PT Fee schedule denial not substantiated

Understanding Fee Schedule Denials in No-Fault Insurance Claims

Physical therapy providers frequently encounter denials from insurance carriers claiming that submitted fees exceed the allowable amounts under New York’s workers’ compensation fee schedule. However, as demonstrated in a recent appellate court decision, carriers cannot simply assert these defenses without proper legal foundation. The case highlights a critical procedural requirement that often trips up insurance companies attempting to limit New York No-Fault Insurance Law payments.

The workers’ compensation fee schedule defense in no-fault litigation has become increasingly technical, requiring insurance carriers to demonstrate not only that fees exceed statutory limits but also to properly authenticate and explain the underlying documentation supporting their position. Under New York Insurance Law Section 5108, carriers must make payments within thirty days unless they deny claims based on specific statutory defenses. The fee schedule defense represents one such permissible basis for denial, but courts have consistently held carriers to exacting evidentiary standards when invoking this defense.

When carriers deny claims based on per diem unit exhaustion—particularly the common 8-unit (now 12-unit) denials—they must do more than attach documents to their motion papers. The court’s analysis reveals how procedural missteps can undermine otherwise valid fee schedule defenses, creating opportunities for healthcare providers to recover appropriate compensation for their services. Authentication requirements serve the dual purpose of ensuring documentary evidence’s reliability and preventing carriers from introducing self-serving documents without proper foundation. The distinction between merely submitting documents and properly authenticating them through competent testimony or affidavits has become a decisive factor in fee schedule litigation.

Case Background

NL Quality Medical, P.C., a healthcare provider, filed suit against GEICO Insurance Company to recover unpaid no-fault benefits for physical therapy services rendered to an injured patient. The provider submitted multiple causes of action, including claims for physical therapy treatments that GEICO contended violated the workers’ compensation fee schedule limitations. GEICO moved for summary judgment, arguing that the fees charged exceeded the maximum allowable amounts under the applicable fee schedule.

In support of its defense, GEICO attached various documents to its motion papers purporting to show that the provider had exhausted the allowable per diem units for physical therapy services. These documents included billing records and fee schedule calculations, but GEICO failed to provide proper authentication through affidavit testimony establishing the foundation for these documents. The provider opposed the motion, challenging GEICO’s failure to authenticate the documents and arguing that the carrier had not met its prima facie burden of establishing the fee schedule defense.

The trial court initially ruled on GEICO’s motion, but the Appellate Term, Second Department, reviewed the matter to determine whether GEICO had properly substantiated its fee schedule defense. The appellate court examined whether the documents attached to GEICO’s motion papers satisfied the evidentiary requirements for establishing that fees exceeded allowable amounts under the workers’ compensation fee schedule, particularly focusing on whether GEICO had provided adequate authentication and foundation for the documentary evidence.

Jason Tenenbaum’s Analysis:

NL Quality Med., P.C. v GEICO Ins. Co., 2020 NY Slip Op 51340(U)(App. Term 2d Dept. 2020)

“With respect to the second cause of action, defendant failed to establish, as a matter of law, its defense that the fees charged exceeded the amounts set forth in the workers’ compensation fee schedule (see Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132, 2009 NY Slip Op 50732 ), because, among other things, defendant attempted to rely on certain documents which were attached to defendant’s motion papers without authentication, foundation or even discussion (see Liberty Chiropractic, P.C. v 21st Century Ins. Co., 53 Misc 3d 133, 2016 NY Slip Op 51409 ).”

This is the line the court uses when it is an 8 unit (now 12 unit) denial based upon exhaustion of per diem units. The court expects the carrier to authenticate someone else’s records.

Legal Significance

The Appellate Term’s decision in NL Quality Medical establishes important precedent regarding the evidentiary standards insurance carriers must meet when asserting fee schedule defenses in no-fault litigation. The court’s emphasis on authentication, foundation, and substantive discussion reflects a broader judicial concern that carriers not be permitted to defeat provider claims through the submission of unverified documents. This ruling aligns with established case law requiring that documentary evidence in summary judgment proceedings be properly authenticated through testimony or affidavit demonstrating the witness’s personal knowledge of the document’s creation and maintenance.

The reference to Liberty Chiropractic, P.C. v 21st Century Insurance Co. and Rogy Medical, P.C. v Mercury Casualty Co. demonstrates that this authentication requirement has deep roots in no-fault jurisprudence. Courts recognize that fee schedule defenses often depend on complex calculations involving multiple treatment dates, billing codes, and fee schedule provisions. Without proper authentication and explanation, opposing parties cannot meaningfully challenge the carrier’s calculations, and courts cannot independently verify their accuracy. The decision reinforces that carriers bear the burden of not merely submitting documents but also explaining their relevance and demonstrating their reliability through competent evidence.

Practical Implications

Healthcare providers defending against fee schedule challenges should immediately scrutinize the carrier’s motion papers for authentication deficiencies. When carriers attach billing records, fee schedules, or calculation spreadsheets without supporting affidavits from witnesses with personal knowledge, providers should object on evidentiary grounds. This defense proves particularly effective when carriers rely on documents created by third parties or maintained in someone else’s records, as the carrier must establish a proper foundation for introducing such evidence.

Insurance carriers seeking to assert fee schedule defenses must ensure that all documentary evidence is properly authenticated through affidavits or testimony. The affiant should have personal knowledge of the document creation process, the record-keeping practices that produced the document, and the specific calculations supporting the fee schedule defense. Simply attaching documents to motion papers without explanation or authentication will not satisfy the carrier’s prima facie burden, regardless of how clearly the documents appear to demonstrate fee schedule violations.

Key Takeaway

Insurance carriers cannot successfully defend fee schedule violations by simply attaching unverified documents to their legal papers. Courts require proper authentication, foundation, and substantive discussion of evidence when carriers attempt to prove that physical therapy fees exceed allowable amounts under the workers’ compensation fee schedule framework.

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