Civil Court of the City of New York, Kings County

02097/08

The plaintiff was represented by Melissa Betancourt, Esq., 155 Kings Highway, Brooklyn, NY 11223-1036, 718.336.8076. The defendant was represented by Kylie A. Higgins, Esq. of the Law Offices of Teresa M. Spina, 170 Froehlich Farm Boulevard, Woodbury, NY 11797, 516.714.7727.

Genine D. Edwards, J.

In an action to recover assigned first party no-fault benefits, defendant seeks leave to amend its answers, strike the notices of trial, and compel discovery, including a deposition. It also seeks to consolidate all nineteen (19) captioned actions. Plaintiff opposes the order to show cause.

BACKGROUND

Defendant argues that plaintiff fraudulently billed for medical services it allegedly rendered to [*2]its assignors.^[FN1] Though defendant admits that it did not deny plaintiff’s bills on the basis of fraudulent billing, it maintains that it has a cause of action to recover benefits paid under a theory of fraud or unjust enrichment.^[FN2] Defendant therefore seeks leave to amend its answers to interpose counterclaims for fraud and unjust enrichment.

Upon such amendment, defendant argues that the notices of trial and certificates of readiness for the captioned actions must be vacated, and the matters stricken from the trial calendar because discovery, including a deposition is warranted with respect to plaintiff’s billing practices. Defendant also seeks consolidation of the captioned actions, arguing that discovery on its counterclaims for fraud and unjust enrichment involve common questions of law and fact.

In opposition, plaintiff asserts that it responded to defendant’s discovery demands and defendant fails to indicate how depositions would provide more relevant information than the responses and documentation previously provided. Plaintiff further alleges that leave to amend the answers must be denied because defendant did not submit an affidavit from a qualified individual with personal knowledge of the subject claim. It argues that the affidavit from Ellen Dargie, a supervisor in defendant’s medical billing unit, who prepared a spreadsheet of the bills plaintiff submitted to defendant for the years 2007 and 2008, does not affirmatively state that plaintiff engaged in fraudulent billing. Finally, plaintiff contends that defendant is attempting to set forth a defense that it is precluded from asserting.

DISCUSSION

Pursuant to CPLR § 3025(b), a party may amend its pleading at any time by leave of the Court. See NY CPLR § 3025(b); Murray v. City of New York, 43 NY2d 400, 401 NYS2d 773 (1977); Cornell Med., P.C. v. Mercury Cas. Co., 24 Misc 3d 58, 884 NYS2d 558 (App. Term, 2d Dept. 2009); Perini Corp. v. City of New York (Honeywell Street and Queens Blvd. Bridges), 27 Misc 3d 813, 897 NYS2d 860 (Sup. Ct. NY County 2010). Leave shall be freely given provided the proposed amendment is not palpably insufficient or patently devoid of merit. See Thomas Crimmins Contr. Co. v. City of New York,74 NY2d 166, 544 NYS2d 580 (1989) (“Where a proposed defense plainly lacks merit, however, amendment of a pleading would serve no purpose but needlessly to complicate discovery and trial, and the motion to amend is therefore properly denied.”); Kuslansky v. Kuslansky, Robbins, Stechel and Cunningham, LLP, 50 AD3d 1101, 858 NYS2d 212 (2d Dept. 2008); Lucido v. Mancuso, 49 AD3d 220, 851 NYS2d 238 (2d Dept. 2008) (“Where the proposed amended pleading is palpably insufficient or patently devoid of merit, or where the delay in seeking the amendment would cause prejudice or surprise, the motion should be denied.”); Uptodate Med. Servs, P.C. v. State Farm Mut. Auto. Ins. Co., 23 Misc 3d 42, 879 NYS2d 695 (App. Term, 2d, 11th & 13th Jud. Dists. 2009) (“The court must examine the merits of the cause of action or defense to be asserted in the proposed amendment since leave to amend should not be granted where the cause of action or defense to be asserted is totally without merit or is palpably insufficient as a matter of law.”).

In the no-fault context, a healthcare provider shall receive payment for services rendered to [*3]

patients whose injuries arise from covered motor vehicle accidents. The insurance carrier has 30 days from the date of receipt of the claim to pay or deny it in whole or in part. See 11 NYCRR 65-3.4; New York & Presbyterian Hosp. v. Progressive Casualty Ins. Co., 5 AD3d 568, 774 NYS2d 72 (2d Dept. 2004); Jesa Medical Supply, Inc. v. American Transit Ins. Co., —- NYS2d —-, 2010 NY Slip Op. 20231 (Civ Ct. Kings County 2010). The law requires a claim for no-fault benefits to be timely and properly denied. See Careplus Med. Supply, Inc. v. Selective Ins. Co. of Am., 25 Misc 3d 48, 890 NYS2d 258 (App. Term, 2d Dept. 2009). In other words, “all bases that an insurer has for denying a no-fault claim, except for specific and limited exceptions, must be raised in a timely denial.” Lincoln General Ins. Co. v. Alev Medical Supply, Inc., 25 Misc 3d 1019, 887 NYS2d 490 (Dist. Ct., Nassau County 2009). See also Fair Price Medical Supply Corp. v. Travelers Indem. Co., 10 NY3d 556, 860 NYS2d 71 (2008); PDG Psychological P.C. v. Utica Mut. Ins. Co., 11 Misc 3d 128(A), 815 NYS2d 496 (App. Term, 2d & 11th Jud. Dists. 2006) (An untimely denial precludes an insurance carrier from raising most defenses at the trial.); Devonshire Surgical Facility v. GEICO, 14 Misc 3d 1208(A), 836 NYS2d 484 (Civ. Ct., NY County 2006); Alev Medical Supply, Inc. v. Progressive Ins. Co., 27 Misc 3d 1220, 2010 NY Slip Op. 50813(U) (Dist. Ct., Nassau County 2010) (An insurance carrier is precluded from asserting any “precludable” defense not asserted in a timely denial.). Fraudulent billing is precluded as a defense unless it is raised in a timely denial. See Fair Price Med. Supply Corp., 10 NY3d at 564-565; Careplus Med. Supply, Inc., 25 Misc 3d at 49 (The defense of provider fraud is precluded if not timely and properly asserted.); M. G. M. Psychiatry Care, P.C. v. Utica Mut. Ins. Co., 12 Misc 3d 137(A), 824 NYS2d 763 (App. Term, 2d & 11th Jud. Dists. 2006) (Fraud defense whether premised on fraudulent billing, excessive medical treatment or otherwise is subject to the preclusion sanction.).

Herein, defendant’s counterclaims for fraud and unjust enrichment are palpably insufficient and patently devoid of merit because the claims were not denied on the grounds of fraudulent billing. They were paid in part and denied in part based upon medical necessity and the charges not being in accordance with the fee schedule. Further, the denials were submitted for the first time in defendant’s reply papers, without an affidavit attesting that the denials were timely mailed to plaintiff pursuant to a standard office practice or procedure. See Rengifo v. City of New York, 7 AD3d 773, 776 NYS2d 865 (2d Dept. 2004) (Defendant cannot rely on documents submitted for the first time in its reply papers.); Fair Price Med. Supply v. Liberty Ins. Co., 12 Misc 3d 145(A), 824 NYS2d 762 (App. Term, 2d & 11th Jud. Dists. 2006) (Defendant failed to establish a timely denial via an affidavit by one with personal knowledge that the denial of claim form was timely mailed or an affidavit containing a sufficiently detailed description of standard office mailing procedure to give rise to the presumption of timely mailing.). As all evidence indicates that the counterclaims pertain to a precluded defense, defendant may not assert them in an amended answer. See Cornell Med., P.C., 24 Misc 3d at 60 (App. Term, 2d Dept. 2009) (“In our opinion, since defendant’s proposed counterclaim [for unjust enrichment] pertains to a defense which is precluded due to defendant’s untimely denials, the Civil Court properly denied the branch of defendant’s motion seeking leave to amend the answer to assert the counterclaim.”).

In reading Judge Engoron’s decision in, Quality Psychological Services, P.C. v. GEICO Ins. Co., Index No.47851/08, Civil Court, Bronx County, dated July 22, 2010, published in the New York Law Journal, August 3, 2010, in conjunction with other decisions discussing no-fault law, this Court is persuaded that the instant matters smack of fraud and unjust enrichment considering the compilation of plaintiff’s bills annexed to Ms. Dargie’s affidavit. However, this Court must follow the law set forth by the Court of Appeals. See Fair Price Medical Supply Corp., 10 NY3d at [*4]564-565. To be quite frank, the buck stops at the insurance carriers upon the receipt of claims for no-fault benefits. Insurance carriers concerned about fraudulent claims must use the verification process to obtain additional information. It behooves GEICO and all other insurance companies to diligently investigate the claims and submit well-thought out denials within the time allotted by the Legislature,^[FN3] until such time as the law is amended.

Accordingly, defendant’s application to amend the answers is denied. Thus, the remaining parts of the order to show cause to strike the notices of trial, compel discovery^[FN4] including a deposition, and to consolidate^[FN5] all nineteen (19) captioned actions are denied as moot.

The order to show cause is denied in its entirety.

This constitutes the decision and order of the Court.

Dated: August 16, 2010____________________________

Genine D. Edwards

Judge of Civil Court

Footnotes

Footnote 1: Specifically, defendant alleges that in one day plaintiff’s treating psychologists performed medical services that amounted to more than 24 hours of testing.

Footnote 2: Defendant paid-in-part and denied-in-part plaintiff’s claims for no-fault benefits. Thus, the counterclaims are based upon plaintiff having obtained partial payments for services rendered.

Footnote 3: “While the 30-day period plus any applicable tolls for paying or denying a claim may be too short a time frame in which to detect billing fraud, any change is up to the Legislature.'” Lincoln General Ins. Co. v. Alev Medical Supply, Inc., 25 Misc 3d at 1022 (quoting Fair Price Med. Supply Corp.,10 NY3d at 565.).

Footnote 4: Discovery may not be obtained regarding matters that are not in issue at trial. See Alev Medical Supply, Inc. v. Progressive Ins. Co., 27 Misc 3d 1220, 2010 NY Slip Op. 50813(U) (Dist. Ct., Nassau County 2010).

Footnote 5: Pursuant to CPLR § 602(a), the Court may consolidate actions involving common questions of law or fact. See Whiteman v. Parsons Transp. Group of New York, Inc., 72 AD3d 677, 900 NYS2d 87 (2d Dept. 2010). Consolidation is usually granted where the issues in the action sought to be consolidated are identical or essentially the same or if it will result in a complete disposition of all claims arising out of the same transaction or incident in one action. Defendant sought consolidation to obtain discovery on its counterclaims for fraud and unjust enrichment. Since leave to amend the answer to interpose the counterclaims was denied, defendant may not obtain consolidation. Moreover, without the amendment defendant cannot consolidate the nineteen captioned actions because the evidence demonstrates that although the actions were brought by a single assignee, the causes of action arose from different automobile accidents on various dates in which unrelated assignors suffered diverse injuries and required different medical treatment. See Poole v. Allstate Ins. Co., 20 AD3d 158, 799 NYS2d 247 (2d Dept. 2005).

[*1]

Civil Court of the City of New York, Kings County, July 27, 2010

APPEARANCES OF COUNSEL

Israel, Israel & Purdy LLP, Great Neck (Josephine Lupis-Usinger of counsel), for plaintiff. Peknik Peknik & Schaefer LLC, Long Beach (Matthew Bruzzese of counsel), for defendant.

{**29 Misc 3d at 367} OPINION OF THE COURT

Pamela L. Fisher, J.

Plaintiff, John Giugliano, DC, P.C., assignee of Laura Hebenstreit,{**29 Misc 3d at 368} instituted this action to recover first party no-fault benefits from defendant Merchants Mutual Ins. Co. A trial was held before this court on June 30, 2010. After considering and evaluating the trial evidence and upon weighing and assessing the credibility of the witnesses, the court makes the following findings of fact and conclusions of law.

At trial, the parties stipulated that plaintiff established its prima facie case, that defendant established timely denials, and that the bills, denials, and underlying medical records would be admitted into evidence. The sole issue remaining for trial was whether plaintiff was entitled to recover for the claims submitted based on the New York Workers’ Compensation Medical Fee Schedule (hereafter “Fee Schedule”).

As stated in Roberts Physical Therapy, P.C. v State Farm Mut. Auto Ins. Co. (14 Misc 3d 1230[A], 2006 NY Slip Op 52565[U], *2 [Civ Ct, Kings County 2006]), in order

“[t]o contain the cost of providing medical services to patients treated under New York’s No-Fault law, the state legislature set limits on the fees health care providers may charge patients who sustain injuries . . . by incorporating into the no-fault scheme the fee [*2]schedules established by the Worker’s Compensation Board for industrial accidents.”

The Fee Schedule is divided into seven sections: Introduction and General Guidelines, Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, Medicine, and Physical Medicine. The Fee Schedule also contains a chiropractic fee schedule section, and a psychology fee schedule section. Each of these sections lists a variety of medical procedures and assigns to each procedure a number known as a current procedural terminology registry code (hereinafter CPT code). In the instant matter, plaintiff, a licensed chiropractor, submitted bills indicating that manipulation of spine under anesthesia (CPT code 22505) and closed treatment of mandibular fracture with manipulation (CPT code 21451) were performed on the assignor. The CPT codes which plaintiff utilized in billing are listed in the surgery section of the Fee Schedule. Dr. Macki was identified as the primary surgeon and Dr. Giugliano was identified as the co-surgeon for the procedures.

Defendant called Laurene Skeffington, a compliance analyst, to testify regarding whether plaintiff properly billed for the services pursuant to the Fee Schedule. Ms. Skeffington testified that it was not appropriate for a chiropractor to utilize the surgical fee schedule even when the procedures performed are not{**29 Misc 3d at 369} listed under the chiropractic fee schedule. She also testified that it was not appropriate to bill CPT code 22505 twice regardless of the fact that both the thoracic and cervical spine were treated.

Plaintiff called Dr. John Giugliano as a rebuttal witness. Dr. Giugliano testified that as the procedures performed, manipulation of spine under anesthesia and closed treatment of mandibular fracture with manipulation, are not listed under the chiropractic fee schedule it was appropriate for them to be billed utilizing the CPT codes listed in the surgery section of the Fee Schedule. Dr. Giugliano stated that it was permissible for CPT code 22505 to be billed twice as two separate areas were treated, namely the thoracic and cervical spine. Dr. Giugliano testified that the procedures required the participation of two doctors and that he served as co-surgeon during the procedures.

It should be noted that the surgery section of the Fee Schedule denotes different percentages of payment based on whether a participating surgeon is acting as a “Surgical Assistant” or a “Co-Surgeon.” A surgical assistant bills at 16%, while co-surgeons are directed to apportion billing in relation to the responsibility and work done. (See New York Workers’ Compensation Fee Schedule, Surgery, at 4.) Defendant’s witness did not offer testimony regarding whether plaintiff should have billed as a surgical assistant or a co-surgeon. Plaintiff’s rebuttal witness, Dr. Giugliano, testified that the classifications are interchangeable and he was entitled to bill as a co-surgeon. Absent proof to the contrary, the court finds that plaintiff was entitled to bill as a co-surgeon under the Fee Schedule.

With respect to plaintiff utilizing the surgery CPT codes, the court finds that plaintiff successfully rebutted defendant’s testimony and plaintiff was entitled to use these CPT codes as the procedures were not listed under the chiropractic fee schedule. When a charge for a reimbursable service has not been scheduled by the superintendent, then the provider shall establish a fee consistent with other fees for comparable procedures shown in such schedule subject to review by the insurer. (Id.; see also Studin v Allstate Ins. Co., 152 Misc 2d 221 [Suffolk Dist Ct 1991].) Therefore, the court finds that plaintiff established that the procedures were properly billed pursuant to the Fee Schedule and plaintiff is entitled to be reimbursed for the services performed.{**29 Misc 3d at 370}

Judgment in favor of the plaintiff in the amount of $2,980.58 plus costs, disbursements, [*3]statutory interest and statutory attorneys fees.

[*1]

Civil Court of the City of New York, Kings County, May 29, 2010

APPEARANCES OF COUNSEL

Law Offices of Daniel J. Tucker, New York City (Peter Coates of counsel), for defendant. Law Offices of Melissa Betancourt, P.C., Brooklyn (Aaron Cargain of counsel), for plaintiff.

{**28 Misc 3d at 828} OPINION OF THE COURT

Sylvia G. Ash, J.

In an action seeking payment of first-party no-fault benefits, defendant moves to reargue the court’s decision dated October 9, 2009, wherein the court found that defendant’s denial of plaintiff’s claim was untimely.

The court found that defendant’s follow-up verification request was two days late, thus reducing its denial time to 28 days (see Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 [2007]), which made its denial in this case late by one day. Defendant contends that the court erred in its finding that its follow-up verification request was sent two days late rather than one day late. Defendant argues that Presidents’ Day is a legal holiday and should not have been included in computing the timeliness of defendant’s denial.

In an action to obtain payment of first-party no-fault benefits, 11 NYCRR 65-3.8 provides that a no-fault insurance carrier has 30 days from the date of receipt of the claim to pay or deny a claim in whole or in part. However, the insurance carrier’s time to pay or deny a claim is extended by making a timely demand for verification. (See Infinity Health Prods., Ltd. v Eveready Ins. Co., 67 AD3d 862 [2d Dept 2009].) A claim does not have to be paid or denied until the insurance carrier has been provided with all timely demanded verification. (See New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004]; Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889 [2d Dept 2007].) Pursuant to 11 NYCRR 65-3.5 (b) the insurance company must request additional verification within 15 business days of the [*2]receipt of the prescribed verification forms. However, an untimely verification request will reduce the 30 calendar days wherein a claim must be denied or paid upon receipt of the requested information. (11 NYCRR 65-3.8 [j].)

The court notes that the rule specifically states business days rather than calendar days. However, the statute does not define either term. Traditionally the law has recognized the difference between a calendar day and business day (see Miuccio v Puppy City, Inc., 22 Misc 3d 1132[A], 2009 NY Slip Op 50404[U] [2009]). A calendar day is defined as a Sunday or any day of the week specifically mentioned (see General Construction Law § 19). Therefore, even a holiday would be considered a calendar day. Generally, when an act must be done within a given number of days, and the last day falls on a holiday, the time is extended{**28 Misc 3d at 829} to the next business day (see General Construction Law § 20). However, when an act must be done within a given number of “calendar” days weekends and legal holidays are not excluded in the calculation thereof.

The General Construction Law does not contain a definition of business days. In examining how the term is defined in different statutes, it generally means any calendar day except Sunday and any legal holiday (see Miuccio v Puppy City, Inc., supra). However, this definition comes into conflict with the way most courts define business days when it comes to no-fault cases, where Saturday, Sunday and holidays have generally been excluded.

Here, if the rule called for 15 calendar days, Presidents’ Day as an intervening holiday would not be excluded in calculating defendant’s verification request (General Construction Law § 20). However, since the rule specifically states that such request must be submitted within 15 business days, it appears that the legislature’s intent was to at least exclude legal holidays in calculating the number of days required to submit additional verification requests.

In the case at bar, plaintiff submitted its claim to the defendant on February 5, 2007. The court, in computing the time defendant was required to request additional verification, hereby defines business day to mean any calendar day excluding Saturday, Sunday and legal holidays. Therefore, the court agrees with the defendant that Presidents’ Day, being a legal holiday, should have been excluded in computing the time for the verification request, and as such, its request was one day late not two days late.

Accordingly, defendant’s motion to reargue and vacate the court’s order dated October 9, 2009, is hereby granted to the extent that the parties’ summary judgment motions are denied, and this matter is set down for trial on the sole issue of medical necessity.

Civil Court of the City of New York, Kings County

042765/08

Plaintiff:

Max Valerio, Esq.

Gary Tsirelman, P.C.

55 Washington Street, Suite 606

Brooklyn, New York 11201

Defendant:

Dominick Dale, Esq.

Law Offices of Teresa M. Spina

170 Froehlich Farm Boulevard

Woodbury, New York 11797

Pamela L. Fisher, J.

Plaintiff, Beal-Medea Products, Inc., assignee of Michael Perez, instituted this action to recover first party no-fault benefits from Defendant GEICO. A trial was held before this Court on March 29, 2010 and April 5, 2010. After considering and evaluating the trial evidence and upon weighing and assessing the credibility of the witnesses, the Court makes the following findings of fact and conclusions of law.

The parties stipulated that Plaintiff established its prima facie case, that Defendant established timely denials, and that the sole issue for trial was medical necessity. The parties also stipulated to the admission of the bills and denials. It is Defendant’s burden at trial to show that the supplies provided to Plaintiff’s assignor were medically unnecessary. See Amaze Med. Supply, Inc. v. Eagle Ins. Co., 2003 NY Slip Op 51701U (NY App. Term 2003). To meet its burden, at a minimum, Defendant must establish a factual basis and medical rationale for its asserted lack of medical necessity, which is supported by evidence of the generally accepted medical/professional [*2]practices. See Nir v. Allstate Ins. Co., 2005 NY Slip Op 25090 (NY Civ. Ct. 2005).

At trial, Defendant called Dr. Michael Jacobs to testify regarding the peer review report of Dr. Andrew Miller. Plaintiff objected on hearsay grounds to Dr. Jacob’s testimony because he was not the author of the original peer report. The Court now turns to the question of whether it is permissible for a substitute doctor to testify.

The Appellate Term First and Second Department have held that a substitute peer doctor is permitted to testify as the witness is subject to full cross-examination, however they have limited the substitute peer’s testimony to the basis for denial as set forth in the original peer review report. Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 2009 NY Slip Op 51475U, 1 (NY App. Term 2009). See also Home Care Orthos. Med. Supply v. American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A) (2007); Spruce Med. and Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143A(2007). Bronx Expert did not limit its holding to cases where documents are in evidence. When the parties have stipulated that either the peer report or the underlying medical records are admitted into evidence applying the Bronx Expert standard is clear. However when the parties have not stipulated documents into evidence the Court must determine to what extent may the witness rely on out-of-court documents without violating the hearsay rule. See Progressive Med., Inc. v Allstate Ins. Co., 2010 NY Slip Op 50219U (NY App. Term 2010).

In SK Med. Servs., P.C. v. New York Cent. Mut. Fire Ins. Co., 2006 NY Slip Op 26227, 1 (NY Civ. Ct. 2006), a lower court case decided before Bronx Expert, the parties stipulated that the peer report was in evidence and the court held that the substitute peer was permitted to testify. The substitute peer was limited to testifying to the facts and opinions contained in the peer review report. Id. The decision was based on the rationale that an insurer may not assert new grounds for its refusal to pay a claim and must adhere to the defense as stated in its denial. Id. Permitting a substitute peer to testify does not violate these principles as long as the substitute peer doctor is limited to the basis for the denial as set forth in the original peer report. Id. As the parties stipulated the peer into evidence, SK Medical did not address the evidentiary concerns associated with admitting the peer report or underlying medical records into evidence when a substitute peer testifies. When documents are not in evidence, the Plaintiff will inevitably object to the testimony of the peer or substitute peer on hearsay grounds. Bronx Expert does not expound upon hearsay concerns. Instead the case states that Defendant’s expert is not precluded from testifying because his opinion may have been based, at least in part, on his review of the assignor’s medical records prepared by plaintiff. See Bronx Expert.

In IAV Med. Supply, Inc. v Progressive Ins. Co., 2010 NY Slip Op 50433U, 5 (NY Civ. Ct. Mar. 15, 2010), the Court relied on the standard set forth in Bronx Expert, and held that a substitute peer doctor was permitted to testify when there were no documents in evidence because the witness would be subject to cross-examination and his testimony would be limited to the original peer review reports. IAV Medical allowed the testimony by relying on the fact that the peer reports had been submitted to the Plaintiff prior to trial as part of a summary judgment motion and expert disclosure, however the court did not address hearsay concerns.When the peer report and/or underlying medical records have not been stipulated into evidence, Defendant must overcome Plaintiff’s hearsay exception in order to elicit testimony from the expert witness. In this instance, the Court may rely on the framework laid by Wagman. Wagman v. Bradshaw, 292 AD2d 84, 85 (NY App. Div. 2d Dep’t 2002). In Wagman, the Appellate Division [*3]held that an expert witness may testify when he or she relied upon inadmissible out-of-court material to formulate an opinion provided: (1) it is of a kind accepted in the profession as reliable as a basis in forming a professional opinion, and (2) there is evidence presented establishing the reliability of the out-of-court material referred to by the witness. Id. See also Hambsch v New York City Tr. Auth., 63 NY2d 723); Supple Mind Acupuncture, P.C. v. State Farm Ins. Co., 2008 NY Slip Op 51856U (NY App. Term 2008). Under the purview of Wagman, it follows that a peer doctor as well as a substitute peer doctor would be permitted to testify as long as the witness is able to satisfy the two prong Wagman test. The testimony of the peer and substitute peer are deemed permissible because of an exception to the hearsay rule. Namely their testimony is deemed permissible when they have established the reliability of the out of court documents relied upon. It is a contradiction to permit the peer doctor to testify based on an exception to the hearsay rule and in turn prohibit a substitute peer from testifying. Both the peer and substitute peer are relying on out of court documents which fall under a hearsay exception. Generally, litigants can satisfy the first prong of Wagman, however establishing the second prong is more difficult.

Courts have held that Plaintiff invariably can not rebuff the reliability of the out of courts documents relied upon by an expert when the out of court documents consist of documents that plaintiff or assignor have prepared. See Andrew Carothers, M.D. (Martinez) v. GEICO, 2008 NY Slip Op 50456[U], 18 Misc 3d 1147[A], 859 NYS2d 892 (Civil Ct., Kings Co. 2008); Home Care Ortho. Med. Supply Inc., v. American MFRS. Mut. Ins. Co., 2007 NY Slip Op 50302[U], 14 Misc 3d 139[A], 836 NYS2d 499 (App. Term, 1st Dept. 2007); Primary Psychiatric Health, P.C., v. State Farm Mutual, 2007 NY Slip Op 50583[U], 15 Misc 3d 1111[A], 839 NYS2d 436 (Civil Ct., Kings Co. 2007). In Popular Imaging, P.C. v State Farm Ins. Co., 2009 NY Slip Op 52355U (NY Civ. Ct. 2009), a peer doctor was permitted to testify with respect to a peer report and underlying medical records which were not in evidence. The Court found that the peer doctor satisfied the Wagman two prong test for permitting expert testimony based upon out of court documents. Id. The Court held that a Plaintiff invariably can not rebuff the permissibility of the expert testimony on reliability grounds when those documents are Plaintiff’s or assignor’s documents.

In PLP Acupuncture, P.C. v. Progressive Cas. Ins. Co., 2009 NY Slip Op 50491U, 1-2 (NY App. Term 2009), the Court permitted a substitute peer doctor to testify. The Court applied the Wagman test and held that the substitute peer could rely upon out of court documents in forming his opinion as long as the substitute peer offers proof of the reliability of the out of court documents. Id. The Court further held that as some of the medical reports relied upon by defendant’s acupuncturist in his peer review report were prepared by plaintiff, plaintiff could not challenge the reliability of its own medical records and reports. Id.

In Dilon Med. Supply Corp. v. New York Cent. Mut. Ins. Co., 2007 NY Slip Op 52454U, 2 (NY App. Term 2007), the Appellate Term reversed a lower court which precluded a substitute doctor from testifying. The Court held that since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services 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.

Applying this standard to the case at hand, the Court will permit the substitute peer doctor to testify and limit his testimony to the basis for denial as set forth in the original peer review. Plaintiff objected to Dr. Jacob’s testimony based upon hearsay grounds. The Court of Appeals has [*4]held that an expert witness may testify that he or she relied upon specific, inadmissible out-of-court material to formulate an opinion provided: (1) it is of a kind accepted in the profession as reliable as a basis in forming a professional opinion and (2) there is evidence presented establishing the reliability of the out-of-court material referred to by the witness. See Wagman. Dr. Jacobs testified that the out-of-court documents he relied upon were professionally reliable, however he did not present evidence establishing the reliability of the out-of-court material. Therefore, Defendant failed to demonstrate either that the testimony did not rely on out-of-court documents for the truth of the matters stated herein, or that the documents were being relied upon for their truth but fell within an exception to the rule against hearsay. See Progressive Med., Inc. v Allstate Ins. Co., 2010 NY Slip Op 50219U (NY App. Term 2010). Accordingly, Dr. Jacobs’ testimony is stricken and the Court finds that Defendant did not establish a factual basis and medical rationale for its asserted lack of medical necessity.

Judgement in favor of Plaintiff in the amount of $563.04, plus costs, disbursements, statutory interest and statutory attorneys fees. This constitutes the decision and order of the Court.

May 6, 2010

Pamela L. Fisher

Judge, Civil Court

Civil Court of the City of New York, Richmond County

08R014639

A P P E A R A N C E S:

Attorneys for Plaintiff:

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, NY 11501

Attorneys for Defendant:

Peter C. Merani, P.C.

298 Fifth Avenue, 3rd Floor

New York, NY 10001

Katherine A. Levine, J.

Plaintiff Anthony Mandracchia, D.C. (“plaintiff”), a medical service provider, brings this action pursuant to Insurance Law § 5106(a) to recover $320.30 for services it provided to its assignor, Dwayne Loftin (“assignor”), for injuries he allegedly sustained in an automobile accident. Defendant Allstate Insurance Co. (“defendant”) moves to dismiss pursuant to CPLR § 3211 or, in the alternative, for summary judgment pursuant to CPLR § 3212 on the grounds that the instant action is barred by the six (6) year Statute of Limitation. Plaintiff opposes the motion.

Pursuant to Insurance Law § 5106, a complete proof of claim is a prerequisite to receiving no-fault benefits. Under the old regulations applicable to insurance policies issued before April 5, 2002, the written proof of claim must be submitted to the insurance company “as soon as reasonably practicable, but in no event later than 180 days after the date services are rendered or 180 days after the date written notice was given to the insurer. 11 NYCRR 65.12. See Rockman v. Clarendon, 2008 NY Slip Op 52093 (U), 21 Misc 3d 1118(A) (Civil Ct., Richmond Co. 2008) citing Montefiore Medical Center v. Mary Immaculate Hospital, 9 AD3d 354 (2d Dept. 2004). Within 30 days of receiving the claim, an insurer shall either pay or deny the claim in whole or in part. See 11 NYCRR 65.15(g)(3). In the event an insurer fails to timely deny a claim or request verification from the provider, the insurer is precluded from asserting that the claim was untimely or incomplete. Presbyterian Hosp. In City of NY v. Maryland Cas. Co., 90 NY2d 274, 282 (1997); Montefiore Medical Center v. NY Cent. Mut. Fire Ins. Co., 9 AD3d 354, 355 (2d Dept. 2004); NY Hosp. Med. Ctr. Of Queens v. Country-Wide Ins. Co., 295 AD2d 583 (2d Dept. 2002).

An action to recover first party benefits owed under an insurance policy is viewed as a breach of contract governed by the six year statute of limitations contained in CPLR 213(2). Alleviation Supplies, Inc. v Enterprise Rent-A-Car, 12 Misc 3d 787, 791 (Civil Ct., Richmond Co. 2006). See, Benson v. Boston Old Colony, 134 AD2d 214, 215 (1st Dept. 1987); Spring World Acupuncture, PC. V. NYC Transit Authority ., 24 Misc 3d 39 (2009). In contract cases, the cause of action accrues ,and the statute of limitations begins to run at the time of the breach.Micha v. Merchants Mutual Ins. Co., 94 AD2d 835, 836 ( 2d Dept. 1983). [*2]

In no fault actions, a defendant insurer’s contractual obligation to pay the first party benefits arises after it receives the claim. As set forth above, pursuant to Insurance Law §5106, an insurer must either pay or deny the claim within 30 days of submission of proof or the bill becomes overdue. The cause of action thus accrues once the claim is overdue. In Line Chiropractic v. MVAIC, 2005 NY Slip Op 50275U, 6 Misc 3d 1032A (Civil Ct, Bronx Co. 2005), and the statute of limitations thus commences either upon the denial of the claim or, if the thirty days after the submission of plaintiff’s proof of claim. Mandarino v. Travelers Prop. Cas. Ins. Co., 37 AD3d 775 (2nd Dept. 2007); Micha v. Merchants Mut. Ins. Co., 94 AD2d 835, 836 (3d Dept. 1983), citing Insurance Law 675(1); Chester Medical Diagnostic v. Kemper Casualty Ins. Co., 2008 NY Slip Op. 52009(U), 21 Misc 3d 1108(A) (Civil Ct., Kings Co. 2008).

On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is time-barred, the defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired. Cimino v. Dembeck,61 AD3d 802 (2d Dept. 2009). See, Swift v New York Med. Coll., 25 AD3d 686, 687 ( 2d Dept. 2006). “In order to make a prima facie showing, the defendant must establish, inter alia, when the plaintiff’s cause of action accrued” (Swift v New York Med. Coll., 25 AD3d at 687). Furthermore, in deciding a CPLR 3211 motion to dismiss, “a court must take the allegations in the complaint as true and resolve all inferences ] in favor of the plaintiff” Cimino, supra, (Sabadie v Burke, 47 AD3d 913, 914,(2d Dept. 2008).

On a motion for summary judgment, a court may consider evidence contained in documents supplied by a party to the court. See Kwiecinski v. Chung Hwang, 2009 NY Slip Op 06630, 2009 NY App. Div. LEXIS 6503 (3d Dept. 2009); Sonnenfeldt v. Kyriakoudes, 226 AD2d 286 (1 Dept. 1996) citing Central Petroleum Corp. v. Kyriakoudes, 121 AD2d 165 (1st Dept. 1986). A court may utilize these admissions as evidence upon which it can make findings of fact. Potamkin Cadillac Corp. v. BRI Coverage Corp., 38 F3d 627 (2d Cir. 1994); Freemantle v. U.S. Hoffman Machinery Corp., 2 AD2d 634 (3d Dept. 1956)(statements in answers to interrogatories or in proposed findings of fact are admissions against the party that made them); Bertha Building Corp. v. National Theatres Corp., 248 F.2d 833, 836 (1957).

Plaintiff has annexed to its complaint a ledger providing the particulars of the assignor’s bill, including the date of accident and the date of service of August 25, 1998. The complaint avers that “the bill was received timely”; i.e. that plaintiff submitted the bill to Allstate within 180 days. The complaint also avers that more than 30 days have passed since the bill was submitted and that defendant failed to properly deny the bill within 30 days of receipt. Given these admissions, the court follows the rational of Pinnacle Open MRI, PC., v. Republic Western Insurance Co., 18 Misc 3d 626 (Dist. Ct., Nassau Co. 2008), in determining the latest date by which plaintiff could have commenced the lawsuit and be timely. In Pinnacle, the defendant insurer averred that it did not have the NF-3 claim form filed with it by the plaintiff, although it did not deny its receipt. The court therefore used the date of service, added the additional 180 days that plaintiff had to file the claim, and then added the maximum of 30 days in which the insurer had in which to pay or deny the claim to determine the day that plaintiff’s cause of action ripened.

Utilizing this formula, plaintiff would be barred by the six year statute of limitations from [*3]bringing this action. Adding the additional 180 days to the date of service – August 25, 1998- and then adding an additional 30 days in which the insurer had to pay or deny the claim – bring the date that the claim became overdue to March 23, 1999. Since plaintiff admits that the service of the summons and complaint upon defendant was completed on August 6, 2008 ( see proposed judgment and attorney’s affirmation of plaintiff’s counsel dated October 6, 2008 annexed to defendant’s motion as Exhibit “B”) it is clear that the instant action was commenced way beyond the six year statute of limitations. As such, the complaint is dismissed.

The foregoing constitutes the order and decision of the court.

Dated: April 28, 2010_____________________________

KATHERINE A. LEVINE

JUDGE, CIVIL COURT

ASN by_________on________

A P P E A R A N C E S:

Attorneys for Plaintiff:

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, NY 11501

Attorneys for Defendant:

Peter C. Merani, P.C.

298 Fifth Avenue, 3rd Floor

New York, NY 10001

[*1]

Civil Court of the City of New York, Bronx County, April 7, 2010

APPEARANCES OF COUNSEL

Ferdinand Diaz for claimant. Jaffe & Koumourdas (Peter Coates of counsel), for defendant.

{**28 Misc 3d at 861} OPINION OF THE COURT

Fernando Tapia, J.

In these nonpayment of no-fault insurance benefits cases before the Commercial Small Claims Part, this court, after oral testimony and review of submitted cases/statutes from claimant, hereby dismisses these cases without prejudice.

Does the Commercial Small Claims Part have subject matter jurisdiction to try a no-fault case when a specific No-Fault Part exists within New York City Civil Court? This court finds that it does not. Thus, under New York City Civil Court Act § 1805-A,^[FN1] the above-captioned case is transferred to the No-Fault Part for proper adjudication.

I. Factual Background

Claimant is an assignee for an individual patient who sought health care treatment from a motor vehicle accident. Claimant’s representative is not an attorney. On or about December 10, 2009 claimant’s representative appeared before the Commercial Small Claims Part to recover [*2]no-fault benefits from defendant Countrywide Insurance, which is represented by counsel.^[FN2]

Claimant seeks $4,365.52 and $5,000 from defendant for unpaid no-fault bills. Defendant argues that the cases should be dismissed for lack of subject matter jurisdiction because claimant became an assignee of the claim that originally belonged to an individual, and not to a commercial entity. Claimant’s representative counters with a First Department Appellate Term case (claimant’s representative relies on East End Med., P.C. v Oxford Health Ins., Inc. [12 Misc 3d 135(A), 2006 NY Slip Op 51229(U) (App Term, 1st Dept 2006)], which will be discussed later) which ruled in favor of the plaintiff, stating that the claim could be heard in the Small Claims Part.

II. The Small Claims Part: Truly a “People’s Court”

A. Brief Discussion on the Small Claims Part

Small claims court is an informal court that is part of Civil Court. (See A Guide to Small Claims Court, Unified Court System; see also Siegel, NY Prac § 581 [4th ed].) As such, there{**28 Misc 3d at 862} is no requisite motion practice involved. In fact, motion practice is discouraged in small claims. (See Weiner v Tel Aviv Car & Limousine Serv., 141 Misc 2d 339, 341 [Civ Ct, NY County 1988] [where movant sought to dismiss pro se claimant’s case, the Civil Court held that the Small Claims Part need not entertain a pretrial motion, absent extraordinary circumstances].)

Under CCA 1809 (1) (“Procedures relating to corporations, associations, insurers and assignees”),

“[n]o corporation, except a municipal corporation, public benefit corporation, school district or school district public library wholly or partially within the municipal corporate limit, no partnership, or association and no assignee of any small claim shall institute an action or proceeding under this article, nor shall this article apply to any claim or cause of action brought by an insurer in its own name or in the name of its insured whether before or after payment to the insured on the policy” (emphasis added).

The purpose of CCA 1809 (1) is to keep businesses from using the Small Claims Part as claimants. (See Siegel, Supp Practice Commentaries, McKinney’s Cons Laws of NY, CCA 1809, 2010 Electronic Update.) To address whether businesses can use the Small Claims Part, then, CCA 1809-A was enacted by the New York State Legislature. A discussion follows.

B. CCA Article 18-A: Legislative Enactment Governing the

1. Legislative History and Intent of Article 18-A

In 1987 the New York Legislature enacted CCA article 18-A, which outlines the [*3]jurisdictional parameters for commercial cases in the Small Claims Part.^[FN3]

Under CCA 1809-A (“Procedures relating to corporations, associations, insurers and assignees”), “[a]ny corporation . . . which has its principal office in the city of New York and an assignee of any commercial claim may institute an action or proceeding under this article” (CCA 1809-A [a] [emphasis added]).

Furthermore, under CCA 1801-A (“Commercial claims defined”), ” ‘commercial claim’ . . . shall mean and include any cause of action for money only not in excess of the maximum amount permitted for a small claim in the small claims part of{**28 Misc 3d at 863} the court . . . provided that . . . the claimant is a corporation, partnership or association.” (CCA 1801-A [a].)^[FN4]

Commercial litigants can therefore initiate suit in the Commercial Small Claims Part. The Unified Court System also has a booklet titled A Guide for the Use of the Commercial Claims Part which is available to the public.

Article 18-A has been criticized for simply paralleling the existing article 18 instead of being an independently distinct rubric for commercial claims being brought to the Small Claims Part. (See Siegel, General Practice Commentary on “Commercial” Small Claims Article, McKinney’s Cons Laws of NY, Book 29A, UCCA 1801-A, at 815-816.) Nevertheless, there are relevant sections germane to the cases at hand that explain why the Commercial Small Claims Part is not the proper venue.

2. Implications of Article 18-A Regarding the Above-Captioned Cases

As mentioned earlier, motion practice is discouraged in small claims. No-fault matters, on the other hand, command motion practice because of their complicated nature.^[FN5] It therefore follows that these two no-fault cases be transferred to the No-Fault Part for proper adjudication in the interest of justice, so that the assignee can be accommodated accordingly.

According to CCA 1802-A (“Parts for the determination of commercial claims established”), the Commercial Small Claims Part “[s]hall not be exclusive of but shall be alternative to the procedure . . . with respect to actions commenced in the court by the service of a summons.” That is, Commercial Small Claims Part is to be used as an alternative forum, not an exclusive one.

In the cases at hand, the most relevant section is CCA 1809-A (“Procedures relating to corporations, associations, insurers and assignees”), which states that no individuals or corporations shall take an assignment of any claim or demand, with the intent and for the purpose of bringing an action or proceeding in the Commercial Small Claims Part (CCA 1809-A [b]). As assignment by an individual to a corporation is neither a small claim nor a commercial claim because it was assigned; neither is it a commercial claim because it was not originally commercial{**28 Misc 3d at 864} when the [*4]assignment was made.^[FN6] This effectively precludes the bringing of a common medical benefits case in the Small Claims Part.

Thus, an assignee may bring a case in the Commercial Small Claims Part, as long as it does not exceed five such suits per month, and as long as its main reason is to have the case tried on its merits, and not as a procedural legal strategy to get a favorable outcome from a forum such as small claims.^[FN7]

Here, claimant relies on East End Med., P.C. v Oxford Health Ins., Inc. (12 Misc 3d 135[A], 2006 NY Slip Op 51229[U]) to put forth its argument that the Commercial Small Claims Part is the proper forum to resolve these cases. In East End Medical, the health care provider (the appellant) sought to recover no-fault insurance benefits from 13 of its patient assignors in this consolidated action. The majority opinion ruled that the appellant’s no-fault case was prematurely dismissed because the merits were not seriously considered. (2006 NY Slip Op 51229[U] at *1.)

It is, however, the cursory sua sponte discussion of subject matter jurisdiction in the dissent that ignites the relevance of East End Medical with respect to the case at hand.^[FN8] According to the dissent, because the claimant’s case was not originally “commercial” as defined pursuant to CCA 1809-A,^[FN9] it could not have been brought in the Commercial Small Claims Part under CCA 1809-A. (2006 NY Slip Op 51229[U] at *2.)

This court, therefore, agrees with the dissent that where there is a more proper forum that specifically addresses claims by{**28 Misc 3d at 865} health care providers for nonpayment of basic economic loss claims, it is that forum that should be regarded as having subject matter jurisdiction. The proper forum with jurisdiction to entertain the type of claim at issue in the instant matter, however, presupposes the existence of a statute that permits through logical reasoning the creation of a judicial forum to most effectively adjudicate no-fault medical benefits claims.

III. Insurance Law Article 51: New York State Comprehensive Automobile Insurance Reparations Act (Also Known as the No-Fault Law)

The No-Fault Insurance Law was created in 1973 for the express purpose of promoting “prompt resolution of injury claims, limit[ing] cost to consumers and alleviat[ing] unnecessary burdens on the courts.” (Byrne v Oester Trucking Inc., 386 F Supp 2d 386, 391 [SD NY 2005], citing [*5]Pommells v Perez, 4 NY3d 566 [2005].)

At the crux of no-fault insurance litigation is the issue of whether the injured party sustained a “serious injury” as defined by Insurance Law § 5102 (d). This “serious injury” threshold, as defined, “provides that in order for a victim of an automobile accident to bring an action for ‘non-economic loss,’ [such as] pain and suffering, he or she must demonstrate ‘serious injury’ [resulting from the accident].” (Lamana v Jankowski, 13 AD3d 134, 136 [1st Dept 2004].)

A determination that the “serious injury” threshold has not been met, however, does not preclude a no-fault claimant from recovering any basic economic loss incurred as a result of a motor vehicle accident (MVA). With a limit of up to $50,000 per person, a claimant can seek to recover for medical services, lost wages, and other reasonable and necessary expenses. It is these types of claims that constitute the overwhelming majority of the No-Fault Part Civil Court case calendar.

In an attempt to handle these claims fairly and expeditiously pursuant to the spirit and letter of the No-Fault Law, a “No-Fault Part” was created in Bronx Civil Court. The No-Fault Part is a specialized court created in Bronx County^[FN10] to handle no-fault basic economic loss claims. This court would have the exclusive authority for entertaining all motions and trials pertaining to these claims.

The No-Fault Part has greatly facilitated the removal of the vast majority of MVA claims from the sphere of common-law{**28 Misc 3d at 866} tort litigation into a quick, sure and efficient system for obtaining compensation for economic loss suffered from a car accident.^[FN11] The nature of the claims exclusively involves payment demands by health care providers (always represented by counsel), as assignees, for health care services and treatment rendered parties (assignors) involved in MVAs.

Likewise, the defendants are exclusively insurance carriers and also invariably represented by counsel. In addition to representation by counsel, limited discovery is allowed in the No-Fault Part. The daily court calendar is divided such that during the morning calendar call, all procedural and nonprocedural motions are heard and orally argued, if not taken on submission. In the afternoon, all bench trials are conducted.^[FN12] This approach, suffice it to say, has generated a fair, uniform, and expeditious adjudication of an otherwise crushing volume of [*6]no-fault cases.

The court’s singular focus on medical benefits claims has allowed judges, attorneys, and court staff to develop the No-Fault Part into an efficient mechanism for the adjudication of these claims. This efficiency is predicated first upon a narrow body of law effectively interpreted and applied by a judge with the sole responsibility of adjudicating medical benefits claims that, secondly, are handled by experienced counsel on a daily basis in an adversarial, but nonconfrontational courtroom setting in the disposition of these claims. The functional structure of the No-Fault Part is consistent, therefore, with one of the No-Fault Law’s goals: the expeditious handling of basic economic loss claims. From a commonsense policy standpoint, the No-Fault{**28 Misc 3d at 867} Part is the proper forum to bring medical benefits claims actions.

IV. Conclusion

In sum, these two cases at hand are not “commercial” per se, based on CCA 1809 (1), as assignees are barred from initiating suit in the Small Claims Part. Instead, they should be adjudicated in the No-Fault Part. Wherefore these cases are hereby dismissed without prejudice so that they can be transferred to the No-Fault Part, which is the proper forum.

Footnotes

Footnote 1: Pursuant to New York City Civil Court Act § 1805-A (b), “[t]he court shall have power to transfer any commercial claim or claims to any other part of the court upon such terms as the rules may provide, and proceed to hear the same according to the usual practice and procedure applicable to other parts of the court.”

Footnote 2: Peter Coates of Jaffe and Koumourdas appeared on the record.

Footnote 3: This took effect on January 1, 1991.

Footnote 4: The amount is currently $5,000.

Footnote 5: An example of a small claims case is where a store customer sues a furniture store for defective furniture. Such a case does not require motion practice, unlike no-fault cases where expert testimony of health care professionals is generally part of proving a plaintiff’s case as to the medical necessity of a treatment or service.

Footnote 6: Dunrite Auto Body & Motors v Liberty Mut. Ins. Co., 160 Misc 2d 168, 171 (Suffolk Dist Ct 1993); see also Arthur F. Engoron, Small Claims Manual: A Guide to Small Claims Litigation in the New York State Courts, at 35 (5th ed 2001).

Footnote 7: To start a commercial claims case, the commercial claimant must give a statement to the commercial claims court clerk as to why she/he is starting a lawsuit. The claimant must also pay a $20 filing fee to the clerk, plus the cost of mailing the notice of the lawsuit to the defendant. The claimant must also file a verification that no more than five commercial claims have been initiated by that claimant anywhere in New York State during a calendar month. (See A Guide for the Use of the Commercial Claims Part, at 2 [1996].)

Footnote 8: In East End Medical, subject matter jurisdiction was neither raised nor briefed by the party on appeal. The Appellate Term therefore broached the issue on its own.

Footnote 9: “Commercial” means any corporation, partnership, or association with its principal office in New York State can initiate suit in the Commercial Small Claims Part, so long as the entity is not a collection agency or entity that take assignments of debts. (See CCA 1809-A; see also A Guide for the Use of the Commercial Claims Part, at 1 n 1 [1996].)

Footnote 10: Both Brooklyn and Queens Civil Court have created a similar No-Fault Part to accommodate such cases.

Footnote 11: The purpose of no-fault auto insurance is to encourage expeditious resolution of claims without the necessity of imposing an additional burden on courts. (See Matter of Gretka [General Acc. Group], 100 Misc 2d 170 [Sup Ct, Erie County 1979].)

Benefits to be paid on a “no-fault” basis were adopted by the New York State Legislature as a means of reducing the caseload of the courts and to provide a fair and adequate way of recovering for those injured in auto accidents. (See Gamble v Randolph, 91 Misc 2d 436 [Rochester City Ct 1977].)

The object of Insurance Law of 1939 § 670 et seq. was to assure prompt compensation to accident victims of substantially all of their economic loss without regard to fault. (See Matter of Criterion Ins. Co. of Wash., D.C. [Commercial Union Assur. Co.], 89 Misc 2d 36 [Sup Ct, Nassau County 1976].) This same tenet is echoed in the current No-Fault Law, along with Ohio Cas. Ins. Co. v Continental Ins. Co. (101 Misc 2d 452 [Sup Ct, Erie County 1979]).

Footnote 12: Although nonjury trials are officially held during the morning calendar call and motions during the afternoon calendar call, most motions are able to be resolved in the mornings as well. If not, then they are resolved in the afternoon calendar.

Civil Court of the City of New York, Richmond County

23541/08

Kim Dollard, J.

This is an action by the plaintiff medical provider, to recover no-fault benefits for medical services provided to Orlando Lainez-Rodriguez, plaintiff’s assignor, arising from an automobile accident that occurred on June 16, 2008.

A trial was held before the undersigned on December 15, 2009. The parties had stipulated that the plaintiff established its prima facie case by having submitted the claims in dispute to the defendant, and that the defendant mailed timely denials of the claims. The only issue before the court was the question of medical necessity of the medical services provided to the assignor.

Defendant presented two witnesses in support of their case. Dr. Jonathan Lown was called to testify on the issue of medical necessity. His testimony was based upon the findings of Dr. Harold A. Schechter who performed a peer review of this case and prepared peer review reports. Defendant also called Karen Waldenheimer, a representative of Progressive Insurance Company. The purpose of Ms. Waldenheimer’s testimony was to lay a foundation for the peer review reports, and to admit the peer review reports into evidence.

Plaintiff objected to admission of the of the peer review reports into evidence through Ms. Waldenheimer’s testimony. Plaintiff further objected to the testimony of Dr. Lown on the grounds that defendant did not comply with CPLR 3101(d). The court heard the testimony of both witnesses, and reserved decision on the issues raised by plaintiff. Both sides submitted briefs to the court as to the admissibility of the peer review reports and the testimony of Dr. Lown.

CPLR 3101(d) – EXPERT TESTIMONY

CPLR 3101(d)(1)(i) states: “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 witness 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.”

Plaintiff claims that the disclosure notice provided by defendant is insufficient and vague, and therefore Dr. Lown should not have been permitted to testify and at trial and his testimony should be stricken.

Defendant, at the outset, states that plaintiff never requested any expert witness

disclosure, rendering its objection to the disclosure notice improper. The disclosure notice was given to plaintiff by defendant on its own volition. Further, defendant maintains that the disclosure notice is in full compliance with the statute. Additionally, defendant states that plaintiff neither objected to the Notice of Trial filed with the court, wherein defendant indicated that discovery was complete, nor did plaintiff make a motion to vacate the Notice of Trial.

The Expert Disclosure states in relevant part, “1. Defendant intends to call Jonathan Lown, MD,… to testify on Dr. Harold A. Schechter’s peer review report; see copies of Dr. Schechter’s peer reviews and Dr. Lown’s CV annexed hereto.”

A determination regarding whether to preclude a party from introducing the testimony of an expert witness at trial based on the party’s failure to comply with CPLR 3101(d)(1)(i) is left to the sound discretion of the court. (see Hubbard v Platzer, 260 AD2d 605; Lyall v City of New York, 228 AD2d 566; McGlauflin v. Wadhwa 265 AD2d 534). In the case at bar, the expert witness disclosure statement is not so inadequate or inconsistent with the expert’s testimony as to have been misleading, or to have resulted in prejudice or surprise. (see Gagliardotto v. Huntington Hosp., 25 AD3d 758, 759; Andaloro v. Town of Ramapo, 242 AD2d 354, 355; Rabinowitz v. Elimian, 55 AD3d 813, 814). Accordingly, preclusion is not warranted herein. (see Rowan v. Cross County Ski & Skate, Inc., 42 AD3d 563; Young v. Long Is. Univ., 297 AD2d 320; Abramson v. Pick Quick Foods, Inc., 56 AD3d 702, 703). The court will not strike Dr. Lown’s testimony upon these grounds.

ADMISSIBILITY OF PEER REVIEW REPORTS

AS A BUSINESS RECORD UNDER CPLR 4518(a)

CPLR 4518(a) permits the introduction of a business record as an exception to the hearsay rule. Pursuant to Rule 4518(a), “Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter….” To admit a record under the CPLR 4518(a) business records exception for the truth of its contents, the four foundational elements must be satisfied. It must be shown that the [*3]document or record was made in the regular course of business; that it was the regular course of such business to make the record; that the record was made at the time of the act or occurrence recorded or within a reasonable time thereafter, and that the person who made the record had actual knowledge of the event recorded or received the information from someone within the business who had actual knowledge and was under a business duty to report the event to the maker of the record or if the statement of an outsider within the business record satisfies an independent hearsay exception. (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:1). To make this showing requires testimony from a sponsoring witness, someone from within the particular business such as the author, a records custodian or other employee who can testify as to the nature of the record keeping practices of the business (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:2; Prince, Richardson on Evidence, § 8-306 [Farrell 11th Ed.] ); Kaiser v. Metropolitan Transit Authority, 170 Misc 2d 321, 323).

As a rule, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (Standard Textile Co. v National Equip. Rental, 80 AD2d 911).Defendant contends that Karen Waldenheimer, as a representative of Progressive Insurance Company, is competent to lay a foundation for the admission of Dr. Schechter’s peer review reports on the basis that she worked with and was familiar with peer review reports and that defendant relies upon peer review reports in making its determinations regarding the medical necessity of services rendered. Essentially, defendant is claiming that the peer review reports are business records of defendant. Defendant relies primarily upon the holding in People v. Cratsley, 86 NY2d81 wherein the court held that

The testimony of a mentally retarded rape victim’s counselor established the requisite foundation under the business records exception to the hearsay rule (CPLR 4518) for the admission of an IQ test report, prepared by a psychologist at the time of the victim’s admission to a sheltered workshop that provided opportunity and support for adults who are mentally retarded….Through the counselor’s testimony, the People established that the report was prepared for the workshop and in conformity with its procedures. That the psychologist was not himself a workshop employee does not, under these facts, defeat admission, because he was acting on behalf of the workshop and in accordance with its requirements when he prepared the report. Although the counselor could not relate the psychologist’s specific recordmaking practices, she was able to state that the report conformed with the statutory and regulatory requirements with which she was familiar. Coupled with her testimony that no client was accepted into the workshop program without such a report, and that the reports were routinely relied on by the workshop in making determinations regarding its clients, the evidence was sufficient to establish that the report, prepared at the time the examination was conducted, [*4]was made in the regular course of business and that it was the regular course of business te prepare such reports.

While it is true that Dr. Schechter may have been acting on behalf of defendant, his peer review reports may not be accepted into evidence through Ms. Waldenheimer. The court in Cratsley, supra made it clear that the admission of the report in that case was permissible under the facts presented in that case. The facts herein do not justify the same conclusion.

Additionally, as plaintiff points out, Dr. Schechter is not an employee of Progressive Insurance Company and was hired by a third party to prepare the reports. Further, Ms. Waldenheimer did not testify that she was familiar with Dr. Schecter’s business practices or exactly when Dr. Schecter prepared the reports.

The peer review reports are not accepted into evidence.

TESTIMONY OF DR. LOWN

The final issue before this court is the admissibility of Dr. Lown’s testimony notwithstanding that the peer reports are not in evidence. Dr. Lown was qualified as an expert, and presented his opinion testimony as an expert. Further, he was subject to full cross-examination.

“It is well settled that, to be admissible, opinion evidence must be based upon one of

the following: first, personal knowledge of the facts upon which the opinion rests: second,

where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and materials in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is of the kind accepted by the profession as a basis in forming an opinion and the out-of-court material is accompanied by evidence establishing its reliability.” (Wagman v Bradshaw at 292AD2d84, 86-87; Velen Medical Supply Inc. v. Travelers Ins. Co. 20 Misc 3d 781,783).

The identical issue was presented to the court in SK Medical Services, P.C. v. New York Central Mutual Fire Insurance Co., 12 Misc 3d 686. Similarly, in that no-fault case, the doctor who prepared the peer review report was not available to testify on the issue of medical necessity of services rendered to plaintiff’s assignor. Defendant presented another doctor to testify to the same facts and opinions that were set forth in the peer review doctor’s report. The court held, that there was no legitimate basis to preclude the doctor from testifying. “Each of defendant’s denials of claim, which asserted lack of medical necessity as a defense, was timely issued (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]), contained the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664), and, with [*5]the inclusion of the peer review report upon which it was based, promptly apprise[d] the claimant[s] with a high degree of specificity of the ground . . . on which [it was] predicated’ (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; see also, Nyack Hosp., 11 AD3d at 664; Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 153). Defendant therefore preserved its right to defend the claims at trial on the ground of lack of medical necessity for the reasons stated in the peer review reports.”SK Medical Services, P.C. v. New York Cent. Mut. Fire Ins. Co., supra.

The Appellate Term in both the First and Second Departments has also addressed the issue before the court. In Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A), an action to recover assigned, first party no-fault benefits, plaintiff moved to preclude defendant’s expert’s testimony on the ground that the expert did not personally undertake the peer review underlying defendant’s denial of the two claims at issue. The court held “This was error, since the expert 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” (see generally General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co. 14 Misc 3d 139(A)).

The same conclusion was reached in Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 24 Misc 3d 134(A); see also Dilon Medical Supply Corp. v. New York Cent. Mut. Ins. Co. 18 Misc 3d 128(A) where the Appellate Term, Second Department held that “Defendant, having preserved the defense of lack of medical necessity by timely denying the claims based upon peer reviews (see New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832), the issue before the court was whether the rationale for the conclusion in the peer review reports, upon which defendant’s denial of claim forms was based, was correct. Since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services 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. (see Spruce Med. Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143(A); Home Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A)). In the instant case, the peer review reports had been provided to plaintiff prior to trial. In fact, a review of the court file reveals a summary judgment motion that had been filed by plaintiff, although subsequently withdrawn, which included a copy of the peer review reports. Additionally, the peer review reports were attached to the CPLR 3101(d) Expert Disclosure notice. Plaintiff was well apprised of defendant’s position regarding lack of medical necessity. Dr. Lown’s testimony and opinion, based upon the findings in the peer review reports is admissible and accepted by this court.

Accordingly, upon due consideration of all the testimony and documentary evidence before the court, the court finds as follows:

The medical expert who testified in this matter is wholly credible, and the defendant [*6]has proven a prima facie case that the services provided to the assignor were not medically necessary herein. Plaintiff has failed to overcome this and has failed to put forth any expert testimony in rebuttal. (see Be Well Medical Supply, Inc. v. New York Central Mutual Fire Insurance Mutual Fire Insurance Co., 18 Misc 3d 139 (A))

Accordingly, judgment for the defendant. Case dismissed.

The foregoing shall constitute the Decision and Order of the Court.

Dated: March 15, 2010

KIM DOLLARD

Judge, Civil Court

ASN by__________ in Court

[*1]

Civil Court of the City of New York, Richmond County, March 5, 2010

APPEARANCES OF COUNSEL

Short & Billy, P.C., New York City, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**29 Misc 3d at 187} OPINION OF THE COURT

Katherine A. Levine, J.

During oral argument, the parties stipulated that the only issue before the court was whether 11 NYCRR 65-3.6 (b) requires the insurer to notify the injured party when it sends the follow-up verification request to the plaintiff provider. This court has already determined and reiterates herein that the injured party need not be notified. (See Cambridge Med., P.C. v Nationwide Prop. & Cas. Ins. Co., Civ Ct, Richmond County, Feb. 22, 2010, index No. 4561/08.)

Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.8, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim or it will be precluded from offering any defenses at trial. (Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889, 889-890 [2d Dept 2007]; see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997].) An insurer may toll the 30-day period by properly requesting additional verification within 15 days from the receipt of the no-fault insurance claim forms (NF-3 or claim form). (Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004]; 11 NYCRR 65-3.5 [b].) If the

“requested verification[ ] has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 [b] [emphasis added]; see Pine Hollow Med., P.C. v Global Liberty Ins. Co. of N.Y., 25 Misc 3d 244 [Civ Ct, Richmond County 2009].)

If the insurer does not receive the verification request after its follow-up request is sent, its time to pay or deny the claim is tolled pending submission of the requested information. “A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; Westchester County Med.{**29 Misc 3d at 188} Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999].) The insurer must pay or deny the claim within 30 days after it receives verification of all relevant information it requested pursuant to its original request for additional information. (11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1]; Westchester County Med. Ctr., supra.)

The clear language of 11 NYCRR 65-3.6 (b) does not even mention the term “applicant” within the context of its requirement that the insurer follow up with the party from whom the verification was requested. Rather, the term “applicant” is only utilized within the context of the further obligation of the insurer to inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.

Plaintiff interprets the term “applicant” of 11 NYCRR 65-3.6 (b) to mean that the insurer must inform the assignor and the assignor’s attorney of the reasons why the claim is delayed at the same time the defendant requests a follow-up verification from the provider, since the defendant failed to notify the assignor and the assignor’s attorney, hence negating its motion for summary judgment. The defendant counters that upon the assignment of no-fault [*2]benefits, the medical provider steps into the shoes of its assignor and assumes all of his rights and obligations, thereby becoming the applicant within the meaning of 11 NYCRR 65-3.6 (b). Moreover, defendant argues that the plaintiff provider’s attorney’s letter directing the defendant to send all correspondence, including payment and verification requests to the provider’s attorney’s office or to “face unnecessary litigation,” placed the defendant on notice that the provider’s law firm was acting as the agent for the bills at issue.

In East Acupuncture, P.C. v Allstate Ins. Co. (61 AD3d 202 [2d Dept 2009]), the Second Department recognized that the no-fault regulations do not specifically define the term “applicant,” which generically refers to both the provider/assignee and injured persons in various no-fault sections. In Doshi Diagnostic Imaging Servs. v State Farm Ins. Co. (16 Misc 3d 42 [App Term, 9th & 10th Jud Dists 2007]), the Appellate Term interpreted the term “applicant” as used in 11 NYCRR 65-3.6 (b), to apply to an MRI facility which was the medical services provider/assignee. Accordingly, the plain meaning of 11 NYCRR 65-3.6 (b) refers to any entity, whether an injured person or a provider/assignee, who submits a claim or applies to an insurance{**29 Misc 3d at 189} company for no-fault benefits. (East Acupuncture, P.C., 61 AD3d at 210, citing Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577 [1998].)

Furthermore, the objective behind the aforementioned law is the efficient and speedy processing of the no-fault claims. It therefore begs all reason to require an insurer to seek verification from a party who has divested his interest in no-fault benefits by assigning his rights to his provider. (Mia Acupuncture, P.C. v Mercury Ins. Co., 26 Misc 3d 39 [App Term, 2d, 11th & 13th Jud Dists 2009] [assignment of no-fault benefits divests eligible injured persons of their interest in no-fault benefits and makes them nonparties to actions commenced by their assignees].) The letter mailed by the plaintiff provider’s attorney to the defendant, directing that all correspondence, including payment and verification requests, be mailed to the plaintiff provider’s attorney clearly placed the defendant on notice that the provider’s law firm was acting as the agent for receipt of all correspondence concerning the bills at issue. (See Lenox Hill Radiology & MIA P.C. v Global Liberty Ins., 20 Misc 3d 434 [Civ Ct, NY County 2008].)

The court therefore deems the provider to be the applicant in the instant matter. Since the plaintiff did not provide the verification sought by the defendant, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run and the instant case is premature. (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [1999].)

Accordingly, the defendant’s motion is granted.

[*1]

Civil Court of the City of New York, Richmond County, February 5, 2010

APPEARANCES OF COUNSEL

Law Office of Robert P. Tusa, Brooklyn, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**27 Misc 3d at 699} OPINION OF THE COURT

Katherine A. Levine, J.

The novel issue presented is what type of proof a defendant insurance company must present at trial in order to prevail on its defense that the injury billed for by a plaintiff medical service provider was not medically ascertainable within a year. Both parties concede that in order for this defense to be even raised, the insurance company must issue a timely denial.

This action was commenced by plaintiff AP Orthopedics & Rehabilitation, P.C. (AP Orthopedics) to obtain payment from defendant Allstate Ins. Co. (defendant or Allstate) for medical services it provided to its assignor Nelson Hernandez (assignor) in the form of arthroscopic surgery of the shoulder on October 11, 2006. Allstate received the bill on June 14, 2007 and timely denied it within 30 days on the grounds that the injury to the assignor’s shoulder was not ascertainable within one year of the accident.

Defendant presented the testimony of its claims examiner Nicholas D’Ermilo (claims examiner or D’Ermilo) to prove its defense. D’Ermilo testified that he had been employed by [*2]Allstate for over 27 years in its no-fault department and was a unit supervisor in no-fault in 1999 when Allstate first received claims from the assignor. He testified, that within one year of the accident, which occurred on February 14, 1999, Allstate received a number of bills from various medical providers other than plaintiff regarding the assignor and denied many bills (defendant’s exhibits A, D). He testified that defendant also received claims in 1999 from Flatbush Diagnostic for physical therapy on, and treatment of the assignor’s ankle, which it timely paid. Defendant also paid claims in 1999 from Alpha Chiro for chiropractic treatment it provided to the assignor’s cervical and lumbar spine.

On June 14, 2007, defendant received a bill for arthroscopic surgery of the assignor’s shoulder which was performed on October 11, 2006. D’Ermilo’s review of the file revealed that, between 2000 through June 2007, Allstate did not receive any further bills from physicians or providers pertaining to the assignor.{**27 Misc 3d at 700} His review of the file also revealed that the assignor’s shoulder had never been treated within one year of the accident, that no X rays or MRIs or CAT scans were taken of the shoulder, and there had been no chiropractic care of the shoulder. Nor was there any indication that the assignor would require future treatment of the shoulder.

On cross-examination, the claims examiner admitted that his testimony was based upon his review of the electronic files and that Allstate had closed the physical file on the assignor back in December 1999. His testimony was based solely upon the denials that Allstate had issued and which had been stored in Allstate’s computer system; Allstate no longer had access to the assignor’s application for benefits (NF-2) back in 1999. He did not know whether any chiropractic or physical therapy notes had been submitted to Allstate back in 1999 or what the chiropractor’s diagnosis had been.

At the close of the defendant’s case, plaintiff argued that defendant had the burden of proving, by the preponderance of the evidence, that the 2007 claim for arthroscopic surgery was not related to the accident. Plaintiff contended that it was impossible for defendant to meet this burden as the claims examiner was not a doctor, and that pursuant to Mount Sinai Hosp. v Triboro Coach (263 AD2d 11 [2d Dept 1999]), the issue of lack of causation could only be established through the testimony of an expert witness. Defendant countered that since there was no dispute that between 2000 and 2007 the assignor had not presented any bills for treatment, and that the 1999 to 2000 bills were solely for the cervical/lumbar spine and the ankle, defendant had met the burden of proving that the injury to the assignor’s shoulder was not ascertainable within one year of the accident.

Insurance Law § 5102 (a) (1) provides, in pertinent part, that an insurer must pay all necessary medical expenses of its insured without limitation as to time “provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of the injury.” (Emphasis added.) The implementing regulations (11 NYCRR 65-1.1 [d] [Sec I, Medical Expense]) further provide that “medical expenses will not be subject to a time limitation, provided that, within one year after the date of the accident, it is ascertainable that further medical expenses may be [*3]sustained as a result of the injury.”

The scant case law interpreting this provision has held that “an injury is not ascertainable if no evidence of it is submitted{**27 Misc 3d at 701} to the insurer within a year of the accident.” (Stanavich v General Acc. Ins. Co. of Am., 229 AD2d 872, 873 [3d Dept 1996].) For example, if an insured submitted expenses for a cervical injury and then three years later submitted expenses for a knee injury, the latter would not be ascertainable within the meaning of section 5102. On the other hand, if the subsequent treatment was for cervical injury, “that injury would be ascertainable since expenses for treatment for that injury had been submitted to the insurer within the one-year period.” (229 AD3d at 873.)

In Hospital for Joint Diseases v Allstate Ins. Co. (21 AD3d 348 [2d Dept 2005]), the Appellate Division, Second Department, further spelled out how this defense could be raised, albeit through a motion for summary judgment. After a plaintiff made out a prima facie case, the defendant had to raise a triable issue of fact as to whether the medical expenses submitted beyond a year after the accident “were for injuries for which expenses for treatment had not been submitted to it within one year of [his] accident.” (Id. at 349, quoting Stanavich at 873; see 11 NYCRR former 65.15 [new regulation § 65-1.1].) The court also held that the defendant’s failure to assert this statutory-exclusion defense within 30 days of the receipt of the no-fault claim constituted a waiver. (Id., citing Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 286 [1997]; see also Matter of Fields [Allstate], AAA case No. 4120070557, Mar. 20, 2008 [failure to submit any evidence which indicated that the applicant would in fact require further treatment after a gap of almost five years]; Ops Gen Counsel NY Ins Dept No. 08-04-16 [Apr. 2008]; see also Barki v Employers Mut. Liab. Ins. Co. of Wis., 87 Misc 2d 912, 913 [Kingston City Ct 1976] [burden is upon plaintiff to prove the fact of “ascertainability” within one year of the accident].)

Thus, according to Stanavich and its progeny, it would appear that as long as the insurance company can prove that it received no claims for a shoulder injury within one year of the accident, it would prevail on its defense that a claim submitted for a shoulder injury some seven years after the accident was not ascertainable within one year of the accident. However, plaintiff contends that only a medical expert can establish that a claim for a new type of injury was not ascertainable, from the medical claims previously supplied, within a year of the date of the injury. Plaintiff is, in essence, contending that it is entitled to a presumption of medical necessity, regardless of the time frame in which it submits a claim, and that defendant can only rebut{**27 Misc 3d at 702} this presumption by establishing a lack of medical necessity through an expert.^[FN*] [*4]

Under the No-Fault Law, individuals are entitled to be compensated for “basic economic loss” resulting from injuries caused by the operation of a motor vehicle. (Insurance Law § 5101 et seq.) “Basic economic loss” is defined to include “[a]ll necessary expenses” incurred for medical services “all without limitation as to time, provided that within one year after the date of the accident . . . it is ascertainable that further expenses may be incurred as a result of the injury.” (Insurance Law § 5102 [a] [1]; 11 NYCRR 65-1.1; see Precision Diagnostic Imaging, P.C. v Travelers Ins. Co., 8 Misc 3d 435, 438 [Civ Ct, NY County 2005].)

A presumption of medical necessity attaches to a timely submitted no-fault claim. (All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U] [App Term, 9th & 10th Jud Dists 2006].) The burden then shifts to the defendant to rebut the presumption of medical necessity. (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d Dept 2004]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50 [App Term, 2d & 11th Jud Dists 2005]; A Plus Med., P.C. v Government Empls. Ins. Co., 21 Misc 3d 799 [Civ Ct, Kings County 2008].)

However, the term “provided that” constitutes a proviso to this section of the No-Fault Law. According to the general rules for statutory construction, the words “provided, however,” are deemed to denote the expression of a limitation or exception. (Matter of Livingston, 14 AD2d 264, 265 [1st Dept 1961].) “It is the province of a proviso to restrain the enacting clause, to take something back from the power first declared, to except something which would otherwise have been within it, or in some measure to modify the enacting clause.” (Id., quoting McKinney’s Cons Laws of NY, Book 1, Statutes § 212.) Thus, a proviso is ” ‘a condition, qualification, or limitation,’ a clause ‘to modify the operation of that part of the statute.’ ” (Ferrer v{**27 Misc 3d at 703} State of New York, 136 Misc 2d 218, 221 [Ct Cl 1987], quoting Webster’s Third New International Dictionary 1827 [unabridged 1993 ed]; Statutes § 212; see County of Erie v City of Buffalo, 4 NY2d 96, 103-104 [1958].)

The term “provided that within one year after the date of the accident . . . it is ascertainable that further expenses may be incurred as a result of the injury” thus serves as an exception or limitation to the presumption of medical necessity that generally attaches to claims that are submitted within one year of the accident. In other words, as long as the insurer can establish that it timely denied the claim and that no claims were presented to it within one year of the accident that were for injuries that were subsequently submitted outside of the one-year period, the insurer will prevail.

This construction comports both with explicit language of the proviso and with the legislative purpose behind the enactment of the No-Fault Law. The governing rule of statutory construction is that when the statutory “language is clear and unambiguous, it should be [*5]construed so as to give effect to the plain meaning of [the] words” used. (People ex rel. Harris v Sullivan, 74 NY2d 305, 309 [1989], citing Doctors Council v New York City Employees’ Retirement Sys., 71 NY2d 669, 675 [1988].) Furthermore, it is a general rule of construction that “omissions in a statute, where the act is clear and explicit in its language, cannot be supplied by construction.” (Eastern Paralyzed Veterans Assn. v Metropolitan Transp. Auth., 79 AD2d 516, 517 [1st Dept 1980]; Statutes §§ 75, 363.) Thus, a court cannot insert words into a statute that are not there and cannot read into a statute a provision which the Legislature did not see fit to enact. (People v Harris Corp., 123 Misc 2d 989, 995 [Clinton County Ct 1984].)

The proviso requires that within one year of the accident, it is ascertainable that further expenses may be incurred. Ascertainable has a clear and unambiguous meaning: “to find out or learn with certainty,” to discover. (Webster’s New Collegiate Dictionary.) The clause does not require that it be medically ascertainable that further expenses be incurred. Thus, if within a year it is not clear with certainty or discoverable that further expenses may be incurred, the insurer is under no obligation to pay for services rendered way after a year has expired. This determination can be made by a claims examiner who reviews records submitted or denials made on claims within the first year of the accident.

Moreover, this interpretation comports with the goal behind the No-Fault Law—to promote the “prompt payment of legitimate{**27 Misc 3d at 704} claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]), and the prompt resolution of injury claims. (Pommells v Perez, 4 NY3d 566 [2005]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 285 [1997] [“(t)he tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices”]; All Health Med. Care v Government Empls. Ins. Co., 2 Misc 3d 907, 910 [Civ Ct, Queens County 2004].) The regulations require insurers to act quickly in evaluating insureds’ claims and to avoid prejudicial delays. (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723, 725 [Civ Ct, Queens County 2004].) Accordingly, it is the court’s duty to interpret and apply the no-fault regulations in a consistent manner leading to the prompt payment of valid, documented claims. (Marigliano v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d 766, 774 [Civ Ct, NY County 2007].)

To hold otherwise, and require an insurance company to present a medical expert to validate a claims examiner’s testimony that the assignor failed to file any claims relating to the shoulder within a year of the accident, would run contra to the intent of the legislation and stymie the insurer’s expeditious processing of claims. It would force insurers to dwell on every claim they received to ascertain what claims for possible new injuries might be sent by the assignor more than a year after the assignor submitted his initial claims. The insurers would be foreclosed from closing any cases for fear that they might need a medical expert, some seven years after the accident, to pour over notes from doctors that were submitted within the initial year of the accident to opine as to whether the claim for new injuries was ascertainable within one year of the accident. [*6]

In light of the above, defendant has proved its defense. Since plaintiff offered no evidence to rebut defendant’s proof that the injury for the shoulder was not readily ascertainable within one year of the accident, judgment is rendered for defendant and the case is dismissed.

Footnotes

Footnote *: Plaintiff’s reliance on Mount Sinai Hosp. v Triboro Coach (263 AD2d 11 [1999]) is misplaced since Mount Sinai did not involve a determination as to whether a claim for a new injury, presented more than a year after the accident, was ascertainable, from the records presented, within a year. Rather, it involved the purely medical determination as to whether an injury was entirely preexisting (i.e., not covered under the insurance agreement) or was in whole or part caused by an insured accident, which would require a review of medical facts. (263 AD2d at 18.)

Civil Court of the City of New York, Kings County

034843/08

Sylvain Jakobavics, Esq.

Attorney for Plaintiff

2630 Ocean Avenue

Suite A-3

Brooklyn, NY 11229

718.332.0577

James Hiebler & Assoc.

Attorney for Defendant

20 Main Street

Hempstead, NY 11550

516.564.8000

Johnny L. Baynes, J.

Plaintiff in this application for first party no-fault benefits pursuant to Insurance Law § 5106[a], See also, Mary Immaculate Hospital. v. Allstate Ins. Co., 5 AD3d 742 [2004], moves for summary judgment in the amount of $729.71 for medical services rendered.

A party moving for summary judgment must show, by evidence in admissible form, that there are no material issues of fact in controversy and that they are entitled to judgment as a [*2]matter of law. Once that showing is made, the burden shifts to the opponent of the motion for summary judgment to come forward with proof in admissible form that there are material issues of fact in controversy which require a trial. Alvarez v. Prospect Hospital, 68 NY2d320 (1986); Winegrad v. New York University Medical Center, 64 NY2d 851(1985).

In the instant matter, plaintiff has shown, by admissible evidence, that it was assigned the instant claim and submitted same to defendant and that said claim was not paid within thirty days of its receipt by defendant. The Affidavit of Alla Noginsky, the owner of plaintiff facility, is detailed, clear and sets forth with specificity the basis for her knowledge of the procedures with respect to the instant claim, the manner of gathering and recording the billing information and the specifics as to the mailing of the bill and NF-3 claim form to the defendant.

Moreover, the Affidavit of Donna King, defendant’s employee, a no fault examiner, acknowledges that the NF-10 submitted with the defendant’s motion papers is correct. That NF-10 denial of claim form states clearly that the denial was not issued with respect to the bills, received “11/26/06-2/16/07”, until April 10, 2007, in clear violation of the requirement of Insurance Law § 5106[a] that the denial be issued within thirty (30) days of their receipt by defendant.

The NF-10 describes the basis for the denial as follows:

AS PER CARRIER’S INVESTIGATION A PORTION OF

YOUR BILL WILL NOT BE HONORED ACCORDING TO

THE CLAIMANT’S RECORDED STATEMENT THE

ACUPUNCTURE SESSIONS LASTED15 MINUTES.

CARRIER WAS BILLED AN ADDITIONAL 15 MINUTES

WITH NEEDLE REINSURCION [sic] WHICH WAS NOT

RENDERED. AS PER DENIAL OF 12/11/06 NO FURTHER

TREATMENT WILL BE HONORED. CONSULTANT

REPORT PREVIOUSLY SENT.

Defendant’s excuse for the delay in denying the claim is that there was a “pending fraud investigation”. There is no indication that any verification request was ever sent to plaintiff after defendant received the bills. Such a request would have served to toll the time to deny the claim. Moreover, the report of Special Investigations Unit [hereinafter “SIU”] Investigator, Charles Rorke, is unsworn and not in admissible form as required by CPLR § 3212. However, even if it were admissible, Mr. Rorke concluded that “there is no evidence that [the accident forming the basis of the claim] was caused or staged”.

Defendant correctly states that “a no fault insurer is not precluded from asserting a defense of fraud, despite the insurer’s untimely denial of the claim”. Central Gen. Hosp v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Matter of Progressive Northwestern Ins Co. V Van Dina, 282 Ad2d 269 [2d Dept 2001]. However, no such tolling provision applies with respect to provider fraud, which seemingly forms the basis for defendant’s denial. Fair Price Medical Supply Corp v. Travelers Indemnity Co., 10 NY3d 556, 860 NYS2d 471 [2008]. [*3]

Defendant urges that the Court find there is an issue of fact as to fraud and set the matter down for trial on that issue. The Court declines to do so. Even if there were admissible evidence of provider fraud, as set forth above, such evidence would not excuse defendant’s untimely denial of the within claims.

The Court finds that plaintiff has met its prima facie burden of proving mailing. Defendant is, however, unable to prove timely denial.

Wherefore, the Clerk of Court is directed to enter judgment in favor of plaintiff in the sum of $729.71, together with statutory costs, interest and attorneys fees.

The foregoing Constitutes the Decision and Order of the Court.

Dated: January 22, 2010

____________________________________

JOHNNY L. BAYNES, JCC