Medalliance Med. Health Servs. v Travelers Prop. Cas. Ins. Co. (2021 NY Slip Op 50737(U))

CV-1909-18/SM
James F. Matthews, J.

Upon the following papers numbered 1 to 19 read on this motion by defendant for summary judgment of dismissal by Notice of Motion/Order to Show Cause and supporting papers 1,2,12 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 13,17 ; Replying Affidavits and supporting papers 18,19 ; Filed papers; Other exhibits: 3-11,14-16 ;(and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the part of the motion by defendant seeking summary judgment of dismissal for the NF-3 claim forms with dates of service (“DOS”) of 10/23/17, 10/25/17 through 11/08/17, and 11/14/17 through 11/17/17, for the respective amounts of $34.68, $41.04, $41.04, $41.04, $101.87, $41.04, $101.87, $101.87 and $92.98, in the total sum of $597.43, upon the grounds of outstanding verification requests pursuant to 11 NYCRR 65-3.8(b)(3), is denied, and the Court awards summary judgment to the non-moving plaintiff in the sum of $597.43, pursuant to CPLR 3212(b).

Defendant’s proof submitted in support of its motion to dismiss the aforementioned NF-3 claims based upon outstanding verification requests, also demonstrates it improperly mailed its verification requests to plaintiff provider at the wrong address. The aforementioned NF-3 proof of claim forms (defendant admits their receipt) clearly lists the Provider’s name and address as being: Medalliance Medical Health Services, c/o Law Offices of Baker Sanders, 100 Garden City Plaza, Suite 500, Garden City, New York 11530. A copy of plaintiff’s envelope received and kept by defendant with each of these NF-3 proof of claim forms (submitted as part of defendant’s exhibits), shows a pre-printed return address of Baker Sanders LLC, 100 Garden City Plaza, Suite 500, Garden City, New York 11530.

Moreover, each correspondence to defendant from plaintiff’s health care provider occurred through its attorneys, Baker Sanders, LLC., whose letterhead clearly states the following: “For all Correspondence: 100 Garden City Plaza, Suite 500, Garden City, NY 11530.”

Yet the address on defendant’s verification requests for the aforementioned NF-3 claims, show they were mailed to: Medalliance Medical Health Services, Curtis Blumenthal, D.C., 100 [*2]Garden City Plaza, Suite 500, Garden City, New York 11530; Medalliance Medical Health Services, Ruchi Shah Pt, 100 Garden City Plaza, Suite 500, Garden City, NY 11530; Medalliance Medical Health Services, Lamercie Jean Jacques, 100 Garden City Plaza, Suite 500, Garden City, New York 11530.

The verification requests were improperly addressed as they did not conform to the specific address provided by the plaintiff provider in its NF-3 notice of claim forms. There is no evidentiary proof submitted which indicates the plaintiff provider had offices at the address indicated on the verification letters. As a result, receipt of the verification letters cannot be presumed, and it may be inferred that the provider did not receive the verification request letters, which would therefore excuse any non-compliance thereof (see Celtic Med. P.C. v Progressive Ins. Co., 194 Misc 2d 429 [Dist Ct, Nassau Cty 2002]). Therefore, the Court finds that defendant has failed in its burden to make a prima facie showing of entitlement to summary judgment of dismissal, as a matter of law, with proof in admissible form sufficient to establish the lack of any material issues of fact, concerning the alleged mailing of verification requests to plaintiff provider (see Alvarez v Prospect Hospital, 68 NY2d 320,324 [1986]); Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]). Defendant has failed to demonstrate that it mailed verification request letters to the proper address provided by the plaintiff provider (see Daily Med. Equip. Distrib. Ctr., Inc. v Auto One Ins. Co., 53 Misc 3d 136[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2016], citing St. Vincent’s Hosp. of Richmond v Government Employees Ins. Co., 50 AD3d 1123 [2nd Dept 2008]).

Defendant thereby failed to show that it properly tolled the 30 calendar days in which each claim must be paid or denied, from the date of receipt of the claim (see Insurance Law §5106[a]; 11 NYCRR §65-3.8[a][1]), by making additional verification requests within 15 days from its receipt of each claim (see 11 NYCRR 65-3.5[b]; NY & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2nd Dept 2006]), thereby making each claim overdue (see 11 NYCRR 65-3.8[a][1]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2nd Dept 2005]), and necessitating the denial of this part of defendant’s motion for summary judgment of dismissal.

The Court also awards summary judgment to the non-moving plaintiff in the sum of $597.43, pursuant to CPLR 3212(b), as plaintiff has demonstrated its prima facie case for entitlement to benefits, by showing evidentiary proof that the prescribed statutory billing forms were mailed to and received by the insurer and that payment of no-fault benefits are overdue (see Viviane Etienne Med. Care v Country-Wide Ins. Co., 25 NY3d 498 [2015]; St. Luke’s Roosevelt Hospital v American Transit Ins. Co., 1 AD3d 498 [2nd Dept 2003]; Insurance Law §5106[a]); and it is further

ORDERED that the part of defendant’s motion seeking summary judgment of dismissal for 10 NF-3 claim forms with dates of service (“DOS”) of 11/14/17, 01/08/18, 03/26/18, 03/31/18, 04/18/18, 05/07/18, 07/14/18, 07/26/18 through 07/28/18, 08/09/18, and 08/24/18, for the respective sums of $41.04, $34.68, $111.80, $111.80, $111.80, $80.02, $111.80, $223.60, $111.80, and $111.80, for a total of $1,050.14, on the grounds of non-receipt of the NF-3 billing after the medical services were allegedly rendered, as required within 45 days by 11 NYCRR 65-1.1(d), is denied, and the Court awards summary judgment to the non-moving plaintiff in the sum of $1,050.14, pursuant to CPLR 3212(b).

The Court determines that the affidavit of Brian Edejer, the supervisor of the mailing [*3]department of plaintiff’s counsel, demonstrates his personal familiarity with and supervision over the standard office practices and procedures of his department, geared to insure the proper addressing and mailing of NF-3 no-fault claim forms to insurance carriers. He asserts that his review of the files and computer records of the mailing department made and kept in the regular and ordinary course of business for the instant matter, shows that the NF-3 claim forms and the cover letters from plaintiff’s counsel’s office, were delivered by plaintiff to the custody of the U.S. Postal Service, and have not been returned as undeliverable. He submits a stamped proof of mailing from the U.S. Postal Service for each of the 10 NF-3 claim forms, which confirm their receipt by the U.S. Postal Service, for mailing to defendant.

The Court also finds plaintiff has demonstrated it is entitled to the presumption of timely receipt by defendant of the 10 NF-3 claim forms, despite defendant’s allegations of denial of receipt (see A.B. Medical Services, PLLC. v MVAIC, 6 Misc 3d 131 [A][App Term, 2nd & 11th Jud Dists 2005]), especially in light of the stamped proof of mailing for each claim from the U.S. Postal Service which remains unrefuted by defendant (see St. Vincent’s Hosp. of Richmond v Government Employees Ins. Co., supra, at 1124; Phoenix Ins. Co. v Tasch, 306 AD2d 288 [2nd Dept 2003]; Quality Psychological Services, P.C. v Hartford ins. Co., 38 Misc 3d 1210[A][Civ Ct, City of NY, Kings Cty, 2013]; Elmont Open MRI & Diagnostic Radiology, P.C., 30 Misc 3d 126[A][App. Term, 9th & 10th Jud. Dists 2010]).

In the view of the Court, defendant’s denial of receipt of the 10 NF-3 claim forms, and the statements of the general and customary standard office practices and procedures of defendant’s mailing department for receipt of incoming mail, as supported by the affidavit of defendant’s litigation examiner, Matthew Dunleavy, are insufficient (see S & M Supply Inc. v GEICO Ins., 2003 NY Slip Op 51192 [App Term, 2nd & 11th Jud Dists]; Amaze Med. Supply v Colonial Penn Ins. Co., 3 Misc 3d 135[A][App Term, 2nd & 11th Jud Dists 2004]), under the instant circumstances, to raise a triable issue of fact (see Matter of Fodor v Mena America Bank, N.A., 34 AD3d 473 [2nd Dept 2006]; Matter of State Farm Mut. Auto. Ins. Co. v Kankam, 3 AD3d 418 [2nd Dept 2006]).

Therefore, since defendant has failed to demonstrate it paid or denied the 10 NF-3 claims in the total sum of $1,050.14, within 30 calendar days of receipt of each claim (see 11 NYCRR 65-3.8[c]), or properly sought verification requests to toll the date within 15 days of receipt of each claim (see 11 NYCRR 65-3.5[b]; NY & Presbyt. Hosp. v Allstate Ins. Co., supra; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., supra), each of the 10 NF-3 claims is overdue (see 11 NYCRR 65-3.8[a][1]), and the part of defendant’s motion for summary judgment of dismissal of the 10 NF-3 claims totaling $1,050.14, is denied.

The Court also awards summary judgment to the non-moving plaintiff in the sum of $1,050.14, pursuant to CPLR 3212(b), as plaintiff has demonstrated its prima facie case for entitlement to benefits, by showing evidentiary proof that the prescribed statutory billing forms were mailed to and received by the insurer and that payment of no-fault benefits are overdue (see Viviane Etienne Med. Care v Country-Wide Ins. Co., 25 NY3d 498 [2015]; St. Luke’s Roosevelt Hospital v American Transit Ins. Co., 1 AD3d 498 [2nd Dept 2003]; Insurance Law §5106[a]); and it is further

ORDERED that the part of defendant’s motion for summary judgment dismissing plaintiff’s complaint pursuant to CPLR 3212, for the NF-3 claim forms with dates of service (“DOS”) of 01/03/18, 01/10/18, 01/15/18, 01/16/18, 01/24/18, 02/14/18, 02/19/18, 02/20/18, 02/26/18, for the respective amounts of $26.42, $34.68, $34.68, $41.04, $34.68, $34.68, $34.68, [*4]$41.04 and $34.68, for the total of $316.58, on the grounds the medical services rendered by plaintiff were not medically necessary, is denied.

The Court determines that the factual basis and medical rationale of the conflicting medical opinions and conclusions offered by Dr. Daniel Sposta, D.C., L.Ac., by his peer review report and affidavit dated 10/06/17, which cut off any further chiropractic treatments effective 11/09/17 (see 11 NYCRR §65-3.8 [b][4]; Delta Dignostic Radiology, P.C. v American Mfrs. Mut. Ins. Co., 12 Misc 3d 145[A][App Term, 2nd & 11th Jud Dists 2006]), and the rebuttal affidavit of plaintiff’s expert and treating Chiropractor, Dr. Curtis Blumenthal, D.C., sworn to on 11/18/20, which disputes the findings and rebuts the conclusions of Dr. Sposta (see Ortho-Med Surgical Supply, Inc. v Progressive Cas. Ins. Co., 34 Misc 3d 145[A][App Term, 2nd, 11th & 13th Jud Dists 2012]; Pan Chiropractic P.C. v Mercury Ins. Co., 24 Misc 3d 136[A] [App Term, 2d, 11th & 13th Jud Dists 2009]), meaningfully demonstrate the collective existence of triable issues of fact as to whether there was a lack of medical necessity for the billed services at issue, rendered by plaintiff’s assignee (see Throgs Neck Multicare, P.C. v Mercury Ins. Co., 52 Misc 3d 138[A][App Term, 2nd Dept, 9th & 10th Jud Dists 2016]; Western Chiropractic, P.C. v Hertz Claim Mgt., 48 Misc 3d 133[A][App Term, 9th & 10th Jud Dists 2015]; Alur Med. Supply, Inc. v Geico, 31 Misc 3d 126[A][App Term, 2nd, 11th & 13th Jud Dists 2011]), which must be determined at a trial (see also Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra); and it is further

ORDERED that the part of the motion by defendant seeking summary judgment of dismissal of the NF-3 claim form with the date of service (“DOS”) of 11/14/17, received by defendant on 02/12/18, in the sum of $41.04, and denied by defendant on 02/26/18, pursuant to 11 NYCRR 65-1.1(d), which requires submission of a no-fault claim within 45 days of rendered services, is denied.

Plaintiff’s affidavit of its mailing supervisor, Brian Edejer, acknowledges that the NF-3 claim form for DOS of 11/14/17, along with plaintiff’s counsel’s cover letter, were mailed to defendant on 02/06/18. Plaintiff justifies the late claim submission beyond the 45 days of rendered services, based upon the cover letter dated 02/06/18 from plaintiff’s counsel, Baker Sanders, LLC. to defendant, which informed defendant the claim was “previously submitted incorrectly to another insurance company based on the information provided to our law firm at the time and/or based on a difficulty in ascertaining the proper carrier.”

However, plaintiff also contends that defendant waived the right to challenge the late submission for the $41.04 NF-3 claim received by defendant on 02/12/18 for the DOS of 11/14/17, based upon defendant’s repudiation of liability as of 11/09/17 on the grounds of Dr. Daniel Sposta’s negative independent medical examination (“IME”), because a repudiation of liability excuses any obligations to comply with any conditions precedent under the insurance policy (see Ighara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 217-218 [1984]).

The Court determines that defendant has repudiated liability by denying all no-fault benefits based upon the opinion of its medical expert, Dr. Daniel Sposta, D.C., L.Ac., dated 10/06/17, which cut off any further chiropractic treatments effective 11/09/17, based upon the IME of the same date, which found there was no medical necessity for further chiropractic treatment. “This disclaimer of coverage excused the [claimant] from further compliance with conditions precedent regarding time limitations for submitting medical proofs of loss for the treatments she nevertheless continued to undergo” (see State Farm Ins. Co. v Domotor, 266 [*5]AD2d 219 [2nd Dept 1999]; see also State Farm Mut. Auto Ins. Co. V Urban, 78 AD3d 1064 [2nd Dept 2010], citing State Farm v Domotor, supra; Matter of NY Med. Health, P.C. v New York City Tr. Auth., 24 Misc 3d 1219[A][Civ Ct, Kings Cty 2009]; Greater Forest Hills Physical Therapy, P.C. v State Farm Auto Ins. Co., 45 Misc 3d 1215[A][D Ct, Nassau Cty 2014]).

Here, plaintiff’s DOS occurred on 11/14/17, five days after the cut-off date of 11/09/17. “An insurance carrier may not, after repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of the policy” (see State Farm Ins. Co. v Domotor, supra at 220, 221). The insurance carrier “must ‘stand or fall upon the defense upon which it based its refusal to pay’…i.e., because ‘no treatment [was] necessary'” (Id., at 221).

Therefore, the Court finds that if the medical opinion of Dr. Daniel Sposta, D.C., L.Ac., should prevail at trial, on the grounds the medical services rendered by plaintiff were not medically necessary, then the part of defendant’s motion to dismiss the NF-3 claim form with the DOS of 11/14/17, in the sum of $41.04, received by defendant on 02/12/18, shall be deemed denied, on the basis defendant repudiated liability, which excused plaintiff from compliance with the time limitations for submitting medical proofs contained in the policy (see State Farm Ins. Co. v Domotor, supra).

However, in the event the medical opinion of Dr. Daniel Sposta, D.C., L.Ac, does not prevail at trial, on the grounds the medical services rendered by plaintiff were medically necessary, the Court finds under this set of circumstances, plaintiff has raised a triable issue of fact (see CPLR 3212[b]), concerning whether plaintiff was reasonably justified in submitting its NF-3 claim form beyond the 45 days of rendered service (see 11 NYCRR 65-1.1[d]), based upon the standards set forth in 11 NYCRR 65-3.5[l][insurer must give due consideration to plaintiff’s late justification explanation]; see also Bronx Expert Radiology v Clarendon Natl. Ins. Co., 23 Misc 3d 133[A][App Term, Sup Ct, 1st Dept 2009][insurer must give “appropriate consideration for situations where the claimant has difficulty ascertaining the insurer’s identity or inadvertently submits a claim to the incorrect insurer”]), which also must be determined at trial (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra); and it is further

ORDERED that the part of defendant’s motion seeking summary judgment of dismissal pursuant to CPLR 3212, for NF-3 claim forms with dates of service (“DOS”) of 02/05/18, 02/05/18, 02/14/18 through 02/19/18, 02/16/18, 02/24/18, 02/26/18, 05/10/18, 05/17/18 through 05/26/18, 05/19/18 through 06/13/18, 05/21/18 through 06/09/18,^[FN1] 05/23/18 through 06/16/18, 04/02/18 through 06/23/18,^[FN2] 06/27/18 through 07/07/18, 06/30/18 through 07/24/18, 07/05/18, [*6]07/10/18 through 07/19/18, 07/31/18, 08/02/18, 08/04/18, 08/18/18, 08/25/18 through 09/01/18 and 08/29/18 through 09/05/18, for the respective sums of $64.07, $101.87, $203.74, 101.87, $101.87, $101.87, $111.80, $223.60, $223.60, $335.40,^[FN1] $234.67, $536.52, $335.40, $447.20, $111.80, $223.60, $111.80, $111.80, $111.80, $111.80, $223.60 and $223.60, for a total submission of 22 NF-3 claims in the sum of $4,353.28, on the grounds that plaintiff’s claim amounts exceeded the permissible fee schedules of the official NY Workers’ Compensation Fee Schedule (“Fee Schedule”), as well as the Travelers Corechoice Preferred Provider Organization (“PPO”),^[FN3] is denied.

However, defendant is granted partial summary judgment of dismissal, for the sums of $53.73, $56.68, $103.30, $51.65, $51.65, $51.65, $56.69, $113.38, $113.38, $154.95, $103.30, $206.60, $154.95, $206.60, $51.65, $103.30, $51.65, $51.65, $51.65, $51.65, $113.38 and $103.30, for a total of $2,056.74, for its prior partial payments made to plaintiff provider, as demonstrated by the proofs submitted in Exhibit G attached to the affirmation of defendant’s counsel, showing defendant’s individual checks made payable to plaintiff provider, which were then deposited by plaintiff provider in its own account, but not credited by plaintiff provider in its complaint, which proof was not refuted by plaintiff.

Furthermore, the Court finds that defendant has failed to demonstrate a prima facie entitlement to summary judgment for dismissal, with proof in admissible form sufficient to establish there are no material issues of fact, for the sufficiency of the remaining sum of $2,296.54 ($4,353.28 less $2,056.74) (see Xiang Fu He v Troon Mgt. Inc., 34 NY3d 167, 175 [2019]).

Defendant has failed to present a sworn statement from a Professional Coder, or from an experienced Claim Representative, along with references to the applicable fee schedule, as sufficient proof demonstrating defendant’s denial at proper no-fault rates (see Gentle Acupuncture, P.C. v Tri-State Consumer Ins. Co., 55 Misc 3d 147[A][App Term, 2nd Dept, 9th & 10th Jud Dists 2017]; GBI Acupuncture, P.C. v 21st Century Ins. Co., 48 Misc 3d 140[A][App Term, 2d, 11th & 13th Jud Dists, 2015]).

Moreover, an affidavit of a no-fault/litigation examiner or professional medical coder/biller must show that defendant properly applied the appropriate relative value units and conversion factor assigned to the CPT codes for the services rendered in calculating the amount plaintiff is entitled to be reimbursed, which is lacking herein (see Renelique v American Tr. Ins. Co., 57 Misc 3d 145[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; see also Adelaida Physical Therapy, P.C. v 21st Century Ins. Co., 58 Misc 3d 135[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; Liberty Chiropractic P.C. v 21st Century Ins. Co., 53 Misc 3d 133[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2016]).

Finally, there is insufficient proof to establish whether the fees submitted by plaintiff [*7]provider were correctly subject to reduction under the fee schedule and the PPO contract, as a part of the PPO contract pertinent to this matter was redacted and not provided by defendant, and there is no copy of a signed PPO contract establishing a nexus between the medical provider and the PPO network, for the time frames the medical services were rendered. Nor is there sufficient proof demonstrating that PPO rates were applicable to the instant matter. Furthermore, plaintiff’s contention that the name of Curtis Blumenthal, D.C. (affiliated with plaintiff medical provider), does not appear on any of the physical therapy bills paid under PPO rates, also raises questions of fact.

Any remaining contentions of the parties, are unavailing or have been rendered academic.

Submit judgment.

The foregoing constitutes the decision and order of this Court.

Dated: June 30, 2021
HON. JAMES F. MATTHEWS
J.D.C.

Footnotes

Footnote 1:The affirmation of Shana Kleinman overlooked providing an explanation for this particular NF-3 claim form, for dates of services (“DOS”) of 05/21/18 through 06/09/18, received by defendant on 06/21/18, in the claim sum of $335.40, with a partial payment by defendant tendered to plaintiff in the sum of $154.95 (by check #: 25693181, dated 07/05/18), leaving a disputed amount in defendant’s NF-10 denial form of $180.45. However, the proof submitted with the affirmation of Shana Kleinman in Exhibit G factually substantiates this set of facts, which includes a copy of both sides of the tendered check for $154.95 deposited by plaintiff in its account, which factual proof the Court accepts.

Footnote 2:In paragraph 176 of Shana Kleinman’s affirmation, it states that the dates of services (“DOS”) are from 5/31/18 through 6/23/18. However, the actual proof of the NF-10 denial of claim in Exhibit G, states the DOS is 04/02/18 through 06/23/18, which dates the Court accepts.

Footnote 3:Defendant asserts that the provider is a voluntary participant in Traveler’s Corechoice Preferred Provider Private Organization (“PPO”), and as a result for each pertinent claim, defendant applied the fee schedule amount, and then the PPO contract amount, with the remainder of the claim being denied. Corechoice Network (“Corechoice”) processes the PPO claims.