New Jersey fee schedule prevails

Surgicare Surgical Assoc. v National Interstate Ins. Co., 2015 NY Slip Op 25338 (App. Term 1st Dept. 2015)

(1) “Insurance Department regulation (11 NYCRR) § 68.6 provides that where a health service reimbursable under Insurance Law § 5102(a)(1) “is performed outside New York State, the permissible charge for such service shall be the prevailing fee in the geographic location of the provider” (emphasis added). We agree, essentially for reasons stated by Civil Court (46 Misc 3d 736 [2014]), that where a reimbursable health care service is performed outside the State of New York in a jurisdiction that has enacted a medical fee schedule prescribing the permissible charge for the service rendered, an insurer may properly rely on such fee schedule to establish the “prevailing fee” within the meaning of 11 NYCRR 68.6, and demonstrate compliance therewith by payment in accordance with that fee schedule.”

In one long paragraph, the Appellate Term has held that a no-fault fee schedule in a sister state will be deemed the appropriate fee schedule for services performed in the sister state.

(2) “We note that since the services here were rendered after April 1, 2013, the defense of excessive fees is not subject to preclusion (see 11 NYCRR 65-3.8[g][eff Apr. 1,2013).”

Lack of conformity of billing in accordance with the fee schedule is a defense for all services rendered after April 1, 2013.    This is important for a reason you may not appreciate.  Many defense counsel are arguing that the bizarre wording of 65-3.8(g) has made billing in conformity with fee schedule and proof that the service was rendered part of the prima facie case.  At face value, this is a good argument.  The problem with this argument is the evil 3.8(g) was ameliorating was the precluability of the defense of fee schedule and billing fraud.  The two cases that 3.8(g) sought to overrule were Mercury v. Encare and Fair Price v. Travelers.  Taken in the light that this must be taken in, the Court has held that the “defense excessive of fees is not subject to preclusion”

It has been my fervent believe that a provider should need to plead and prove the foundation elements of a no-fault action – necessity, causal relationship, overdue and damages.  The Courts have uniformly held that all four elements are satisfied through submission of bill or, in the context of Domotor, proof of receipt of a global denial or its equivalent.  As they say, deal with it.

Also, a favorable mention to Aaron Peretta for prosecuting this appeal.  It was a mine field – and I have stepped in too many lately – but he did the best he could.

 

 

Coder’s affidavit is sufficient to prove non-conformity with the fee schedule

GBI Acupuncture, P.C. v 21st Century Ins. Co., 2015 NY Slip Op 51235(U)(App. Term 2d Dept. 2015)

“Furthermore, the affidavit executed by defendant’s certified professional coder established that defendant had properly used the workers’ compensation fee schedule to determine the amount which plaintiff was entitled to receive for the services at issue”

I am sensing this case (among a few others) might cut into the argument (more so raised at arbitration) that the affidavit of the coder is insufficient to reduce the fee charged since the coder is not a medical professional.

Another old fee schedule 20553 reduction case

Alleviation Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co., 2015 NY Slip Op 50778(U)(App. Term 2d Dept. 2015)

“Plaintiff’s main argument on appeal with respect to defendant’s cross motion is that defendant failed to demonstrate that it had properly reduced the sum billed for CPT code 20553 from $4,000 to $645.90 pursuant to the workers’ compensation fee schedule. Contrary to plaintiff’s contention, the affidavit submitted by defendant was sufficient to demonstrate, prima facie, that Ground Rule 3 and Ground Rule 5 were appropriately applied to the services billed, and that defendant properly applied CPT code 20552 in order to determine the amount due, which it calculated to be $645.90. It is of no relevance to the determination of this appeal that defendant has described a potential alternate calculation which, had defendant used it, would have concluded that only $416.85 was due.”

It is so nice to see the Court mention codes by number and to explain their methodology for reaching a given conclusion that the reduction is correct.  Now I am curious how much money the carrier would recoup if they brought an unjust enrichment claim against Alleviation/ Guiterrez for the difference between $645,90 and $416,85 that was paid.

Assume there were 5000 claims with this pattern.  That would be  $1,145,250.

First application of 11 NYCRR 65-3.8(g)(1)(ii)

Saddle Brook Surgicenter, LLC v All State Ins. Co.,  2015 NY Slip Op 25099 (Civ. Ct. Bx. Co. 2015)

“Accordingly, for all of these reasons the Court holds that the “prevailing fee” as that term is used in section 68.6 is the amount permitted under New Jersey’s fee [*3]schedule. (Surgicare Surgical v National Interstate Insurance Co., 997 NYS2d 296 [Civ Ct Bx Co 2014] [holding “that when services are rendered outside of New York but in a jurisdiction which utilizes a fee schedule, the insurer complies with Section 68.6 by paying . . . the amount permitted by that jurisdiction’s fee schedule.”]).

Timeliness of Denial
11 NYCRR § 65-3.8(a)(1) provides in pertinent part that “[n]o-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim . . .” Here there is no dispute that Defendant did not deny Plaintiff’s claim within 30 calendar days after it received proof of Plaintiff’s claim.

“There are substantial consequences [for] an insurer’s failure to pay or deny a claim within 30 days.” (A.M. Medical Services, P.C. v Progressive Casualty Insurance Company, 101 AD3d 53, 65 [2nd Dept 2012] citing Hospital for Joint Diseases v Travelers Property Casualty Insurance Company, 9 NY3d 312 [2007] [internal quotations omitted]). Where an insurance carrier fails to deny a claim within the 30-day period, it is generally precluded from asserting a defense against payment of that claim. (Id., citing Presbyterian Hospital in City of NY v Maryland Casualty Company, 90 NY2d 274, 282-83 [1997]). However, a narrow exception to this preclusion rule is recognized in “situations where an insurance company raises a defense of lack of coverage.” (Hospital for Joint Diseases, 9 NY3d at 318). Under these circumstances, “an insurer who fails to issue a timely disclaimer is not prohibited from later raising the defense because the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed.” (Hospital for Joint Diseases, 9 NY3d at 318).

The test for “determining whether a specific defense is precluded . . . or available . . . entails a judgment: Is the defense more like a normal’ exception from coverage (e.g., a policy exclusion), or a lack of coverage in the first instance (i.e., a defense implicating a coverage matter)?” (Fair Price Medical Supply Corp. v Travelers Indemnity Co., 10 NY3d 556, 565 [2008] [internal citations omitted]). An example of a normal exception from coverage/policy exclusion is where the insurer alleges the billed for services were never rendered. (Id.). Thus, an insurer is precluded from raising this defense unless timely raised in its denial. (Id.). An example of a lack of coverage in the first instance is an insurer’s “founded belief that the alleged injury does not arise out of the insured incident.” (Central General Hospital v Chubb Group of Insurance Companies, 90 NY2d 195, 199 [1997]). An insurer is not precluded from raising this defense even though it failed to issue a denial within the 30 day period under Insurance Law § 5106(a) and 11 NYCRR 65-3.8(a). (Id.).

Appellate authority stands for the proposition that a defense that the provider’s bill exceeds the maximum allowed under the fee schedule is a policy exclusion defense and thus precluded if not preserved within a timely issued denial of claim. (Mercury [*4]Casualty Co. v. Encare, Inc., 90 AD3d 475, [1st Dept 2011] lve denied 18 NY3d 810 [2012] [holding fee schedule defense does not fit within narrow exception for denials based on lack of coverage]; Okslen Acupuncture P.C. v NY Central Mutual Fire Ins. Co, 37 Misc 3d 127(A) [app T 1st Dept 2012]) [holding “insurer did not timely deny the claim for first-party no-fault benefits within the prescribed 30-day period, [therefore,] it is precluded from asserting the defense that the fees charged were excessive.”]).

However, a February, 2013, amendment to the insurance regulations regarding timeliness of fee schedule defenses calls into question whether Mercury Casualty Co. and Okslen Acupuncture P.C. are still controlling authority. 11 NYCRR § 65-3.8 provides in pertinent part that:

(g)(1) Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:
(i) when the claimed medical services were not provided to an injured party; or

(ii) 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.[FN1]
Here the parties agree that the medical services were provided to an “injured party”, someone having a claim for benefits pursuant to New York’s statutory and regulatory no-fault insurance scheme and this case does not involve an issue under Insurance Law § 5108(a), a New York fee schedule dispute.

The relevant portion of section 65-3.8(g)(1) for this case is subsection (ii) and its reference to Insurance Law § 5108(b). This case is within the rubric of section 5108(b) because the Court is called upon to interpret 11 NYCRR § 68.6, a regulation promulgated by the insurance superintendent, and as already stated above, the Court interprets 11 NYCRR § 68.6 as requiring Plaintiff to bill for its services at the applicable New Jersey fee schedule rate for its geographic location. As such, this case involves a [*5]fee that exceeds the charges permissible pursuant to Insurance Law § 5108(b) requiring the Court to interpret and determine the applicability of 11 NYCRR § 65-3.8(g)(1)(ii).

The parties do not cite to a case interpreting section 65-3.8(g)(1)(ii) and the Court did not find such a case. Therefore, it appears to be a question of first impression whether 65-3.8(g)(1)(ii) allows an insurer to assert a fee schedule defense even though it did not issue a denial of claim within 30 days of receipt of the claim asserting that the provider billed at a rate above the amount permitted under the applicable fee schedule for the provider’s geography location.

Parsing section 65-3.8(g)(1) assists in its interpretation. 11 NYCRR § 65-3.8(g)(1) relieves insurers from the obligation to pay first party no-fault benefits under two sets circumstances. Section 65-3.8(g)(1)(i) relieves a insurer from paying a claim when the medical provider renders services to a patient who is not an injured party. (11 NYCRR § 65-3.8[g][1][i]). In other words, the insurance company is not required to reimburse a provider for medical services provided to someone who is not an accident victim as that term is understood under Insurance Law. (See Insurance Law § 5108[b]). Section 65-3.8(g)(1)(i) codifies an example of a defense that is more akin to a lack of coverage in the first instance because coverage never legitimately came into existence. (Fair Price Medical Supply Corp., 10 NY3d at 565).

The Court determines that the superintendent intended the same result for section 65-3.8(g)(1)(ii). The Court reaches this determination for two reasons. First because, the plain language of the regulation relieves an insurer of paying the provider “under any circumstances” when the claimed medical service fees exceed the permissible amount pursuant to the applicable fee schedule for the provider’s geographic location. (Klein v. Empire Blue Cross and Blue Shield, 173 AD2d 1006, 1009 [3rd Dept 1991] [noting that “[generally, the plain language used in a regulation should be construed in its natural and most obvious sense.” [citation omitted]). Therefore, “any circumstances” includes instances where the insurer fails to issue a denial rasing fee schedule as an issue within thirty days of its receipt. Second, because the preceding subsection (i) is a codification of a defense that falls squarely within the realm of defenses that are more akin to lack of coverage in the first instance. (MHG Enterprises Inc. v. City of New York, 91 Misc 2d 842, 846 [Sup Ct NY Co 1977] [reasoning that “[i]n interpreting the language of a statute or regulation, the court must give meaning to its words in the context of their particular setting.'” [quoting MVAIC. Eisenberg, 18 NY2d 1, 3 [1966]).

This interpretation of section 65-3.8(g)(1)(ii) conflicts with the holdings of Mercury Casualty Co. and Okslen Acupuncture P.C. wherein the First Department Appellate Division and Appellate Term held that fee schedule defenses are precluded if not raised in a timely issued denial. However, those cases predate the amendment to section 65-3.8(g)(1) and the Court determines that subsection (ii) abrogates Mercury Casualty Co. [*6]and Okslen Acupuncture P.C. The Court reaches this determination because “[a]n administrative agency’s exercise of its rule-making powers is accorded a high degree of judicial deference, especially when the agency acts in the area of its particular expertise” (Consolation Nursing Home, Inc. v Commissioner of New York State Department of Health, 85 NY2d 326, 331 [1995]) and where the regulation is “in harmony with the statute’s over-all purpose.” (General Electric Capital Corp. v New York State Division of Tax Appeals Tribunal, 2 NY3d 249, 254 [internal quotation and citations omitted]). Here, the regulation pertains to an area of expertise within the Insurance Division of the Department of Financial Services. (Consolation Nursing Home, Inc., 85 NY2d at 331). Furthermore, allowing an insurer to rase a fee schedule defense even though it was not preserved in a timely issued denial, is in harmony with the no-fault statute’s goal of significantly reducing “the amount paid by insurers . . . thereby helping] to contain the no-fault premium”. (Goldberg, 153 AD2d at 118; General Electric Capital Corp., 2 NY3d at 254).

For theses reasons, the Court holds that where an insurer fails to issue a denial within 30 days of its receipt rasing a fee schedule issue, under 11 NYCRR § 65-3.8(g)(1)(ii) the insurer is not precluded from raising its defense that the provider billed above the applicable amount permitted under the fee schedule for the provider’s geographic location in an action by the provider for first party no-fault benefits.”

This completely makes sense.  The purpose of this regulation is to overturn Mercury v. Encare.  A court has finally seen this.

CPT Code 20553 reduced from $4,000 to less than $1,000

Alleviation Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co., 2015 NY Slip Op 50379(U)(App. Term 2d Dept. 2015)

First off, good job to Linda Filosa, Esq from Richard Lau’s office on an impressive affirmance.  These fee schedule issues in many ways are sui generis and each raise issues of first impression.

Second, this case explains the methodology of how you get from a BR report code (CPT Code 20553 [pre 2012 fee schedule amendments]) to a scheduled use Code (CPT code 20552) with the application of the 50% reduction of Ground Rule 5.

Third, in the pre 2013 fee schedule precludability era, this case describes how box #18 being checked is (shall we say) the be all and end all of the analysis.

Good win for State Farm!!

Plaintiff’s main argument on appeal with respect to defendant’s cross motion is that defendant failed to demonstrate that it had properly reduced the sum billed for CPT code 20553 from $4,000 to $645.90 pursuant to the workers’ compensation fee schedule. Contrary to plaintiff’s contention, the affidavits submitted by defendant were sufficient to demonstrate, prima facie, that Ground Rule 3 and Ground Rule 5 were appropriately applied to the services billed, and that defendant properly applied CPT code 20552 in order to determine the amount due, which it calculated to be $592.07. Defendant’s employee explained that defendant had mistakenly paid $645.90 for 21 trigger point injections rather than $592.07 for the 20 injections for which plaintiff had billed. In any event, it is of no relevance to the determination of this appeal that defendant paid an additional $53.83 as a result of this mistake, or that it has described a potential alternate calculation which, had defendant used it, would have concluded that only $416.85 was due. Defendant has demonstrated that it paid more than it was responsible for pursuant to the workers’ compensation fee schedule, and plaintiff has not rebutted that showing. Contrary to plaintiff’s second argument on appeal with respect to defendant’s cross motion—that defendant’s proffered defense was not set forth in its denial—a checked box on the denial of claim form indicated that benefits were denied because the fees were not in accordance with the fee schedule, and the denial referenced an attached “Explanation of Review.”

Acupuncture may be billed using 97039 and 97026

VS Care Acupuncture v State Farm Mut. Auto. Ins. Co., 2015 NY Slip Op 50164(U)(App. Term 1st Dept. 2015)

(1) “Defendant’s documentary submissions established prima facie that it timely and properly denied plaintiff’s no-fault claims billed under CPT codes 97810, 97811 and 99203 on the ground that the amounts charged were in excess of the fees fixed by the applicable workers’ compensation fee schedule.” Payment at the chiropractor rate was sufficient to prevail on these codes.

(2) “Contrary to plaintiff’s contention, defendant’s April 12, 2010 denial of plaintiff’s claim in the amount of $2,690 was timely, since the last day of the 30 calendar days within which defendant was required to pay or deny the claim (see 11 NYCRR 65-3.8[c]) fell on Saturday, April 10, 2010 (see General Construction Law § 20).”  Here, day 30 fell on a Saturday, and it was sufficient that the disclaimer was mailed on a Monday.

(3) “Triable issues remain, however, in connection with plaintiff’s claims billed under CPT codes 97039 (moxibustion) and 97026 (infrared treatment). The position taken by defendant’s affiant, a certified medical coder, that the above-mentioned services, although “within the scope of practice of an acupuncturist, . . cannot be considered for reimbursement” because the procedure codes billed under were listed in the workers’ compensation physical medicine fee schedule, is unpersuasive. Inasmuch as the superintendent of insurance has not adopted or established a fee schedule for reimbursement of acupuncture services performed by a licensed acupuncturist, an insurer may consider the “charges permissible for similar procedures under schedules already [*2]adopted or established by the superintendent” (11 NYCRR 68.5[b]) for purposes of determining the appropriate reimbursement rate (see Forrest Chen Acupuncture Servs., P.C. v Geico Ins. Co., 54 AD3d 996 [2008]).”

Consider the situation a listed provider bills for services outside of the portion of the fee schedule that is unique to that provider.  I believe Robert Physical in light of VS Acupuncture an Avanguard may be dead.

It came and I am surprised – but if everything is now done in New Jersey, what’s the long term impact?

Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 2015 NY Slip Op 01413 (2d Dept. 2015)

(1) “We hold that, absent express statutory or regulatory authorization, a no-fault insurer is not required to pay a facility fee for office-based surgery performed in a practice and setting accredited under Public Health Law § 230-d.”

(2) “Insurance Law § 5108 provides, with some exceptions, that charges for services covered under Insurance Law § 5102 “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents” (Insurance Law § 5108[a])[FN3]. Where Workers’ Compensation schedules have not been prepared for certain services covered under Insurance Law § 5102, Insurance Law § 5108 requires that the Superintendent of Financial Services establish schedules after consulting with the [*3]chairperson of the Workers’ Compensation Board and the Commissioner of Health”

(3) “The implementing and coordinating regulations of the Department of Financial Services [FN4]—11 NYCRR 65 3.16 (Regulation No. 68-C; “Measurement of no-fault benefits”)—refer, in turn, to “Regulation No. 83.” Regulation No. 83 (11 NYCRR 68.0) adopts the Workers’ Compensation schedules that were already in existence (see 11 NYCRR 68.1 [“Adoption of certain workers’ compensation schedules”]; 12 NYCRR 329.3 [“Medical fee schedule; incorporation by reference”]), and establishes schedules for services not already contained in Workers’ Compensation schedules (11 NYCRR 68.2 [“Establishment of certain health provider schedules”]).”

(4) “Further, Avanguard points out that Regulation No. 83 includes a default provision in recognition that not all covered services will be contained in the applicable fee schedules.  This provision—11 NYCRR 68.5 (“Health services not set forth in schedules”)—provides a mechanism for determination of appropriate fees for those services that are included within the definition of “basic economic loss” but are not contained in a schedule. Avanguard contends that, under this “default” regulation, it is entitled to a facility fee and that this fee is the same fee provided to ambulatory surgical centers under article 28 of the Public Health Law.

(5)“the determination of what is a necessary expense must take Insurance Law § 5108 into account. There is no provision in the Workers’ Compensation schedules expressly providing for payment of facility fees for office-based surgery performed in a practice and setting accredited under Public Health Law § 230-d. The absence of such a provision supports GEICO’s argument that a facility fee is not a necessary expense for medical services performed by a practice and in a facility accredited under Public Health Law § 230-d”

(6)“Section 68.5 Health services not set forth in schedules

“If a professional health service is performed which is reimbursable under section 5102(a)(1) of the Insurance Law, but is not set forth in fee schedules adopted or established by the superintendent, and:

“(a) if the superintendent has adopted or established a fee schedule applicable to the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule, subject to review by the insurer; or

“(b) if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR 68.5; [emphasis added]).

Under this regulation, a provider may be entitled to reimbursement in situations when there is no fee schedule for a particular service. Avanguard cannot accurately assert that there is no existing fee schedule that determines the amount of a facility fee. Indeed, it is undisputed that Avanguard has consistently billed GEICO for facility fees based on the existing fee schedule and “PAS” codes that are applicable to Public Health Law article 28 ambulatory surgical centers (see 10 NYCRR 86-4.1, 86-4.40). Accordingly, there is indeed a fee schedule for facility fees. That schedule, however, it is not applicable to Avanguard. Thus, a prerequisite to application of the default provision is absent.

(7) “The conclusion that the default provision is inapplicable makes sense in light of its purpose. The default provision relates to particular procedures that do not appear on any existing fee schedule (see 11 NYCRR 68.5[a], [b]). A facility fee is not a fee for a particular medical procedure, but a blanket charge added to the billing for all procedures. In other words, Avanguard contends that, under the default regulation, an entire category of fees should be deemed compensable. We reject such a broad interpretation of the default provision, because the obvious intent of the default provision is to fill in discrete gaps in the schedules, not to make an entirely new category of “service” compensable”

Fee schedule vendor properly substituted for a claims rep. affidavit

Healing Art Acupuncture, P.C. v Amica Mut. Ins. Co., 2015 NY Slip Op 50078(U)(App. Term 2d Dept. 2015)

“Defendant denied plaintiff’s claims on the grounds that they exceeded the amount permitted by the workers’ compensation fee schedule, and that defendant had fully paid for the billed-for services in accordance with the fee schedule for acupuncture services performed by chiropractors. Contrary to plaintiff’s assertion, the affidavit executed by a fee schedule adjuster [*2]for defendant’s vendor, Managed Care Network, established that defendant had properly used the workers’ compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which plaintiff was entitled to receive for the services at issue”

So here, you have a vendor’s affidavit establishing the merits of the fee schedule defense.  Generally, this type of issue can be handled through claims representative affidavit.

Another acupuncture fee schedule challenge fails

Health Needles Acupuncture, P.C. v GEICO Ins. Co., 2014 NY Slip Op 51864(U)(App. Term 2d Dept. 2014)

“On appeal, plaintiff argues that defendant failed to establish that its fee schedule reductions were proper. We disagree and find that defendant demonstrated that it had fully paid plaintiff for the services at issue in accordance with the workers’ compensation fee schedule for acupuncture services performed by chiropractors”

New Jersey fee schedule is proper as a matter of law

Surgicare Surgical v National Interstate Ins. Co., 2014 NY Slip Op 24362 (Civ. Ct. Bronx Co. 2014)

The quick synopsis of this case is that were the services are performed in a state where there is a fee schedule for these types of service, the state’s fee schedule will control.  It makes sense, and the Court goes on to note that not applying this rule will turn every “simple” no-fault matter into a battle of coding and billing experts.  This is antithetical to the realm of no-fault.  I personally like how the Court uses 68.5(b) to create a rule that a reasonable and customary amount will only be permissible upon there being no way to harmonize the fee schedule with the service provided.

“In a claim brought under New York’s Comprehensive Motor Vehicle Insurance Reparations Act, otherwise referred to as the “No-Fault Law” (see New York Insurance Law § 5101, et seq.), a provider’s reimbursement for eligible health services performed in New York “shall not exceed the charges permissible under [the fee schedule established by the New York State Workers’ Compensation Board]” (see Insurance Law § 5108[a]). Under subdivision (b), “no provider of health services may demand or request any payment in addition to the charges authorized [under the fee schedule]” (Insurance Law § 5108).

Responsibility for administering the Insurance Law rests with the Superintendent of Insurance who has “broad power to interpret, clarify, and implement the legislative policy” (see Insurance Law § 301; A.M. Med. Services, P.C. v Progressive Cas. Ins. Co., 101 AD3d 53, 64 [2d Dept 2012] [internal quotations omitted]). In the no-fault context, Section 5108 (b) of the Insurance Law empowers the Superintendent to “promulgate rules and regulations implementing and coordinating the provisions of [the No—Fault Law] . . .” These rules, found in Part 68 of the New York Insurance Department Regulations, “govern the charges for professional health services” (see Great Wall Acupuncture v Geico General Ins. Co., 16 Misc 3d 23 [App Term, 2d Dept 2007]).

Within this regulatory framework, the Insurance Department has promulgated Section 68.6 which provides that:

“If a professional health service is performed outside New York State, the permissible charge for such service shall be the prevailing fee in the geographic location of the provider” (11 NYCRR § 68.6).

The question of exactly what constitutes the “prevailing fee” in this context appears to be one of first impression since neither of the parties nor this Court have located authority interpreting Section 68.6 in relation to a state which utilizes a no-fault fee schedule. However, the Superintendent of Insurance has issued a formal Opinion interpreting Section 68.6 in the context of a foreign jurisdiction that apparently did not have a fee schedule. The Opinion, which involved a question of licensure for physical therapists providing health services in Guatemala, specifically cites the Section at issue and states:

As to the amount of the reimbursement, where the health services are provided outside of New York State . . . [t]he dollar amount of the reimbursement for physical therapy services (or other professional health services) performed on an eligible injured person under a New York No-Fault insurance policy in Guatemala is determined by the permissible cost for such services in Guatemala (General Counsel Opinion 4-1-2003 (No.3), 2003 WL 24312368 (US), 2 [emphasis added]).

The Superintendent’s use of the word “permissible” is significant as it strongly suggests that reimbursement for health services performed in a foreign jurisdiction may be regulated by that jurisdiction’s laws, including a governing no-fault regime. Indeed, the principle of limiting reimbursements to “permissible” amounts is mirrored in the section of the Insurance Law that codifies the No-Fault Law’s salient feature of explicitly restricting reimbursement for health services performed in New York to the amounts allowable by this State’s fee schedule (see Ins. Law Section 5108[a]); therefore, it is only logical that the same principle should apply to foreign jurisdictions. Consistent with the use of “permissible ” in the core provision of the No-Fault Law, the Superintendent has reasonably interpreted the language of Section 68.6 to require that an insurer pay for any health service performed in a locale outside of New York at the permissible cost for that location. As such, the Superintendent’s interpretation of its own regulations is entitled to deference (LMK Psychological Services, P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009] [“the Insurance Superintendent’s interpretation of its own regulations if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision'”).

In addition, the language of the preceding subsection within Section 68.6 also utilizes the term “prevailing fee.” That subsection, Section 68.5 (b), states that:

“If a professional health service is performed which is [eligible for no-fault benefits], but is not set forth in fee schedules adopted or established by the superintendent, and if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR § 68.5[b] [emphasis added).

Section 68.5 (b) requires that the insurer pay the “prevailing fee in the geographic location of the provider” only if this State’s fee schedule has not established a permissible charge for the health service or has not adopted the type of provider who seeks reimbursement for no-fault benefits. In other words, for any claimed health service, the insurer must look first to the fee schedule in determining the proper reimbursement amount. It is only after the insurer concludes that the fee schedule does not apply that it may look to the “prevailing fee” in the provider’s location. The provider’s likelihood of receiving the “prevailing fee” is further conditioned upon the insurer’s prerogative to re-categorize the particular health service to fit under existing fee schedules. By looking first to the application of a fee schedule, Section 68.5 employs a logical approach in which [*3]the insurer pays a “prevailing fee,” as plaintiff defines that term, only after all possible fee schedule applications have been exhausted.

Both the Insurance Department’s Opinion and Section 68.5 (b)’s formula for applying the “prevailing fee” comport with the policy goals underlying the Legislature’s adoption of a fee schedule. The purpose of a fee schedule is “to significantly reduce the amount paid by insurers for medical services, and thereby help contain the no-fault premium” (Goldberg v Corcoran, 153 AD2d 113, 118 [2d Dept 1989] [internal quotations omitted] citing Governor’s Program Bill, 1977 McKinney’s Session Laws of NY, at 2449; Governor’s Memorandum in Support of Assembly Bill 7781—A). Moreover, per Insurance Department regulation, the express purpose of the fee schedule was to “contain the cost of no-fault insurance” (see 11 NYCRR 68.0). Like New York, New Jersey passed similar no-fault legislation as a “cost containment initiative” (see Casinelli v Manglapus, 181 NJ 354, 360, 858 A2d 1113, 1116 [2004]). In furtherance of policy goals akin to New York’s, New Jersey’s Department of Insurance has promulgated a medical fee schedule (see 11 NJSA 11:3-2.9). Thus, the “permissible” charge for health services rendered in New Jersey are limited by the maximum amounts permitted under New Jersey’s fee schedule.

Based on the foregoing, this Court holds that, when services are rendered outside of New York but in a jurisdiction which utilizes a fee schedule, the insurer complies with Section 68.6 by paying the “permissible” charge for that particular medical service, that is, the amount permitted by that jurisdiction’s fee schedule. There being no dispute that defendant issued payment on plaintiff’s claim in accordance with New Jersey’s fee schedule, plaintiff is not entitled to more. Since plaintiff’s action is based entirely on its claim of entitlement to reimbursement in excess of New Jersey’s “permissible” charge, the relief sought in the complaint must be denied and the action dismissed.

Contrary to plaintiff’s position, this Court neither exceeds its “jurisdiction” nor subverts the plain language of Section 68.6 by holding that an insurer complies with Section 68.6 when the reimbursement amount is consistent with another state’s fee schedule. Rather, this Court merely adopts a reading of Section 68.6 that comports with both the Insurance Department’s interpretation of its own regulation, as well as the policy goals underlying New York’s (not to mention, New Jersey’s) No-Fault Law.

Aside from the core objective of “provid[ing] a tightly timed process of claim, disputation and payment” (see LMK Psychological Services, P.C., 12 NY3d at 223), another important goal of the no-fault laws was also to “reduce the burden on the courts” (see Hosp. for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007] [internal quotations omitted]). If this Court were to accept plaintiff’s interpretation of Section 68.6, rather than “reduce the burden on the courts,” similar no-fault disputes would routinely call upon trial courts to conduct evidentiary hearings on local billing practices to determine the “prevailing fee” in a neighboring location notwithstanding the fact that such a jurisdiction has already established its own legally permissible fee. Such a situation would undoubtedly subvert the No Fault Law’s core objective of creating a speedy process of claim, dispute resolution, and, ultimately, payment.

Equally important, the goals of consistency and fairness are undermined when injured parties, or their provider-assignees, can be reimbursed for the same health services at different rates [*4]from those permitted under either New York’s or even another state’s fee schedule simply because the services were rendered outside of New York but are to be paid in this State. Plaintiff’s proposed reimbursement scheme would only frustrate the purposes of both jurisdictions’ no fault laws because providers would be incentivized to treat New York patients in other jurisdictions hoping to receive more for performing the same health service outside of New York’s borders.