Key Takeaway
Court rejects insurance carrier's argument that chiropractor's 5% billing company fee constitutes ownership under Mallela doctrine in New York no-fault case.
H & H Chiropractic Servs., P.C. v Metropolitan Prop. & Cas. Ins. Co., 2015 NY Slip Op 25132 (Civ. Ct. Queens Co. 2015)
Fact
“Defendant also submits the deposition transcript of Dr. Lucas Bottcher, DC, a member of the plaintiff’s practice. Therein, Dr. Bottcher admitted that plaintiff employs SMG and they are paid a fixed fee of five percent of collections. Defendant argues that since plaintiff allegedly pays six (or five) percent of its fees to its billing company, that its billing company owns six percent of plaintiff’s practice.”
Contention
Plaintiff owned by a management conclusion
Court’s conclusion
No sir.
My thought
Carrier is probably overreaching. Was this an arms length transaction? Was it commercially reasonable? Was the PC being operated by people who were unauthorized to operate a medical practice? Many people pay payroll companies a percentage of their payrolls to do process the payroll. Franchisees pay franchisors a percentage of net proceedings for the ability to carry the company’s name. The franchisee is usually guaranteed distributos, advertising, a customer base and marketting support. A medical practice needs a practice manager to perform various tasks. Thus, is a percentage of net or gross of intake to a practice manager who handles the business end inappropriate? I am not sure I would agree to that set up, but it does not make it wrong.
If one can tell me that the practice manager is not telling (explicitly or implicitly) the doctor/healthcare practitioner to perform 25 EMG/s a day, 30 SSEPs a day and bill 200 hours of PT per date of operation, then this might be reasonable. But that is the rub: many times there are people who are not duly licensed and credentialed healthcare practitioners calling the shots as to the medical treatment. Thus, while a 6% percent spread on the net or gross might be an indicia of the latter, this allegation in and of itself should not allow a carrier to issue a blanket disclaimed to the provider.
I think it is an invitation for more disclosure as to financials, but if that does not yield anything, then the end of the line has appeared.
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