Simple addition is insufficient

The Complexity of Fee Schedule Defenses in No-Fault Litigation

No-fault insurance cases frequently involve disputes over the proper amount payable for medical services under New York’s fee schedule regulations. When insurers assert fee schedule defenses, claiming that providers billed more than the maximum allowable amount, they bear the burden of proving not only that the fee schedule applies, but also that they correctly applied the relevant billing codes and calculations.

The Workers’ Compensation fee schedule serves as the default reimbursement standard for certain medical services under New York No-Fault Insurance Law. However, this schedule is complex, containing numerous procedure codes, modifiers, and calculation rules that require specialized knowledge to apply correctly. Courts have recognized that simply producing the fee schedule and showing mathematical calculations is insufficient—insurers must demonstrate that they properly identified and applied the correct codes to the specific services rendered.

This evidentiary requirement reflects a fundamental principle: defendants seeking dismissal on affirmative defenses must establish their entitlement to such relief as a matter of law. In the fee schedule context, this means proving not just that providers’ bills exceed certain amounts, but that the insurer’s alternative calculation correctly utilizes applicable billing codes. As the Appellate Term’s decision in Jodi Jacobs, D.C., PLLC v. Global Liberty Ins. Co. demonstrates, producing a fee schedule and performing arithmetic alone does not satisfy this burden.

Case Background: Jodi Jacobs, D.C., PLLC v. Global Liberty Ins. Co.

Jodi Jacobs, D.C., PLLC v Global Liberty Ins. Co., 2021 NY Slip Op 50445(U)(App. Term 2d Dept. 2021)

In this no-fault insurance action, plaintiff chiropractor sought reimbursement for services rendered between June 1, 2016 and June 13, 2016, billing a total of $380.73. Defendant insurer partially paid the claim but denied the remaining portion, asserting that plaintiff’s charges exceeded the maximum amounts permitted under the Workers’ Compensation fee schedule. The insurer moved for summary judgment seeking dismissal of the unpaid portion of plaintiff’s claim on fee schedule grounds.

Defendant’s motion included the Workers’ Compensation fee schedule itself and mathematical calculations showing that plaintiff’s billed amounts exceeded what defendant calculated as the proper reimbursement under the schedule. However, the insurer’s submission lacked detailed explanation of how it identified which specific codes within the fee schedule applied to each service plaintiff rendered. The submission essentially asked the court to accept defendant’s arithmetic without demonstrating the underlying code selection and application methodology.

The Civil Court granted defendant’s motion and dismissed the portion of plaintiff’s complaint seeking the disputed unpaid amounts. Plaintiff appealed, arguing that defendant failed to establish its prima facie entitlement to summary judgment because it did not prove proper utilization of the fee schedule codes. The Appellate Term reversed, finding that defendant’s evidence was insufficient to sustain its burden on summary judgment.

Jason Tenenbaum’s Analysis:

Since when was taking out the abacus insufficient to prove that you properly added and multiplied?

“Contrary to defendant’s contention, defendant was not entitled to the dismissal of so much of the complaint as sought to recover upon the unpaid portion of the $380.73 claim for services rendered June 1, 2016 through June 13, 2016 because defendant failed to conclusively establish 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 ). Indeed, “the fee schedule does not, in and of itself, establish that defendant properly utilized the codes set forth within the workers’ compensation fee schedule to calculate the amount which plaintiff was entitled to recover for each service rendered (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 ; Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132, 2009 NY Slip Op 50732 )” (Acupuncture Healthcare Plaza I, P.C. v Metlife Auto & Home, 54 Misc 3d 142, 2017 NY Slip Op 50207, *1-2 ).”

The one good think about no-fault is the stakes are relatively low, so I can give attorneys who want the experience an opportunity to draft an appeal or to try a case.

Legal Significance: Establishing Prima Facie Proof of Fee Schedule Defenses

The Appellate Term’s decision establishes important precedent regarding the quantum of proof required to sustain fee schedule defenses on summary judgment. The court made clear that producing the fee schedule document and performing mathematical calculations does not, standing alone, establish prima facie entitlement to dismissal. This holding recognizes that the Workers’ Compensation fee schedule contains numerous codes, each with specific criteria for application, and that selecting the wrong code can result in incorrect reimbursement calculations.

The decision’s reliance on Kingsbrook Jewish Medical Center v. Allstate Insurance Co. and other precedents demonstrates consistent application of this principle across the Appellate Term. These cases collectively stand for the proposition that insurers asserting fee schedule defenses must explain their code selection methodology and demonstrate that they applied the correct codes to the specific services at issue. Without such explanation, courts cannot determine whether the insurer’s calculations accurately reflect the fee schedule’s requirements or simply represent the insurer’s preferred interpretation.

This requirement serves important policy objectives in the no-fault insurance system. It prevents insurers from obtaining summary judgment through bare assertions that provider charges exceed fee schedule maximums without substantiating their alternative calculations. It also ensures that providers receive fair reimbursement by requiring insurers to prove, not merely assert, that their payment decisions comply with applicable fee schedules. The burden-shifting framework of summary judgment motions thus operates meaningfully in this context, requiring defendants to establish their defenses with specificity before shifting the burden to plaintiffs to demonstrate triable issues of fact.

Practical Implications for No-Fault Insurance Practitioners

For insurance defense counsel, this decision underscores the need for detailed expert affidavits or detailed explanations when asserting fee schedule defenses on summary judgment. Simply attaching the fee schedule and showing that the provider’s charges exceed the insurer’s calculated amounts will not suffice. Insurers must submit evidence explaining how they selected the applicable codes from the fee schedule, why those codes apply to the specific services rendered, and how they applied any relevant modifiers or calculation rules. This typically requires affidavits from medical billing experts or insurance adjusters with specialized knowledge of fee schedule application.

For providers’ counsel, this case offers a roadmap for opposing fee schedule-based summary judgment motions. When insurers fail to explain their code selection methodology, providers can successfully argue that the insurer has not met its prima facie burden. Even if the insurer’s arithmetic is correct, the absence of proof regarding proper code utilization creates a gap in the prima facie showing that defeats summary judgment. Providers should scrutinize insurers’ fee schedule submissions to identify missing elements and highlight these deficiencies in opposition papers.

The decision also reflects the relatively low stakes of individual no-fault cases, which creates opportunities for professional development. As Jason Tenenbaum notes, these cases allow less experienced attorneys to gain valuable motion practice and trial experience without the pressure of high-value litigation. However, the accumulation of these small-dollar cases creates significant financial impact for both insurers and providers, making proper application of fee schedule principles critically important to the no-fault insurance system’s functioning.

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