Dugo v State Farm Mut. Auto. Ins. Co. (2012 NY Slip Op 52375(U))

Civil Court of the City of New York, Richmond County

23900/10

Joseph Sparacio Esq.

Counsel for Plaintiff

2555 Richmond Avenue

Staten Island, NY 10314

Richard T. Lau & Associates

Counsel for Defendant

300 Jericho Quadrangle, Ste 260 P.O Box 9040

Jericho, N 11753-9040

Philip S. Straniere, J.

This litigation involves two separate law suits brought by plaintiffs for first-party no-fault benefits provided to defendant State Farm Mutual Automobile Insurance Company’s insured. In the first action (Index No.23900/02), plaintiff, J.R. Dugo, DC, PC, as assignee of Anthony Giambrone, sought payment of $9,600.00 for chiropractic services rendered in the form of manipulation under anesthesia(MUA) to Giambrone. In the second action (Index No.23902/02), plaintiff, J.R. Dugo, Jr., DC, as assignee of Giambrone, sought payment of $7,200.00 for chiropractic services in the form on MUA to Giambrone. As the services by both chiropractors was rendered to the same patient at the same time and place for injuries received in the same motor vehicle accident, the parties agreed that there were common issues of law and fact that warranted trying the cases together. A trial was held on November 27, 2012. All parties were represented by counsel.

Background:

On January 14, 2010, Giambrone was injured in a motor vehicle accident in Staten Island, New York. He was treated at Richmond University Hospital both in the emergency room and as an admitted patient. His primary injury was a fractured right patella. Soft tissue injury to his back was also diagnosed. On January 30, 2010, he was admitted to Staten Island University Hospital for treatment for cardiac problems apparently unrelated to injuries received in the accident. On March 5, 2010, he came under the care of Daniel Wilen, MD, an orthopedic surgeon. At some point Giambrone sought chiropractic and physical therapy treatment. There are no records in evidence from any treating chiropractor or physical therapist and none was reviewed by the peer review chiropractor utilized by the defendant.

Dr. Wilen’s notes indicate that on March 19, 2010 Wilen was made aware that Giambrone had consulted both a physical therapist and chiropractor. The name “Dugo” is listed in those notes for both services. Giambrone underwent diagnostic testing at the hospital on January 14 & 15, 2010 and had MRI’s conducted on April 8, 2010 of the knee and the spine at an MRI facility.

On May 4-5-6, 2010 at Specialty Surgery of Middletown, LLC, in Middletown, New Jersey, the plaintiffs participated in MUA on Giambrone to treat his knee, cervical, thoracic and lumbar spin. On May 6, 2010 and May 27, 2010 Giambrone apparently received epidural injections for continued back pain.

Plaintiffs timely billed for these services. Defendant denied coverage alleging that the MUA was not medically necessary. Although in this case the standard is that the services were “not chiropractically necessary” as chiropractors do not practice medicine in New York [Education Law Article 65]. Part of the problem is that in New York neither the Insurance Law, the regulations of the commissioner, nor the insurance policies themselves define what is meant by “medical necessity.” In Prime Psychological Services, PC v Progressive Casualty Ins. Co., 24 Misc 3d 1244 (A), 2009, the court noted that in New York,

A presumption of medical necessity attaches to a defendant’s admission of the [*2]plaintiff’s timely submission of proper claim forms, and the burden then switches to the defendant to demonstrate the lack of medical necessity (citations omitted). Defendant thus bears “both the burden of production and the burden if persuasion with respect to the medical necessity of the treatment or testing for payment is sought” (citations omitted).

Although there have been few decisions elucidating defendant’s exact burden of proof to establish that the services were medically unnecessary, (citation omitted) at the minimum, a defendant must “establish a factual basis and medical rationale for the lack of medical necessity of plaintiff’s services.” (citation omitted). The New York courts “explicitly or implicitly look to generally accepted practice in determining medical necessity. (citation omitted).

In contrast the court in Advanced Rehabilitation LLC v UnitedHealth Group Inc.. 2012 WL 4354782, in discussing whether MUA was a covered service under four healthcare plans the insurance carrier offered, the court outlined some of the criteria to take into account in order to determine if a service was “medically necessary.” Although this litigation was brought under ERISA, and not a “no-fault” law, absent some indication that a different standard is to be applied, the court set out some general criteria to look at when “medical necessity” of a procedure is in question. The court noted medical necessity

generally required treatment to be necessary to meet the patient’s need, (2) not solely for the patient’s convenience, (3) the most appropriate level of service that could safely be supplied (4) supported by national medical standards, and (5) considered by medical literature to be a safe and effective method of treating the patient’s symptoms.

On May 20, 2010, Robert Snitkoff, DC, conducted a peer review in regard to the necessity of the MUA procedure. For some reason his report states he is reviewing services performed only on May 5 & May 6 and not May 4. Presumably this is a typographical error as he indicated both in his report and at trial that the MUA was not necessary.

It should be pointed out that in his report he noted that he was not provided with certain documentation for his review, primarily a comprehensive narrative report from the treating chiropractor and detailed chiropractic progress notes. At trial he admitted that he would have preferred to have had this and some other background information for him to use in preparing his peer review report.

Issue Presented:

Do the Duo of Doctors Dugo Deserve Dollars Due for Diverting Derangement Disorders or Does Defendant’s Denial Definitely Declare the Doings of the Duo of Doctors Dugo Deficient Depriving them of Dough?

1. May Chiropractors Perform MUA in New York?

This court has on more than one prior occasion concluded that chiropractors in [*3]New York cannot perform MUA’s as this procedure is classified as surgery and chiropractors are not permitted to perform surgery in New York. The most recent decision rendered on that issue is Willets Point Chiropractic PC v Allstate Insurance, 36 Misc 3d 1235(A) (2012), 2012 WL 3667433. This prohibition is in place irrespective of the fact that the MUA was performed in New Jersey where chiropractors are permitted to do it and the chiropractors performing the procedure are licensed in both New York and New Jersey, as the insured is covered by a New York insurance policy and New York no-fault law. The court will not restate the findings in that case here but will apply them in full to the facts of this litigation.

As this court has pointed out in several decisions, MUA appears to be the “flavor of the month” in regard to chiropractic treatment with a marked spike in claims for this service being filed and litigated in this and other courts. In many of them the court has had to question whether the alleged benefits of the MUA procedure to reduce “pain” is outweighed by the risks to the patient to undergo the anesthesia necessitated by MUA. I’m not a doctor and don’t even play one on TV, yet common sense asks whether using MUA for this patient was appropriate considering it appears that his hospitalization in late January 2010 was for chest pain and heart related issues.

In fact, it is not a settled question as to whether manipulation under anesthesia is widely accepted in the medical and chiropractic communities so as to allow it to be paid for under various types of insurance policies. Three cases reported since this court decided the Willets Point Chiropractic case in August question whether MUA is an accepted procedure [Advanced Rehabilitation LLC v UnitedHealth Group, Inc., 2012 WL 4354782 (CA 3 NJ); Sanctuary Surgical Centre, Inc. v Connecticut General Life Ins. Co., 2012 WL 5386555 (SD Fla); Ambrose v Coffey, 2012 WL 5398046 (ED Cal)].

2. Is the Peer Review Valid?

What makes this litigation particularly galling is that the defendant has utterly failed to provide a basis for the peer review chiropractor to render an informed opinion. It failed to provide him either with a copy of the treating chiropractor’s narrative or progress notes. Nor is there any evidence of pre-surgical screening by a physician and the result of that screening. The peer review chiropractor even requested this additional information from the defendant’s intermediary and never received it. At the trial he admitted it would be preferable to have had this information, but then testified that he still could render an opinion based on what documents he was given. This is somewhat analogous to the court deciding a case by only reading the defendant’s answer or motion papers rather than the pleadings of both parties.

If these were claims for any other treatment, the court would have to award the plaintiffs their fees as the defendant would have failed to have established the lack of medical necessity for the procedure. The failure to give the peer review health care professional a complete record practically insures that the claim will be denied because it [*4]will be based on incomplete documentation placed before the reviewer, who will have to conclude that the record as reviewed does not support the treatment. This is the “no-fault world” definition of a self-fulfilling prophecy. It would of course be better that the peer reviewers indicate “I can’t render an opinion based on this incomplete record.” But in the real world where these reviewers are being compensated by the person referring the matter for review, too many rejections for incomplete information will inevitably lead to a diminishment of referrals from that source to the reviewer.

What also is troubling about the peer review is that it is supposedly of MUA performed over three days, May 4-5-6 2010. Yet the reviewer starts out that he is reviewing services performed on May 5-6 2010. Is it to be concluded that the first day’s treatment was permitted or is this a typographical error? It also appears that the reviewer was rendering an opinion in regard to all of the charges submitted to the defendant concerning the MUA as he indicates that bills of $4,033.18; $15,571.62; and two for $19,497.44 were included in the information he received. If these figures are accurate, this defendant is being asked to pay for almost $60,000.00 worth of services. Parenthetically, none of those numbers matches with the amount the plaintiffs are seeking as damages. Also, as pointed out below, other than the plaintiffs herein, none of the other claims for payment by the health care providers involved in the MUA are part of this litigation. Neither is there any evidence as to what was defendant’s position on those charges, assuming that the providers submitted bills nor even the status of those claims.

Insurance carrier defendants cannot continue on a regular basis to submit incomplete records to doctors for review and expect that such a submission is acceptable. It is not fair to any party in the litigation nor the court. It deprives the court of the ability to have a full record to review and properly decide the case. The only explanation for this continued behavior is that the amount of money involved, although important to the individuals, is “chump change” for the carriers so there is no motivation to address the situation and actually prepare a file for a legitimate peer review and subsequent litigation.

3. Did the Defendant Have the Obligation to Join Other Claims?

Many things come in “fives.” Dionne babies. Books of Moses. Marx Brothers in Vaudeville. And so do apparently bills for MUA services ^[FN1]. There are at least five separate charges submitted to insurance carriers when a person undergoes MUA- the two chiropractors-one primary the other an assistant, the anesthesiologist, the screening [*5]physician and the facility. Yet for some reason, the insurance companies refuse to either try these cases together or to even provide the court information as to the status of these other claims.

The defendant has all of the injured party’s records and will know what medical providers he visited, when he visited them, what services were performed and what services were paid for or denied coverage. To claim that it is speculative as to what would be contained in those documents, as argued by defendant’s counsel, is ludicrous especially because the defendant is the only party to the action with that knowledge or the ability to obtain the information from its own records. Its failure to provide the information initially as part of the submission to the peer review person, especially after requested, can only be concluded as an attempt to control the outcome of the peer review process so as to justify a denial.

It would seem that this information is readily available to all carriers, including the defendant, by putting some information into a computer and generating a list of providers who filed claims and were paid. On the outside chance that defendant’s records are still kept by hand by eye-shaded workers with #2 Dixon-Ticonderoga Pencils such as at the accounting firm of “Whitehall & Marks” where Leo Bloom worked in the “Producers,” one would still believe the information could have been forwarded to the peer reviewer in a timely manner so as to give some added credibility to his report.

This court in Willets Point, questioned whether MUA cases were ones where there should be permissive joinder under CPLR §1002. In fact, CPLR §1001 may be more appropriate where it says:

(a) Parties who should be joined. Persons who ought to be parties if complete relief is to be accorded between the persons who are parties to an action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants.

Clearly a finding by this or any other court in regard to the claim of one of the five participants in the MUA process as to the necessity for the procedure would be binding on participants. It would be inconsistent to find that the anesthesia was medically necessity, but the procedure was not. Or that the facility fee was not covered but the pre-screening was. Therefore, the rights of any provider not participating in the litigation would be “inequitably affected by a judgment” in the action brought by only one of the five providers.

Because each of the five participants is potentially an independent actor, as a plaintiff they would be unaware of whether or not any of the others have filed a claim (the failure of them to have done so being extremely improbable) or whether the carrier had paid or denied the claim. Only the defendant has such knowledge. The defendant would also be the only party who could easily identify if any of the providers whose claim for [*6]MUA related services was denied commenced a civil action and in what court that action was pending. As such, the defendant has the obligation to take affirmative action to have all of the claims arising from the MUA if not joined as parties in one suit, at least consolidated for a joint trial.

The real question is why does the no-fault insurance industry as well as professional associations representing health care providers continue want to tolerate this system? Carriers are undertaking to defend MUA cases where the basic issue of the necessity of the procedure affects all providers on the service in different courts in different counties leading to potentially different results and the appeal of inconsistent verdicts. Health care providers run the risk of discovering that their pending cases are now subject to an adverse decision in litigation brought in another venue in which they failed to have notice or participation.

CONCLUSION:

This case creates an interesting problem. First, this case should be dismissed. Based on the prior rulings of this court, chiropractors cannot collect for MUA services in New York primarily because MUA is classified a surgery and chiropractors cannot perform surgery in New York.

Second, part of the plaintiff’s claim is for manipulation of the patient’s knee. Nowhere in the Education Law, where chiropractic services are defined, is there an authorization for manipulation of a person’s knee . Chiropractors under the statute deal only with the spine. So even if the MUA were otherwise permitted, plaintiffs have not established that they are legally permitted to manipulate knees.

Third, case law holds that chiropractic services under the CPT codes are restricted to 68.4% of the relative value unit allowable for medical doctors [Flatbush Chiropractic, PC v Metlife Auto & Home, 35 Misc 3d 1203(A), (2012)]. Plaintiffs have not established whether the amounts they billed were at the full value or the reduced rate for chiropractic services.

Fourth, a review of the diagnostic tests in evidence reveals degenerative changes and conditions which could be the cause of back pain there is insufficient evidence to link the need for the MUA to the motor vehicle accident which might preclude payment for the procedure through no-fault insurance rather than processing a claim through regular medical insurance. Although MUA through medical insurance coverage would probably entail getting “pre-approval”such as the procedure which exists in the Workers’ Compensation arena, “pre-approval” is a term which is foreign in no-fault world. In fact, it’s the no-fault insurance equivalent of “He-Who-Must-Not-Be-Named” in Harry Potter stories ^[FN2]. This is the case even when requesting the MUA procedure to be performed in a non-emergency situation, such as in this case four months after the accident date. [*7]Sometimes it is easier to explain “Flub-a-dub” to someone who never watched “Howdy Doody” than to understand certain practices in the world of no-fault.

The above being said, in the event that there is an appellate court decision in this case, another MUA case, or a change in the statutes or rules governing chiropractors authorizing the performance of MUA and thereby permitting the plaintiffs to recover for MUA services, the court would have to address whether the plaintiffs would have prevailed had this trial been treated as one for any other covered no-fault first party benefit cases. Examining this case from that viewpoint leads to the conclusion that the plaintiffs would be permitted to recover because the defendant utterly failed to provide the peer reviewer with sufficient documentation to render an opinion as to the medical or chiropractic necessity of the MUA services. The peer reviewer was not provided with the reports or treatment notes from the treating or referring chiropractor as well as other essential documents. The peer reviewer even requested these documents after receiving the file and was not provided them by the defendant. As such, if this were a no-fault case other than MUA, the court would rule in favor of the plaintiffs.

Finally, in MUA cases, the defendant insurance carrier is required to consolidate all claims arising from a particular MUA for a joint trial so as to prevent inconsistent verdicts arising from the same treatment. In those actions which have not as yet been consolidated for trial, the carrier must notify the court as to the status of all of the claims for services provided in connection with the particular MUA and to request a stay of the action so that all the claims can be consolidated for joint trial in one venue. Perhaps this is something which will have to be mandated by a court rule to insure universal and consistent treatment of these MUA claims.

Judgment for defendant. Plaintiffs cause of action in each case is dismissed for the reasons set forth above.

If it turns out that MUA is authorized by an appellate court or statute, then based on the failures of the defendant to prove its case, plaintiff J.R. Dugo in action Index #23900/10 would be entitled to $6,566.40 [68.4% of the $9,600.00 billed] and plaintiff Jack R. Dugo in action Index #23902/10 would be entitled to $5,024.80 [68.4% of the $7,200.00 billed] together with interest, costs, disbursements and attorney’s fees as permitted by statute.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after a receipt of a copy of this decision.

The foregoing constitutes the decision and order of the court.

Dated: December 26, 2012

Staten Island, NYHon. Philip S. StraniereJudge, Civil Court

ASN byon

Footnotes

Footnote 1:

There are numerous other “fives” such as Jacksons and Dave Clarks , Graves to Cairo, Easy Pieces, Golden Rings, de Mayo celebrations, O’clock shadows, consecutive Yankee World Championships, to name a few. However to include them above would break the “rule of three.” For those of you deficient in vaudeville history the five Marx Brothers are Chico(Leonard), Harpo(Adolph later Arthur), Groucho (Julius), Gummo (Milton), and Zeppo (Herbert).

Footnote 2: Voldemort.