Ins Law 5109 and the failure to promulgate regulations thereto is not fatal to a Mallela defense

Major B.S. here J.T. in the decision and from you. Same Court said that the Superintendent had so much discretion he didn’t have to obey Ins. Law 309 which mandates market conduct investigation every three years. In fact according to the same court the only person that can make an insurance company obey the law is the Superintendent. And if the Superintendent does not want to “then no one can take such action” to quote the clever court. Well if the Court was consistent it would not have labeled the argument as “absurd.” In fact if the Court consistently applied the same reasoning — we call that justice J.T. — it would have bought the argument. Sauce for the goose. Certainly if the Super is that much of an all powerful uber discretion maverick (a Sarah Palin type) then it does not take much creativity to come up with the argument. The only thing that is absurd is the Court’s inconsistency which builds to my ultimate argument. If the powerful do not have to obey the law why should anyone. If all the taxed and fined and harassed full body scanned citizens all decided at once that they would not pay parking tickets — another tax — we could be more powerful. It’s Clausewitz’s economy of force. The citizens are too stupid to organize but the corporations are organized based upon the greatest motivator there is — greed. It is so sad that this fight manifests itself in No Fault. But it is really not a No Fault issue. It’s an economic issue. Time and time again the powerful that do so much damage in this country, instead of being locked up, are bailed out. Why I should respect any aspect of this government.

Sorry J.T. I pulled an all nighter. I left the Lithium at home. I don’t know if you noticed but I get carried away sometimes. Mea Culpa. Happy Holiday!!

This Court truly missed the point of Insurance Law 5109 and has now held that a regulation supersedes a statute. Insurance Law 5109 was enacted only 6 months after the Court published its decision in Mallela, and was intended to supplement Mallela, by requiring the implementation of fair and reasonable standards in order to define insurance fraud and determine whether those standards were violated. This is clear by the plain language of the statute, which requires the creation of regulations, IN CONJUNCTION WITH THE DEPARTMENTS OF HEALTH AND EDUCATION, which MUST PROVIDE at least as much DUE PROCESS to the MEDICAL PROVIDERS, as they are afforded under Article 2 of the Workers’ Comp, and be PUBLISHED AT LEAST 90 days BEFORE they become effective. Instead, the Court decided that enforcing Insurance Law 5109 and providing due process to medical providers, is inconsistent with the purpose of 11 NYCRR 65-3.16(a)(12), which was to combat insurance fraud. This decision reinforces the status-quo,which affords absolutely no due process to medical providers because there are no substantive standards to determine what actions render a medical provider ineligible to receive no-fault benefits. There are no rules or regulations that regulate the amount a medical provider can pay a management company for billing services or for rent, there are no standards that determine what non-medical services a physician is prohibited from delegating to his/her staff, or the amount that a medical provider is permitted to pay his staff. Yet, the insurance companies, who have absolutely no right whatsoever to tell a medical provider how to run their business, have created an illusion, that the amount that a medical provider pays its staff or for rent or to its billing company are relevant to determine who really owns a medical practice. The closest thing to a standard that is exists today is comparable to Justice Potter Stewart’s definition of obscenity in his concurring opinion in, Jacobellis v. Ohio, which was that he knows obscenity when he sees it. The only agencies that do have the right to tell a medical provider how to run its business though, are the Departments of Health and Education. Neither agency has created any standard that would make it improper for a physician to enter into an agreement with a lay person who has rented out an office suite with the intention of renting space to physicians and charging them for providing administrative services, which likely most insurances and many judges would deem to be improper. A medical provider could operate for years without any question or concern into the manner in which it operates its facility, and then have all of its outstanding no-fault bills jeopardized by being sandbagged when it files a claim to collect a bill by an insurance company that has unilaterally decided that the manner in which it operates is questionable. Furthermore, under the current status-quo, it is impossible for a medical provider to operate a profitable medical practice. If the physician hires employees to operate the business aspect of his medical practice, the insurer’s will argue that he lacks sufficient control of his business. If the medical provider focuses on operating the business aspect of his practice, he must then hire employees to provide medical treatment, and insurer’s will then argue that he cannot be the true owner of his medical facility because he does not treat any patients. It was precisely this lack of due process that the legislature intended to balance with the need to fight insurance fraud when it enacted Insurance Law 5109. By holding that the absence of the standards that are required by Insurance Law 5109 does not impact the insurer’s right to challenge the corporate structure of a medical provider, simply gives a windfall to the insurance companies. Each medical provider must comply with the separate unpublished standards that each individual insurance company has decided to adopt in order to determine what renders a medical provider ineligible to collect no-fault benefits. Not only are these standards unpublished, but I am unaware of any case that has even required an insurer to disclose these standards prior to being entitled to obtain discovery from the medical providers. Leave to appeal this decision to the Court of Appeal should be granted. In Presbyterian, the Court invited the Superintendent to amend the Regulations to overturn its decision. Here, the legislature did precisely what the court invited in Presbyterian, and passed a statute that required the Superintendent create regulations to ensure that the application of Mallela not be tortured to absolve insurers from having to pay legitimate no-fault claims. The Superintendent has ignored the law and wholly failed to regulate insurance companies, and the Court has now decided that this lack of regulation should be rewarded because combating perceived insurance fraud is more important than enforcing the law and ensuring due process. If this decision had held otherwise, it is likely that the Superintendent would have quickly complied with the law and created these regulations, making it possible for physicians to comply with the clear standards and resume providing medical services to their patients. Additionally, I would not parenthetically, that Court’s reasoning is extremely flawed from a technical perspective. The Court stated that the purpose of 11 NYCRR 65-3.16(a)(12) was to combat insurance fraud. By giving deference to the reasoning behind the regulation, the Court is essentially holding that a regulation supersedes a statute.

Bravo. The Court is doing more than that. The Court is superseding the legislature by saying its laws do not have to be obeyed.