Key Takeaway
NY court rules insurance company failed to substantiate fee schedule defense by not proving correct conversion factor was used in calculating reimbursement rates.
In New York no-fault insurance disputes, insurance companies frequently assert that healthcare providers have overbilled by exceeding the applicable fee schedule rates. However, simply claiming that services exceed fee schedule limits isn’t enough — insurers must prove their position with proper documentation and calculations. This requirement becomes particularly important when dealing with specific CPT codes and the complex conversion factors that determine reimbursement rates.
The Appellate Term’s decision in Adelaida Physical Therapy demonstrates how courts scrutinize fee schedule defenses, especially when insurers fail to establish the foundational elements of their claims. This case highlights the ongoing challenges in New York no-fault insurance law regarding proper fee schedule calculations and the burden of proof required to sustain such defenses.
Jason Tenenbaum’s Analysis:
Adelaida Physical Therapy, P.C. v 21st Century Ins. Co., 2017 NY Slip Op 51808(U)(App. Term 2d Dept. 2017)
“Plaintiff properly argues on appeal that defendant failed to establish, as a matter of law, its defense that the fees charged with respect to the services billed under codes CPT 97010, 97110 and 97124 exceeded the amounts set forth in the workers’ compensation fee schedule therefor (see Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132, 2009 NY Slip Op 50732 ). Defendant failed to demonstrate that it had used the correct conversion factor in calculating the reimbursement rate. Consequently, the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover for those services should have been denied.”
Again, the Court has not been favorable of adjudicating these types of disputes as a matter of law.
Key Takeaway
Insurance companies asserting fee schedule defenses must do more than simply claim overcharges — they must prove they used correct conversion factors in their calculations. Courts remain reluctant to resolve these complex fee schedule disputes on summary judgment when insurers fail to establish proper foundational proof of their reimbursement rate calculations.
Legal Update (February 2026): Since this post’s publication in 2017, New York’s no-fault fee schedules and workers’ compensation fee schedules referenced for reimbursement calculations have undergone multiple revisions and updates. Additionally, regulatory amendments may have modified the evidentiary standards and procedural requirements for insurers asserting fee schedule defenses in no-fault disputes. Practitioners should verify current fee schedule provisions, conversion factors, and updated case law interpreting the burden of proof standards for such defenses.
