Two Out of Three Ain't Bad, or Is It?

For folks like Dave Barshay over at No-Fault Paradise who keep score, of the six decisions decided by the Appellate Term, Second Department, on November 26th and posted to the New York Official Reports website last Wednesday, December 1st,  four were reversals in favor of the defendant insurers' motions for summary judgment, all on lack of medical necessity grounds:

Pomona Med. Diagnostics, P.C. v GEICO Ins. Co.
2010 NY Slip Op 52059(U) (App. Term, 2nd, 11th & 13th Dists., decided 11/26/2010)

Triangle R, Inc. v GEICO Ins. Co.
2010 NY Slip Op 52060(U) (App. Term, 2nd, 11th & 13th Dists., decided 11/26/2010)

Elmont Open MRI & Diagnostic Radiology, P.C. v Clarendon Natl. Ins. Co.
2010 NY Slip Op 52061(U) (App. Term, 9th & 10 Dists., decided 11/26/2010)

Dynamic Med. Imaging, P.C. v New York Cent. Mut. Fire Ins. Co.
2010 NY Slip Op 52062(U) (App. Term, 9th & 10th Dists., decided 11/26/2010)

One was an affirmance of summary judgment to the self-insurer on the assignor's IME no-show:

Trimed Med. Supply, Inc. v ELRAC, Inc.
2010 NY Slip Op 52057(U) (App. Term, 2nd, 11th & 13th Dists., decided 11/26/2010)

And one was an affirmance of partial summary judgment to the hospital provider on a verification issue:

St. Vincent's Hosp. & Med. Ctr. v American Tr. Ins. Co.
2010 NY Slip Op 52063(U) (App. Term, 9th & 10th Dists., decided 11/26/2010)

What does the high proportion of reversals at the Appellate Term mean?  Some might conclude that the lower courts don't know what they're doing.  Some others might conclude (and have already concluded) that the Appellate Term favors insurers on no-fault issues.  Regardless, it seems appealing to the Appellate Term has become a necessary part of the no-fault litigation process in metro New York and Long Island.

Appellate Term Agrees that Affidavit Is Better than None

NO-FAULT – MEDICAL NECESSITY – CPLR 2106 – USE OF AFFIRMATION
High Quality Med., P.C. v. Mercury Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 11/8/2010)

New York CPLR 2106 states:

The statement of an attorney admitted to practice in the courts of the state, or of a physician, osteopath or dentist, authorized by law to practice in the state, who is not a party to an action, when subscribed and affirmed by him to be true under the penalties of perjury, may be served or filed in the action in lieu of and with the same force and effect as an affidavit.  (Bold added.)

Attorneys, physicians, osteopaths and dentists may affirm via affirmations, rather than aver via affidavits, as long as they are not parties to the action in which they're affirming. 

Mercury moved for summary judgment dismissing the fifth cause of action of plaintiff provider's complaint.  In support of its motion, Mercury submitted two affidavits:  one presumably from a Mercury claim representative to establish that Mercury's denial of claim form, which had denied the claim at issue of the ground of lack of medical necessity, was timely mailed in accordance with Mercury's standard office practices and procedures; and the other executed by the doctor who had performed the IME upon which Mercury denied payment, as well as an affirmed IME report, establishing a lack of medical necessity for the services at issue.

Plaintiff provider opposed Mercury's motion with an affirmation executed by plaintiff's principal, Dr. Nihamin.  In its reply papers, Mercury objected to that affirmation on the basis that CPLR 2106 disallows the use of an affirmation from a physician who is a party to the action.

Finding that Mercury had not established that Dr. Nihamin was plaintiff's principal and that Dr. Nihamin's affirmation raised a question of fact regarding the medical necessity of the billed services, Kings County Civil Court (Noach Dear, J.) denied Mercury's motion.  In REVERSING that order, the Appellate Term, Second Department, found that the motion court should not have considered Dr. Nihamin's affirmation:

Although the Civil Court found that defendant had failed to prove that Dr. Nihamin was plaintiff's principal, the claim form submitted to defendant by plaintiff identified Dr. Nihamin as plaintiff's principal.  As a result, the submission of Dr. Nihamin's affirmation was improper because Dr. Nihamin is a principal of plaintiff professional corporation, which is a party to the action (see CPLR 2106; Samuel & Weininger v Belovin & Franzblau, 5 AD3d 466 [2004]; Richard M. Gordon & Assoc., P.C. v Rascio, 12 Misc 3d 131[A], 2006 NY Slip Op 51055[U] [App Term, 2d & 11th Jud Dists 2006]; see also Pisacreta v Minniti, 265 AD2d 540 [1999]).  Since the Civil Court should not have considered any facts set forth, or exhibits referred to, in said affirmation (see Pisacreta, 265 AD2d 540), plaintiff failed to proffer any evidence in admissible form which raised an issue of fact (see Zuckerman v City of New York, 49 NY2d 557 [1980]). 

Over at his No Fault Defender blog, Jason Tenebaum reports that this was Mercury's (his) fourth kill shot with a CPLR 2106 slug.  Coverage Counsel is seeking confirmation of the report that during oral argument of Mercury's appeal, in response to a question from Presiding Justice Pesce, plaintiff provider's counsel quoted another well-known litigator from the Second Department, in saying:  "I explained it to you already, didn't I?  It's procedure.  I'm bound to f@#! up a little." 

May seem trite to some, but the outcomes of New York no-fault cases often rest on seemingly nitpicky procedural  rather than substantive grounds.  This wouldn't have anything to do with the inundation of the New York courts with hundreds and hundreds of thousands of no-fault suits would it?

Recent Appellate Term, Second Department, New York No-Fault Decisions

These eleven Appellate Term, Second Department, New York no-fault decisions were decided on March 10 and posted on March 18, 2010.  Click the case name links to read the full decisions. 

NO-FAULT – CHOICE OF LAW – NEW JERSEY VEHICLE, INSUREDS AND POLICIES
A.B. Med. Servs., PLLC a/a/o Leon Regis v. GEICO Cas. Ins. Co.
(App. Term, 2nd Dept., 9th & 10th Dists., decided 3/10/2010)

Upon the application of a "center of gravity" or "grouping of contacts" analysis, New Jersey law was found to apply to a New York motor vehicle accident that involved a New Jersey registered vehicle, a New Jersey insured, and two New Jersey insurance policies.   Summary judgment to GEICO was properly denied. 

NO-FAULT – JOINT TRIAL
Anthony M. Palumbo, D.C. a/a/o Marc Taly v. Tristate Consumer Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil improperly denied defendant's motion for a joint trial of three providers' separate actions for the same services rendered on the same date at the same location.  Tristate intended to defend all three actions on the ground that the services rendered were not medically necessary, and plaintiff failed to establish that a joint trial would prejudice a substantial right.

NO-FAULT – PROOF OF MAILING – UNANSWERED VERIFICATION REQUESTS
St. Vincent Med. Care, P.C. a/a/o Breyton Squires v. Country-Wide Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

• Plaintiff established its prima facie entitlement to summary judgment because defendant's claims representative conceded receipt of claims in question and the affidavit of plaintiff's billing manager established that the documents annexed to plaintiff's motion were admissible pursuant to CPLR 4518.  
• The affidavit of defendant's no-fault litigation supervisor sufficiently established the timely mailing of the NF-10 denial of claim forms and verification requests since it described, in detail, based on the affiant's personal knowledge, defendant's standard office practices or procedures used to ensure that said documents were properly mailed. 
• Although defendant sent follow-up verification requests on the 30th day after its initial verification requests, rather than waiting the full 30 days before sending its follow-up requests, plaintiff did not respond to those requests, so defendant was entitled to summary judgment on those claims, pursuant to Infinity Health Prods., Ltd. v Eveready Ins. Co. (67 AD3d 862 [2d Dept 2009]).

NO-FAULT – PROOF OF MAILING – MEDICAL NECESSITY
Right Aid Diagnostic Medicine, P.C. a/a/o Tarshia Harrison v. Geico Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

• Plaintiff established its prima facie entitlement to summary judgment because defendant's claims representative conceded receipt of claims in question and the affidavit of plaintiff's billing manager established that the documents annexed to plaintiff's motion were admissible pursuant to CPLR 4518.  
• In opposition to plaintiff's summary judgment motion, defendant established that it had timely mailed its denial of claim form, which denied plaintiff's $911.99 claim on the ground of lack of medical necessity, by submitting an affidavit of an employee with knowledge of defendant's standard office practices or procedures designed to ensure that items are properly addressed and mailed.
• Defendant also raised triable issues of fact by submitting a copy of the affirmed peer review report setting forth a factual basis and medical rationale for the conclusion that the MRI was not medically necessary and presenting evidence that it had already paid plaintiff's claim.

NO-FAULT – TIMING OF EUO REQUEST
St. Vincent Med. Care, P.C. a/a/o Omar Morgan v. Travelers Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Although an examination under oath (EUO) need not be scheduled to be held within 30 days of the receipt of the claim form, the EUO request letter must be mailed within 30 days of the insurer's receipt of the bills in question.  The mailing of Travelers' EUO scheduling letters 52 days after its receipt of three bills from plaintiff was untimely and did not toll Travelers' time to pay or deny those bills, regardless of plaintiff's nonappearance at the requested EUO.

NO-FAULT – MEDICAL NECESSITY OF MEDICAL SUPPLIES  – AFFIRMED PEER REVIEW REPORT
High Quality Med., P.C. a/a/o Robel Thomay v. Mercury Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied Mercury's cross motion for summary judgment.  The affirmation of plaintiff's doctor did not meaningfully refer to, let alone rebut, the conclusions set forth in the affirmed peer review report Mercury submitted in support of its cross motion, which set forth a factual basis and medical rationale for the conclusion that there was a lack of medical necessity for the medical supplies at issue.  

NO-FAULT – UNTIMELY PROOF OF CLAIM – 11 NYCRR § 65-3.3(e) NOTICE  – BILL INITIALLY SUBMITTED TO WRONG INSURER
Prestige Med. & Surgical Supply, Inc. a/a/o Michael Martin v. Chubb Indem. Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Kings Civil (Sherman) properly granted defendant's motion for summary judgment.  Defendant's denial of claim form adequately advised plaintiff pursuant to 11 NYCRR § 65-3.3 (e) that its late submission of the claim would be excused if plaintiff provided a reasonable justification for its failure to timely submit the claim within 45 days after the date the supplies at issue had been provided to its assignor.  Plaintiff failed to proffer any explanation as to why it first submitted the claim to another insurance carrier.

NO-FAULT – VACATING DEFAULT JUDGMENT – CPLR 317
Nursing Personnel Homecare a/a/o Evelyn White v. New York Cent. Mut. Fire Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Kings Civil (Garson) improvidently exercised its discretion in denying defendant's motion to vacate the default judgment.  Pursuant to CPLR 317, NYCM met its burden of showing that it did not receive actual notice of the summons in time to defend the action.  NYCM submitted an affidavit from one of its no-fault litigation examiners, who had personal knowledge regarding defendant's practices and procedures in retrieving, opening and filing its mail and in maintaining its files on existing claims. In that affidavit, the no-fault litigation examiner stated that defendant had never received the summons, the complaint or the motion for a default judgment.  NYCM also submitted an affidavit from its litigation examiner in which he stated that the assignor had cancelled her insurance policy with defendant prior to the date of the accident and had not subsequently taken out another insurance policy with NYCM.  

NO-FAULT – MEDICAL NECESSITY OF CHIROPRACTIC TREATMENT – QUESTION OF FACT
Co-Op City Chiropractic, P.C. a/a/o Gloria Fagan v. Mercury Ins. Group
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil properly denied defendant's motion for summary judgment.  Although the affidavit and peer review report of defendant's chiropractor set forth a factual basis and medical rationale for the chiropractor's conclusion that there was a lack of medical necessity for the services rendered, the affidavit of plaintiff's treating chiropractor, submitted in opposition to defendant's motion for summary judgment, was sufficient to demonstrate the existence of a triable issue of fact as to the medical necessity of the services rendered.

NO-FAULT – MEDICAL NECESSITY OF MEDICAL SUPPLIES – UNREBUTTED SWORN PEER REVIEW REPORTS
Favorite Health Prods., Inc. a/a/o Jeoniel Michel v. Geico Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied defendant's cross motion for summary judgment.  Defendant submitted, among other things, two sworn peer review reports, which set forth a factual basis and medical rationale for the conclusion that there was a lack of medical necessity for the medical supplies at issue.  Defendant's showing that the supplies were not medically necessary was unrebutted by plaintiff.

NO-FAULT – MEDICAL NECESSITY – UNREBUTTED IME REPORT
Advanced Med., P.C. a/a/o Joyce Asiedu v. GEICO Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied defendant's cross motion for summary judgment.  Defendant sufficiently established that the denial of claim forms were timely mailed in accordance with defendant's standard office practice or procedure, and submitted an affirmation by the doctor who performed the independent medical examination as well as a copy of the independent medical examination report, establishing, prima facie, that with respect to the services at issue in plaintiff's third and fifth causes of action, there was no medical necessity.  Plaintiff did not rebut that evidence.

Richmond Civil Rules that Although General Denial of No-Fault Benefits Excused Provider's Obligation to Continue to Submit Bills, Burden Remained with Provider to Establish Medical Necessity of Unsubmitted Billings At Trial

NO-FAULT – PROOF OF CLAIM – MEDICAL NECESSITY – BURDEN OF PROOF
J.R. Dugo, D.C. a/a/o Kristen Puma v. Allstate Ins. Co.
(NYC Civil Ct., Richmond Co., decided 1/12/2010)

If a New York no-fault insurer issues a general denial of all future no-fault benefits based on the opinion of its IME-doctor that no further medical services are necessary, must the treating providers continue to submit bills and "proof of claim" within 45 days of the dates of service?

No, reiterates Richmond County NYC Civil Court Judge Katherine Levine in this decision, adhering to the Appellate Division, Second Department's 1999 holding in Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219 (2d Dept. 1999).  However, Judge Levine also ruled that because plaintiff chiropractor had not  continued to submit his bills to Allstate after its general denial, no presumption of medical necessity attached to the services plaintiff rendered, and the burden therefore had not shifted to Allstate to demonstrate the lack of medical necessity at trial.  Instead, Judge Levine opined that at trial, plaintiff would be required to establish the medical necessity of the services that he rendered and negate Allstate's general denial based on its negative IME-based position that no further medical services were necessary:

Defendant's attempt to distinguish the current factual situation from the governing case of Mtr. Of State Ins Co. v. Domotor, 266 AD3d 219 (2d Dept. 1999) is unavailing.  In Domotor, supra, the insurance company initially provided medical benefits to the appellant assignor but then issued an IME cut-off denial based upon its expert's opinion that the assignor no longer needed medical treatment.The assignor nevertheless continued to obtain medical care although she submitted no further claims to the insurance company.  She subsequently demanded arbitration to resolve the issue of the insurance company's liability.

The court ruled that once an insurance company had unequivocally repudiated liability on the claim by sending a letter disclaiming coverage, it could not "insist upon adherence to the terms of its policy." 266 AD2d at 220. The insurance company's letter of disclaimer thus negated the insured's otherwise absolute obligation to comply with the conditions precedent under the policy to provide a timely written proof of loss. Id at 220-21. The assignor was therefore entitled to arbitrate her claim that she was entitled to such medical benefits following the issuance of the denial, even though the bills for those services were never submitted to the insurer prior to her demand for arbitration. Id.

Domotor was further explained in Mtr. Of Arbitration between NY Medical Health v. NYC Transit Authority, 2009 NY Slip Op. 51526U, 24 Misc 3d 1219A ( Civil Ct, Kings Co. 2009). Judge Sweeney first noted that the condition precedent to the obligation of an insurer to pay no fault benefits arose from the policy of insurance which contained the mandatory personal injury protection ("PIP") endorsement - that an eligible injured person or his assignee submit written proof of claim within 45 days after the date services are rendered (11 NYCRR 65.1, 65-2.4(c)). However, pursuant to set insurance law precedent, "an insurer cannot insist upon cooperation or adherence to the terms of its policy after it has repudiated liability on the claim ***by sending a letter denying liability. Id at 3 citing Rajchandra Corp. v. Title Guarantee Co., 163 AD2d 765, 769 (2d Dept. 1990). See, Auerbach v. Otsego Mutual Fire Ins. Co., 36 AD3d 840, 842 (2d Dept. 2007). Since the Transit Authority had unequivocally notified the assignor that it was denying all no -fault benefits, neither the assignor nor his assignee - the medical provider - were obligated to submit written proof of claim to the respondent. Id. At 4.

Nor does the opinion letter annexed to defendant's papers from the Office of Counsel, State Insurance Department, support defendant's position. The precise question posed before Counsel was whether an insurance company must continue to issue denials for claims for continued treatment which are submitted subsequent to the company's issuance of a general denial for all-future benefits. Unlike the current situation, where plaintiff has not submitted any claims, the facts presented to the Office of Counsel revealed that the medical provider continued to submit claims for reimbursement after the general denial was issued. Therefore, Counsel's opinion was predicated upon an insurer's obligation under the regulations (11 NYCRR §65-3.8(c)) to either deny or pay a claim within 30 calendar days after proof of claim is received. His further comment that "the obligation of an applicant to submit timely claims to be eligible for reimbursement remains continuous, irrespective of whether an insurer has denied a claim" is merely dicta. 

However, Allstate's "ability to resolve the claims at issue if warranted" is not prejudiced. Plaintiff had the option of continuing to submit claims, despite Allstate's general denial, and chose not to. Since plaintiff has failed to file its claim, no presumption of medical necessity attaches to the services rendered by plaintiff.  The burden therefore has not shifted to defendant to demonstrate the lack of medical necessity. See, e.g. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U, 17 Misc 3d 1135A (Dist. Ct., Nassau Co. 12/3/2007); A.B. Medical Services, PLLC v. NY Central Mutual Fire Ins. Co., 2005 NY Slip. Op. 50662(U), 7 Misc 3d 1018(A) (Civil Ct. Kings. Co. 2005; Citywide Social Work & Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings Co. 2004). At trial, plaintiff must establish the medical necessity of the services rendered and negate the general denial issued by Allstate that pursuant to an IME, no further medical services were warranted.

As such, the court denies defendant's motion to dismiss the case due to plaintiff's failure to submit a claim and directs the parties to contact the court, within 20 days of receipt of this decision, to schedule a date to recommence the trial unless they can resolve the matter beforehand. 

The opinion letter to which Judge Levine refers is the September 2, 2004 New York State Insurance Department Office of General Counsel opinion letter entitled "No-Fault Denials", which can be found here.  Although Judge Levin correctly noted the precise question being addressed in that opinion letter, Supervising Attorney Lawrence Fuchsberg did say, twice, that "the obligation of an applicant to submit timely claims to be eligible for reimbursement remains continuous, irrespective of whether an insurer has denied a claim and indicated that all future claims will be denied" and "an applicant for benefits must also continue to submit their claims on a timely basis in order to protect their rights to reimbursement, in the event that it is ultimately established that the services rendered were medically necessary despite a negative IME report."  The opinion letter, however, although issued nearly five years after the Second Department's decision in Domotor, does not cite Domotor or any other case law.

Judge Levine's ruling on the unshifted burden of proving medical necessity appears to be new, as none of the three case decisions she cited involved unsubmitted bills or found that the burden of proving medical necessity remained with the provider.  Count of there being further litigation of that issue in other New York state courts.

Lack of Factual Basis in Treating Chiropractor's Opinion on Medical Necessity Fails to Raise Triable Issue of Fact

NO-FAULT – MEDICAL NECESSITY – FACTUAL BASIS OF MEDICAL OPINION
Innovative Chiropractic, P.C. a/a/o Jose Ovalles v. Travelers Ins. Co.
(App. Term, 2nd Dept., decided 12/1/2009)

Travelers appealed from Queens Civil's denial of its cross motion for summary judgment dismissing the fourth and fifth causes of action of plaintiff's complaint.  The Civil Court held that an issue of fact existed as to the medical necessity of the services that formed the basis of those causes of action.

In REVERSING the order and granting summary judgment to Travelers on the two causes of action, the Appellate Term, Second Department, held that plaintiff's submission of an affidavit from the treating chiropractor which did not set forth any facts to support his conclusion that the billed services were medical  necessary failed to raise a triable of issue of fact, warranting summary judgment:

In support of its cross motion, defendant annexed an affidavit and a peer review report from the chiropractor who performed the peer review, which established a lack of medical necessity with respect to plaintiff's $425.44 claim. In opposition thereto, plaintiff's treating chiropractor submitted an affidavit in which he merely stated that the treatment was medically necessary, without setting forth any facts to support the conclusion. Consequently, plaintiff's opposition papers failed to raise a triable issue of fact as to medical necessity (see Bronze Acupuncture, P.C. v Mercury Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51219[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Accordingly, defendant's cross motion for summary judgment dismissing plaintiff's fifth cause of action should have been granted (see Continental Med., P.C. v Mercury Cas. Co., 22 Misc 3d 134[A], 2009 NY Slip Op 50234[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; CPT Med. Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 87 [App Term, 1st Dept 2007]).

Practice pointer:  Unsworn or factually unsupported affidavits will not suffice to raise a triable issue of fact in opposition to a motion for summary judgment.

Testimony of Re-Peer Review Doctor Not Limited to Rationale of Original Peer Review Report

NO-FAULT – TESTIMONY OF RE-PEER REVIEW DOCTOR – GENERALLY ACCEPTED STANDARDS OF MEDICAL PRACTICE – MEDICAL NECESSITY
Prime Psychological Servs., P.C. a/a/o James Gajadhar v. Progressive Cas. Ins. Co.
(NYC Civil Ct., Richmond Co., decided 8/5/2009)

In the words of New York City Civil Court, Richmond County, Judge Katherine Levine, "[t]his case was submitted to the court to determine whether a re-peer doctor's testimony must exactly replicate what is contained in a peer review report generated by another doctor, and whether the re-peer doctor can opine that certain services are contrary to generally accepted standards when the peer review report does not explicitly set forth that conclusion."  In the opinion of Judge Levine, the answers to these questions are no, the re-peer doctor's testimony must not exactly replicate the original peer review's contents, and yes, the re-peer doctor may add his opinion that the billed services were contrary to generally accepted medical standards.

Progressive denied payment of plaintiff provider's bills for psychological testing , a diagnostic interview, individual psychotherapy and other services it provided to the assignor based on a peer review report of Dr. Moses Weksler dated February 9, 2007, which found that the psychological services were not medically necessary.  Since Dr. Weksler was unavailable to testify when the suit reached trial, Progressive presented as its expert witness, Dr. Robert Daley, who conducted a re-peer review by reading the peer review report of Dr. Weksler and reviewing the records listed on the original peer review report.  While both doctors reached the same conclusion that the five psychological services provided to the assignor were not medically necessary, and specified at length as to the fallacies of the tests, Dr. Daley added that the services at issue were not in accordance with generally accepted medical procedures.

At trial, Dr. Daley testified that he agreed with Dr. Weksler's opinion that the tests were not medically necessary and basically reiterated all the points made by Weksler in the peer review report.  He testified that the five tests at issue were utilized for screening a large number of persons and that they did not add to the diagnostic formulation and treatment. He then opined that the use of the tests deviated from the generally accepted procedures in psychology since a psychologist should first determine whether someone is suffering from a disease through an interview, not testing. The standard of care also incorporated the precept that the tests should only be performed if specific questions arose about the diagnosis or if the doctor could not develop a diagnosis.

Counsel for plaintiff objected to Dr. Daley's testimony about generally accepted medical procedure because Dr. Weksler made no such finding in his report. Plaintiff contended that the breadth of Daley's testimony was  limited to the rationale contained in the peer review report and that both the re-peer doctor and the court were bound by what was written in the peer review report and that the court was limited to adducing "whether the original rationale was correct."

Progressive contended that a re-peer doctor who testifies on medical necessity may refer to the generally accepted medical practice even though the peer review report by the original doctor "does not explicitly state that point" because once an expert is qualified as an expert, his testimony is governed by CPLR 3101(d), which only mandates that an expert disclose "in reasonable detail" the subject matter on which he is going to testify. Furthermore, Progressive asserted that even if a medical expert testifying at trial about medical necessity does not directly state whether the services were rendered in accordance with the generally accepted medical practice, a court can infer from the testimony whether the generally accepted medical practice was followed.

In overruling plaintiff's objection to Dr. Daley's testimony about generally accepted standards of psychological practice and procedures, Judge Levine held:

Although there have been few decisions elucidating defendant's exact burden of proof to establish that the services were medically unnecessary, Nir. v. Allstate Insurance Co., 7 Misc 3d 544, 546 (Civil Ct, Kings Co. 2005), at the minimum, a defendant must "establish a factual basis and medical rationale for the lack of medical necessity of plaintiff's services." Id. See also, CityWide Social Work, supra, A.B. Medical Services, supra. The New York courts "explicitly or implicitly look to generally accepted practice in determining medical necessity. Citywide Social Work , supra at 613.

Generally accepted practice "is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling." CityWide, supra at 616. Millennium Radiology, P.C. v. New York Cent. Mut., NY Slip Op 50877U, 23 Misc 3d 1121A (Civil Ct., Richmond Co. 2009) . The doctor must submit "objective testimony or evidence to establish that his opinion is what is generally accepted in the medical profession." Williamsbridge Radiology & Open Imaging v. Travelers Indemnity Co., 2007 NY Slip Op. 50224U, 14 Misc 3d 1231A (Civil Ct., Kings Co. 2007).

"A peer review's medical rationale is insufficient if it is unsupported by or controverted by evidence of medical standards." Nir supra, 7 Misc 3d at 547. Thus, in order to carry the insurer's burden of proof that the services were not medically necessary, the insurer's expert must show that the services provided were inconsistent with generally accepted medical/professional standards. Citywide Soc. Work & Psychological Servs., PLLC v. Allstate Ins. Co., 2008 NY Slip Op 51601U, 20 Misc 3d 1124A (Sup. Ct., Nassau County 2008). Ultimate Medical Supplies v. Lancer Insurance Co., 7 Misc 3d 1002(A), 2004 NY Slip Op 51860(U) (Civil Ct., Kings Co. 2004). "Although peer review, or general acceptance in the relevant scientific community, is not always a sine qua non for admissibility of an expert's theory, see Kumho Tire Co. v. Carmichael, 526 U.S. 137, 151, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999) ,the absence of such review or acceptance is often indicative of the unreliability of an expert's opinion." Seneca Meadows, Inc. v. ECI Liquidating, Inc., 427 F. Supp. 2d 279, 304, (W.D.NY 2006). 

In the instant matter it is clear that the re-peer doctor, by explicitly mentioning the term "generally accepted medical standard," bolstered the original peer report's conclusion that there was no medical necessity for the five psychological tests performed on the assignor. Defendant claims that the original doctor, in sum and substance, gave the same rationale for lack of medical necessity as was testified to by the second doctor since he mentioned the same factors and rationale albeit without using the talismanic phrase "generally accepted medical standards."

CPLR 3101(d)(1) provides that: Upon request, each party shall identify each person whom the party expects to call as an expert witness at trial and shall disclose in reasonable detail the subject matter on which each expert is expected to testify, the substance of the facts and opinions on which each expert is expected to testify, the qualifications of each expert witness and a summary of the grounds for each expert's opinion.

CPLR 3101(d)(1) "does not require a party to respond to a demand for expert witness information 'at any specific time nor does it mandate that a party be precluded from proffering expert testimony merely because of noncompliance with the statute', unless there is evidence of intentional or willful failure to disclose and a showing of prejudice by the opposing party" Shopsin v. Siben & Siben, 289 AD2d 220, 221 (2d Dep't 2001); Cutsogeorge v Hertz Corp., 264 AD2d 752, 753-754 (2d Dep't 1999). In LaMasa v. Bachman, 56 AD3d 340 (1st Dept. 2008), the First Department upheld the lower court's refusal to preclude the testimony of plaintiff's experts concerning the seriousness of the injury plaintiff sustained in an automobile accident, despite the discrepancies that existed between some of their testimony and their reports, since "defendant did not show a willful attempt to deceive or prejudice, and such discrepancies, which defendant was free to raise on cross-examination, go only to the weight, not the admissibility, of the testimony" Id. At 341.See, Hageman v Jacobson, 202 AD2d 160, 161 (1st Dep't 1994);; Dollas v Grace & Co., 225 AD2d 319, 321 (1st Dept. 1996). 

Plaintiff cites Dilon Medical Supply Corp. v. NY Central Mutual Ins., 2007 NY Slip Op. 52454U, 18 Misc 3d 128A (App. Term, 2d Dept. 2007), for the proposition that the re-peer doctor's reasoning as to why he, as opposed to the original doctor, believes the tests were not medically necessary is completely irrelevant. In Dilon, supra, as in the instant matter, the doctor who wrote the peer review report was unavailable, hence causing the defendant's to call a re peer doctor. Plaintiff sought to preclude the re-peer doctor from testifying. The Appellate Term found that the issue before it was whether the rationale for the conclusion in the peer review report, upon which the defendant based its denial was correct. "Since the defendant sought to call a medical expert witness, who was available for cross-examination, and his testimony as to the lack of medical necessity...would be limited to the basis for the denials as set forth in the original peer review reports, the expert witness should have been permitted to testify." Id . See. Spruce Med. & Diagnostic, P.C. v. Lumbermen's Mut. Cas. Co., 2007 NY Slip Op 51104U, 15 Misc 3d 143A (App. Term, 1st Dept. 2007) (court denies motion to preclude re-peer doctor from testifying since defendant's expert witness "would be subject to full cross-examination and his testimony as to lack of medical necessity would be limited to the basis for denial set forth in the original peer review report").

In SK Medical Services, P.C. v. New York Central Mutual Ins. Co., 12 Misc 3d 686 (Civil Ct., Richmond Co. 2006), Judge Sweeney further amplified upon the interplay between the disclosure of the peer review report and the subsequent testimony of a re peer doctor. The court found that there was no reason to deny the testimony of the re-peer doctor since defendant had issued a timely denial of claim which asserted lack of medical necessity as a defense and which contained the information called for in the prescribed denial of claim form. 

Furthermore, the qualification of a witness as an expert presumes that he is knowledgeable about and may testify about the generally accepted medical standards. Olivier v. Robert L. Yeager Mental Health Ctr., 398 F.3d 183, 190 (2d Cir. NY 2005). The requirement that the plaintiff introduce expert medical testimony is imposed in part because "without expert assistance a jury will often have no understanding of what constitutes reasonable behavior in a complex and technical profession such as medicine." Id at 190 citing Sitts v. United States, 811 F.2d 736, 740 (2d Cir. 1987). See, Paul v. Boschenstein, 105 AD2d 248, 249(2d Dep't 1984).For that reason "expert testimony has been held to be admissible not only to explain highly technical medical or surgical questions (e.g., Meiselman v Crown Hgts. Hosp., 285 NY 389), but has also been found appropriate to clarify a wide range of issues calling for the application] of accepted professional standards." Selkowitz v. County of Nassau, 45 NY2d 97, 102 (1978). 

Moreover, the expert should be possessed of the requisite skill, training, education, knowledge or experience from which it can be assumed that the information imparted or the opinion rendered is reliable." Matott v. Ward, 48 NY2d 455, 459(1979); McCormick, Evidence [2d ed], § 13. In order for a court to credit the testimony of a qualified expert, it must be convinced that the expert exhibit "a degree of confidence in his conclusions sufficient to satisfy accepted standards of reliability. Matott, supra at 459-60. 

Since the sine qua non of an expert's testimony is to opine how accepted professional standards apply to the case at hand, this court will not preclude Dr. Daley from testifying that the five psychological tests rendered were inconsistent with generally accepted medical procedures. The basis for this conclusion - that a psychologist should first obtain a diagnosis from an interview and that only if he is unsuccessful in this endeavor or has questions about the diagnosis should he consider utilizing these tests - was first set forth in the peer review report albeit without an explicit reference to the generally accepted standards. Furthermore, Dr. Weksler cited to two authoritative reports or treatises to back up his opinion and also mentioned that in order for a procedure to be medically necessity, it must be in accordance with generally accepted standards of medical practice. 

Finally, plaintiff cannot validly argue that it was subjected to surprise or prejudice by the re-peer doctor since his testimony basically dovetailed what was contained in the peer review report which had previously been provided to plaintiff. Dr. Daley did not postulate a new theory during his testimony which surprised plaintiff and he was subjected to cross-examination.  Plaintiff could have reasonably expected that once it agreed to the qualifications of an expert, said witness might refer to a generally accepted medical standard.

In light of the above, the court finds that defendant has sustained its burden of proving lack of medical necessity for the five tests and that plaintiff has not rebutted this testimony by producing its own witness or treatises proving that the tests were medically necessary.

Dr. Daley did not rebut the presumption of medical necessity that attached to the initial psychiatric diagnostic interview, two sessions of psychotherapy and explanation and interpretation of results to the primary physician which totaled $438.09. The trial stipulation indicated that Progressive has already made a partial payment to plaintiff of $314.68. As such, the court awarded judgment to plaintiff in the amount of $123.41 plus interest from the date of the summons and complaint plus costs and attorneys' fees.

A Spate of No-Fault Decisions from the Appellate Term, Second Department

NO-FAULT – NOTARY PUBLIC'S JURAT – TECHNICAL DEFECT – PEER REVIEW – MEDICAL NECESSITY
Complete Orthopedic Supplies, Inc. a/a/o Ana Valencia v. State Farm Mut. Auto. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment for plaintiff DME provider on its motion for summary judgment.

REVERSED and State Farm's cross motion for summary judgment was granted. The notary public's jurat was missing the year State Farm's affidavits of mailing were signed. The Appellate Term held that this was a "technical defect" that the Civil Court should have disregarded since it did not prejudice a substantial right of a party, and plaintiff had raised no objection to it. State Farm's affirmed peer review report established prima facie that there was no medical necessity for the supplies provided by plaintiff, which proof plaintiff did not rebut. As a result, State Farm's cross motion for summary judgment dismissing the complaint should have been granted.


NO-FAULT – UNTIMELY SUBMISSION OF CLAIMS
Long Is. Multi-Medicine Group, P.C. a/a/o Sumira Lund v. Travelers Ins. Co.
(App. Term, 2nd Dept., decided 1/8/2009)

Appeal from a Queens Civil judgment for plaintiff on its motion for summary judgment.

AFFIRMED. Civil Court had granted plaintiff's motion based on its finding that Travelers waived its defense of claim submission untimeliness, since it failed to advise plaintiff that the claim would be reconsidered upon a showing of impossibility to timely submit the claims. The Appellate Term affirmed the judgment, not on that ground, but because Travelers' opposition motion papers annexed denial of claim forms that did not correspond to the claim forms upon which plaintiff sought summary judgment. As such, the court held that Travelers had failed to establish that it timely denied the subject claims and, as such, failed to raise a triable issue of fact with respect to the claims at issue.


NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
Union Physician Healthcare, P.C. a/a/o Christopher Kelly v. Utica Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Kings Civil judgment for plaintiff on its motion for summary judgment.

REVERSED and plaintiff's motion denied. The affidavit by plaintiff's officer submitted in support of plaintiff's motion for summary judgment failed to lay a proper foundation for the admission of the documents annexed to plaintiff's moving papers and, as a result, plaintiff failed to establish a prima facie case. The affidavit submitted by plaintiff's officer was insufficient to demonstrate that he possessed personal knowledge of plaintiff's practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff's moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 15 Misc 3d 144[A], 2007 NY Slip Op 51161[U] [App Term, 2d & 11th Jud Dists 2007], affd 55 AD3d 644 [2008]; Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]).


NO-FAULT – MVAIC – NOTICE OF CLAIM – INSURANCE LAW § 5208(A)
M.N.M. Med. Health Care, P.C. a/a/o Erick Papillion v. MVAIC
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil order denying defendant MVAIC's motion for summary judgment.

REVERSED and MVAIC's motion granted, dismissing the complaint. The filing of a timely affidavit providing MVAIC with notice of intention to file a claim is a condition precedent to the right to apply for payment from MVAIC pursuant to New York Insurance Law § 5208(a). Compliance with the statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a "covered person" who is entitled to recover no-fault benefits from MVAIC. MVAIC's submissions in support of its motion for summary judgment made a prima facie showing that plaintiff's assignor failed to timely file a notice of claim. By defaulting on the motion, plaintiff did not demonstrate that its assignor timely filed a notice of claim or sought leave to file a late notice of claim. Thus, MVAIC's motion for summary judgment should have been granted.


NO-FAULT – NOTICE TO ADMIT – PRIMA FACIE CASE SHOWING
All Mental Care Medicine, P.C. a/a/o Augustin Martes v. State Farm Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Vista Surgical Supplies, Inc. a/a/o Tyrone Pearson v. State Farm Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Judgments for State Farm dismissing the complaints AFFIRMED. An admission that defendant received plaintiff's claim form is not a concession of the facts set forth in said claim form (Bajaj v General Assur. Co., 18 Misc 3d 25, 28 [App Term, 2d & 11th Jud Dists 2007]; Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006]). By only submitting the notices to admit and producing no witnesses at trial, plaintiffs failed to make a prima facie case for recovery of no-fault benefits.


NO-FAULT – MOTION TO AMEND ANSWER TO ADD AFFIRMATIVE DEFENSES – RES JUDICATA – COLLATERAL ESTOPPEL BASED ON PRIOR ARBITRATION DECISION – FRAUDULENTLY INCORPORATED PC
Uptodate Med. Serv., P.C. a/a/o Jean Alberic v. State Farm Mut. Auto. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment for plaintiff on its motion for summary judgment.

REVERSED, granting State Farm's motion to amend its answer and, upon such amendment, summary judgment dismissing the complaint. The Civil Court improperly denied State Farm's motion to amend its answer to add the affirmative defenses of res judicata and collateral estoppel. Generally, leave to amend a pleading pursuant to CPLR 3025 (b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the amendment may have merit. State Farm sought to add those affirmative defenses because there was a prior arbitration proceeding between the parties in which plaintiff had sought to recover assigned first-party no-fault benefits for services rendered from August 2003 through January 14, 2004, in which proceeding the arbitrator had determined that plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation. Plaintiff did not demonstrate prejudice or surprise from the proposed amendment.

State Farm established that the issue of whether plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation was identical to the issue previously decided by the arbitrator. In opposition to State Farm's cross motion, plaintiff failed to address the branch of the cross motion which sought summary judgment dismissing the complaint on the ground of collateral estoppel. Therefore, plaintiff failed to establish that it did not receive a full and fair opportunity to litigate in the arbitration proceeding. Thus, the branch of defendant's cross motion seeking summary judgment should have been granted.


NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
V.S. Med. Servs., P.C. a/a/o Mohamad Nazir v. Travelers Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment after non jury trial for Travelers dismissing plaintiff's complaint.

AFFIRMED. While plaintiff produced a witness to testify regarding the claim forms plaintiff sought to have admitted into evidence, because said witness did not testify at all as to the generation of such claim forms, they were not admissible as business records (see CPLR 4518). Accordingly, plaintiff failed to establish a prima facie case (see Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d & 11th Jud Dists 2007]).

Court Denies Motion to Vacate Arbitration Award of DME Cost Despite Evidence of Fraud

NO-FAULT – DMEs – MEDICAL NECESSITY – FRAUD
Matter of Travelers Indem. Co. v. Tri Borough Medical Supply, Inc. a/a/o Clarence Beckles
(Sup. Ct., New York Co., decided 10/24/2008)

There were two things working against Travelers in this case: (1) the limited scope of judicial review of an arbitration award; and (2) an affidavit of the prescribing physician which said that "most" but not all durable medical equipment items (DMEs) he had prescribed while working at Sunset General Medicine & Rehabilitation, PC, in Brooklyn were not medically necessary.

Based on a negative peer-review report, Travelers timely denied payment of DMEs prescribed by the subsequently de-licensed Dr. Melchias Mukendi of Sunset General Medicine & Rehabilition, PC. Respondent DME provider filed for arbitration of that denial and was awarded $850.62 by the arbitrator, despite Traveler's submission of:

• the negative peer-review report, opining that the prescribed DMEs were not medically necessary;
• an affidavit from Dr. Mukendi, in which he averred that: “While at Sunset, [a manager and a representative of a DME supplier] gave me a list of DME that I was told to prescribe to rnost patients. I was required to prescribe these items even if there was no medical necessity to support the prescriptions. In addition, I was told that I should make referrals for consultants to other medical providers whose specialties appeared on the initial evaluation form. These referrals . . . were made regardless of medical necessity”; and
• copies of correspondence sent to a federal magistrate judge related to fraud in the no-fault DME industry that related to a RICO suit in which one of the defendants was thc wholesaler that provided the DME in this case.

Based on the submitted initial medical evaluation of Dr. Mukendi, which “specifically include[d] the medical equipment here in question in its 'Treatment Plan' and g[ave] as its reason for same ‘to alleviate pain and muscle spasm, to prevent stiffness, to improve blood circulation, to promote healing and restore normal joint mobility", the no-fault arbitrator concluded that Triborough "met its burden to present a prima facie case of medical necessity for the equipment here in question and has adequately refuted [Travelers'] peer review."

Travelers appealed the arbitration decision to a master arbitrator and lost, based on the mater arbitrator's conclusion that the original arbitrator had shown a "rational basis" for the award. Traveler's then commenced this special proceeding purusuant to CPLR 7511 to vacate the arbitration award as "arbitrary, irrational, contrary to applicable law and so imperfectly executed as to warrant vacatur and reversal."

In concluding that Travelers had not met its burden of establishing its entitlement to vacatur of the award, given the court's limited scope of review of arbitration awards, New York County Supreme Court Justice Eileen Bransten held:

Here, the evidence was sufficient. It was not irrational for the arbitrator, after holding a hearing, listening to the arguments of all counsel and reviewing the parties’submissions, to conclude that based on the medical evaluation, the DME was medically necessary. Dr. Mukendi's affidavit, while acknowledging that he was told to prescribe DME in "most" cases while working at Sunset, did not address the particular facts related to Mr. Beckles. The physician performing peer review on behalf of Travelers, moreover, never personally saw Mr. Beckles.

Additionally, there is absolutely no indication that the master arbitrator did not examine the sufficiency of the evidence. Indeed, the [master arbitration award] sets forth that it was within the arbitrator's province to “deterniine what cvidence or testimony to accept or reject, and what inferences should be drawn as supported by the evidence” and that the master arbitrator could not substitute his “interpretation of the evidence or [] judgment in place of the arbitrator.”

Regardless of what you may think about the outcome of this matter, this case points up the difficulty parties generally experience when asking courts to overrule and vacate arbitration awards. At each step of the appeal process, the scope of review becomes narrower and, consequently, it becomes more difficult to gain a reversal.

Not Sworn, Not Retro, Not Enough

NO-FAULT – MEDICAL NECESSITY DEFENSE – UNSWORN IME REPORT
OS Tigris Acupuncture, P.C. a/a/o Janeth Agarpao v. Liberty Mut. Ins. Co.
(App. Term, 1st Dept., decided 10/7/2008)

No surprise here. The Appellate Term, First Department, AFFIRMED New York Civil's award of summary judgment to the plaintiff medical provider because: (1) plaintiff made its prima facie showing by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue; (2) the unsworn chiro's negative IME report was properly excluded from consideration; and (3) besides, that report only concluded that further acupuncture treatment was not necessary, and did not raise a question of fact about the medical necessity of the acupuncture treatment that the assignor had already received; and (4) Liberty did not produce competent evidence in support of its defense of the plaintiff's nonconformity with the applicable fee schedule.

Court Rejects "Novel" Argument That Incomplete EMG & NCV Tests Render Them Medically Unnecessary

NO-FAULT – MEDICAL NECESSITY DEFENSE – EMG & NCV TESTS
Complete Med. Care Servs. of NY, P.C. a/a/o Vanessa Garcia v. State Farm Mut. Auto. Ins. Co.
(NYC Civil, Queens Co., decided 8/22/2008)

ENDs (electroneurodiagnostic tests) continue to stimulate challenge and litigation in the no-fault world, principally because of the perception -- or some would say reality -- that they are over-prescribed to generate increased billings for providers. Referring providers have learned, literally by the trial and error of themselves and others, better to support their referrals or prescriptions of costly ENDs and document their purported medical necessity in order to warrant payment of no-fault benefits.

In this case, State Farm did not challenge the front end of the referral, but the back end of the testing, arguing that the incomplete performance of the electromiogram (EMG) and nerve conduction velocity (NCV) tests made their results useless in terms of the diagnosis and treatment of the assignor patient and, as such, those tests were rendered medically unnecessary as a practical matter and therefore not eligible for reimbursement under no-fault.

In what appears to be a case of first impression, and calling State Farm's argument "unique" and "novel", Queens Civil Judge William Viscovich rejected State Farm's argument and awarded payment for the tests, holding:

Defendant's position seeks a retrospective determination of medical necessity but this court can find nothing in the precedents discussed or in the No-Fault statute and related regulations that establish such a position. In fact, to the contrary, they seem to require a determination of medical necessity be made prospectively from the standpoint of the insured at the time a treatment or service is rendered, not at a time when its effectiveness or lack thereof can be established retrospectively.

This is particularly true when one considers that the expenses sought in No Fault litigation are in reality expenses incurred by the insured, not the provider. A medical provider does not "incur" expenses when it treats an insured. Rather, the provider accepts an assignment of the insured's benefits, allowing it to step into the shoes of the insured for litigation purposes. In theory, if not reality, the insured, not the provider, is the one seeking reimbursement for expenses already incurred. As such, the No Fault statute was clearly intended to "deliver better protection for the insured and to pay off claims quickly.(NY Legis. Ann. 1973 p. 298)". Pavone v. Aetna Cas. & Sur. Co., 91 Misc 2d 658, at 663 [Sup Ct. Monroe County 1977] and No Fault regulations have been interpreted in favor of the insured's rights (and through an assignment of benefits, the rights of the provider), especially as they relate towards speedy payment of proper claims on behalf of the insured. ( See Presbyterian Hospital v. Maryland Casualty Co., 90 NY2d 274 [1997]).

To adopt defendant's position, quite frankly, would be to dramatically and judicially change the very nature of No Fault litigation. It would result in these proceedings all too often delving into issues more related to medical malpractice or professional misconduct litigation, a fact reflected by defendant's brief, which cites as authority a matter decided before the State Board of Professional Medical Conduct (See In the Matter of Carl Dobson, M.D., 2006 NY Phys. Dec. Lexis 411 [2006] ). The nature of such litigation would defeat the very purpose of the No-Fault statute which is "to permit liberal recovery of moneys actually expended in the treatment of accident-related injuries ." Vidra v. Shoman, 59 AD2d 714, at 716 [2nd Dept. 1977]). (See also Presbyterian Hospital v. Aetna, 233 AD2d 431 [2nd Dept. 1996]). This is only reinforced by the Court of Appeals findings that the regulations "are written to encourage prompt payment of claims, to discourage investigation by insurers and to penalize delays." Dermatossian v. NYCTA, 67 NY2d 219, at 225 [1986].

Nowhere in the statutory or regulatory scheme are "necessary expenses" defined to exclude charges for services that were duly prescribed, but improperly or inadequately performed. Insurance Law Section 5102(a)(1) defines "basic economic loss" as including, inter alia, "All necessary expenses incurred...". If either the legislature or the Superintendent of Insurance had intended that the determination regarding medical necessity should be made in hindsight, with regard for whether a procedure was properly performed, a statutory or regulatory change could be made to define necessary expenses as including payment for "properly performed medical procedures." Neither has chosen to do so.

After a reading of the No-Fault statutes and regulations, the precedents established by both Judge Siegal and Judge Agate and the testimony, evidence and briefs submitted in this matter, this court holds that even if defendant has demonstrated that a prescribed medical service or procedure may not have been conducted properly, reimbursement is warranted so long as said service or procedure was medically necessary. The issue of proper performance of such service or procedure is best left for other areas of litigation practice and/or, where appropriate, the State Board for Professional Medical Conduct.

The decision contains a detailed discussion of the expert medical proof State Farm proffered through Dr. James B. Sarno, who, the court noted, acknowledged that a complete bilateral EMG/NCV of the upper and lower extremities was, in fact, medically necessary for the treatment and care of the assignor for injuries she sustained in a motor vehicle accident. Dr. Sarno testified, however, that an insufficient number of muscles in both the upper and lower extremities were tested, a deviation from the accepted standard of care for administering the tests when "assessing evidence of electro-diagnostic radiculopathy." Plaintiff's expert, Dr. Finkelstein (no first name given), while agreeing that the testing may not have been "thorough", testified that it was "not incomplete". Both Dr. Sarno and Dr. Finkelstein acknowledged that EMG/NCVs are extremely uncomfortable and painful for the patient -- Dr. Sarno maintaining that a proper testing regimen in this case required the placing of needles in 48 muscles, while Dr. Finkelstein's position was that, for this case, the placing of needles in 22 muscles was sufficient, particularly if the patient was having a difficult time dealing with the procedure.

"Skillful and Thorough" Cross Examination of Insurer's Ortho Expert Is Not Rebuttal Evidence of Medical Necessity

NO-FAULT – MEDICAL NECESSITY – EXPERT PROOF – BIAS
Andrew Carothers, M.D., P.C. a/a/o Sabrina Defares v. GEICO Indem. Co.
(NYC Civil Ct., Kings Co., decided 8/20/2008)

Suit over an $879.73 MRI bill, denied based on a peer review. At trial, in an effort to carry its initial burden of proving that the MRI was not medically necessary, GEICO called orthopedic medicine expert "Dr. Bazos" (Andrew?) as its chief and only witness.

Dr. Bazos testified that he reviewed the MRI reports and determined that the MRI performed on the assignor was not medically necessary. He stated that a MRI is necessary when there is significant clinical findings and the patient is a surgical candidate. Dr. Bazos stated that the assignor's examination was proper and well documented; that there was no indication that the assignor was a candidate for surgery; that based on the assignor's diagnosis of soft tissue injury, said injuries usually resolve within four to six weeks with a conservative course of treatment consisting of physical therapy and anti-inflammatory medication. Dr. Bazos stated that the assignor had multiple post traumatic soft tissue injuries which did not necessitate the need for a MRI. That these injuries were typical post-accident injuries and that the performance of an MRI for such injuries was a deviation from the generally accepted standard of care in the medical profession.

On cross examination, Plaintiff's counsel attempted to impeach the credibility of Dr. Bazos, claiming that in 90 percent of his peer reviews, Dr. Bazos found that MRIs were medically unnecessary. Plaintiff's counsel cross-examined Dr. Bazos concerning the number of times he testified, his understanding of the use of peer reviews, the number of peer reviews he performed, the fees charged for each peer review, and the fees he receives for his testimony at trial. Counsel also cross-examined Dr. Bazos concerning his basis for his opinion of lack of medical necessity, claiming that his opinion was contrary to the views expressed in Campbells Operative Orthopedics and that his opinion was reached based on his financial interests with GEICO.

In entering judgment for GEICO dismissing the complaint, Kings Civil Court Judge Sylvia Ash ruled:

While, it is well recognized that compensation has a direct and vital bearing on credibility, the fact that Dr. Bazos had a great deal of experience testifying on behalf of insurance companies does not alone support an inference that his opinion is not honest in this case (see Scott v. Spanjer Bros., Inc., 298 F.2d 928). Dr. Bazos' evidence cannot be disregarded simply because he is an "employee" of the Defendant. While employment or other relationship of a witness may be considered on the point of his credibility in weighing his evidence against opposing evidence, it is not by itself a sufficient reason for disregarding his testimony. Although the fact that Dr. Bazos testified on numerous cases on behalf of Insurance Companies may support the inference of bias, if direct unimpeached, uncontradicted, and reasonable testimony is shown which is consistent with Dr. Bazos' finding of lack of medical necessity, no lawful finding can be made of the existence of bias (see Arnall Mills v. Smallwood, 68 F. 2d 57). And if any bias was established it would simply go to the weight given to the testimony (see Khan v. New York State Dept. Of Health, 17 App. Div. 3d 938). To establish the existence of bias sufficient to disregard Dr. Bazos' testimony, Plaintiff would have to show that his opinion flowed from the claimed bias (see Cohen v. Mills, 271 App. Div. 2d 826).

The Court has assessed and accepted Dr. Bazos' uncontradicted expert opinion and makes the following findings: (1) his testimony was credible and convincing (2) his opinion was medically and factually supported and (3) his opinion was not based on any alleged bias. Dr. Bazos' testimony supplemented his detailed peer review report and fully and explicitly set forth his reasons for the denial. Therefore, the Court finds that Defendant has met its prima facie burden of demonstrating lack of medical necessity for the services rendered, thus shifting the burden to Plaintiff to establish medical necessity. At trial, Plaintiff did not submit any rebuttal evidence, such as the testimony of the referring physician or of its own medical expert, to establish that the services rendered to its assignor were medically necessary. Instead, Plaintiff relied solely upon its cross examination of Defendant's medical expert, Dr. Bazos. However, despite Plaintiff's counsel's skillful and thorough cross examination, he was unable to refute Dr. Bazos' testimony thus failing to meet its burden of establishing medical necessity.

Even a skillful and thorough cross examination, without affirmative proof of some kind, may not be enough. Regardless of how artful the cross examination, I've yet to see any expert change her opinion at trial and say, "You know counselor, that's an awfully good point. Nevermind what I said on direct. "

No Limitations Placed on Non-Party Deposition of Treating Doctor

NO-FAULT – MEDICALLY UNNECESSARY CPT TESTS – DISCOVERY – NON-PARTY DOCTOR'S DEPOSITION – SUBPOENAED BANK RECORDS
State Farm Mutual Auto. Ins. Co. v. CPT Medical Services, P.C.
(EDNY, decided 7/22/2008)

State Farm brought this action against 47 defendants, alleging that it was defrauded when defendants CPT Medical Services, P.C., Hoss Medical Services, P.C., Channel Diagnostics, P.C., and East-Way Chiropractic, P.C. performed medically unnecessary diagnostic current perception threshold tests ("CPT tests") on patients covered by State Farm insurance, and then submitted bills to State Farm for those tests with fraudulent documentation purporting to support the medical necessity of those tests. State Farm also alleged that the defendants who performed the CPT tests, Drs. Huseyin Tuncel and Andrew Susi, owned and operated the Defendant Medical Corporations in name only, when in fact they were secretly owned and operated by layperson Richard Weinstein through defendant management companies Richard's Medical Management Corp. and Weinstein Healthcare Management, Inc. in violation of New York law requiring medical corporations to be owned by licensed physicians. To carry out their fraudulent scheme, Weinstein and the Weinstein Entities allegedly paid kickbacks to either the treating physicians or other lay persons who controlled the medical corporations in order to obtain patient referrals and letters of medical necessity that they submitted to State Farm to bolster their claims.

State Farm subpoenaed Dr. John McGee, a non-party, to appear for a deposition on April 1, 2008. It claimed that Dr. McGee was one of the treating physicians who ordered CPT tests from the Defendant Medical Corporations. He was also the principal of two non-party medical corporations, Ostia Medical and Wexford Medical, that allegedly billed State Farm for medically unnecessary CPT tests and submitted fraudulent supporting documentation almost identical to that submitted by the Defendant Medical Corporations. State Farm asserts that Dr. McGee's deposition was necessary to:

provide direct testimony about why CPT Tests billed by the CPT Medical Defendants were performed, the basis for certain statements about CPT Testing that State Farm alleges were fraudulent, and the conduct of named defendants in the case, including the CPT Medical Defendants, the Weinstein Entities, Richard Weinstein, Huseyin Tuncel, Andre Susi, Yan Moshe and Dr. Riaz Ahmad.

Dr. Gee moved to quash that subpoena, based on his belief that at his deposition State Farm would question the propriety of his medical practice and whether he violated any rules of professional conduct. Dr. McGee asserted that State Farm has in the past used depositions of other physicians to "intentionally seek[] out information of professional misconduct in order to report the doctors to state authorities," thereby gaining the added benefit of "being able to deny all pending and future insurance claims from those doctors." Dr. McGee contended that he should be afforded a qualified privilege not to answer questions regarding his medical practice because if he were subjected to similar questioning from a professional disciplinary committee he would be given notice of the claims against him, given time to prepare a defense, and granted a hearing.

The magistrate judge overseeing discovery denied that motion, holding:

The court declines to stay Dr. McGee's deposition and directs Dr. McGee to answer all questions that are relevant to the claims and defenses of the parties to this action or that are likely to lead to the discovery of admissible evidence. Dr. McGee has not demonstrated the existence of any privilege that would allow him to avoid answering relevant questions that might put his medical license at risk. Dr. McGee's assertion that disciplinary proceedings may be commenced against him as a result of his deposition testimony are speculative at this time, nor has he shown that he would not be afforded due process in any disciplinary proceedings against him.

District Court Judge Leo Glasser upheld the magistrate's ruling:

With respect to Dr. McGee's deposition, there is no authority for limiting depositions based on mere speculation that some questions might put the witness at risk of appearing before a professional disciplinary committee. Dr. McGee is not protected by any privilege, and as such must answer all relevant questions regarding his relationships to defendants and the submission of claims for CPT tests as they relate to State Farm's allegations.

State Farm had also served subpoenas on the Bank of America and Morgan Stanley for financial documents related to Weinstein and the Weinstein Entities to determine how the alleged kickback payments were made. The Weinstein defendants moved to quash the bank subpoenas, arguing that the subpoenas were overly broad, missing return dates, and that State Farm should not be permitted to pursue its own discovery when it had failed to properly respond to the Weinstein defendants' discovery demands.

The magistrate judge denied the motion to quash, and the district court upheld that decision:

The Court is also not aware of any authority that would allow the Weinstein defendants to quash State Farm's subpoenas to the Banks based on the alleged noncompliance by State Farm with discovery requests. Moreover, that objection is now moot pursuant to Judge Matsumoto's finding on July 7th that State Farm has fulfilled its discovery obligations. See Docket Minute Entry dated July 7, 2008. Defendants' objection based on the procedural defects of the subpoenas, namely that they were missing relevant return dates, is also moot because those defects have since been corrected by Plaintiff, as noted in Judge Matsumoto's Memorandum & Order. Thus, the Court finds that, with Judge Matsumoto's directive to add temporal limits in accordance with the dates set out in the Amended Complaint, the subpoenas are tailored to produce relevant evidence directed at whether the Weinstein defendants made kickback payments to the other defendants, and if they did, how those payments were made.

Psychiatric Evaluation & Testing Services Found Medically Unnecessary

NO-FAULT – MEDICAL NECESSITY DEFENSE – BURDEN OF PROOF – PSYCHIATRIC EVALUATION & TESTING
CityWide Social Work & Psychological Servs., PLLC v. Allstate Ins. Co.
(Dist. Ct., Nassau Co., decided 7/1/2008)

This decision includes a good discussion of a no-fault insurer's burden of proof on a medical necessity defense. Allstate timely denied payment of plaintiff medical provider's $958.32 bill for psychiatric evaluation and testing services. Nassau District Court Judge Robert Bruno conducted a trial on Allstate's lack of medical necessity defense, noting preliminarily in his decision:

A no-fault insurer defending a denial of first-party benefits on the ground that the billed for services were not medically necessary must show that the services provided were inconsistent with generally accepted medical/professional standards. The opinion of the insurer's expert, standing alone, is insufficient to carry the insurer's burden of proof that the services were not medically necessary (see CityWide Social Work & Psychological Services v. Travelers Indem. Co., 3 Misc 3d 608, 777 NYS2d 241 [Civ. Court Kings County 2004]; Ultimate Medical Supplies v. Lancer Insurance Co., 7 Misc 3d 1002(A), 801 NYS2d 243, 2004 NY Slip Op 51860(U) [Civil County Kings County 2004]; Expo Medical Supplies, Inc. v. Clarendon Insurance Company, 12 Misc 3d 1154(A), 819 NYS2d 209, 2006 NY Slip Op 50892(U), 2006 WL 1341418). At trial, Defendant bears the burden of proof for its claim of lack of medical necessity (see Expo Medical Supplies, Inc. v. Clarendon Insurance Company, supra; A.M. Medical Services v. Deerbrook Insurance Co., Slip Copy, 18 Misc 3d 1139A, 2008 NY Misc. LEXIS 749, 2008 WL 518022 (NY City Civ. Ct.), 2008 NY Slip Op. 50368(U)).

In order for Defendant to prevail, Defendant must establish a factual basis and medical rationale for its claim of lack of medical necessity (see Nir v. Allstate Insurance Co., 7 Misc 3d 544, 796 NYS2d 857 [Civ. Ct. Kings Co. 2005]).

Allstate produced Dr. Samuel Rock for testimony at trial. Plaintiff called no witnesses to rebut Dr. Rock's testimony. Judge Bruno summarized Dr. Rock's testimony as follows:

Defendants' medical expert, Dr. Samuel Rock, testified that he reviewed the medical records and reports of the claimant and that he had sufficient information to render an opinion as to whether the services rendered were medically necessary. Dr. Rock testified on direct examination that he reviewed the medical records he received from Dr. Braun as well as other medical reports and results of the Beck inventory tests.

Dr. Rock also testified that the general accepted medical/professional standard for conducting the initial interview is six (6) weeks post-accident and to conduct the initial interview any earlier could result in a false positive, as most individuals experience some type of psychological stress after an accident, but the initial stress dissipates several weeks thereafter.

In the instant case, Dr. Braun conducted the initial interview on September 12, 2003, thirteen (13) days post accident, which according to Dr. Rock was improper and against generally accepted medical/professional standards.

In addition to the foregoing, Dr. Rock testified that had the initial interview been properly conducted, a determination could have been made that claimant was not seriously psychologically disturbed and therefore no additional testimony [sic] would be necessary.

According to Dr. Rock, the medical reports he reviewed does not indicate whether the claimant was ever treated, or whether Dr. Braun ever examined claimant or just relied upon the paperwork generated from claimant's self-administered Beck inventory tests.

In addition to the foregoing, Dr. Rock testified that the results of Dr. Braun's tests indicated claimant had the mildest form of anxiety, and in Dr. Rock's opinion, that diagnosis could have been determined during a proper forty-five (45) minute interview rendering subsequent testings unnecessary.

On cross-examination, Dr. Rock admitted, he did not review the accident report, hospital records or Dr. Gelphan's report in concluding the tests performed on claimant were not medically necessary. However, on re-direct examination, Dr. Rock testified that even if he had reviewed those reports they would not have effected his opinion regarding the lack of medical necessity.

Without any rebuttal testimony from the plaintiff, Judge Bruno found that plaintiff had failed to refute Allstate's expert witness testimony that the services provided deviated from the generally accepted medical professional standards. Judgment for Allstate.

A Day Late & 1,937.58 Dollars Short

NO-FAULT – VERIFICATION – INSURANCE LAW § 5106(A) – UNTIMELY DENIAL – MEDICAL NECESSITY DEFENSE
North N.Y. Med. Care, P.C. a/a/o Miledy Corniel v. New York Cent. Mut. Fire Ins. Co.
(App. Term, 2nd Dept., decided 7/10/2008)

This decision reminds no-fault insurers that the 30-day pay or deny period of Insurance Law § 5106(a) and Regulation 68 (11 NYCRR § 65-3.8) is reduced by the number of days a request for additional verification is sent after 10 business days from receipt of a prescribed claim form.

According to the decision, New York Central requested additional verification from plaintiff medical provider 12 days after receiving its NF-3 verification of treatment form. Section 65.15(d)(2) provides that additional verification required by an insurer is to be requested within 10 business days of receipt of a prescribed claim form. Pursuant to § 65-3.8(j), therefore, the 30-day period within which New York Central was required to pay or deny plaintiff's claim was reduced to 28 days.

The decision indicates that New York Central received the requested additional verification on May 16, 2001. Adding 28 and subtracting 31 made June 13, 2001 the 30-day deadline to pay or deny the plaintiff's bill. New York Central denied plaintiff's bill (or it appears a portion of it) on June 14, 2001.

In REVERSING Nassau District Court's order denying summary judgment to plaintiff, the Appellate Term held that "[a]s defendant did not deny plaintiff's claim until June 14, 2001, defendant's denial of plaintiff's claim was untimely and defendant is precluded from raising its proffered defense of lack of medical necessity[.]"

(Billing Manager or Corporate Officer) - (Personal Knowledge) = 0(Summary Judgment)

NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS – LACK OF PERSONAL KNOWELDGE OF OFFICE PRACTICES & PROCEDURES – NECESSITY OF MEDICAL SUPPLIES

In Vista Surgical Supplies, Inc. a/a/o Anna Vastardis v. American Protection Ins. Co. (App. Term, 2nd Dept., decided 6/12/2008), Infinity Health Prods. a/a/o Cecelia Morgan v. Amex Assur. Co. (App. Term, 2nd Dept., decided 6/12/2008) and Alur Med. Supply, Inc. a/a/o Douglas Gomez v. Country-Wide Ins. Co. (App. Term, 2nd Dept., decided 6/12/2008) , the Appellate Term AFFIRMED the denial and REVERSED the granting of summary judgment to plaintiff medical providers because:

The affidavit submitted by plaintiff's "billing manager and corporate officer" was insufficient to establish that said person possessed personal knowledge of plaintiff's practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff's moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the judgment is reversed, the order granting plaintiff's motion for summary judgment is vacated and plaintiff's motion for summary judgment is denied. Infinity Health Prods a/a/o Morgan v. Amex Assur. Co.

In Alur Medical Supply, Inc. a/a/o Douglas Gomez v. Country-Wide Ins. Co., the Appellate Term AFFIRMED the denial of Country-Wide's cross motion for summary judgment because the affirmed IME report submitted in support of that cross motion "did not address the necessity for medical supplies and, therefore, did not establish prima facie that the supplies provided by plaintiff were not medically necessary."

In Vista Surgical Supplies, Inc. a/a/o Anna Vastardis v. American Protection Ins. Co., the Appellate Term AFFIRMED the granting of American's cross motion for summary judgment because the affirmed IME report submitted in support of that cross motion "established prima facie that the supplies furnished by plaintiff were not medically necessary and plaintiff did not present any evidence refuting defendant's prima facie showing[.]"

No Opposition to Affirmed Peer Review Report Supports Summary Judgment to Insurer on Lack of Medical Necessity

NO-FAULT – MEDICAL NECESSITY – PEER REVIEW REPORT
Eden Med., P.C. a/a/o Shevonne Decamp v. Progressive Cas. Ins. Co.
(App. Term, 2nd Dept., decided 5/272008)

Kings Civil's grant of summary judgment to Progressive AFFIRMED.

"[Progressive] established that it paid $182.18 towards plaintiff's $3,247.19 claim and timely denied the balance on the ground that the services rendered were not medically necessary based on an affirmed peer review report. Since the peer review report submitted by defendant in support of its cross motion established prima facie that the services rendered by plaintiff were not medically necessary and plaintiff did not present any evidence refuting defendant's prima facie showing, the court below properly granted defendant's cross motion for summary judgment dismissing the complaint[.]"