Sunday, March 26, 2017

No-Fault Insurer Found Entitled to Breakdown of What Hospital Services Constituted Necessary Emergency Health Services

St. Barnabas Hospital v. Government Employees Insurance Company
(Sup. Ct., Nassau Co., decided 2/1/2017)

Once upon a time (before 2011) New York no-fault insurers could deny personal injury protection (no-fault) coverage benefits to a person "injured as a result of operating a motor vehicle while in an intoxicated condition or while his ability to operate such vehicle is impaired by the use of a drug within the meaning of section [1192] of the vehicle and traffic law[.]"

Since January 26, 2011, when the amended Insurance Law § 5103(b)(2) went into effect, however, New York no-fault insurers could no longer exclude from coverage payments for "necessary emergency health services rendered in a general hospital" to a person injured as the result of operating a motor vehicle while in an alcohol intoxicated or drug impaired condition.

In August 2015 I blogged about the new law and was surprised to report that in the more than four years since the new law's effective date, no New York court had yet issued a decision on its interpretation and application to no-fault claims.  In that blog post I did digest the 15 AAA awards issued since January 2011 that mentioned NEHS.

We now have our first (and so far only) New York reported decision on necessary emergency health services in the no-fault context, and it comes from Nassau County Supreme Court.

Utilizing a Hospital Facility Form (Form NF-5) and a UB-04, St. Barnabas Hospital submitted a bill for hospital services to GEICO in the amount of $43,212.59.  Based in part on the hospital's own toxicology report showing that GEICO's insured had a BAC of 0.15% and THC in her system at the time of her admission to the hospital's emergency room, GEICO timely requested verification in the form of a breakdown of which hospital services constituted necessary emergency health services (NEHS). Specifically, GEICO requested a "breakdown of charges up to where the patient was found to be stabilized".

In response to GEICO's verification request, the hospital stated that GEICO's "request for a `breakdown of charges up to where the patient was found to be stabilized' is not required under the insurance regulations or no fault law'", and added that "[t]he patient received `Necessary Emergency Health Services' during his admission at the hospital."

When GEICO did not pay the bill, plaintiff commenced this action contending, in part, that GEICO's payment was overdue because GEICO's verification request did not toll the 30-day deadline to pay or deny the hospital's bill.  GEICO argued that the hospital's action was premature because it had not responded to GEICO's proper verification request.  Both parties moved for summary judgment.

In DENYING the plaintiff's motion and GRANTING GEICO's motion for summary judgment, dismissing the complaint, Supreme Court reasoned:
The Plaintiff's position that the verification request was improper because it is not required under the insurance regulations or no fault law is without merit. The Defendant, GEICO, referenced Circular Letter No. 4 dated January 12, 2011, issued by the State of New York Insurance Department, in its original request for additional verification. The purpose of the Circular Letter is to advise no-fault insurers and health insurers of the amendment of Insurance Law §5103(b)(2) and to interpret the regulations related thereto. While the Plaintiff concedes that the law was amended in January 2011 to reflect that insurers are prohibited from excluding from coverage necessary emergency health services even where the patient was intoxicated by alcohol or drugs, the Plaintiff fails to address the portion of the Circular Letter at issue here. Specifically, the Plaintiff submits no argument or opposition with regard to the portion of the Circular Letter that permits a no-fault insurer to request a hospital to specify what portion of the bill consists of "necessary emergency health services". Rather, the Plaintiff claims that the statutory language does not explicitly provide as such. The Court disagrees. 11 NYCRR 65-3.5(c) provides that "[t]he insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested." 
The Court also disagrees with the Plaintiff's contention that it fully responded to the Defendant's verification requests by merely stating, "[t]he patient received `Necessary Emergency Health Services' during his admission at the hospital." The Plaintiff's response is vague in that it fails to delineate whether some, most or all of the services were in fact "necessary emergency health services". Further, in its Circular Letter, the Insurance Department contemplated the need for hospitals to specify what portion of the bill consists of such emergency services. The Insurance Department also defined "necessary emergency health services" as sudden pain or injury that is treated until the patient is stabilized, generally in the emergency room. 
In the matter sub judice, the patient was admitted to St. Barnabas for approximately three (3) days from April 10, 2016 through April 13, 2016. The Defendant, GEICO, submitted sufficient proof in admissible form showing that the patient was intoxicated by alcohol and Marijuana at the time of the accident. As such, GEICO was entitled to request information concerning the breakdown of services until the patient was found to be stabilized in accordance with the Insurance Law §5103(b)(2), as amended, and the related Circular Letter No. 4 interpreting the statute. Such information would permit GEICO to assess when the no-fault insurance coverage ceases, if at all, and the appropriate amount of the claim that must be paid. 
Pursuant to 11 NYCRR 65-3.6(b), where there is a timely original request for verification, but no response to the request for verification is received within 30 calendar days thereafter, or the response to the original request for verification is incomplete, then the insurer, within 10 calendar days after the expiration of that 30-day period, must follow up with a second request for verification. When a no-fault medical service provider fails to respond or inadequately responds to two timely verification requests, the 30 days in which to pay or deny the claim is tolled and does not begin to run. Accordingly, any claim for payment by the medical service provider after two timely requests for verification is premature (See Sound Shore Med. Ctr. V. New York Cent. Mut. Fire Ins. Co., 963 N.Y.S.2d 282 [2d Dept. 2013].
New York no-fault insurers that would seek to deny PIP benefits on intoxication grounds must always be mindful of their burden to show not only that its insured was alcohol intoxicated or drug impaired, but also that the insured's intoxication or impairment was a proximate cause of the accident.  Failure to make a prima facie demonstration of both may undermine an NEHS verification request or defense, like in this arbitration matter.  

Since I last blogged about NEHS in August 2015, 14 AAA arbitration awards have mentioned NEHS.  You can search those yourself by doing a date-limited, exact phrase, full text search for awards with "necessary emergency health services" here.  Relative to the NEHS issue, the most notable seven of those arbitration awards are:
Erie County Medical Center aao [Redacted] and Geico Ins. Co.  (Arbitrator Mona Bargnesi, issued 3/8/17)
"I find that 'good reasons' for Respondent's verification request are lacking in the present circumstances, as the outcome of criminal charges has no effect on whether emergency services should be reimbursed. * * * As the services provided in the instant case were 'necessary emergency services rendered in a general hospital', the insurer cannot exclude Assignor from coverage. Respondent did not contend that the criminal charges related to anything other than intoxication. Therefore, Respondent's pend of the claim for suspected intoxication was improper in this case."
North Shore University Hospital aao [Redacted] and Hertz Rent A Car  (Arbitrator Greta Vilar, issued 11/28/16)
"Admittedly, the burden placed upon the respondent in this case [to prove causation] is a high one. However, it is the burden placed upon the respondent by the statutory framework applicable to this case. Having determined that the respondent has failed to meet its burden of proof, I do not reach the additional issues raised at the hearing of this matter including what portion of the treatments provided to the patient constituted emergent care prior to stabilization (an issue upon which an IHC's opinion was sought). This issue would only be relevant in the event that the respondent proved that the patient was intoxicated, and that the intoxication was the cause the accident. In light of my holding, the argument is moot. I find in favor of the applicant."
Westchester Medical Center aao [Redacted] and New York Central Mut. Fire. Ins. Co.  (Arbitrator Marcelle Brandes, issued 5/30/16)
"After a careful and thorough review of the evidence, it is hereby determined that Applicant's claim is denied. Respondent has established that Assignor was intoxicated at the time of the accident (Assignor's statements to the police and EMS), and that this single car crash was the proximate cause of the accident, (police report). Moreover, the medical services provided to Assignor at Westchester Medical Center does not fall within the "necessary emergency health services" as defined by the Department of Finance [sic] circular letter inasmuch as Assignor was not transported directly from the scene of the motor vehicle accident to Applicant's facility."
Nassau University Medical Center aao [Redacted] and Liberty Mut. Fire Ins. Co.  (Arbitrator Anthony Joseph Bianchino, issued 3/7/16)
"Here based upon the bill submitted by the Applicant I find that the Applicant has made a prima facie showing that the services the patient received on December 26, 2013 in the emergency room were 'necessary emergency health services'.  As such the burden now shifts to the Respondent to prove that the emergency room services in dispute were not 'necessary emergency health services'.  However since the Respondent has submitted nothing from a medical professional which states that the emergency room services the patient received on December 26, 2013 were not 'necessary emergency health services' I find that the Respondent has not rebutted the Applicant's prima facie showing that the emergency room services in dispute were 'necessary emergency health services'. Therefore since the emergency room services in dispute were 'necessary emergency health services' based upon Section 5103 (b) (2) of the New York State Insurance Law the Respondent must provide No-Fault coverage for these services. As such I find that the Applicant is entitled to be reimbursed for the emergency room services in dispute."
Westchester Medical Center aao [Redacted] and Allstate Ins. Co.  (Arbitrator John Kannengieser, issued 12/15/15)
Allstate paid $27,011.31 of applicant's $47,011.31 bill on the basis that the lesser amount represented payment for NEHS to stabilize the EIP (which Allstate delineated as number of days the EIP spent in the hospital's ICU).  The EIP's admission was for a period of six days.  Applicant's coding expert "re-ran DRG 912-3 with the EIP's stay as if it had been four days instead of six days (the length of time the EIP was in the ICU), and the DRG rate came out the same at $47,011.31. The reason for this is that DRG rates are primarily determined based on the injuries, as well as the admitting diagnosis and discharge diagnosis. The length of stay and treatment rendered have a minimal effect on the DRG assigned, and the proper billing was $47,011.31."
Westchester Medical Center aao [Redacted] and Geico Ins. Co.  (Arbitrator Ben Feder, issued 11/3/15)
"Upon a thorough review of the evidence submitted and position statements presented at the hearing, it is this Arbitrator's determination that Respondent's expert failed to explain why Applicant's medical treatment did not fall under the definition of necessary emergency medical care. The peer review is not supported by factual evidence. No medical authority was provided that supports the position that extubation is deemed the end of necessary emergency medical care. I find no basis for Dr. Sharahy's statements other than her own opinion on the matter. I find that the peer review report is insufficient to meet Respondent's burden of proof as referenced above, the burden of which shifts to Respondent once Applicant has established a prima facie case." 
Westchester Medical Center aao [Redacted] and Geico Ins. Co.  (Arbitrator Michael Achtziger, issued 10/25/15) 
"Applicant further noted that Respondent's denial was defective on its face in not stating that these were not emergency health services. In any event, Applicant noted its following services were emergency health services:  An exploratory emergency laporotomy, bladder repair, repair of colonic serosal tear.  Applicant's counsel noted that Dr. Benatar confirmed the emergency nature of the hospitalization, and Applicant's counsel justified its mandated billing (Diagnostic related Group), and that a breakdown of charges is not required with Respondent obligated pursuant to 11 NYCRR 65-3.5(g) to accept an NF5 Form or an NF5 Form with a UBF-1. Counsel noted Respondent was sent a UB-04 and Master Output Report. Finally, counsel noted that a split of the DRG to award only the emergency health care portion of the bill would release the DRG rate and create a balance due of $51,746.00.  Accordingly, as Applicant has proven its entitled pursuant to law and its appropriate breakdown of charges. Applicant is awarded $27,933.45."

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