NF-10 Wars -- Arbitrator Held to Have Erroneously Invalidated PT Denial Based on Lack of Medical Rationale Set Forth in Denial

NO-FAULT – NCV-EMG COSTS – SPECIAL PROCEEDING TO VACATE MASTER ARBITRATION AWARD – NF-10 SUFFICIENCY – MEDICAL RATIONALE – PROVIDING COPY OF IME-PEER REVIEW REPORT WITH DENIAL
American Transit Ins. Co. v. 21st Ave. Medical Plaza, P.C. a/a/o Dennene Baker
(Sup. Ct., New York Co., decided 5/8/2008)

In April 2007, the Second Department issued its decision in A.B. Med. Servs., PLLC v. GEICO Cas. Ins. Co., 39 AD3d 778, holding that a no-fault insurer is not required to set forth with sufficient particularity the factual basis and medical rationale upon which NF-10 denial of claim forms are based:

The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request (see 11 NYCRR 65-3.8 [b] [4]). Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form (see NYS Form N-F 10; 11 NYCRR 65-3.4 [c] [11]), it would have so provided.

In this case, defendant conducted NCV/EMG (nerve conduction velocities/electromyography) studies of and provided PT (physical therapy) to the defendant's assignor in conjunction with defendant's treatment of her. American Transit denied payment of both the NCV/EMG and PT billings, based on negative peer review and IME reports, respectively. Plaintiff provider sought payment of those services in compulsory no-fault arbitration.

One day before the Second Department decided A.B. Med. Services, PLLC v. GEICO, the arbitrator ruled against American Transit, finding: (1) that the peer review report relied upon to deny payment of the NCV/EMG studies was "not very persuasive"; and (2) that American Transit's denial of reimbursement for PT treatments based on the negative IME performed by a consulting physiatrist was defective because a copy of the IME report had not been sent to the assignor within thirty days of the date American Transit issued the denial. The lower arbitrator stated that because the IME report was not timely sent to the claimant, she was "constrained to
preclude the IME report."

American Transit appealed the lower arbitrator's decision to a master arbitrator, who, based on the Appellate Term's (not Division's) decision in A.B. Med. Services, PLLC v. GEICO, upheld the arbitrator's decision in both respects. American Transit then brought this CPLR article 75 special proceeding to vacate the master arbitrator's decision.

In partly denying and partly granting American Transit's petition, New York County Supreme Court Justice Kibbie F. Payne found: (1) that the lower arbitrator acted within her authority in considering but rejecting as legally and factually deficient and unpersuasive the peer review report concerning the NCV/EMG studies; and (2) that the master arbitrator's decision upholding the lower arbitrator's refusal to consider the IME report and invalidation of America Transit's NF-10 for PT services violated existing law and was not rationally based.