$5000 (Ins Law 5106[c]) cannot be manipulated

Understanding the $5,000 Threshold in No-Fault Arbitration Appeals

Under New York No-Fault Insurance Law, medical providers and insurers often find themselves in disputes over unpaid claims that go to arbitration. When a provider disagrees with an arbitration award, they may seek a trial de novo (a completely new trial) in court — but only if the award meets certain requirements. One crucial requirement is that the arbitration award must be for $5,000 or more under Insurance Law § 5106(c).

A recent First Department decision highlights an important limitation: providers cannot manipulate this threshold by artificially combining separate medical services or bills. This ruling reinforces the integrity of the arbitration process and prevents abuse of the appeals system. The court’s analysis also raises questions about proper jurisdiction for these cases, as discussed in our coverage of procedural issues in no-fault litigation.

Jason Tenenbaum’s Analysis:

American Tr. Ins. Co. v Health Plus Surgery Ctr., LLC, 2021 NY Slip Op 01499 (1st Dept. 2021)

“Plaintiff is not entitled to de novo adjudication of the master arbitrator’s award in favor of defendant CitiMed Services, PA, because the award is less than $5,000 (Insurance Law § 5106). The medical services provided to plaintiff’s insured were separate and distinct from each other, were billed separately and should not be combined to meet the $5,000 threshold for de novo review (Imperium Ins. Co. v Innovative Chiropractic Servs., P.C., 43 Misc 3d 137 , 2014 NY Slip Op 50697 ).”

The biggest issue I have here is the citation to an Appellate Term case holding that Civil Court has jurisdiction over trial de novo-declaratory judgment actions. Under the current rules of the NY Court system, this is just wrong.

Key Takeaway

Medical providers cannot circumvent the $5,000 threshold for appealing no-fault arbitration awards by combining separate, distinct medical services that were billed individually. Each service must independently meet the threshold requirement. This decision protects the arbitration system from manipulation while ensuring that only substantial disputes proceed to costly court proceedings.