dismissing plaintiff’s no-fault claims for services rendered July 12, 2010 through August 31, 2010, by demonstrating that it timely and properly denied the claims based on the June 17, 2010 independent medical examination (IME) report of its examining doctor, which set forth a sufficient basis and medical rationale for the conclusion that there was no need for further acupuncture treatment (see AutoOne Ins./Gen. Assur. v Eastern Is. Med. Care, P.C., 136 AD3d 722 ). Plaintiff’s opposition consisting of an attorney’s affirmation unaccompanied by any medical evidence or other competent proof was insufficient to raise a triable issue as to medical necessity (see Diagnostic Medicine, P.C. v Clarendon Natl. Ins. Co., 34 Misc 3d 143[A], 2012 NY Slip Op 50102[U][App Term, 1st Dept. 2012]). The assignor’s subjective complaints of pain cannot overcome the objective medical tests detailed in the affirmed report of defendant’s examining doctor (see Arnica Acupuncture PC v Interboard Ins. Co., 137 AD3d 421 ).”
(2) “Defendant’s position that the charges billed under CPT Code 97039 are not reimbursable because plaintiff is not licensed to provide physical medicine modalities is unpersuasive”
It’s interesting to see a Second and First Department case that I won in the first three cited to cases. The Arnica case is a killer on the IME cut off cases because it requires the provider to marshal real proof, not manufactured affidavits that at their root say nothing.
The fee schedule issue is correct and yet another iteration of why the commercial EOB systems need to be manually overridden when acupuncture fee schedule issues outside the standard 97810-97814 codes arise.