Key Takeaway
New York courts require competent expert medical proof to challenge medical necessity in no-fault insurance disputes, with fair and reasonable charges being key factors.
New York’s no-fault insurance system creates a complex framework where medical providers and insurers frequently clash over payment obligations. One critical battleground involves disputes over medical necessity—whether specific treatments or services were actually required for a patient’s condition. Understanding when and how these challenges can be raised is essential for both healthcare providers seeking payment and insurers defending against claims.
The burden of proof in medical necessity disputes can be particularly challenging, especially when dealing with out-of-network providers or services rendered outside New York State. Courts have established clear standards for what constitutes adequate evidence to support or refute claims of medical necessity, and these standards can significantly impact the outcome of payment disputes.
Jason Tenenbaum’s Analysis:
Hercules Med., PC v Cabello, 2013 NY Slip Op 52186(U)(App. Term 1st Dept. 2013)
“A fair interpretation of the evidence supports the trial court’s determination that plaintiff, an out-of-network medical service provider, was entitled to recover for examination and testing services rendered to defendant for which defendant failed to pay, despite timely demand. Indeed, defendant did not dispute that the services billed for were rendered, or the reasonableness of the amounts charged for each particular service. Nor did defendant adduce any competent expert medical proof to support her assertion that the services here in dispute were not medically necessary (see Mount Vernon Hosp. v Brennan, 21 Misc 3d 140, 2008 NY Slip Op 52358 ; see generally Viacom Intl. v Midtown Realty Co., 193 AD2d 45, 55 ).”
If you read the Mount Vernon Hospital case that was cited, the Court required the hospital ” establish[] that the charges for the services rendered were fair and reasonable.”
Fair and reasonable seems to be an important issue in the realm of no-fault as it applies to services rendered out of state. Compare, 11 NYCRR 68.6
Key Takeaway
The Hercules Medical decision reinforces that insurers cannot simply assert medical necessity defenses without substantive proof. When challenging medical necessity, insurers must provide competent expert medical evidence—not just conclusory statements. This standard protects healthcare providers from baseless denials while ensuring that medical necessity reversals are grounded in legitimate medical opinions rather than administrative convenience.
The case also highlights the importance of “fair and reasonable” charges, particularly for out-of-state services where New York’s standard fee schedule may not directly apply. This creates additional complexity in New York No-Fault Insurance Law cases involving cross-border medical care, where providers must establish both medical necessity and reasonable pricing to secure payment.
Legal Update (February 2026): Since this post’s publication in 2013, New York’s no-fault insurance regulations have undergone significant revisions, including amendments to medical necessity determination procedures, updated fee schedules, and revised timeframes for disputing claims. The procedural requirements for challenging medical necessity and the standards for out-of-network provider reimbursements may have been modified through regulatory updates and court decisions. Practitioners should verify current provisions under 11 NYCRR Part 65 and subsequent amendments to ensure compliance with current medical necessity dispute procedures.
