Carothers v. Geico: The No-Fault Business Records Showdown

The New York no-fault insurance landscape has been shaped by landmark cases that determine how medical providers must establish their claims. One case that has captured the attention of personal injury attorneys and insurance law practitioners is Andrew Carothers, M.D., P.C. v Geico Indemnity Company, a decision that may fundamentally alter the evidentiary requirements for no-fault claims in New York.

The Carothers Case: A Critical Juncture

Andrew Carothers, M.D., P.C. v Geico Indemnity Company, 2009 NY Slip Op 85909(U)(2d Dept. 2009)

The Appellate Division, on October 15, 2009, granted Plaintiff Andrew Carothers, P.C., leave to appeal the adverse decision of the Appellate Term, Second Department, which reversed the order of the Civil Court, Kings County, and held that Plaintiff failed to establish its prima facie case at a plenary trial.

If you recall, the Carothers case, the following was stated:

“The witness testified that plaintiff’s no-fault claim forms were prepared by plaintiff and transmitted electronically to AHCS to be printed and mailed to defendant. He further testified that the remaining subject documents were forwarded by plaintiff to AHCS. Even assuming that the witness was familiar with plaintiff’s business practices and proceduresand that, as an employee of plaintiff’s billing company, the witness would be competent to testify about such practices and procedures he still failed to establish, by laying the requisite foundation that the documents were plaintiff’s business records and, therefore, admissible in court pursuant to the business records exception to the rule against hearsay.  Upon reconsideration of this court’s decision in Pine Hollow Med., P.C. v. Progressive Cas. Ins. Co., 13 Misc.3d 131(A), 2006 WL 2829824, 2006 N.Y. Slip Op. 51870(U) , we conclude that the law was misapplied to the facts presented in that case. Accordingly, to the extent that it is not in accord with this decision, it should no longer be followed.

In light of plaintiff’s failure to establish the admissibility of its evidence, including its claim forms, plaintiff did not establish a prima facie case Even under the standard set forth in Pine Hollow Med., P.C., 13 Misc.3d 131(A), 2006 N.Y. Slip Op. 51870(U), the witness’ testimony was not sufficient to lay the proper foundation for the records plaintiff sought to introduce into evidence because AHCS did not incorporate plaintiff’s records into its own records, but merely received, printed and mailed them. Accordingly, defendant was entitled to judgment dismissing the complaint.” (internal citations omitted)

I believe that this case is going to spell the end of Dan Medical, which requires that a business record foundation (CPLR § 4518) be laid for the entry of the bills into evidence in order to satisfy a provider’s prima facie.  For those who believe that Art of Healing Medicine, P.C. v. Travelers Home and Marine Ins. Co., 55 AD3d 644 (2d Dept. 2008)(upholding the business record foundation model to satisfy a prima facie case) is dispositive, I think one should evaluate New York Presb. Hosp. v. New York Cent. Mut. Fire Ins. Co., 31 AD3d 403 (2d Dept. 2006)(finding that a signed assignment of benefits is part of a prima facie case), and how the Appellate Division,immediately moved away from this model, eventually leading in the Court of Appeals holding that a signed assignment of benefits is nor part of a prima facie case. Hospital for Joint Diseases v. Travelers Prop. Cas. Co.,  NY3d 312 (2008)

Understanding the Implications for New York No-Fault Practice

The Carothers decision represents a potential watershed moment in New York’s no-fault insurance law. The case addresses fundamental questions about how medical providers must establish their claims and what evidentiary standards courts will apply to business records in the no-fault context.

The Business Records Foundation Requirement

At the heart of the Carothers controversy lies the question of whether medical providers must establish a proper business records foundation under CPLR § 4518(a) to admit their billing records into evidence. This requirement has been a source of significant litigation and confusion in no-fault cases throughout New York.

The traditional approach, established in cases like Dan Medical, required providers to demonstrate that their billing records were made in the regular course of business, were contemporaneous with the events they recorded, and were based on the personal knowledge of the person making the entry or someone with a business duty to transmit the information.

The Third-Party Billing Company Complication

The Carothers case introduces additional complexity because the medical provider used a third-party billing company (AHCS) to process and submit claims. This arrangement, common in modern medical practice, creates evidentiary challenges that the traditional business records framework wasn’t designed to address.

The court’s analysis focuses on whether AHCS merely acted as a conduit for transmitting the provider’s records or whether it incorporated those records into its own business operations. This distinction proves crucial because it determines whether the witness from the billing company can lay the necessary foundation for admitting the records.

The Evolution of Prima Facie Requirements

The Carothers case must be understood within the broader context of how New York courts have evolved their approach to prima facie requirements in no-fault cases. This evolution reflects ongoing tensions between making the no-fault system accessible to legitimate providers while preventing fraud and ensuring evidentiary reliability.

Historical Context and Precedent

The reference to Pine Hollow Medical in the Carothers decision highlights how appellate courts sometimes reconsider their earlier decisions when faced with new factual scenarios. The court’s acknowledgment that “the law was misapplied to the facts presented in that case” suggests a more restrictive approach to evidentiary requirements.

This pattern mirrors what occurred with assignment of benefits requirements. Initially, courts required signed assignments as part of a prima facie case, but the Court of Appeals ultimately rejected this requirement in Hospital for Joint Diseases v. Travelers Property Casualty Company.

Practical Implications for Medical Providers

If the Carothers approach becomes the standard, medical providers throughout New York City and Long Island will need to reconsider how they structure their billing operations and maintain their records. Providers who rely on third-party billing companies may need to:

• Ensure their billing companies properly incorporate provider records into their own business operations
• Establish clear protocols for maintaining the chain of custody for medical records
• Train staff to testify about business practices and record-keeping procedures
• Consider alternative arrangements that provide better evidentiary foundations

Strategic Considerations for No-Fault Litigation

The uncertainty created by the Carothers case requires both medical providers and insurance companies to adapt their litigation strategies. Understanding how courts may interpret these evidentiary requirements is crucial for success in no-fault disputes.

For Medical Providers

Providers must be particularly careful about how they structure their relationships with billing companies and maintain their records. The traditional approach of simply forwarding records to a billing service may no longer be sufficient if courts adopt the Carothers standard.

Successful providers will need to demonstrate that their billing arrangements create true business partnerships rather than mere processing relationships. This might involve showing that billing companies maintain their own records of the provider’s claims, incorporate those records into their business operations, and have employees who can testify about both companies’ business practices.

For Insurance Companies

Insurance companies defending against provider claims may find new opportunities to challenge the admissibility of billing records under the Carothers analysis. However, they must be prepared for providers to adapt their practices in response to these challenges.

The key for insurance companies is understanding which provider arrangements are vulnerable under the Carothers standard and which have been structured to meet the higher evidentiary requirements.

Future Trends and Predictions

Based on the pattern established in previous cases, several trends seem likely to emerge from the Carothers decision and its aftermath.

Consolidation of Standards

If the Carothers approach gains acceptance, we can expect to see more uniform requirements for establishing business records foundations in no-fault cases. This would provide greater predictability for both providers and insurers, even if it makes initial compliance more challenging.

Industry Adaptation

The medical billing industry will likely develop new practices and procedures designed to meet the Carothers standard. This might include more comprehensive record-keeping systems, better documentation of business relationships, and enhanced training for billing company employees who may need to testify.

Frequently Asked Questions About No-Fault Claims and Business Records

What does the Carothers decision mean for my medical practice?

If your practice uses a third-party billing company, you may need to review your arrangements to ensure they meet stricter evidentiary standards. The key is demonstrating that your billing company truly incorporates your records into their business operations, not merely processes them.

How can medical providers protect themselves under the new standards?

Providers should work with their billing companies to establish clear protocols for record maintenance and ensure that billing company employees are familiar with both companies’ business practices. Documentation of these relationships will be crucial.

Will insurance companies be able to deny more claims based on evidentiary issues?

Potentially, yes. If courts adopt the Carothers standard more broadly, insurance companies may have more opportunities to challenge the admissibility of billing records. However, providers who adapt their practices should still be able to meet the requirements.

How does this affect patients seeking no-fault benefits?

While patients aren’t directly involved in provider-insurer disputes, delays or denials in provider reimbursement can affect their access to care. Patients may need to be more careful about choosing providers who understand these evidentiary requirements.

What should I do if my no-fault claim is denied based on evidentiary issues?

If you’re a provider facing claim denials based on business records issues, it’s important to work with an attorney who understands both the substantive no-fault law and the evidentiary requirements. The standards are complex and continue to evolve.

Broader Implications for New York Personal Injury Practice

The Carothers case represents more than just a technical dispute about business records—it reflects broader questions about how New York’s legal system balances efficiency with reliability in personal injury-related proceedings.

The Ongoing Evolution of No-Fault Law

No-fault insurance was designed to provide quick, efficient compensation for medical expenses and lost wages without the need for lengthy liability determinations. However, as the system has matured, courts have struggled with questions about how to maintain efficiency while preventing fraud and ensuring proper evidence.

The Carothers decision suggests that courts are willing to impose stricter evidentiary requirements even if they make the no-fault system more complex. This trend reflects broader concerns about fraudulent claims and the need to maintain the integrity of the no-fault system.

Impact on Personal Injury Cases

For personal injury attorneys, the Carothers decision and similar cases highlight the importance of understanding not just the substantive law but also the procedural and evidentiary requirements that can determine case outcomes.

Clients who are injured in accidents in New York City or Long Island may find that their medical providers face additional challenges in obtaining no-fault reimbursement. This could affect the availability of medical care and the overall resolution of personal injury cases.

Navigating the Changing Legal Landscape

The no-fault insurance system in New York continues to evolve, with cases like Carothers creating new requirements and challenges for all participants. Whether you’re a medical provider seeking reimbursement, an insurance company evaluating claims, or an injured person navigating the system, understanding these developments is crucial.

The complexity of modern no-fault law requires experienced legal guidance to ensure that claims are properly prepared and presented. The evidentiary requirements may seem technical, but they can determine whether legitimate claims are paid or denied.

If you’re dealing with no-fault insurance issues, whether as a provider, insurer, or injured person, having knowledgeable legal representation is essential. The law continues to develop, and staying current with the latest requirements can make the difference between success and failure.

For assistance with no-fault insurance claims or related personal injury matters, call 516-750-0595 to discuss your situation with an attorney who understands the complexities of New York’s evolving legal standards.

The Carothers case may indeed represent the showdown we’ve been waiting for in no-fault law, but its ultimate impact will depend on how courts, practitioners, and industry participants adapt to its requirements. Professional legal guidance ensures that you’re prepared for whatever standards ultimately prevail.

Related Articles

• Fourth Department’s decade-long discussion on prima facie case requirements
• Court guidance on the business records exception
• Third-party billing records under Carothers application
• Business records rule restoration after Pine Hollow
• New York No-Fault Insurance Law

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Legal Update (February 2026): Since this 2009 post, New York’s no-fault regulations have undergone significant amendments, particularly regarding electronic filing procedures and business records authentication requirements under CPLR § 4518. The evidentiary standards and procedural requirements for establishing prima facie cases in no-fault claims may have evolved through subsequent regulatory changes and case law developments. Practitioners should verify current provisions of the Insurance Law and updated court procedural rules when relying on business records testimony.