Key Takeaway
Appellate Division rules CPM reimbursement must be at general public rental value. Analysis of 6-year no-fault insurance billing dispute and DFS/WCB regulatory gaps.
This article is part of our ongoing fee schedule coverage, with 118 published articles analyzing fee schedule issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
Matter of Global Liberty Ins. Co. v ISurply, LLC, 2018 NY Slip Op 04961 (1st Dept. 2018)
The CPM saga came down to the 2014 letter addressing an inquiry from an insurance carrier and a 2016 letter that was responsive to an inquiry from a prominent plaintiff no-fault attorney. The Court did not care about informal DOH opinions and WCB opinions, or the famous “FAQ” that appeared to override the 2016 letter.
Sadly, this issue has been playing out for about 6 years, mostly in arbitration. It has had some action in the Courts, but more sporadic. From my vantage point, the issue needed an end date. It made no sense to have a purely legal issue bouncing back and forth in probably over 100,000 awards and court decisions.
First, for those who have questioned “what is CPM/CTU”, it is post-rehabilitative machinery that is supposed to increase healing and functionality following extremity surgery. It is rented from about a 30-60 day period depending on the provider/supplier. The equipment wholesales for between $6,000-$10,000. If I am wrong, correct me – I do not have an invoice in front of me.
The rental rate that has been accepted in arbitration and court is $85-$100 per day. The item as a 2-3 year useful life. Again, this is what I have heard. It could be more.
therefore, assuming the equipment is used 320 days per year for 3 years, this would yield a billable value of close to $100,000 for the life of the machine. Not bad for a $6000 investment. And now you see the genesis of the frustration some of the pragmatists in no-fault have with what is happening here.
The Appellate Division, although couching the decision in terms of rationality held as matter of law that reimbursement shall be at the value of the rental to the general public. Of course, nobody rents these machines on a cash basis, this there is no accurate general public fee absent “Ingenix” that exists. And, if you want to call Ingenix a true valuation as to the cost to the general public, then you are sadly mistaken. The Court’s holding:
“Global failed to present sufficient evidence demonstrating that the Department of Health (DOH) had determined a price for these rentals. The July 3, 2014 letter from Joanne Criscione, Senior Attorney for the Bureau of Health Insurance Programs Division of Legal Affairs for the DOH appeared to indicate that DOH had adopted “a medicaid reimbursement policy for durable medical equipment (DME) rental items that have not been assigned a Maximum Reimbursement Amount (MRA). For DME items that do not have a MRA, the rental fee is calculated at 1/6th of the equipment provider’s acquisition cost.” In her June 8, 2016 letter, however, she makes clear that her July 3, 2014 letter “was not a determination by the Department of Health area office establishing the reimbursement rate” and she “merely state the Medicaid reimbursement as that policy is set forth in the Medical Provider Manual for DME.” None of Global’s other evidence establishes that DOH had adopted the “1/6th of the equipment provider’s acquisition cost” rate.
It is true that the Medicaid DME fee schedule, which listed certain codes for DMEs, some of which had a MRA and some of which did not, established that for those that did not have a MRA, the monthly rate of 1/6th of the equipment provider’s acquisition cost would apply. And it is also true that, pursuant to 12 NYCRR § 442.2(b), “the total accumulated monthly charges shall not exceed the fee amount allowed under the Medicaid fee schedule.” However, it was not irrational for the arbitrator to conclude that this 1/6th rate applied only to items which had codes listed in the Medicaid fee schedule, which the CPM and CTU at issue here did not. Therefore, as Global neither demonstrated that DOH had adopted the 1/6th rental fee guideline, or that DOH had otherwise determined a rental fee, it was not irrational for the arbitrator to conclude that the reimbursement rate would be “the monthly rental charge to the general public” (12 NYCRR 442.2(b).”
Now, it is up to DFS and WCB to finally address this issue.
One more thing. Many of you out there are unaware of this, and I was not going to share until this opinion was published. But, WCB has already ruled on this issue, and I suspect this is what prompted the FAQ:
In the Matter of Long Island DDSO, 2016 WL 7010143 (2016):
“As for the amount for the durable medical equipment, the valuation of durable medical equipment is not within the MTG. This is left to the Board’s Fee Schedule, which references the NYS Medicaid DME Services Fee Schedule.
The rental for the continuous passive motion machine is properly billed as E0936-RR. The Medicaid fee schedule does not contain an entry for this billing code. 12 NYCRR 442.2 (DURABLE MEDICAL GOODS FEE SCHEDULE)” provides:
(a) The maximum permissible charge for the purchase of durable medical equipment, medical/surgical supplies, and orthotic and prosthetic appliances shall be the fee payable for such equipment or supplies under the New York State Medicaid program at the time such equipment and supplies are provided, except that the fee for bone growth stimulators (HCPCS codes E0747, E0748 and E0760) shall be paid in one payment and not split. For orthopedic footwear or if the New York State Medicaid program has not established a fee payable for the specific item, then the fee payable, shall be the lesser of:
(1) the acquisition cost (i.e. the line item cost from a manufacturer or wholesaler net of any rebates, discounts or other valuable considerations, mailing, shipping, handling, insurance costs or any sales tax) to the provider plus 50%; or
(2) the usual and customary price charged to the general public.
(b) The maximum permissible monthly rental charge for such equipment, supplies and services provided on a rental basis shall not exceed the lower of the monthly rental charge to the general public or the price determined by the New York State Department of Health area office. The total accumulated monthly rental charges shall not exceed the fee amount allowed under the Medicaid fee schedule.
(c) The maximum permissible charge for the purchase of durable medical equipment, medical/surgical supplies, and orthotic and prosthetic appliances and the maximum permissible monthly rental charge for such equipment, supplies, and services provided on a rental basis as set forth in subdivisions (a) and (b) of this section are payment in full and there are no separate and/or additional payments for shipping, handling, and delivery.
As there is no fee schedule for the continuous passive motion machine, SIF is liable to reimburse the provider in accordance with “the usual and customary price charged to the general public” and that this amount “shall not exceed the lower of the monthly rental charge to the general public or the price determined by the New York State Department of Health area office.”
Therefore, upon review of the record and based upon a preponderance of the evidence, the Board Panel finds that the record supports finding the C-8.1(B) in favor of the provider, to the extent that the SIF is liable for payment for a three-week rental of the continuous passive motion machine at the usual and customary price charged to the general public. Any unpaid balance shall not be the responsibility of the claimant.
Time for action on this issue now!
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Legal Update (February 2026): Since this 2018 post, New York’s no-fault fee schedules and reimbursement rates for durable medical equipment, including CPM devices, may have been subject to regulatory amendments or updates by DFS and WCB. Additionally, procedural changes in arbitration processes and further judicial decisions may have affected CPM reimbursement disputes. Practitioners should verify current fee schedule provisions and recent regulatory guidance when handling CPM-related claims.
Legal Context
Why This Matters for Your Case
New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.
Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.
About This Topic
Fee Schedule Issues in No-Fault Insurance
The New York no-fault fee schedule establishes the maximum reimbursement rates for medical treatment provided to injured motorists. Disputes over fee schedule calculations, coding, usual and customary charges, and the applicability of workers compensation fee schedules to no-fault claims are common. These articles analyze fee schedule regulations, court decisions on reimbursement disputes, and the practical challenges providers face in obtaining appropriate payment under the no-fault system.
118 published articles in Fee Schedule
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Nov 26, 2014Common Questions
Frequently Asked Questions
What is the no-fault fee schedule?
New York's no-fault fee schedule, established by the Workers' Compensation Board and the Department of Financial Services, sets the maximum reimbursement rates that no-fault insurers must pay for medical services. When an insurer pays less than the billed amount, citing the fee schedule as a defense, the provider can challenge the reduction by demonstrating that the fee schedule was improperly applied or that the services are not subject to fee schedule limitations.
Can a medical provider charge more than the fee schedule allows?
Medical providers treating no-fault patients are generally limited to the amounts set by the fee schedule and cannot balance-bill the patient for the difference. However, certain services may not be covered by the fee schedule, and disputes about whether a specific service falls within the fee schedule are common in no-fault litigation. The Department of Financial Services periodically updates the fee schedule rates.
How are fee schedule disputes resolved in no-fault arbitration?
When an insurer partially pays a claim citing the fee schedule, the provider can challenge the reduction through no-fault arbitration. The provider must demonstrate that the service billed is not subject to the fee schedule or that the fee schedule was incorrectly applied. The insurer bears the burden of proving the fee schedule applies and the correct rate was used. Fee schedule disputes often involve coding issues, modifier usage, and applicability of Workers' Compensation rates.
Does the no-fault fee schedule apply to all medical services?
Not all medical services are subject to the no-fault fee schedule. Certain services, supplies, and procedures may fall outside its scope, in which case the provider may bill the usual and customary rate. Disputes about whether a specific service or billing code is covered by the fee schedule are common. The Workers' Compensation Board fee schedule and the Department of Financial Services ground rules guide which services are covered and at what rates.
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About the Author
Jason Tenenbaum, Esq.
Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.
Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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