Business record rule applies to hospitals also

When hospitals seek summary judgment in no-fault insurance disputes, they cannot simply assume their medical records will be automatically admitted as evidence. The Appellate Term’s decision in Westchester Medical Center v. Government Employees Insurance Co. demonstrates that even large healthcare institutions must satisfy strict procedural requirements to establish that their documentation qualifies as admissible business records under New York’s evidence rules.

The business records exception to the hearsay rule, codified in CPLR 4518, allows documents made in the regular course of business to be admitted into evidence without requiring testimony from the person who created them. However, this exception requires proper foundation. The party seeking admission must demonstrate through competent testimony that the records were made at or near the time of the events they document, by someone with personal knowledge, and in the regular course of business.

This ruling has significant implications for how medical providers pursue payment from insurance companies in no-fault cases. The court’s emphasis on proper foundation requirements shows that even routine hospital forms require careful authentication before they can support a motion for summary judgment. For hospitals that have their cases removed from Supreme Court through CPLR 325(d) transfers, this decision adds a critical procedural hurdle that must be overcome in lower courts.

Case Background

Westchester Medical Center filed a no-fault claim against GEICO seeking reimbursement for medical services provided to an auto accident victim. The hospital submitted standard billing forms including an NF-5 hospital facility form and a UB04 billing statement to support its motion for summary judgment. To authenticate these records, the hospital relied on a third-party affidavit rather than testimony from someone with direct knowledge of the hospital’s record-keeping practices.

GEICO contested the admissibility of these documents, arguing that the third-party affidavit failed to establish the necessary foundation for admitting the hospital’s billing records as business records. The Appellate Term, Second Department, reviewed whether the hospital had properly authenticated its records to support summary judgment.

Jason Tenenbaum’s Analysis:

Westchester Med. Ctr. v Government Empls. Ins. Co., 2012 NY Slip Op 50398(U)(App. Term 2d Dept. 2012)

“In the case at bar, plaintiff’s submission of a third-party affidavit failed to demonstrate that the NF-5 hospital facility form or the UB04, which was incorporated by reference into the NF-5 and which listed the services provided by the hospital, was plaintiff’s business record and therefore admissible as proof that, for example, those services had been rendered (see Matter of Carothers, 79 AD3d 864; New York Hosp. Med. Ctr. of Queens, 33 Misc 3d 130, 2011 NY Slip Op 51863).”

What is amazing here is that a hospital that gets its case 325(d)‘d from Supreme Court now has to make an additional threshold showing in order for its motion for summary judgment to be granted.

Legal Significance

This decision aligns hospital record authentication requirements with the standards applied to other medical providers. The Court of Appeals in Matter of Carothers established strict requirements for proving that medical billing records qualify as business records, requiring testimony from someone with personal knowledge of the entity’s record-keeping practices. The Appellate Term’s application of Carothers to hospitals eliminates any implicit exception that larger healthcare institutions might have claimed.

The ruling addresses a common problem in no-fault litigation where third-party billing companies handle claims submission for medical providers. These companies often submit affidavits purporting to authenticate medical records, but they lack personal knowledge of how the treating facility maintains its records. The court recognized that allowing such third-party affidavits would circumvent the foundational requirements of CPLR 4518.

Furthermore, this decision has particular impact on CPLR 325(d) transferred cases. When hospitals file no-fault claims in Supreme Court seeking amounts within Civil Court jurisdiction, defendants can invoke Section 325(d) to transfer the case to a lower court. Once transferred, hospitals face heightened scrutiny of their evidentiary submissions, including strict enforcement of business record authentication requirements.

Practical Implications

Hospitals pursuing no-fault reimbursement must ensure that affidavits authenticating their billing records come from employees with actual knowledge of the hospital’s record-keeping systems. Generic affidavits from billing companies or third-party administrators will not suffice. The affiant must establish personal familiarity with how the specific hospital creates, maintains, and stores its NF-5 forms and UB04 billing statements.

Medical providers should also document their record-keeping procedures in detail. This includes establishing written policies describing when records are created, who creates them, how they are verified, and where they are maintained. Such documentation makes it easier to provide the foundational testimony required under CPLR 4518.

For insurance companies defending no-fault claims, this decision provides a valuable tool for challenging hospital billing. Defense counsel should carefully scrutinize the authentication affidavits submitted with hospital records, focusing on whether the affiant has personal knowledge of the plaintiff hospital’s specific record-keeping practices.

Key Takeaway

This decision creates an additional procedural hurdle for hospitals pursuing no-fault claims. Medical providers can no longer rely on third-party affidavits alone to establish that their billing forms and treatment records qualify as business records. Instead, they must provide proper foundation testimony demonstrating how these documents were created and maintained as part of their regular business operations. Failure to meet this requirement will result in denial of summary judgment, even when the underlying claim appears meritorious.