Great Wall Acupuncture Continues to Control Fees Charged by Licensed Acupuncturists

With the comment period still open on the New York State Insurance Department's proposed amendment to Regulation 83 regarding licensed acupuncture fees, New York no-fault professionals know that most New York acupunturists continue to bill at and litigate over "prevailing geographic rates" for their services. 

Over at Arbiters of NY No-Fault, another legal blog of my law firm, my associate, Scott Mancuso, reports on two recent no-fault arbitration decisions in which the arbitrators adhered to the Appellate Term's holding in Great Wall Acupuncture, P.C. a/a/o Maria Gonzalez v. Geico Ins. Co., 26 Misc.3d 23 (App. Term, 2d Dept., 2009) that no-fault insurers "may use the workers' compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which a licensed acupuncturist is entitled to receive for such acupuncture services".  Check out that post here.  

Appellate Term Again Holds that Licensed Acupuncturists Properly Reimbursed Under Workers' Compensation Fee Schedule for Acupuncture Performed by Chiropractors

NO-FAULT – REIMBURSEMENT RATE FOR ACUPUNCTURE SERVICES – WORKERS' COMPENSATION FEE SCHEDULE
Great Wall Acupuncture, P.C. a/a/o Maria Gonzalez v. Geico Ins. Co.
(App. Term, 2d Dept., 2d, 11th & 13th Dists., decided 11/17/2009)

Geico paid plaintiff acupuncture PC for acupuncture services using the the workers' compensation fee schedule for acupuncture services performed by chiropractors.  Plaintiff claimed that its licensed acupuncturists were not limited to the fee schedule for acupuncture services performed by chiropractors -- there being no separate fee schedule for for acupuncture services performed by licensed acupuncturists -- and commenced this action to recover additional payment.  The parties stipulated to all but the propriety of the fees charged.  Following a non-jury trial on that issue, Civil Queens granted judgment to Geico, dismissing the complaint.  Plaintiff appealed. 

In AFFIRMING the judgment dismissing the complaint, the Appellate Term held:

A person who seeks to practice acupuncture must be either licensed (Education Law § 8214) or certified (Education Law § 8216) to do so (see Education Law § 8212). The training to obtain a license remains the same even if the person seeking to practice acupuncture has a license in a different profession, such as a chiropractic license (see 8 NYCRR 52.16[b]; cf. 8 NYCRR 52.16[a]). Indeed, at trial, plaintiff's witness, who was both a licensed acupuncturist and a licensed chiropractor, so testified. Accordingly, in light of the licensure requirements, we hold, as a matter of law, that an insurer may use the workers' compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which a licensed acupuncturist is entitled to receive for such acupuncture services (see Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007]; see also AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 23 Misc 3d 140[A], 2009 NY Slip Op 51017[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007]; 2004 Ops Gen Counsel NY Ins Dept No. 04-10-03 [Oct 2004] [http://www.ins.state.ny.us/ogco2004/rg041003.htm]). Consequently, since it is undisputed that the instant defendant reimbursed plaintiff pursuant to the workers' compensation fee schedule for acupuncture services rendered by a chiropractor, plaintiff is not entitled to any additional reimbursement.

New York State Insurance Department Office of General Counsel Opinions for April 2009

Posted yesterday to the NYS Insurance Department's website are the Office of General Counsel Opinions for April 2009. Two of the 6 posted opinions are relevant to P&C insurers doing business in New York.

Applicability of Workers' Compensation Board Directive to Durable Medical Equipment Fee Schedule in No-Fault Claims (April 6, 2009)

Question Presented:

Is the Workers’ Compensation Board’s (“WCB”) directive of July 18, 2008 concerning the inapplicability of the durable medical equipment (“DME”) fee schedule to medical providers supplying such equipment applicable to no-fault claims?

Conclusion:

Yes, the WCB’s directive of July 18, 2008 concerning the inapplicability of the DME fee schedule to medical providers supplying such equipment is applicable to no-fault claims.

Facts:

The inquiry is of a general nature, without reference to particular facts.

Analysis:

Under New York’s “no-fault” insurance law, see Article 51 of the New York Insurance Law, a provider of health services is limited in what he can charge to an insurer by the amounts specified in the workers’ compensation fee schedules. See N.Y. Ins. Law § 5108 (McKinney 2000). Section 68.1(a) of N.Y. Comp. Codes R. & Regs. tit. 11, pt. 68 (Regulation 83) adopts certain workers’ compensation fee schedules for purposes of the no-fault law. That regulatory provision reads as follows:

The existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board for industrial accidents are hereby adopted by the Superintendent of Insurance with appropriate modification so as to adapt such schedules for use pursuant to the provisions of section 5108 of the Insurance Law.

Furthermore, 11 N.Y.C.R.R. 68.1(b)(1) incorporates the grounds rules of the workers’ compensation fee schedules by providing in relevant part that “[t]he general instructions and ground rules in the workers’ compensation fee schedules apply” for purposes of no-fault billing. Thus, any charges for health services submitted to an insurer for reimbursement under the no-fault law are limited to the fee schedules and ground rules put forth by the WCB. This includes charges for DME, for which the WCB has established a fee schedule. 

Injured persons typically receive DME either directly from a medical provider or from a DME supplier, as when the equipment has been prescribed by a physician. On July 18, 2008, the WCB issued a directive addressing the fee schedule for DME. The directive makes the DME fee schedule inapplicable to medical providers supplying DME, and reads in relevant part as follows:

The Durable Medical Equipment Fee Schedule does not apply to medical providers supplying durable medical equipment to injured workers as part of medical treatment described in the New York Workers’ Compensation Medical Fee Schedule. Billing and reimbursement follows the ground rules as described in the fee schedule.

The directive thus establishes a separate reimbursement system for medical providers supplying DME directly to patients, while leaving in effect the current DME fee schedule for suppliers of DME (who are not licensed medical providers) to patients. 

For those medical providers, the directive states that billing and reimbursement will instead follow “the ground rules” set forth in the fee schedule. With respect to the reimbursement of medical providers, Ground Rule No. 4 of the Medical Fee Schedule reads in pertinent part as follows:

Supplies and materials provided by the physician…over and above those usually included with the office visit or other service rendered may be charged for separately…. Payment shall not exceed the invoice cost of the item.

Ground Rule No. 4 thus requires that the compensation physicians may receive for providing DME directly to patients shall not exceed the invoice cost of the item.

Since 11 N.Y.C.R.R. 68.1(b)(1) (Regulation 83) adopts the WCB’s fee schedules and ground rules for no-fault billing and reimbursement, and because physicians are excluded from the DME fee schedule, the WCB’s directive interpreting the DME fee schedule applies to charges arising from no-fault claims, in accordance with the clear intent of Insurance Law § 5108(a) to ensure that no-fault health services are reimbursed in accordance with the WCB fee schedule. Thus, the DME fee schedule applies only to DME suppliers, and not to medical providers supplying DME directly to patients, for purposes of reimbursing the cost of DME under the no-fault law.

For further information you may contact Principal Attorney Lawrence M. Fuchsberg at the New York City office.

Insurer's Obligation to Notify the Insured's Authorized Agent of the Insurer's Nonrenewal of the Policy (April 8, 2009)

Question Presented:

Does an insurer have an obligation to notify an insured's authorized agent if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured?

Conclusion:

Yes.  Under N.Y. Ins. Law § 3425(h)(3) (McKinney Supp. 2009), if an insurer mails a notice of intention not to renew a non-commercial automobile insurance policy to the named insured, the insurer shall mail, deliver or transmit a copy of the notice to the insured's authorized agent or broker within seven days of the time the notice is mailed to the named insured.

Facts:

The inquiry is of a general nature, without reference to particular facts.

Analysis:

Insurance Law § 3425 is germane to the inquiry. The statute applies to most non-commercial automobile insurance policies other than those issued through the New York Automobile Insurance Plan. Insurance Law § 3425(a)(1) defines a "covered policy" to mean an insurance policy issued or issued for delivery in this State by an authorized insurer, on a risk located or resident in this State, and that insures against losses or liabilities arising out of the ownership, operation or use of a motor vehicle, when a natural person is the named insured.

Insurance Law § 3425(h)(3) is relevant to the inquirer’s inquiry because that provision governs an insurer's obligation to notify the insured's authorized agent or broker if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured. Insurance Law § 3425(h)(3) reads as follows:

(3) A copy of every notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, including the reasons therefor, or a summary of such notice, shall be mailed, delivered or transmitted to the insured's authorized agent or broker within seven days of the time such notice is mailed to the named insured. Electronic transmission or any other means of delivery or transmission of information commonly used by the insurer to communicate with agents or brokers shall be deemed sufficient for compliance with this paragraph. Failure to mail, deliver or transmit a copy of such notice to the insured's authorized agent or broker pursuant to this paragraph shall not render any such notice ineffective, provided that all of the other requirements of this section are met and shall not be considered failure to include a provision required by this section for purposes of paragraph two of this subsection. (Emphasis supplied.)

Insurance Law § 3425(h)(1), too is relevant here, because proof of mailing of a notice of intention not to renew a non-commercial automobile insurance policy constitutes sufficient proof of notice. Insurance Law § 3425(h)(1) reads as follows:

(h) (1) Proof of mailing of a notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, or proof of the mailing of the reasons therefor, to the named insured at the address shown in the policy, shall be sufficient proof of the giving of notice and the giving of reasons required by this section.

For further information, you may contact Senior Attorney Robert Freedman at the New York City office.

NYS Insurance Department Office of General Counsel April 2008 Opinions -- Part II

Just posted to the NYS Insurance Department's website are the Office of General Counsel opinions from the second half of April.

Construction Company Acting as a Public Adjuster (April 22, 2008)

A roofing contractor that specializes in catastrophic claims arising from wind, ice, or other storm damage, estimates roof damage, offers insureds opinions as to whether the roof damage is from a storm or other incident normally covered by the insured’s homeowners’ insurance, but does not file a claim on behalf of the insured, charge any fees for meeting with and dealing the insurer's representatives, or negotiate with the insurer is not acting as a public adjuster and does not need to be licensed as such to perform those services. Under Insurance Law § 2101(g)(2), a "public adjuster" is any person, including a corporation, who or which for money, commission or thing of value "acts or aids in any manner on behalf of an insured in negotiating for, or effecting, the settlement of a claim or claims for loss or damage to property of the insured in this state."

In the scenario presented, the OGC opined that the roofing contractor "does not not appear to negotiate or effect the settlement of a claim for money, a commission, or any other thing of value pursuant to Insurance Law § 2101(g)(2), and therefore need not be licensed by the Department as a public adjuster." OGC Assistant Attorney Joana Lucashuk added, however, that "[the contractor] must limit any communications between ABC and the insurer to responding to questions posed by the insurer with regard to the damage to the home. [The contractor] may not advocate on behalf of the insured."

1033 Waiver Pursuant to 18 U.S.C. § 1033 (April 23, 2008)

The Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. § 1033(e) prohibits a person who has been convicted of a felony involving dishonesty or breach of the trust, or of an offense under 18 U.S.C. § 1033 whose activities affect interstate commerce, from engaging in the “business of insurance” unless the person has obtained written consent from any insurance regulatory official authorized to regulate the insurer, such as the Superintendent (“1033 waiver”).

At issue here is a conviction under 18 U.S.C. § 1014, a Class B felony. Section 1014 makes it a crime to knowingly make any false statement or report, or willfully overvalue any land, property or security for the purpose of influencing the action of certain entities, such as banks and credit unions, “upon any application, advance, discount, purchase, purchase agreement, repurchase agreement, commitment, or loan, or any change or extension of any of the same, by renewal, deferment of action or otherwise, or the acceptance, release, or substitution of security therefor . . . .”

1. A felony conviction under 18 U.S.C. § 1014 constitutes a felony involving dishonesty or breach of the trust within the meaning of 18 U.S.C. § 1033 ("a disqualifying conviction").


2. An insurer may not employ a person who has a disqualifying conviction, including as an in-house staff attorney or as a claim examiner or adjuster whose activities affect interstate commerce and the business of insurance, unless the person has obtained written consent from any insurance regulatory official authorized to regulate the insurer, such as the Superintendent of Insurance of the State of New York.


3. A person with a disqualifying felony conviction may be employed by an unaffiliated law firm that is retained by an insurer to defend its insureds in third-party lawsuits.

1033 Waiver (April 23, 2008)

The inquirer reported that he was denied employment as a service associate trainee for an insurer because he has a class E felony conviction for criminal possession of a forged instrument. He asked whether an insurer could refuse employment on that basis.

Answer: Yes, an insurer that employs a person who has been convicted of a felony involving dishonesty or breach of the trust, or of an offense under 18 U.S.C. § 1033, runs afoul of The Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. § 1033(e), unless the person has obtained written consent from an insurance regulatory official authorized to regulate the insurer, such as the Superintendent ("a 1033 waiver").

At issue here was a felony conviction for possession of a forged instrument. Forgery clearly constitutes an act involving dishonesty because dishonesty is commonly defined to include deceiving another. It logically follows that a person who knowingly has a forged instrument in his or her possession is engaged in an act that involves dishonesty. Given this circumstance, the Department was of the view that a felony conviction for possession of a forged instrument is a criminal felony involving dishonesty within the meaning of the Act.

Hospital Balance Billing (April 25, 2008)

Question: May a hospital balance bill a psychiatric patient who is hospitalized, but stays longer than the contract between the hospital and insurer provides, and whose stay for the last few days is not deemed medically necessary by the insurer?

Answer: Broadly speaking, reimbursement rates between an insurer and a hospital that is participating in the insurer’s network are negotiated pursuant to a contract. The New York Insurance Law does not address whether a hospital may bill a patient for continued care beyond that which is covered under the provider contract. Since the Insurance Department regulates insurers—not hospitals—any steps that a hospital may take should be addressed to the appropriate regulatory authority. The New York State Department of Health regulates contracts between hospitals and managed care organizations.

Applicability of the “Two Percent Rule” to Commercial Lines Insurance (April 29, 2008)

1. The “two percent rule” set forth in NY Insurance Law § 3425(f)(1), which limits to 2% per calendar year the number of personal lines automobile insurance policies that an insurer may non-renew or conditionally renew based upon a reduction or elimination of coverage, is not applicable to commercial automobile insurance policies governed by Insurance Law § 3426. Insurance Law § 3425(f)(1) specifically applies to automobile insurance covering motor vehicles predominantly used for non-business purposes, where a natural person is the named insured. Insurance Law § 3426, which governs commercial automobile policies, nowhere limits the number of policies that an insurer may non-renew in a given year.
   
2. Private passenger automobiles used predominantly for commercial purposes and written on commercial policies are governed by Insurance Law § 3426, and are not subject to the two percent rule prescribed in Insurance Law § 3425(f)(1). The applicability of the statutes depends on the principal use of the vehicle, not the classification of the motor vehicle.

DRG Medical Implants and No-Fault Insurance Reimbursement (April 30, 2008)

Workers' Compensation Law § 13(a-1) does not alter the payment rates for medical procedures performed under the no-fault insurance system. WCL § 13(a-1) only applies to payment rates for the spinal procedures performed under the workers’ compensation system.

Because the no-fault system has adopted the workers' compensation fee schedule (Insurance Law § 5108 and 11 NYCRR § 68.1[a]), reimbursement for professional health services is customarily comparable for both systems. Inpatient services such as the spinal procedures at issue here are an exception, however, because payments to health providers for inpatient services are governed by the New York Public Health Law, which generally provides that inpatient health providers are to be reimbursed by third party payors on a Diagnostic Related Group (DGR) basis, as set by the New York State Department of Health. Public Health Law § 2807-c reads, in relevant part as follows:

(b) Payments to general hospitals for reimbursement of inpatient hospital services provided to patients eligible for payments pursuant to the comprehensive motor vehicle insurance reparations act… shall be case based payments per discharge, for each diagnosis-related group[.]

Chapter 592 of the Laws of 2006 amended Workers’ Compensation Law (“WCL”) § 13 to increase the rates of payment for implantable hardware and instrumentation in connection with certain spinal procedures performed under the workers’ compensation system. As codified at WCL § 13(a-1), Chapter 592 limits the scope of the statute to procedures performed under the workers’ compensation system; there is nothing in the statutory provision with respect to reimbursement under the no-fault system or the Public Health Law. Stated differently, Chapter 592 did not amend the Insurance Law, Public Health Law or the DRGs promulgated thereunder in any manner. Therefore, the Public Health Law, through the setting of DRG rates, remains the sole statutory mechanism for establishing permissible charges for inpatient hospital health services rendered under the no-fault system, including the spinal procedures made applicable to workers’ compensation under WCL § 13(a-1).

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Recently added to the NYSID's website is a search engine for OGC opinions dating back to 2000. Check it out and bookmark it.