CPT Code 970309

Understanding CPT Code 97039 and the “Out of Scope” Defense

In New York’s no-fault insurance system, healthcare providers frequently battle with insurers over coverage of specific medical treatments. One common defense strategy employed by insurance companies is the “out of scope” argument, claiming that certain procedures fall outside a provider’s licensed specialty and therefore aren’t reimbursable under the no-fault fee schedule.

CPT code 97039 represents “unlisted modality,” a catch-all billing code used for therapeutic procedures that don’t fit into standard categories. This code often becomes a point of contention, particularly when acupuncturists and other alternative medicine providers seek reimbursement for treatments that insurers argue exceed their scope of practice.

The case of Acupuncture Approach, P.C. v Tri State Consumer Ins. Co. demonstrates how courts evaluate these disputes, especially when insurers fail to meet their burden of proof in summary judgment motions. Similar fee schedule disputes arise with other acupuncture-related codes, highlighting the ongoing tension between traditional medical billing practices and alternative therapies.

Case Background

In Acupuncture Approach, P.C. v Tri State Consumer Ins. Co., an acupuncture provider sought payment for services billed under CPT code 97039. The insurance company moved for summary judgment dismissing the claim, arguing that the services constituted a “physical medicine modality” that fell outside the acupuncturist’s licensed scope of practice and therefore was not reimbursable under New York’s no-fault fee schedule.

The procedural posture centered on whether the insurer had established its prima facie entitlement to judgment as a matter of law. In New York civil procedure, the moving party on a summary judgment motion bears the initial burden of demonstrating the absence of any triable issues of material fact. Only after this burden is met does the burden shift to the non-moving party to raise factual disputes requiring trial resolution.

The case reached the Appellate Term on appeal from the trial court’s determination regarding whether the insurer’s submissions were sufficient to warrant dismissal of the provider’s claim without trial.

Jason Tenenbaum’s Analysis:

Acupuncture Approach, P.C. v Tri State Consumer Ins. Co., 2017 NY Slip Op 51170(U)(App. Term 1st Dept. 2017)

The long-failed out of scope defense, well has long-failed. Again, it failed. Common theme?

“Triable issues of fact are raised as to whether defendant-insurer properly denied plaintiff’s no-fault claim billed under CPT code 97039, thus precluding summary judgment dismissing this claim. Defendant’s submissions failed to establish prima facie its contention that the service is not reimbursable because it is a “physical medicine modality” and “outside the provider’s specialty”

Legal Significance

This decision fits within a broader pattern of New York appellate courts rejecting the “out of scope” defense when insurers fail to provide substantial evidence supporting their position. The ruling reinforces that insurers cannot defeat no-fault claims through conclusory assertions about scope of practice limitations without presenting concrete proof establishing that specific services exceeded the provider’s licensure.

The Appellate Term’s decision places the evidentiary burden squarely on insurance companies to demonstrate scope-of-practice violations through expert testimony, regulatory citations, or other substantive evidence. Merely asserting that a service constitutes a “physical medicine modality” without explaining why such modality falls outside acupuncture practice is insufficient to meet the prima facie standard required for summary judgment.

This case also reflects judicial recognition that CPT code 97039’s designation as an “unlisted modality” creates inherent ambiguity about whether specific treatments fall within or outside a practitioner’s scope. When such ambiguity exists, courts require insurers to shoulder a heavier burden of proof to establish their defenses, consistent with the remedial purpose underlying New York’s no-fault insurance system.

Practical Implications

For healthcare providers, this decision provides important strategic guidance when defending against scope-of-practice challenges. Providers should resist summary judgment motions where insurers offer only bare assertions about scope limitations without supporting expert testimony or regulatory analysis. The decision confirms that such motions should fail, preserving the provider’s right to trial.

Insurance companies, conversely, must invest more resources in developing their scope-of-practice defenses before moving for summary judgment. This requires obtaining expert affidavits from qualified medical professionals, conducting thorough research into applicable licensing statutes and regulations, and demonstrating through competent evidence that the specific service billed genuinely exceeds what the provider’s license authorizes. Generic objections to CPT code 97039 will not suffice.

For no-fault practitioners, the case underscores that “out of scope” arguments have repeatedly failed in New York courts when insurers cannot substantiate their position. Attorneys representing providers should cite this pattern of decisions when opposing dismissal motions, while defense counsel should carefully evaluate whether sufficient evidence exists before pursuing this defense strategy.

Key Takeaway

This decision reinforces that insurers cannot simply assert that a treatment falls outside a provider’s scope without substantial proof. When insurers fail to establish their defense with concrete evidence, courts will allow the case to proceed to trial, giving healthcare providers the opportunity to demonstrate that their services were properly rendered within their licensed scope of practice.

Legal Update (February 2026): Since this post’s publication in 2017, New York’s no-fault fee schedules and reimbursement rates have undergone multiple regulatory updates and amendments. Additionally, recent statutory changes and case law developments may have affected the application of CPT code 97039 and “out of scope” defenses in no-fault insurance disputes. Practitioners should verify current fee schedule provisions and recent appellate decisions when evaluating reimbursement claims for unlisted modality codes.

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