First application of 11 NYCRR 65-3.8(g)(1)(ii)

A late denial did not defeat the insurer’s fee-schedule defense in this 2015 case. But lateness was not the only question: the court also had to decide which schedule applied to New Jersey surgery and whether the insurer had already paid the permissible amount. That combination explains the result in Saddle Brook Surgicenter v All State.

Legal Update (September 2026): The 2015 Surgicare appellate decision subsequently applied the post-April 1, 2013 excessive-fee exception, while DFS changed out-of-state reimbursement for services from January 23, 2018; the fee-schedule hub separates preservation of a defense from proof of the payment.

Last reviewed: September 2026.

What happened in Saddle Brook

Saddle Brook Surgicenter, LLC v All State Insurance Co., 48 Misc 3d 336, was decided in Bronx County Civil Court on April 7, 2015. The provider sought assigned no-fault benefits for outpatient surgery performed at its New Jersey facility on October 21, 2013. The treatment date mattered because it followed the April 1, 2013 effective date of the amendment at issue.

The insurer received the claim on November 29, 2013, made a partial payment on January 3, 2014, and denied the balance because the bill exceeded the New Jersey schedule. The denial was late; the parties did not dispute that point. The insurer argued that 11 NYCRR 65-3.8(g)(1)(ii) nevertheless allowed it to defend the excess portion.

Its motion included a claims representative’s affidavit explaining the calculation. The representative had training in the relevant regulations and fee schedules and was a certified coder. The provider opposed the legal use of New Jersey’s schedule but did not submit a competing affidavit from someone familiar with coding and fee schedules.

The court granted the insurer summary judgment and dismissed the claim with prejudice. That disposition followed proof of payment under the applicable schedule and the failure to raise a factual issue—not merely the presence of an excessive-fee defense in an answer.

Two questions that the original headline compresses

The first question concerned geography. The version of 11 NYCRR 68.6 then in force used the prevailing fee in the provider’s geographic location. The provider argued that a prevailing fee was not necessarily the amount in New Jersey’s no-fault schedule. The court rejected that interpretation, relying in part on the 2014 Surgicare decision.

The second question concerned preclusion: could the insurer still raise the fee defense after missing the denial deadline? Earlier decisions, including Mercury Casualty v Encare, had treated excessive fees as a defense that needed a timely denial. Saddle Brook considered the intervening regulation, not simply a disagreement with those earlier results.

Keeping the questions separate prevents two mistakes. Applying a schedule does not prove that a denial was timely. Allowing an otherwise late fee defense does not prove which schedule or calculation is correct. A reader looking for the New Jersey payment rule needs both parts of the record, along with the service date.

The excessive-fee provision the court applied

The relevant provision was 11 NYCRR 65-3.8(g)(1)(ii). It concerns medical-service fees exceeding the charges permissible under Insurance Law § 5108(a) and (b) and the implementing regulations. Subdivision (g)(2) makes the provision applicable to medical services rendered on or after April 1, 2013.

Saddle Brook reasoned that the regulation’s denial of payment for the excess applied even when the insurer had not raised that excess within the ordinary denial period. The opinion treated the amendment as displacing the earlier preclusion analysis for the post-amendment services before it. That is the holding this historical title records.

The court described the issue as apparently one of first impression because neither the parties nor the court had identified an earlier decision interpreting the provision. The title remains an account of that early application; it should not be read as a certification that no earlier unreported decision existed anywhere.

The court also discussed the separate language in subdivision (g)(1)(i). That discussion does not make every dispute about necessity, treatment, policy conditions or coverage interchangeable with excessive billing. This note concerns the fee-schedule branch. For a concrete example of different defenses receiving different treatment in one action, read the Tyorkin NF-10 and peer-review decision.

Why the form of the opposition mattered

The provider did not simply ignore the motion. It argued that the insurer had failed to make a prima facie showing and therefore maintained that no competing coding affidavit was required. Saddle Brook recognized the initial burden on the moving party before rejecting the provider’s position on the proof actually submitted.

The court found that the certified representative’s explanation and the payment evidence met that burden. At that point, the provider needed a basis to keep a factual dispute alive. Its legal argument that the New Jersey schedule could not supply the prevailing fee did not succeed, and it offered no competing calculation from a knowledgeable witness.

That sequence is different from a default. The insurer did not win merely because the opposition lacked an affidavit with a particular title. It won after the court accepted its affirmative payment proof and rejected the legal objection to the schedule. A motion with an unexplained amount, such as the one discussed in Tyorkin, cannot assume the same starting point.

This distinction is useful when comparing the two records: first ask whether the movant established the proposed calculation, then ask whether the response identified an unresolved issue. Reversing that order would place the entire burden on a provider before the insurer had proved its defense.

What Jason wrote in April 2015

Jason’s reaction to the new interpretation is preserved below. It is his contemporaneous view of the amendment’s purpose, not a claim that every holding in Mercury was erased for every service date.

This completely makes sense.  The purpose of this regulation is to overturn Mercury v. Encare.  A court has finally seen this.

The appellate decisions that followed

The trial-level analysis did not remain the only authority in the archive. In Surgicare Surgical Associates v National Interstate, 50 Misc 3d 85, decided October 8, 2015, the Appellate Term, First Department, affirmed the separate Surgicare case. It accepted the applicable New Jersey schedule as evidence of the prevailing fee and expressly noted that the excessive-fee defense for the post-April 1, 2013 services was not precluded.

The Appellate Term, Second Department, later addressed the issue directly in Precious Acupuncture Care v Hereford, 2018 NY Slip Op 50042(U). The services there fell between December 2013 and April 2014. The court held that the insurer did not have to establish a timely denial to preserve its fee defense. Its certified coder and biller also established full payment under the schedule, and the provider did not raise a triable factual issue.

That later case supplies both parts of the analysis: the defense survived the timing objection, and the evidence established its merits. The certified-coder note follows that proof issue. A witness’s credential alone is not a substitute for evidence showing how the submitted bills were paid.

Later disagreement should not disappear from the history

There is contrary trial-level treatment. In Blano Medical v Hereford, 2025 NY Slip Op 51540(U), Kings County Civil Court rejected a fee defense asserted at trial without a denial; the earlier motion and trial order had not presented that defense. The court also disagreed with the nonpreclusion interpretation of the amendment.

The same judge followed that interpretation in Yumi Acupuncture v 21st Century, 2026 NY Slip Op 50433(U), a dispute involving improper verification requests about other insurance. Those decisions belong in the research trail. They should not be described as appellate reversals of Surgicare or Precious Acupuncture, or as proof that the 2013 amendment has been repealed.

For a disputed bill, the court, procedural posture, service date and later history need to be identified. The archive can show the competing decisions without turning a trial-level disagreement into a new statewide rule.

The New Jersey calculation changed after this case

Saddle Brook involved services in 2013. For later treatment, the historical prevailing-fee discussion is incomplete without the 33rd Amendment to Regulation 83.

Under the adopted text of 11 NYCRR 68.6, the general comparison for covered out-of-state services to a New York resident uses the lowest of the highest applicable New York regional fee, the provider’s charge and the local prevailing fee. Emergency care, nonresident patients and New York residents living in the treatment jurisdiction for reasons unrelated to treatment fall within the separate comparison in subdivision (a).

An applicable motor-vehicle medical fee schedule in the treatment jurisdiction still supplies the prevailing-fee amount. It is one component of the amended calculation, not a reason to skip the remaining comparison. The proposal-to-adoption note explains why the final rule differs from the initial announcement.

What to look for in a comparable claim file

Start with the service dates and treatment location, then identify the fee provision actually used. Compare the bill, partial payment, denial and coder’s explanation. If the carrier says it paid the full scheduled amount, its figures should be traceable to the services and applicable schedule rather than to an unexplained total.

Next, identify what remains disputed. In Saddle Brook, the provider principally challenged the legal application of New Jersey’s schedule. In Tyorkin, the court could not determine the allowable reductions from the explanation supplied. Those are different problems and produced different outcomes.

Finally, read the requested relief. Dismissal after proof of full allowable payment is not a holding that any overbilled claim is forfeited in its entirety. Nor does a dispute over a provider’s reimbursement automatically establish a patient’s responsibility for the balance. Keep the payment calculation, any separate defense and the requested judgment distinct.

Connect to the Encyclopedia

Start with the fee-schedule defense hub. Follow the closest case comparisons:

• Surgicare (2014): the prevailing-fee dispute behind Saddle Brook.
• Tyorkin (2016): a surviving fee defense still needed a trial.
• Avanguard: whether an office-based facility fee was reimbursable.
• Healing Art: the vendor affidavit supporting the fee calculation.
• MIA Acupuncture: proof of full payment and denial mailing.
• Precious Acupuncture: appellate nonpreclusion and coder proof.

For review of a particular no-fault billing dispute, contact the Law Office of Jason Tenenbaum. Bring the service dates, bills, payment records, denials and the insurer’s fee calculation. A review can identify the disputed issue; these historical decisions do not guarantee a recovery.