Functional ATIC/ medial necessity and fee schedule defense susbstantiated

Strategic Considerations in Medical Necessity and Fee Schedule Litigation

No-fault insurance litigation frequently involves dual-track defenses: insurance carriers challenge both the medical necessity of services rendered and the proper coding and fee schedule application for those services. The Second Department Appellate Term’s decision in Jaga Medical Services, P.C. v American Trust Ins. Co. provides crucial guidance on how healthcare providers must respond to these combined challenges to avoid summary judgment dismissal.

This case demonstrates the distinct evidentiary requirements for rebutting different types of insurance carrier defenses. When carriers submit peer review reports questioning medical necessity, providers must offer more than general medical assertions—their opposition must directly engage with and rebut the peer reviewer’s specific conclusions. Similarly, when carriers raise fee schedule defenses through expert professional coder affidavits, providers must present substantive evidence challenging the coding analysis rather than making conclusory objections.

Understanding these requirements is essential for healthcare providers seeking to recover payment under New York’s no-fault system, where procedural missteps in opposition papers can prove fatal to otherwise meritorious claims.

Case Background

Jaga Medical Services, P.C. sought payment for various medical services provided to automobile accident patients. American Trust Insurance Co. denied five separate causes of action, raising medical necessity defenses supported by peer review reports for some claims, and fee schedule defenses supported by professional coder affidavits for others.

The insurance carrier moved for summary judgment, submitting peer review reports for certain claims that provided factual bases and medical rationales for denying coverage. For other claims, the carrier presented expert affidavits from professional coders establishing that the services should be reimbursed under the workers’ compensation fee schedule rather than the higher no-fault fee schedule.

In response, Jaga Medical Services submitted a physician affidavit addressing the medical necessity issues. However, the provider’s opposition failed to meaningfully engage with the specific conclusions in the peer review report. Additionally, the provider offered no substantive rebuttal to the carrier’s fee schedule analysis.

Jason Tenenbaum’s Analysis:

Jaga Med. Servs., P.C. v American Tr. Ins. Co., 2017 NY Slip Op 50954(U)(App. Term 2d Dept. 2017)

(1) “In opposition to those branches of defendant’s cross motion, plaintiff submitted an affidavit from a doctor which failed to meaningfully refer to, let alone sufficiently rebut, the conclusions set forth in the peer review report (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136, 2009 NY Slip Op 51495 Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]).”

(2) “Contrary to plaintiff’s contention, the affidavit executed by defendant’s expert professional coder, submitted in support of the branches of defendant’s cross motion seeking summary judgment dismissing the first, second and fifth causes of action, established that defendant had properly used the workers’ compensation fee schedule to determine the amount which plaintiff was entitled to receive for the services at issue in these causes of action (see e.g. Sama Physical Therapy, P.C. v American Tr. Ins. Co., 53 Misc 3d 129, 2016 NY Slip Op 51359 ).”

Interesting observation from the motion papers.

(1) Peer review involved EMG/NCV: The opposition affidavit did not seem bad. While it said a lot, however, it was totally not responsive to the peer report.

(2) Expert analysis involved ROM and MMT: Payable per extremity and trunk. The review again recommended less than what was actually paid. There was no fee schedule opposition.

Legal Significance

This decision reinforces critical principles governing the sufficiency of opposition evidence in no-fault summary judgment motions. The Appellate Term’s analysis demonstrates that courts apply different standards depending on the nature of the insurance carrier’s defense, requiring providers to tailor their rebuttal strategy accordingly.

For peer review-based medical necessity challenges, the court emphasized that opposition affidavits must do more than assert medical necessity in general terms. The provider’s physician must specifically address the peer reviewer’s conclusions, explaining why the reviewer’s medical rationale is flawed or why the reviewer’s interpretation of the medical records is incorrect. Generic statements about the patient’s condition or treatment needs, without direct engagement with the peer review findings, prove insufficient.

The fee schedule analysis establishes that professional coder affidavits carry substantial weight when properly executed. When an insurance carrier presents expert testimony that specific procedures fall under the workers’ compensation fee schedule rather than the no-fault fee schedule, providers cannot defeat summary judgment through mere disagreement. Instead, they must present countervailing expert evidence or demonstrate specific factual or legal errors in the carrier’s coding analysis.

These dual rulings reflect the court’s expectation that summary judgment motions in no-fault cases should be resolved through substantive expert analysis rather than conclusory assertions, while simultaneously recognizing that different types of defenses require different forms of rebuttal.

Practical Implications

Healthcare providers facing combined medical necessity and fee schedule defenses must prepare multi-faceted opposition papers addressing each challenge with specific, substantive evidence. For peer review rebuttals, providers should ensure their medical experts review the actual peer review report and provide point-by-point responses to the reviewer’s conclusions. The opposition should reference specific portions of the medical records that contradict the peer reviewer’s findings or demonstrate why the reviewer’s interpretation is medically unsound.

When confronting fee schedule defenses, providers should consider retaining their own certified professional coders to review the carrier’s coding analysis. Opposition papers should identify specific CPT code definitions, modifier applications, or regulatory provisions that support the provider’s position. Simply arguing that the carrier’s expert is wrong without providing substantive coding analysis will not survive summary judgment scrutiny.

Insurance defense counsel should recognize the strategic value of combining medical necessity and fee schedule defenses in appropriate cases. Even if one defense proves insufficient, the other may carry the day if the provider fails to adequately rebut both challenges. However, carriers must ensure their expert affidavits provide detailed factual bases and medical or coding rationales, as conclusory defense submissions will likewise fail.

Related Articles

• Understanding medical necessity disputes in major medical cases
• Why conclusory affidavits fail in medical necessity summary judgment motions
• When comp defense succeeds but medical necessity defense falters
• Ground rule 11 and the IME cut off in fee schedule cases
• New York No-Fault Insurance Law

Legal Update (February 2026): Since this 2017 decision, New York’s no-fault fee schedules and reimbursement regulations have undergone multiple revisions, including potential updates to workers’ compensation fee schedule cross-references and medical necessity determination procedures. Practitioners should verify current fee schedule provisions and peer review standards, as regulatory amendments may have modified the reimbursement methodologies and expert affidavit requirements discussed in this case.