Another arbitration only rule bites the dust

Matter of Global Liberty Ins. Co. v Medco Tech, Inc., 2019 NY Slip Op 02167 (1st Dept 2019)

” Respondent seeks from petitioner no-fault insurance benefits for medical equipment that respondent provided to its assignor, who was involved in a motor vehicle accident. In denying respondent’s claim, petitioner relied on a peer review report that concluded, based on a review of the medical records, that the assignor’s condition was degenerative in nature and not post-traumatic and therefore that the surgery undergone by the assignor was “not medically necessary in relation to the accident” (emphasis supplied). The arbitral award must be vacated and a de novo hearing held, because, on the record before us, as argued, it would be irrational to conclude that the need for the subject medical equipment was causally related to the accident (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-19 [2d Dept 1999]; Shahid Mian, M.D., P.C. v Interboro Ins. Co., 39 Misc 3d 135[A], 2013 NY Slip Op 50589[U] [App Term, 1st Dept 2013]). “

I always ask myself what is it that causes me to appeal certain cases. Sometimes, it is pure curiosity, sometimes it is because the lower arbitrator did such a horrible job that I cannot see record support for the award and other times it is because the lower fact finder created a legal precedent that is completely without legal support. You can figure that my level of success in categories number one and two are minimal. Category two represents the cases that are most personal to me (e.g., Miller v Elrac) and are heart-breakers because AAA just got the cases wrong. As to category three, I have gotten some bites, as can be seen here.

The issue in this case represented the perfect storm. Arbitrator Resko was not able to make a factual determination based upon the master arbitrator rule stating that post-surgical DME peer reviews and IMEs must make reference to the DME in order to be valid. That was not done here. An award was entered in favor of the Applicant. The master arbitrator gave it the Petrofsky “seal of approval” and I bounced into Supreme Court. FYI – the master arbitration program is a disgrace, but I can discuss that off-line.

My issue had nothing to do with this applicant, law firm or my dislike towards CPM and some of the abuses I see with extremity surgery billing. Some people think these appeals are personal, but this was not. It was based upon a rule of law that I found not well reasoned and I will say was “stupid”. I was hesitant about appealing this, but I went to an arbitration, saw a certain law firm with many surgery cases “cite” to voluminous master awards involving this issue and I said to myself that I should pull the trigger. The beneficiary of this rule will probably be Geico and Allstate given their presence in the market. But, I never want to see this rule applied in any of my cases. I got my wish.

If you look at the oral arguments, my main point is that that the medical necessity or causal relationship should not be barred due to a made up rule that runs counter to established precedent. I told one of the judges I do not even care if I win or lose at the end, just apply a rational precedent. The Court agreed. My bill for this case? Satisfaction that reason prevailed.