Key Takeaway
Court ruling on facility fees for office-based surgery under NY no-fault insurance law, examining Insurance Law § 5108 and Workers' Compensation fee schedules.
Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 2015 NY Slip Op 01413 (2d Dept. 2015)
(1) “We hold that, absent express statutory or regulatory authorization, a no-fault insurer is not required to pay a facility fee for office-based surgery performed in a practice and setting accredited under Public Health Law § 230-d.”
(2) “Insurance Law § 5108 provides, with some exceptions, that charges for services covered under Insurance Law § 5102 “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents” (Insurance Law § 5108). Where Workers’ Compensation schedules have not been prepared for certain services covered under Insurance Law § 5102, Insurance Law § 5108 requires that the Superintendent of Financial Services establish schedules after consulting with the [*3]chairperson of the Workers’ Compensation Board and the Commissioner of Health”
(3) “The implementing and coordinating regulations of the Department of Financial Services —11 NYCRR 65 3.16 (Regulation No. 68-C; “Measurement of no-fault benefits”)—refer, in turn, to “Regulation No. 83.” Regulation No. 83 (11 NYCRR 68.0) adopts the Workers’ Compensation schedules that were already in existence (see 11 NYCRR 68.1 [“Adoption of certain workers’ compensation schedules”]; 12 NYCRR 329.3 [“Medical fee schedule; incorporation by reference”]), and establishes schedules for services not already contained in Workers’ Compensation schedules (11 NYCRR 68.2 [“Establishment of certain health provider schedules”]).”
(4) “Further, Avanguard points out that Regulation No. 83 includes a default provision in recognition that not all covered services will be contained in the applicable fee schedules. This provision—11 NYCRR 68.5 (“Health services not set forth in schedules”)—provides a mechanism for determination of appropriate fees for those services that are included within the definition of “basic economic loss” but are not contained in a schedule. Avanguard contends that, under this “default” regulation, it is entitled to a facility fee and that this fee is the same fee provided to ambulatory surgical centers under article 28 of the Public Health Law.
(5)“the determination of what is a necessary expense must take Insurance Law § 5108 into account. There is no provision in the Workers’ Compensation schedules expressly providing for payment of facility fees for office-based surgery performed in a practice and setting accredited under Public Health Law § 230-d. The absence of such a provision supports GEICO’s argument that a facility fee is not a necessary expense for medical services performed by a practice and in a facility accredited under Public Health Law § 230-d”
(6)“Section 68.5 Health services not set forth in schedules
“If a professional health service is performed which is reimbursable under section 5102(a)(1) of the Insurance Law, but is not set forth in fee schedules adopted or established by the superintendent, and:
“(a) if the superintendent has adopted or established a fee schedule applicable to the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule, subject to review by the insurer; or
“(b) if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR 68.5; ).
Under this regulation, a provider may be entitled to reimbursement in situations when there is no fee schedule for a particular service. Avanguard cannot accurately assert that there is no existing fee schedule that determines the amount of a facility fee. Indeed, it is undisputed that Avanguard has consistently billed GEICO for facility fees based on the existing fee schedule and “PAS” codes that are applicable to Public Health Law article 28 ambulatory surgical centers (see 10 NYCRR 86-4.1, 86-4.40). Accordingly, there is indeed a fee schedule for facility fees. That schedule, however, it is not applicable to Avanguard. Thus, a prerequisite to application of the default provision is absent.
(7) “The conclusion that the default provision is inapplicable makes sense in light of its purpose. The default provision relates to particular procedures that do not appear on any existing fee schedule (see 11 NYCRR 68.5, ). A facility fee is not a fee for a particular medical procedure, but a blanket charge added to the billing for all procedures. In other words, Avanguard contends that, under the default regulation, an entire category of fees should be deemed compensable. We reject such a broad interpretation of the default provision, because the obvious intent of the default provision is to fill in discrete gaps in the schedules, not to make an entirely new category of “service” compensable”
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Legal Update (February 2026): Since this 2015 post, New York’s no-fault fee schedules referenced under Insurance Law § 5108 and the implementing regulations (11 NYCRR 65-3.16 and 11 NYCRR 68.0) may have been amended multiple times, and the Workers’ Compensation Board schedules that serve as the foundation for no-fault reimbursement rates are updated periodically. Practitioners should verify current fee schedule provisions and any regulatory changes that may affect facility fee determinations for office-based surgery.
