Matter of Global Liberty Ins. Co. v ISurply, LLC, 2018 NY Slip Op 04961 (1st Dept. 2018)
The CPM saga came down to the 2014 letter addressing an inquiry from an insurance carrier and a 2016 letter that was responsive to an inquiry from a prominent plaintiff no-fault attorney. The Court did not care about informal DOH opinions and WCB opinions, or the famous “FAQ” that appeared to override the 2016 letter.
Sadly, this issue has been playing out for about 6 years, mostly in arbitration. It has had some action in the Courts, but more sporadic. From my vantage point, the issue needed an end date. It made no sense to have a purely legal issue bouncing back and forth in probably over 100,000 awards and court decisions.
First, for those who have questioned “what is CPM/CTU”, it is post-rehabilitative machinery that is supposed to increase healing and functionality following extremity surgery. It is rented from about a 30-60 day period depending on the provider/supplier. The equipment wholesales for between $6,000-$10,000. If I am wrong, correct me – I do not have an invoice in front of me.
The rental rate that has been accepted in arbitration and court is $85-$100 per day. The item as a 2-3 year useful life. Again, this is what I have heard. It could be more.
therefore, assuming the equipment is used 320 days per year for 3 years, this would yield a billable value of close to $100,000 for the life of the machine. Not bad for a $6000 investment. And now you see the genesis of the frustration some of the pragmatists in no-fault have with what is happening here.
The Appellate Division, although couching the decision in terms of rationality held as matter of law that reimbursement shall be at the value of the rental to the general public. Of course, nobody rents these machines on a cash basis, this there is no accurate general public fee absent “Ingenix” that exists. And, if you want to call Ingenix a true valuation as to the cost to the general public, then you are sadly mistaken. The Court’s holding:
“Global failed to present sufficient evidence demonstrating that the Department of Health (DOH) had determined a price for these rentals. The July 3, 2014 letter from Joanne Criscione, Senior Attorney for the Bureau of Health Insurance Programs Division of Legal Affairs for the DOH appeared to indicate that DOH had adopted “a medicaid reimbursement policy for durable medical equipment (DME) rental items that have not been assigned a Maximum Reimbursement Amount (MRA). For DME items that do not have a MRA, the rental fee is calculated at 1/6th of the equipment provider’s acquisition cost.” In her June 8, 2016 letter, however, she makes clear that her July 3, 2014 letter “was not a determination by the Department of Health area office establishing the reimbursement rate” and she “merely state[d] the Medicaid reimbursement as that policy is set forth in the Medical Provider Manual for DME.” None of Global’s other evidence establishes that DOH had adopted the “1/6th of the equipment provider’s acquisition cost” rate.
It is true that the Medicaid DME fee schedule, which listed certain codes for DMEs, some of which had a MRA and some of which did not, established that for those that did not have a MRA, the monthly rate of 1/6th of the equipment provider’s acquisition cost would apply. And it is also true that, pursuant to 12 NYCRR § 442.2(b), “the total accumulated monthly charges shall not exceed the fee amount allowed under the Medicaid fee schedule.” However, it was not irrational for the arbitrator to conclude that this 1/6th rate applied only to items which had codes listed in the Medicaid fee schedule, which the CPM and CTU at issue here did not. Therefore, as Global neither demonstrated that DOH had adopted the 1/6th rental fee guideline, or that DOH had otherwise determined a rental fee, it was not irrational for the arbitrator to conclude that the reimbursement rate would be “the monthly rental charge to the general public” (12 NYCRR 442.2(b).”
Now, it is up to DFS and WCB to finally address this issue.
One more thing. Many of you out there are unaware of this, and I was not going to share until this opinion was published. But, WCB has already ruled on this issue, and I suspect this is what prompted the FAQ:
In the Matter of Long Island DDSO, 2016 WL 7010143 (2016):
Time for action on this issue now!
Karina K. Acupuncture, P.C. v Phoenix Ins. Co., 2018 NY Slip Op 50913(U)(App. Term 1st Dept. 2018)
“Defendant made a prima facie showing of entitlement to summary judgment dismissing plaintiff’s no-fault claims for acupuncture needle reinsertion services by demonstrating that it timely and properly denied the claims based on the assignor’s sworn statement denying that such services were performed upon him. In opposition, plaintiff’s proof, essentially consisting of an attorney’s affirmation, was insufficient to raise a triable issue as to whether the needle reinsertions were actually performed.”
What happens when the EIP says “sometimes” I get reinserted needles? Or the proof is inconclusive that the EIP never had the needles reinserted. Does the provider lose all reinsertion billing or does the carrier lose the defense because it cannot delineate the dates the reinsertion never occurred.
This question asks whether submitting a false bill in the first instance carriers the penalty of losing out on all false billing (even if some of the false billing is not false). Since the “fraud” provision of the general policy does not apply to the no-fault endorsement (Utica v. Timms), I am hard pressed to say the defense would exist in what I think is the circumstance that occurs more frequently.
This is from the Vice President of James Skelton, Esq., from AAA today (4-23-18) – It is for everybody’s edification:
Dear Jason – The Workers’ Compensation Board has recently advised the Department that the following email regarding PT rules is not the Board’s official position. If you have any questions, please contact Chris Maloney at firstname.lastname@example.org or (212) 480-5586.
Supervising Insurance Examiner
Property Bureau – Claims Administration Unit
New York State Department of Financial Services
One State Street Plaza, 6th floor, New York, NY 10004+1511
Ph: (212) 480-5586 | Fax: (212) 709-1570 | email@example.com
From: MacMaster, Heather (WCB)
Sent: Tuesday, January 30, 2018 3:59 PM
To: Maloney, Chris (DFS) <Chris.Maloney@dfs.ny.gov>
Cc: Woods, MaryBeth (WCB) <MaryBeth.Woods@wcb.ny.gov>; Smith, Steven (WCB) <Steven.Smith@wcb.ny.gov>
Subject: Fee Schedule: PT rules
Here is the PT information from our MDO.
The 8 RVU limitation is per patient per day regardless of how many body parts are treated or how many practitioners treat. The only exception is with chiro and PT. If a chiro renders manipulation only (98940-98943) and does not bill any of the other physical medicine codes, the injured worker could receive chiro and PT on the same day. This scenario is usually performed by a chiro who is affiliated with the Chiropractic Council. They only perform manipulation.
The physical medicine codes that are impacted by the 8 RVU limitation are in the chiro physical medicine fee schedule but the codes for spinal manipulation are not in the general physical medicine fee schedule.
Deputy General Counsel
NYS Workers’ Compensation Board
328 State Street, Schenectady, NY 12305
(518) 486-9564 | firstname.lastname@example.org
Confidentiality Notice: All contents of this message, including any attachments, may be confidential and/or legally privileged. Contents are intended for the recipient only. Any other use, dissemination or disclosure is unauthorized. If you are not the intended recipient, please notify the sender and delete the message and any attachments immediately.
American Arbitration Association
32 Old Slip, 33rd Floor, New York, NY 10005
T: 917 438 1562
Our office has moved. The new address is 32 Old Slip, 33rd fl, New York, NY 10005
The information in this transmittal (including attachments, if any) is privileged and/or confidential and is intended only for the recipient(s) listed above. Any review, use, disclosure, distribution or copying of this transmittal is prohibited except by or on behalf of the intended recipient. If you have received this transmittal in error, please notify me immediately by reply email and destroy all copies of the transmittal. Thank you.
You asked for it. Here it is. Riveting reading.
First, I must give a hat tip to an unnamed source at DFS who (1) Reads my blog; (2) Listens to me lament about certain court decisions; and (3) Has been very helpful about addressing the no-fault issues that I feel are unjust. Since this person probably does not want his/her name published, I will decline to do same.
This comes from Arbitrator Gewurz in the case of 21st Physical v. Geico (17-16-1037-6496)
To summarize: the 8 PT units can be split between specialties – but never more than 8 per day. CMT codes do not count to a non-chiro’s 8 unit allowance.
“Recently, however, the NYS Workers’ Compensation Board clarified the “8 unit rule.” In email correspondence from Heather MacMaster, Deputy General Counsel for the NYS Workers’ Compensation Board, to Chris Maloney at the Department of Financial Services, dated 01/30/18, it was explained that “[t]he 8 RVU limitation is per patient per day regardless of how many body parts are treated or how many practitioners treat. The only exception is with chiro and PT. If a chiro renders manipulation only (98940-98943) and does not bill any of the other physical medicine codes, the injured worker could receive chiro and PT on the same day. This scenario is usually performed by a chiro who is affiliated with the Chiropractic Council. They only perform manipulation. The physical medicine codes that are impacted by the 8 RVU limitation are in the chiro physical medicine fee schedule but the codes for spinal manipulation are not in the general physical medicine fee schedule.”
The WCB guidance is mostly consistent with this Arbitrator’s prior interpretation. Eight units are eight units unless treatment is rendered by a medical doctor/physical therapist/occupational therapist and chiropractor on the same day. In that circumstance, the chiropractor may be reimbursed a maximum of 8 units of spinal manipulation (CPT codes 98940-98943) even when a medical doctor/physical therapist/occupational therapist has already been reimbursed 8 units. Here, the Respondent received claims from Hills Chiropractic PC for the same dates of service as the Applicant. Hills submitted claims for reimbursement of three CPT codes: 98940, 97112, and 97140. Per date of service, the Respondent reimbursed Hills for 8 units and said units were directed towards CPT codes 98940 and 97140. Code 98940 was reimbursed in full and received 4.57 units while 97140 was partially reimbursed and received 3.43. No reimbursement was provided for CPT code 97112. The balances were denied based on the “8 unit rule.” Thereafter, the Respondent partially reimbursed the Applicant for its billed-for physical medicine modalities rendered on the same dates of service and denied the balances for the same reason as the balance of 8 units was paid to Hills. A total of 4.57 relative value units for self-employed physical therapists were reimbursed per date of service. Under the WCB’s recent guidance, the Respondent engaged in a legally valid distribution of 8 units of physical medicine modalities excluding chiropractic spinal manipulation between the two providers.”
If you have questions, you can write me, retain me or call me 🙂
Oleg’s Acupuncture, P.C. v Hereford Ins. Co., 2018 NY Slip Op 50095(U)(App. Term 2d Dept. 2018)
“Defendant supported its cross motion with an affidavit by its certified medical coder and biller, which affidavit was sufficient to establish, prima facie, that defendant had fully paid the claims in accordance with the fee schedule. In opposition, plaintiff failed to raise a triable issue of fact, as plaintiff submitted only an affirmation by its counsel, who did not establish that she possessed personal knowledge of the facts. In an order entered January 27, 2016, the Civil Court granted plaintiff’s motion, and denied defendant’s cross motion on the ground that defendant was precluded from interposing its defense because defendant had failed to timely deny plaintiff’s claims.”
“As defendant argues, 11 NYCRR 65-3.8 (g) (1) (ii); (2) provides that, effective April 1, 2013, “no payment shall be due for  claimed medical services under any circumstances . . . for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108 (a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.” Thus, defendant was not required to establish that it had timely denied the claims in order to preserve its fee schedule defense, as the services at issue had been provided between May 7, 2014 and July 16, 2014 (see 11 NYCRR 65-3.8 [g]  [ii]; ).”
This is what I take from this case. First, an untimely denial is not fatal to a defendant’s fee schedule defense. Second, a late payment in full (where there is a fee schedule defense) will not require interest payment provided there was an overbilling. And again, a certified coding affidavit will knock out the modality billing if properly paid in the first instance (I assuming there is modality billing here)
Precious Acupuncture Care, P.C. v Hereford Ins. Co., 2018 NY Slip Op 50042(U)(App. Term 2d Dept. 2018)
” Plaintiff moved for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint on the ground that plaintiff sought to recover amounts which were in excess of the amounts permitted by the workers’ compensation fee schedule. Defendant supported its cross motion with an affidavit by its certified medical coder and biller, which affidavit was sufficient to establish, prima facie, that defendant had fully paid the claims in accordance with the fee schedule”
Workers compensation fee schedule defense is satisfied through the affidavit of a certified medical coder.
Advanced Recovery Equip. & Supplies, LLC v Maya Assur. Co., 2018 NY Slip Op 50022(U)(App. Term 2d Dept. 2018)
The CPM story has been a terrific coup for the medical providers. The American Arbitration Association has consistently ruled in favor of the medical providers. The Courts have generally confirmed arbitration awards. A Civil Court has now taken the AAA position. All that is now left is to see what the Appellate Courts will do.
This is one area where I think both DFS and WCB have dropped the ball. Reimbursement rates have once again declined for surgeries and associated providers through regulation. Yet, this piece of the surgery puzzle now has a larger price tag attached to it than the facility fee and the surgery fee.
Eventually, the regulators will do something…
Bronx Acupuncture Therapy, P.C., as asignee of Mejia v Hereford Ins. Co., 2017 NY Slip Op 79291(U)(2d Dept. 2017)
This came out on July, 2017. The Court granted Hereford leave to argue that the failure to satisfy the “BR code” requirements of the fee schedule is fatal to a medical provider’s prima facie case. I am unsure if I agree since the Courts in New York consider all fee schedule issues “defenses”. My next thought is to state that the disclaimer based upon “BR” is sufficient to ultimately force a plaintiff to prove compliance with the rule. The theory for this comes from the “standing” jurisdiction in mortgage foreclosure cases. Pleading this as an affirmative defense – or in NF parlance through a disclaimer – requires an additional element of proof as part of the PF case – in this case compliance with the BR rule. But do I think my above theory is meritorious? Probably not.
If the Courts absent regulatory fiat will authorize billings short of provider fraud where a timely disclaimer is not issued, why should this be different.
Don’t get me wrong – I appreciate Hereford’s position. But after Amaze v. Eagle and Mary Immaculate Allstate (15 and 14 years ago, respectively), these are battles that bare no fruit.
Adelaida Physical Therapy, P.C. v 21st Century Ins. Co., 2017 NY Slip Op 51808(U)(App. Term 2d Dept. 2017)
“Plaintiff properly argues on appeal that defendant failed to establish, as a matter of law, its defense that the fees charged with respect to the services billed under codes CPT 97010, 97110 and 97124 exceeded the amounts set forth in the workers’ compensation fee schedule therefor (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]). Defendant failed to demonstrate that it had used the correct conversion factor in calculating the reimbursement rate. Consequently, the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover for those services should have been denied.”
Again, the Court has not been favorable of adjudicating these types of disputes as a matter of law.