By report? Again?

The “BR Code” Controversy in New York No-Fault Fee Schedule Litigation

New York’s no-fault fee schedules require healthcare providers to bill using specific CPT (Current Procedural Terminology) codes that correspond to the services rendered. However, certain medical procedures don’t fit neatly into pre-established CPT codes, requiring providers to bill using “by report” or “BR” codes that allow for individualized pricing based on the complexity and nature of the specific procedure. The question of whether failure to comply with BR code documentation requirements constitutes a fatal defect in a provider’s prima facie case or merely an affirmative defense has divided courts and created significant uncertainty in no-fault litigation.

Under traditional burden-shifting principles in no-fault cases, healthcare providers establish their prima facie case by proving they submitted proper claim forms, provided medically necessary treatment, and billed at reasonable rates. Once this showing is made, the burden shifts to the insurer to raise valid defenses, including fee schedule defenses asserting that billing exceeds allowable rates or fails to comply with regulatory requirements. The BR code issue challenges this framework by asking whether documentation requirements are so fundamental that non-compliance prevents establishment of a prima facie case, or whether they constitute technical defenses that insurers must affirmatively raise and prove.

The stakes in this debate are significant. If BR code compliance is part of the prima facie case, providers who fail to submit proper documentation with their initial claims cannot recover at all, even if they later provide the required information. If BR code compliance is merely an affirmative defense, insurers must timely disclaim on this basis or forfeit the defense, potentially obligating them to pay claims that don’t comply with fee schedule requirements.

Case Background: Bronx Acupuncture v. Hereford Insurance

Bronx Acupuncture Therapy, P.C., as asignee of Mejia v Hereford Ins. Co., 2017 NY Slip Op 79291(U)(2d Dept. 2017)

In July 2017, the Appellate Division granted Hereford Insurance Company leave to reargue its position that failure to satisfy BR code requirements of the fee schedule should be treated as fatal to a medical provider’s prima facie case rather than as an affirmative defense. This procedural posture is significant: Hereford wasn’t appealing an adverse decision on the merits, but rather seeking permission to argue a novel legal theory about the fundamental nature of BR code compliance requirements.

The case involved acupuncture services billed using BR codes, which require special documentation under fee schedule regulations. Bronx Acupuncture apparently submitted billing without the detailed procedural descriptions and complexity justifications that BR codes demand. Hereford sought to characterize this failure not as a defense to liability, but as a deficiency in the provider’s threshold showing entitling it to payment.

Jason Tenenbaum’s Analysis

This came out on July, 2017. The Court granted Hereford leave to argue that the failure to satisfy the “BR code” requirements of the fee schedule is fatal to a medical provider’s prima facie case. I am unsure if I agree since the Courts in New York consider all fee schedule issues “defenses”. My next thought is to state that the disclaimer based upon “BR” is sufficient to ultimately force a plaintiff to prove compliance with the rule. The theory for this comes from the “standing” jurisdiction in mortgage foreclosure cases. Pleading this as an affirmative defense – or in NF parlance through a disclaimer – requires an additional element of proof as part of the PF case – in this case compliance with the BR rule. But do I think my above theory is meritorious? Probably not.

If the Courts absent regulatory fiat will authorize billings short of provider fraud where a timely disclaimer is not issued, why should this be different.

Don’t get me wrong – I appreciate Hereford’s position. But after Amaze v. Eagle and Mary Immaculate Allstate (15 and 14 years ago, respectively), these are battles that bare no fruit.

Legal Significance: Prima Facie Case vs. Affirmative Defense Framework

The Bronx Acupuncture decision represents an attempt to shift fee schedule compliance issues from the affirmative defense category into the prima facie case category. This shift would fundamentally alter the burden of proof in BR code cases. Under current law, as reflected in decisions like Amaze Operating Corp. v. Eagle Insurance Co. and Mary Immaculate Hospital v. Allstate Insurance Co., fee schedule defenses are generally treated as affirmative defenses that insurers must raise through timely disclaimers. When insurers fail to timely disclaim based on fee schedule violations, they forfeit those defenses and must pay the claims.

Hereford’s argument analogizes to mortgage foreclosure standing doctrine, where plaintiffs must affirmatively prove they possess the right to enforce the note and mortgage as part of their prima facie case. If this analogy holds, BR code compliance would become an element that providers must affirmatively establish in their initial showing, rather than a defense that insurers must raise and prove. This would eliminate the need for timely disclaimers on BR code issues and potentially bar recovery for providers who billed using BR codes without submitting required documentation, even when insurers failed to object within the 30-day claim determination period.

However, this argument faces significant doctrinal obstacles. New York courts have consistently characterized fee schedule issues as defenses rather than elements of the prima facie case. This characterization serves important policy purposes: it incentivizes insurers to investigate claims promptly and communicate specific objections within the 30-day period, preventing indefinite claim uncertainty. Treating BR code compliance as a prima facie element would undermine these incentives by allowing insurers to sit on defects indefinitely without issuing timely disclaimers.

Practical Implications: Documentation and Disclaimer Strategy

For healthcare providers billing with BR codes, this case underscores the importance of submitting comprehensive documentation with initial claims. Even though current law treats BR code compliance as an affirmative defense, the possibility that courts might adopt Hereford’s position creates risk for providers who rely solely on technical disclaimer requirements. Best practices include submitting detailed procedural descriptions, complexity justifications, and time documentation with all BR code billings, ensuring compliance regardless of how courts ultimately categorize BR code requirements.

For insurance companies, the Bronx Acupuncture decision suggests continued vigilance in issuing timely disclaimers on BR code defects. Until appellate courts definitively adopt the prima facie case theory, carriers cannot safely assume they can raise BR code defenses at summary judgment without having issued timely disclaimers. However, the decision also suggests that carriers should preserve arguments about the fundamental nature of BR code compliance, positioning these requirements as elements of the prima facie case rather than mere affirmative defenses.

The tension between these positions reflects broader debates about the proper balance between provider payment rights and insurer investigation obligations in the no-fault system. As courts continue to grapple with BR code issues, practitioners should monitor developments carefully and adjust their strategies accordingly.

Related Articles

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• Understanding competent evidence in fee schedule defense cases
• NY acupuncture prima facie defense and rate limitations
• First application of regulatory fee schedule requirements
• New York No-Fault Insurance Law

Legal Update (February 2026): Since this 2018 post, New York’s no-fault fee schedules and billing code requirements may have been subject to regulatory amendments or clarifications through Department of Financial Services updates. Additionally, subsequent court decisions may have further refined the application of “BR code” compliance requirements and the treatment of fee schedule defenses in no-fault litigation. Practitioners should verify current fee schedule provisions and recent case law developments when addressing billing code compliance issues.