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.