Sunday, June 21, 2009

Fraud Accusation (Corporate Structure)

- “The regulatory scheme, however, does not permit abuse of the truth-seeking opportunity that 11 NYCCR §65-3.16(a)(12) authorizes. Indeed, the Superintendent’s regulations themselves provide for agency oversight of carriers, and demand that carriers delay the payment of claims to pursue investigations solely for good cause (see 11 NYCRR §65-3.2[c]). In the licensing context, carriers will be unable to show a “good cause” unless they can demonstrate behavior tantamount to fraud. Technical violations will not do. For example, a failure to hold an annual meeting, pay corporate filing fees or submit otherwise acceptable paperwork on time will not rise the level of fraud. We expect, and the Legislature surely intended, vigorous enforcement action by the Superintendent against any carrier that uses the licensing requirement regulation to withhold or obstruct reimbursements to non-fraudulent healthcare providers.” State Farm Mutual Automobile Insurance Co. v. Robert Mallela 2005 WL 705972 (N.Y.); 2005 N.Y. Slip Op. 02416

Ninety Day Notice

- “In the event that the party upon whom is served the demand specified in subdivision (b)(3) of this rule fails to serve and file a note of issue within such ninety day period, the court may take such initiative or grand such motion unless the said party shoes justifiable excuse for the delay and a good meritorious cause of action”. CPLR 3216[e]

- “The plaintiffs proffered a reasonable excuse for their delay in responding to the 90-day notice in that they were actively engaged in settlement negotiations with the defendants at the time that they were served with the 90-day notice and the subsequent motion to dismiss the complaint [cf. Scarlett v McCarthy, 2 AD3d 623; Sortino v Fisher, 20 AD2d 25, 29]. Additionally, the plaintiffs established the existence of a meritorious cause of action. Accordingly, the defendants' motion to dismiss the complaint should have been denied.” Katina, Inc. v. Town of Hempstead, [Index No. 31967/98] New York Law Journal December 15, 2004, Section: Decisions; Pg. 29

Medical Supplies

“For medical equipment and supplies (e.g., TENS units, soft collars) provided by a physician or medical equipment provider, the maximum permissible charge is 150 percent of the documented cost of the equipment to the provider. Appendix 17-C, Part E (b)(1) to 11 NYCRR 68, effective on and after September 1, 1994.

Providers Relationships

- “The Insurance Department regulations provide, in relevant part, for the direct payment of benefits “directly to the applicant … or, upon assignment by the applicant… [to] the providers of services” (11 NYCRR §65.15[j][1]). Pursuant to these regulations Plaintiff would be entitled to payment from the defendant as assignee only if it was the provider of the service billed for. If the treating provider was an employee of a billing provider, the billing provider would be considered a provider of services, thought its employee, and thereby entitled under the regulation to direct payment. If, however, the treating provider was an independent contractor, the billing provider would not be entitled to direct payment under the regulation since it did not provide service to the applicant patient.” Rockaway Blvd. Med. P.C. v. Progressive Ins. 2004 NYSlipOp 24184

Prima Facie

- “[T]he defendant has the burden to prove that the services rendered were not medically necessary. To clarify, this Court finds that a plaintiff sustains its burden of proof by presenting a timely and proper notice of claim, for which there has been no payments or proper denial. A timely notice of claim includes evidence that insured assignor was treated for injures sustained as a result of an automobile accident, and includes bills for treatment rendered by plaintiff with regard to those injures. Plaintiff does not to prove the medical necessity of its treatment. If plaintiff meets its burden, defendant must then prove that the treatment was not medical necessary. Should defendant meet that burden, plaintiff may present evidence to rebut defendant’s evidence on that issue. While this could be contrary to prior holdings in arbitration, those decision are not binding on this court and, in this Court’s opinion, are contrary to the intention of the insurance regulations and existing case law. Hobby v. CAN, 267 A.D.2d 1084 [4th Dept. 1999] [citing McKinney’s Cons. Laws of NY Book I, Statute §72).” Fifth Avenue Pain Control Center v. Allstate Insurance, 2003 NY Slip Op 50594U; 2003 N.Y. Misc. LEXIS 136, NYLJ 4/30/03, p. 23 col. 4 (Civil Court, Queens Co.)


- Since carrier has not issued a timely denial, no further discovery, which includes an EBT of the medical provider, is permissible, unless the carrier alleges fraud of lack of coverage. Ostia Medical, P.C. v. GEICO, 2003 WL 23152964 (N.Y. Dist.Ct.), 1 Misc.2d 907(A), 2003, N.Y. Slip Op. 51560(U)


- State of New York Supreme Court, County of Otsego rejected the insurer’s argument that it was illegal for physicians to employ acupuncturists, and ruled that the State attorney general, on behalf of the people, had exclusive authority to challenge the manner in which the medical corporation was structured. The Supreme Court also ruled that since the services rendered were medically necessary, selected by covered persons for covered accidents, and competently provided by licensed health care providers, the insurer’s complaint failed to state a compressible claim. New York Central Mutual Fire Insurance Company v. 563 Grand Medical, P.C.

Concurrent Care

“…when the condition of the patient requires the disparate skills of two or more physicians to treat different conditions which do not fall within the scope of other physicians treating the patient at the same time, payment is due to each physician who pays an active role in the treatment program. The services rendered by each physician shall be distinct, in different disciplines, identifiable and adequately documented in the records and reports.” The Ground Rules of the Fee Schedule.

Examination Under Oath

- A request for an Examination Under Oath to an insured party’s attorney is not sufficient notification to the injured party under New York’s No-Fault Law and Regulations Star Medical Services, P.C. v. Allstate Insurance Co.

- A denial of first party benefits under the No-Fault Law can not be based on statements and suppositions made by a person who lacks personal knowledge of the situation. Star Medical Services, P.C. v. Allstate Insurance Co.

- Insurer must serve request for additional verification within fifteen days of the date that the bill or prior verification is received. 11 NYCRR §65-3.6(b)

- Further, when the additional request is an examination under oath, the examination must be scheduled within thirty days from the date bill is received. 11 NYCRR §65-3.5(d)

Assignment of Benefits

- “The authorization by plaintiff's assignor to pay no-fault benefits constitutes an assignment enabling the plaintiff health care provider to sue to recover the insurance proceeds applicable to the medical service provided. (Rehab. Medical Care of New York, P.C., as Assignee of Dor Vania v. Travelers Insurance Company, 188 Misc.2d 176, 727 N.Y.S.2d 247 [App Term 2nd Dept 2001]; Gingold v. State Farm Ins. Co, 168 Misc2d 62, 642 N.Y.S.2d 812 [Civ Ct Queens Co 1996]; see also, Pain Resource Ctr. v. Travelers Ins. Co. 185 Misc 2d 409, 713 N.Y.S.2d 258 [Civ Ct Kings Co 2000].) The authorization is permitted by 11 NYCRR § 65.15 (j) which states: "Direct Payments. (1) An insurer shall pay benefits [***3] for any element of loss, ... directly to the applicant or, ... upon assignment by the applicant ... shall pay the providers of services ... directly."” S&M Supply Inc., v New York Central Mutual Fire Ins. Co. 193 Misc. 2d 282; 748 N.Y.S.2d 910; 2002 N.Y. Misc. LEXIS 1293

- “There is no mention in the assignment language of any intent to revoke the assignment, and thus it operates as a valid assignment allowing plaintiff to sue as an assignee for the medical supplies it provided to its assignor. (Craniofacial Pain Management, as Assignee of Noemi Rivera, v. New York Central Mutual Fire Insurance Co., 186 Misc2d 309, 718 N.Y.S.2d 130 [Civ Ct, Queens County 2000].).” S&M Supply Inc., v New York Central Mutual Fire Ins. Co. 193 Misc. 2d 282; 748 N.Y.S.2d 910; 2002 N.Y. Misc. LEXIS 1293

Proof of Mailing

- Presumption of mailing can be created either by actual proof of the mailing or proof of a standard office practice or procedure. Allstate Social Work & Psychological Svcs PLLC v. Gen. Ins. Co. (2005 Slip Op. 50024 (U), Civil Court of the City of New York, Kings County, 2005)

- “Affidavits that make no reference to the specifics of the office mailing practice or procedures, which merely aver that the bills were mailed… are insufficient to establish proof of actual mailing.” Allstate Social Work & Psychological Svcs PLLC v. Gen. Ins. Co. (2005 Slip Op. 50024 (U), Civil Court of the City of New York, Kings County, 2005)


- “[A]ll independent medical examinations shall be performed by a practitioner competent to evaluate or examine the injury or disease from which the injured worker suffers.” McKinney's Workers' Compensation Law § 137.5

- If the EIP failed to submit for the IME the insurance company still has to pay all claims for services where it does not dispute the medical necessity of such services. The Office of General Counsel Opinion Letter, February 11, 2003.

Verifications Requests

- The insurer shall not issue a denial prior to the receipt of verification of all the relevant information. Section 5-3.5.

- Once the insurer issues a denial of a proof of claim, it waives its right to other requested verification if it’s still outstanding. By serving its denial, the insurer in fact affirms the fact that it has all of the relevant information it deems necessary to serve a denial. See 11NYCRR Section 65-3.8(a)(1); (c) and Exclusive Medical & Diagnostic, P.C. v. New York Central Mutual Fire Ins. Co., N.Y.L.J., March 30, 2004, Special Term Pt. 1, p. 43 col. 3.

- It is a respondent’s burden to establish the reasonableness of the verification requests. The conditions form the 11 NYCRR §65-1, (stating that “The eligible injured person shall submit to medical examination by physicals selected by, or acceptable to the Company when and as often as, the company may reasonable require.”), doesn’t give the insurer the right to conduct an Examination without first establishing reasonable grounds. In other words, it’s respondents burden to establish the reasonableness of the verification requests. Assessment Number: 179913519404, File No.: 11190

Rule of Evidence

- “The movant must tender evidence, by proof in admissible form, to establish the cause of action “sufficiently to warrant the court as a matter of law in directing judgment” (CPLR 3212[b]; Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). “Failure to make such shoeing requires the denial of the motion, regardless of the opposing papers.”((Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Vitiello v. Mayrich Constr. Corp., 255 AD2d 182, 184 [1st Dept 1998]). Once the movant has offered sufficient proof to establish a prima facie case, “the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action.”(Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986])

Defective Denial

- The denial of claim is “fatally defective” when it failed to include the information listed in items 23 though 30 of the prescribed denial form (including the name of the provider, the date and amount of the claims being denied, and the date it received those claims), and when the defects in the denial were not cured by supplying the previously-omitted information before the expiration of the 30-day statutory period. Nyack Hosp. v. State Farm Mut. Auto. Ins. Co., 2004 WL 2394038, 2004 NY Slip Op 07663 (2d Dept. October 25, 2004)

- A valid denial of claim must include the information called for in the prescribed denial of claim form, 11NYCRR §65-3.4(c)(11), and must “promptly apprise the claimant with a high degree of specificity of the grounds on which the disclaimer is predicated”. General Accident Ins. Group v. Cirucci, 46 NY2d 862, 864, 414 NYSd512, 387 NY2d 223 (1979)

- Assuming arguendo that the denial is valid, however, “(a) timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law”. Amaze Med. Supply (Regnoso) v. Allstate Ins. Co., 2004 NY Slip Op 24119 (App Term 2d Dept. 2004).

Fee Schedule

Acupuncture billing, at this time, was under the New York Workers’ Compensation Medical Fee Schedule listings (“NYWCMFS”), with identifying code numbers of 97780 and 97781, in Section 8 Physical Medicine (“PM”). Codes 97780 and 97781 provide, under the relative portion heading of the section, that Acupuncture has a BR listing. That is, billing is done by report. As defined by General Ground Rules of Section 1 Introduction and General Guidelines, subdivision 3, BR coding is used when the services are to be variable to permit assignment of unit values. Pertinent information concerning the nature, extent, and need for the procedure or service, the time, skill and equipment necessary are to be furnished. The subdivision further provides that “…the physician shall establish a unit value consistent in relativity with other unit values shown in the schedule.” The PM ground rules, subdivision 13, provides “[W]hen multiple physical medicine procedures …are performed on the same day, reimbursement is limited to 8.0 units or the amount billed, whichever is less.”
In other words, although acupuncture has a BR coding, it is limited to a maximum of 8.0 units per day and is to be correlated to other services provided in the PM section of the NYWCMFS as well as providing documentation as nature, extent, time and need for the services. A review of the PM section indicates that the majority of relative values range between 2.37 and 4.40 with 1 procedure at 28.00, 2 procedures at 9.47, 1 procedure at 5.55 and 1 procedure at 5.41. Since Acupuncture services are “variable” I assign a unit value of 6.00. Conversion factor for PM, Region IV, is $8.45. Unit value 6 x’s $8.45 would be $50.70 per acupuncture session. There were 6 sessions @ $50.70 is a total of $304.20.

No Show to EUO

- The insurer has to comply with proper procedures for conducting such examinations under oath. The examination must be scheduled in the county the Eligible Injured Person resides (except the boroughs of New York due to the mass transportation.) 11 NYCRR §65-3.5(e).

- “The opportunity to schedule examinations (including EUOs)”, “does not give Respondent the right to conduct an EUO without having first established the reasonable grounds for seeking such an EUO.” MRI of the Bronx a/a/o Tucker and Infinity Ins. Co. NF 2959

No Show to IME

- If an insurer does not receive the IME verification within thirty days of its original request, it must send a follow-up request to a claimant within 10 days. 11 NYCRR §65.15(e)(2). Metro Medical Diagnostics, P.C. v. Lumberman’s Insurance Company, NYLJ p. 26, col.2, 10/09/01, the Appellate Term, 2nd and 11th Judicial District.

- Failure to do so resulted in preclusion of carrier’s denial based upon such reasoning. Bronx Medical Services, P.C. a/a/o Molina v. Windsor Insurance, App. Term., 1st Dept., #029379, Sept. 2002.

Negative IME’s

- Insurer has to support the basis for the denials if they are based on negative IME’s, by presenting the IME report in court. Advanced Medical Rehabilitation, P.C. A/A/O Magda Arango v. Geico Insurance Co. AAA Case No.: 412004045491; Assessment No.: 17 991 42367 04.

- “As defendant has not supplied the IME or the peer review itself, without any evidence in admissible form, defendant [***6] cannot raise a triable issue of fact and the plaintiff's motion for summary judgment is granted”. S&M Supply v. NY Cent. Mut. Fire Ins. Co. (103 Misc. 2d 282, 748 N.Y.S.2d 910 [Civil Ct, Kings Co. 2002)

Peer Review Denial With No Support

- A denial premised on lack of medical necessity must be supported by evidence, such as independent medical examination, peer review or examination under oath, “setting forth a sufficiently detailed factual basis and medical rationale for the claim’s rejection”. Amaze Medical Supply (Bermudez) v. Eagle Insurance Co., 2004 NY Slip Op 51701(U) (App Term, 2nd & 11th Jud Dists 2004); A.B. Medical Serv. v. Geico Ins. Co., 2 Misc 3d 26, 773 NYS2d 773 (App Term, 2nd & 11th Jud Dist 2003).

- On the provided by the defendant denials , however, were no information explaining the Defendants position provided, and due to ambiguous grounds for the denial (11 NYCRR §65-3.2 (e)), the Plaintiff requested a copy of a peer review in order to further comprehend the basis of the denial (Exhibit “E”). The request was made in written form and was sent to Amex Insurance Company on August 13th, 2004 (Exhibit “E”). There were no response form the Defendant. Then, as a good faith performance second request were sent to the insurer under the USPS certified proof of mailing on December 16th, 2004. (Exhibit “E”). The request was sent to the examiner’s attention, however, the examiner ignored Plaintiff’s request. Thus the Defendant failed to prove and confirm its position and clearly violated 11 NYCRR §65-3.8 (b)(4) and 11 NYCRR §65-3.2 (b), which requires the insurer to respond to the request for Peer Review Report

Improper Delay

- The Defendant made an invalid attempt to extend its 30 days by forwarding a letter advising that the payment of the bills is being delayed pending their request for a peer review. Annexed hereto as Exhibit “F” is a copy of the Defendant’s letter. The Defendant’s letter does not constitute a valid delay nor does it extend its time to deny the claim as they are not requesting any verification. Atlantis Medical, P.C. v Liberty Mutual Insurance Company 2002 WL 523102 (N.Y.Dist.Ct.))

Late Denial (Envelope)

- To issue a timely denial of a claim under the No-Fault Law, insurer must generate its denial and mail it to plaintiff within 30 days. 11 NYCRR 65.15(g)(3).

- “[A]s defendant submitted an untimely denial, defendant can present no defense against plaintiff, thereby leaving no issues of fact in dispute.“ Damadian MRI in Canarsie, P.C. v. Countrywide Ins. Co. 194 Misc.2d 708, 755 N.Y.S.2d 585.

No Denial Provided

- Within thirty (30) days after a claimant submits “proof of the fact and amount of loss sustained”, an insurer must pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident. N.Y. Ins. Law §5106(a); Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 N.Y.2d 195, 200 (1997); Mount Sinai Hosp. v. Triboro Coach, 263 A.D.2d 11, 16 (2nd Dept. 1999). See 11 N.Y.C.R.R. §65.15(g)(3); Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 278 (1997); New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 A.D.2d 583, 584 (2nd Dept. 2002).

- If a No-Fault claim is not paid or denied within thirty days of its receipt by the insurer, it is “overdue”, commencing the accrual of interest and attorneys fees. See N.Y. Ins. Law §5106[a] (McKinney 2000); 11NYCRR §65.15(g)(3); Presbyterian Hospital v. Maryland Cas. Co., 90 N.Y.2d 274, 660 N.Y.S.2d 536 (1997).