Understanding Medical Necessity Defense Failures in New York No-Fault Insurance Cases

Key Takeaway

Learn how medical necessity defenses fail in NY no-fault cases. Expert analysis of Progressive Med v Allstate reveals key evidentiary pitfalls & hearsay issues.

When dealing with New York’s complex no-fault insurance system, understanding how medical necessity defenses can fail is crucial for both healthcare providers and legal professionals throughout Long Island and New York City. A recent Appellate Term decision provides valuable insight into the procedural requirements and evidentiary standards that can make or break a medical necessity defense.

The Legal Landscape: Progressive Med., Inc. v Allstate Insurance Co.

Progressive Med., Inc. v Allstate Ins. Co., 2010 NY Slip Op 50219(U)(App. Term 2d Dept. 2010) serves as a critical example of how insurance carriers can lose medical necessity defenses due to inadequate foundational evidence and hearsay issues.

The Court’s Analysis of Expert Testimony

“On cross-examination, the witness testified that he relied on several out-of-court documents in reaching his conclusion. He also testified that, in his report, he referred to a report from his board- certifying academy regarding one type of equipment at issue. Although plaintiff had previously stipulated to qualifying the witness as an expert, its attorney subsequently objected to this testimony on the ground that it was based upon records that were not in evidence and upon a study, the reliability of which had not been established. The court sustained the objection and ordered the testimony stricken.“

“Based upon the court’s statements that the only issue for trial was medical necessity and that a claim form had been submitted and timely denied, as well as defendant’s presentation of its witness instead of moving for judgment pursuant to CPLR 4401, we find that the parties agreed that the sole issue for trial was defendant’s defense of lack of medical necessity. The record [*2]reveals no basis, under the specific facts of this case, for the court’s finding that plaintiff was required to submit a claim form in order to establish, prima facie, “the health benefit’s medical necessity.””

On the other hand, on the scant record provided to this court, there is no basis to disturb the court’s decision to strike defendant’s witness’s testimony. Plaintiff advanced what was, in effect, a hearsay objection. Defendant failed to demonstrate either that the testimony did not rely on out-of-court documents for the truth of the matters stated therein, or that the documents were being relied upon for their truth but fell within an exception to the rule against hearsay. Consequently, we cannot say that it was an improvident exercise of discretion for the court to strike the testimony.”

Expert Analysis: The Foundation Failure

It looks like the attorney for the defense failed to lay a proper foundation to allow the doctor to testify about the medical records. What needed to be asked was: how the doctor received the records; what they represented; whether the assignor’s name was on the records; whether the date of loss on the records corresponded to when the accident occurred; whether the claim number on the documents matched the actual claim number; whether there was other information that would correlate the documents to the assignor; and the veracity of the journal articles.

The courts in the realm of no-fault litigation will generally allow an expert to testify about the documents that purport to be those representing the treatment of the alleged assignor. The only thing an attorney has to do is find some correlating link between the medical reports and the assignor. That link is almost always in the reports. If the link is not there, then look further – you should find it. If you cannot find that link at all, then the doctor probably did not review the entire medical record, and this is rife with its own issues, none of which are good for the insurance carrier.

This case also asks the following question: how can a medical necessity summary judgment motion be made without annexing the medical records? Presumably, the attached medical records allow for the inference that they represent the treatment notes of the alleged assignor. Without those notes, it looks like a peer review by itself must fail on constraint of this case and the others I have previously discussed.

Implications for Long Island and NYC Healthcare Providers

For healthcare providers operating throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx, this decision highlights several critical considerations when dealing with no-fault insurance claims and potential litigation:

Documentation Requirements

Healthcare providers must ensure that all medical records contain clear identifying information linking the treatment to the specific patient and accident. This includes maintaining accurate patient identification, accident dates, claim numbers, and comprehensive treatment notes that can withstand legal scrutiny.

Expert Testimony Preparation

When insurance carriers challenge medical necessity, the expert witnesses they employ must be properly prepared to establish foundational requirements for their testimony. This case demonstrates that even qualified experts can have their testimony stricken if proper procedural requirements aren’t met.

Strategic Considerations for No-Fault Practitioners

This decision provides several strategic insights for attorneys practicing in New York’s no-fault insurance arena:

For Plaintiff’s Counsel

Understanding how to effectively challenge expert testimony based on hearsay objections can be a powerful tool. When insurance company experts rely on out-of-court documents without proper foundation, aggressive objections can result in testimony being stricken.

For Defense Counsel

Insurance carriers and their counsel must ensure that expert witnesses are properly prepared to establish the reliability and admissibility of any documents or studies they reference. The failure to do so can result in the complete collapse of a medical necessity defense.

The Broader Context of New York No-Fault Law

New York’s no-fault insurance system creates unique challenges for both healthcare providers and insurance companies. The system is designed to provide prompt payment for necessary medical treatment following motor vehicle accidents, but disputes over medical necessity continue to generate significant litigation throughout the metropolitan area.

Cases like Progressive Medical highlight the technical nature of these disputes and the importance of proper legal representation for all parties involved. Whether you’re a healthcare provider seeking payment for services rendered or an insurance company defending against claims, understanding these procedural requirements is essential.

Frequently Asked Questions

Q: What is medical necessity in the context of no-fault insurance?

A: Medical necessity refers to healthcare services that are reasonable, necessary, and appropriate for the diagnosis or treatment of an injury resulting from a covered accident. Insurance companies may deny claims they deem medically unnecessary.

Q: Can expert testimony be stricken for relying on out-of-court documents?

A: Yes, as this case demonstrates, expert testimony can be stricken if it relies on out-of-court documents for their truth without proper foundation or if the documents don’t fall within a hearsay exception.

Q: What should healthcare providers do to protect themselves in no-fault disputes?

A: Maintain comprehensive, accurate medical records with clear patient identification and treatment justification. Ensure all documentation clearly links the treatment to the specific accident and patient.

Q: How important is proper legal representation in no-fault cases?

A: Extremely important. As this case shows, technical procedural errors can result in the complete failure of otherwise valid defenses or claims.

Contact an Experienced New York No-Fault Attorney

If you’re a healthcare provider dealing with no-fault insurance disputes, or if you’re involved in any aspect of New York’s no-fault insurance system, having experienced legal representation is crucial. The complexities demonstrated in cases like Progressive Medical require attorneys who understand both the substantive law and the procedural requirements that can make the difference between success and failure.

Don’t let technical procedural errors undermine your case. Contact our experienced New York no-fault insurance attorneys today at 516-750-0595 to discuss your situation and ensure your rights are properly protected. We serve clients throughout Long Island, New York City, and the surrounding areas, providing the knowledgeable representation you need in these complex legal matters.

Legal Update (February 2026): Since this 2010 decision, New York’s no-fault insurance regulations have undergone multiple amendments affecting medical necessity determinations and expert testimony standards. Additionally, the fee schedules referenced in Insurance Regulation 68 have been updated several times, and procedural requirements for challenging medical necessity may have been modified through regulatory changes and subsequent appellate decisions. Practitioners should verify current provisions in Insurance Regulation 68 and review recent case law for updated evidentiary standards in medical necessity disputes.

Filed under: Evidence Experts Hearsay Medical Necessity

Understanding Medical Necessity Defense Failures in New York No-Fault Insurance Cases