Summary judgment granted on Mallela case

Summary Judgment Granted on Mallela Case

The Mallela defense has become a cornerstone strategy for insurance companies seeking to deny no-fault benefits to healthcare providers who fail to meet New York State licensing requirements. This defense, rooted in Insurance Law Section 5102(a)(1), requires that providers demonstrate proper licensing and corporate structure to be eligible for reimbursement. The recent decision in Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co. provides another clear example of how courts apply these strict requirements.

Understanding the Mallela defense framework is crucial for both healthcare providers and insurance companies navigating no-fault disputes. While providers must ensure they meet all licensing requirements, insurance companies can use this defense when arbitration is demanded by applicants.

Jason Tenenbaum’s Analysis:

Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co., 2013 NY Slip Op 50581(U)(App. Term 1st Dept. 2013)

The Court was clear: “It is well-settled that a provider of healthcare services is not eligible for reimbursement of assigned first-party no-fault benefits “under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York”

…

“Applying these principles to the matter at bar, Mutual has made a prima facie showing of entitlement to summary judgment dismissing the complaints by demonstrating that the services rendered by Physical are not reimbursable expenses under the No-Fault Law. In opposition, Physical failed to raise a triable issue of fact with respect to its claims because they were not performed by a medical professional corporation, or a licensed health provider.”

Key Takeaway

This decision reinforces that healthcare providers must meet all licensing requirements to receive no-fault insurance reimbursement. Courts will grant summary judgment when insurance companies demonstrate that services were not performed by properly licensed entities or medical professional corporations. Provider compliance with licensing requirements is non-negotiable under New York’s no-fault law.

Legal Update (February 2026): Since this 2013 post, New York’s no-fault regulatory framework under Insurance Law Section 5102 has undergone several amendments affecting provider eligibility requirements and licensing standards. Additionally, Department of Financial Services regulations governing healthcare provider qualifications and corporate structure requirements may have been updated. Practitioners should verify current provisions of Section 5102(a)(1) and related DFS regulations when applying Mallela defense strategies or assessing provider eligibility for no-fault reimbursement.