The By Report paradigm

Understanding “By Report” Billing in New York No-Fault Insurance

Medical billing in New York No-Fault Insurance Law relies heavily on standardized CPT (Current Procedural Terminology) codes that correspond to specific medical services. However, some procedures don’t fit neatly into standard billing codes, requiring providers to use special “by report” codes that allow for individualized billing based on the unique characteristics of the service provided. These BR codes create special procedural obligations for both healthcare providers submitting claims and insurance carriers processing them.

The interaction between BR billing codes and insurance carrier verification rights presents recurring challenges in no-fault litigation. When a provider submits a claim using a by report code, carriers may require additional documentation to determine appropriate payment amounts. However, regulatory requirements constrain how carriers may handle such claims, particularly regarding the timing and nature of documentation requests. Understanding these requirements is essential for both providers seeking payment and carriers seeking to process claims correctly.

The regulatory framework governing BR codes reflects a balance between carriers’ legitimate need for adequate information to evaluate claims and providers’ interest in receiving prompt payment for services rendered. This balance becomes particularly important when carriers seek to deny claims based on inadequate documentation, as such denials must comply with specific procedural requirements that protect providers from improper claim handling.

Case Background

In Pavlova v Allstate Insurance Co., a medical provider submitted a claim that included services billed under CPT code 20999, a “by report” code requiring individualized assessment rather than standard fee schedule pricing. The provider did not submit additional documentation with the initial claim form explaining the nature of the services or justifying the billed amount. Allstate denied payment for the services billed under code 20999, citing insufficient documentation to establish proof of claim.

The provider challenged this denial, arguing that 11 NYCRR 65-3.5(b) required Allstate to request additional verification before denying the claim based on inadequate documentation. The case presented the Appellate Term of the Second Department with a critical question about carrier obligations when processing BR-coded claims: must carriers affirmatively request additional documentation before denying such claims, or may they simply deny them based on the provider’s failure to submit adequate initial documentation?

Jason Tenenbaum’s Analysis

Pavlova v Allstate Ins. Co., 2018 NY Slip Op 51654(U)(App. Term 2d Dept. 2018)

“Plaintiff properly argues that where, as here, a provider does not provide such documentation with its claim form, and the insurer will not pay the claim as submitted, 11 NYCRR 65-3.5 (b) requires the insurer to, within 15 business days of its receipt of the claim form, request “any additional verification required by the insurer to establish proof of claim” (see Bronx Acupuncture Therapy, P.C. v Hereford Ins. Co., 54 Misc 3d 135, 2017 NY Slip Op 50101 ). Thus, defendant’s denial of payment for the services billed under CPT code 20999 on the ground that plaintiff had failed to provide sufficient documentation, where defendant did not demonstrate that it had requested any such documentation, was not proper and the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for services billed under that CPT code should have been denied.”

This is an interesting case since several arbitrators have been lulled into finding that Bronx Acupuncture stands for the proposition that an insurance carrier ma not re-price a code labelled “BR” without resort to verification.  Bronx Acupuncture means what it says – you cannot deny a bill based upon the non-compliance with the by report requirements.  Should the carrier believe it has sufficient information to re-price a service, then this defense will stand despite not following the by-report protocols.  Yet, we shall still see too many arbitrators refusing to follow the law.

Legal Significance

The Appellate Term’s decision clarifies a critical distinction in how insurance carriers may handle by report billing codes. When a carrier seeks to deny a BR-coded claim based on insufficient documentation, it must first request the necessary verification within the 15-business-day timeframe mandated by 11 NYCRR 65-3.5(b). This requirement prevents carriers from simply rejecting BR claims without affording providers the opportunity to submit the additional documentation necessary for proper evaluation.

However, the decision does not establish an absolute prohibition on carrier re-pricing of BR codes without verification requests. As the decision emphasizes, the carrier’s obligation to request verification applies specifically when the carrier “will not pay the claim as submitted” due to lack of documentation. This language suggests that if a carrier possesses sufficient information to re-price a service despite the BR coding, it may do so without first seeking additional verification. The distinction turns on whether the carrier is denying payment entirely versus adjusting payment based on available information.

This interpretation aligns with the referenced Bronx Acupuncture Therapy, P.C. v Hereford Insurance Co. decision, which similarly prohibited denials based on by report non-compliance. The regulatory scheme thus distinguishes between outright denials (which require proper verification requests) and payment adjustments or repricing (which may be sustainable if based on adequate existing information). This distinction reflects practical recognition that carriers should not be required to request information they already possess or that would not affect the payment determination.

Practical Implications

For medical providers billing BR codes, this decision emphasizes the importance of submitting adequate supporting documentation with initial claims. While carriers must request additional verification before denying claims for insufficient documentation, providers who fail to provide necessary information face payment delays and potential disputes. Best practices include submitting detailed narrative reports, operative notes, or other documentation explaining the nature of the BR-coded service and justifying the billed amount with the initial claim submission.

Insurance carriers must ensure their claims processing systems identify BR-coded services and trigger appropriate verification requests within the regulatory timeframe. Simply denying such claims based on inadequate documentation without first requesting additional information violates regulatory requirements and exposes carriers to liability for improper claim handling. However, carriers who possess adequate information to evaluate BR-coded services may re-price or adjust payment based on that information without necessarily requesting additional verification, provided they are not denying the claim entirely.

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Legal Update (February 2026): Since this post’s publication in 2018, 11 NYCRR Part 65 has undergone multiple amendments affecting verification procedures and “by report” claim processing requirements. The regulatory framework governing insurer obligations for documentation requests and denial procedures under section 65-3.5 may have been substantially modified. Practitioners should verify current provisions regarding verification timelines, documentation requirements, and proper denial procedures for “by report” billing codes.