April 11, 2013

Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co. (2013 NY Slip Op 50581(U))

Headnote

The relevant facts the court considered in this case were that a healthcare provider, Physical Performance Testing of NY, was seeking to recover assigned first-party no-fault benefits from New York Central Mutual Insurance Company. However, Mutual moved for summary judgment, arguing that Physical was unlicensed and therefore ineligible for reimbursement of the benefits. The main issue decided by the court was whether a healthcare provider is eligible for reimbursement of first-party no-fault benefits if they fail to meet New York State or local licensing requirements. The holding of the court was that a provider of healthcare services is not eligible for reimbursement if they fail to meet licensing requirements, and in this case, Physical failed to raise a triable issue of fact with respect to its claims because the services were not performed by a medical professional corporation or a licensed health provider. Therefore, the court affirmed the orders and dismissed Physical's complaints.

Reported in New York Official Reports at Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co. (2013 NY Slip Op 50581(U))

Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co. (2013 NY Slip Op 50581(U)) [*1]

Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co.

2013 NY Slip Op 50581(U) [39 Misc 3d 135(A)]

Decided on April 11, 2013

Appellate Term, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 11, 2013

SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Torres, Hunter, Jr., JJ
11-226.

Physical Performance Testing of NY a/a/o William Myka, Plaintiff-Appellant, – –
against
New York Central Mutual Fire Ins. Co., Defendant-Respondent. Physical Performance TestingNY County Clerk’s No. of NY a/a/o Thomas Taylor,570213/09 Plaintiff-Appellant, – – New York Central Mutual Fire Ins. Co., Defendant-Respondent. Physical Performance TestingNY County Clerk’s No. of NY a/a/o Vanessa Quiros,570214/09 Plaintiff-Appellant, – – New York Central MutualCalendar No. 11-228 Fire Ins. Co., Defendant-Respondent.

Plaintiff appeals from three orders of the Civil Court of the City of New York, Bronx County (Sharon A.M. Aarons, J.), dated July 17, 2008 (two orders) and July 18, 2008, which granted defendant’s motions for summary judgment dismissing the complaints.

Per Curiam. [*2]

Orders (Sharon A.M. Aarons, J.), dated July 17, 2008 (two orders) and July 18, 2008, consolidated for the purpose of this decision, affirmed, with $10 costs on each action.

In these three actions by the provider, plaintiff Physical Performance Testing of NY (Physical), to recover assigned first-party no-fault benefits, defendant New York Central Mutual Insurance Company (Mutual) moved for summary judgment. Civil Court granted Mutual’s motions for summary judgment dismissing Physical’s complaints, finding that Physical was unlicensed and, therefore, ineligible for reimbursement of first-party no-fault benefits. Physical appeals, as limited by its brief, and we affirm.

It is well-settled that a provider of healthcare services is not eligible for reimbursement of assigned first-party no-fault benefits “under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York” (Insurance Department Regulations [11 NYCRR] § 65-3.16[a][12]; see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005]). State law mandates that professional service corporations be owned and controlled only by licensed professionals (see Business Corporation Law §§ 1503[a], 1507, 1508), and that licensed professionals render the services provided by such corporations (see Business Corporation Law § 1504[a]; 11 NYCRR 65-3.16[a][6]). A professional corporation, which is actually controlled by a management company owned by unlicensed individuals in violation of the Business Corporation Law, is not entitled to be reimbursed for no-fault benefits (see One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738, 740 [2008]).

The Court of Appeals has held that the Superintendent of Insurance promulgated 11 NYCRR 65-3.16(a)(12) so as to “exclud[e] from the meaning of basic economic loss’ payments made tounlicensed or fraudulently licensed providers, thus rendering them ineligible for reimbursement” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d at 320; see Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407, 408 [2006]).

Applying these principles to the matter at bar, Mutual has made a prima facie showing of entitlement to summary judgment dismissing the complaints by demonstrating that the services rendered by Physical are not reimbursable expenses under the No-Fault Law. In opposition, Physical failed to raise a triable issue of fact with respect to its claims because they were not performed by a medical professional corporation, or a licensed health provider.

We have examined Physical’s remaining contentions, and to the extent they are preserved for appellate review, find them to be without merit.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 11, 2013