Major medical carrier taken to the mat for unscrupulous conduct

Kamhi v EmblemHealth, Inc., 2012 NY Slip Op 22073 (Sup. Kings 2012)(Demarest, J.)

Major medical.  It is a different world.  First-level “utilization reviews” of conservative treatment are performed by individuals who are properly credentialed to review nothing more than perhaps the format, size and typeface of a UB-04 or maybe a HCFA 1500.  There is a reason why more than 50% of Level 2 appeals to the Medical Society get reversed, and it is not because: (a) someone did not prove a “denial was mailed”; (b) it was demonstrated that an NF-10 has a typographical error; (c) an attorney convinced a judge that Great Wall does not apply today (although it applied yesterday and will apply tomorrow) because of some vague App. Term decision  that involved CPT Code 99203; (d) the magical words “The Court should take Judicial Notice of the fee schedule” were not in someone’s papers; or (d)  AAA needs to keep Applicant win ratios at 70-80 percent on medical necessity cases in order to stay in business.  Rather, it is because many major medical carriers operate in an alternate and distinct universe.

I would also add that if the no-fault carriers reviewed claims the way major medical providers did, then I think many of the gripes the plaintiff’s bar expresses in court and on here might have palpable merit.

The reality of major medical is that whereas the no-fault insurance carriers are seemingly stuck having to process claims from all types of healthcare providers, major medical providers can put their proverbial foot down and kick anyone out of their network.  Well, so they thought.

One doctor who had enough struck back, and a Supreme Court Justice seemed unhappy at the major medical carrier and denied the motion to dismiss, except for one portion of a cause of action, of which leave to re-plead was granted.

Here are the pertinent facts:

“Between January 2007 and December 2010, Lawrence M. Kamhi, M.D., and his medical practice, Lawrence M. Kamhi, M.D., P.C. (collectively, plaintiff), participated in the GHI and HIP health care plans in the specialties of anesthesiology and interventional pain management. Plaintiff alleges, and it is not disputed, that his participation was pursuant to a three-year contract which was “automatically renewable each year” (¶ 8). In October 2010, plaintiff received written notices from Emblem, advising him that his participation in defendants’ health care plans would expire on December 31, 2010 and would not be renewed. These notices expressly state: “This decision is not related to the quality of care received by Plan members and does not involve a peer review determination; as such it is not a reportable credentialing determination.” (bold type in original). Plaintiff alleges that defendants elected not to renew his participation solely because of his prior complaints against defendants. Plaintiff asserts that he commenced a prior action against defendants for monetary damages in the Kings [*2]County Civil Court, Index No. 7240/09 in November 2009 (the collection action), upon which he obtained a default judgment in February 2010 for what he describes as multiple unpaid or denied medical invoices, and successfully opposed defendants’ motion to vacate the default judgment. Plaintiff alleges that when the judgment remained unpaid, he had legal counsel at the Medical Society of the State of New York write a letter to defendants on his behalf urging them to pay the judgment, but had to hire a City Marshal before he succeeded in collecting the judgment.

Plaintiff further alleges that after he obtained satisfaction of his judgment in the collection action, defendants continued to deny his claims without justification. He states that approximately one month before his participation was not renewed, he spoke on the telephone with defendants’ Senior Executive of Provider Relations who allegedly informed him that ” there was no other reason whatsoever that Emblem was not renewing in-network contract except for posed too many complaints about Emblem’s claims reimbursements and even went so far as to take Emblem to Court, on one occasion’” (¶¶ 37, 47).

Plaintiff alleges that his advocacy and complaints were the principal reasons why defendants failed to renew his participation in their health care plans. There is no suggestion in defendants’ motion papers that the non-renewal of plaintiff’s contract was prompted by any cause other than the complaints plaintiff has made. According to plaintiff, he was advocating for his patients when he instituted the collection action in the Small Claims court, as the alternative to plaintiff’s recovery from defendants would be to charge the patients for these allegedly pre-authorized services. In addition, plaintiff asserts that he filed written complaints with the New York State Attorney General’s Office and the New York State Department of Health “in reference to Defendants’ egregious behavior” (¶¶ 35, 45). Lastly, he asserts that he “has requested reconsideration and review of his contract with Defendant, to no avail” (¶¶ 35, 45).

The Court  in large part denied the motion to dismiss.

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Legal Update (February 2026): Since this 2012 post, New York’s no-fault fee schedules and reimbursement rates have been subject to multiple regulatory amendments and updates. Additionally, procedures governing utilization review processes and medical necessity determinations may have been modified through Insurance Department regulations or legislative changes, and practitioners should verify current provisions before relying on the reimbursement frameworks discussed in this older analysis.