Key Takeaway
New York's Appellate Term reveals stark differences between First and Second Departments in handling peer review reports for no-fault insurance medical necessity denials.
Understanding Peer Review Standards Across New York’s Appellate Departments
The evaluation of peer review reports in New York no-fault insurance cases reveals significant procedural differences between the state’s appellate departments. When insurance companies deny claims based on lack of medical necessity, they typically rely on peer review reports to support their position. However, not all peer reviews meet the legal standards required to successfully defend against a lawsuit, and the threshold for adequacy varies dramatically depending on which appellate department hears the case.
This variation in standards has created a complex landscape for healthcare providers seeking reimbursement and insurance companies defending against no-fault claims. Understanding these differences is crucial for practitioners navigating medical necessity reversals and related litigation strategies.
Jason Tenenbaum’s Analysis:
Devonshire Surgical Facility, Carnegie Hill Orthopedic Servs., P.C. v American Tr. Ins. Co., 2011 NY Slip Op 50513(U)(App. Term 1st Dept. 20110
“Even assuming that defendant issued timely denials of plaintiffs’ claims (see Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 , lv denied 93 NY2d 809 ), the peer review report relied upon by defendant to deny plaintiffs’ claims is conclusory and fails to set forth sufficient facts to raise triable issues with respect to its defense of lack of medical necessity (see East Coast Acupuncture Servs., P.C. v American Tr. Ins. Co., 14 Misc 3d 135, 2007 NY Slip Op 50213).”
A peer review in the First Department presents three options: (1) Insufficient; (2) Sufficient to raise an issue of fact only; and (3) Sufficient to demonstrate lack of medical necessity prima facie.
In the Second Department, it is usually option (3) and rarely option (1). Never option (2)
Key Takeaway
The First Department maintains stricter standards for peer review adequacy, frequently finding reports insufficient or only capable of raising factual issues. Conversely, the Second Department typically accepts peer reviews as sufficient to establish a prima facie case against medical necessity, creating more favorable conditions for insurance company defenses.
Legal Update (February 2026): Since this 2011 analysis of peer review standards, New York’s appellate departments may have issued additional decisions that have refined or modified the requirements for adequate peer review reports in no-fault insurance cases. The standards for medical necessity determinations and the sufficiency of peer review documentation may have evolved through subsequent case law and regulatory updates. Practitioners should verify current appellate precedent and any amendments to no-fault insurance regulations that may affect peer review adequacy requirements.
