Civil Court, Kings County

047034/2004

Genine D. Edwards, J.

This is a bench trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by Elite Medical Care, P.C. (“plaintiff”) as assignee of Dan Teper (“assignor”) against Travelers Property and Casualty Insurance Company (“defendant”) pursuant to the New York Insurance Law and the No-Fault regulations. Plaintiff billed defendant a total of $5,155.47 for medical treatment rendered to its assignor. The treatment was provided from January 2002 through July 2002.

At the outset, defendant made a motion to dismiss plaintiff’s complaint because the NF-3 forms (proof of claim) were defective. Defendant contended that there was an issue regarding the relationship of a health service provider and the plaintiff. Defense counsel stated that according to New York State information, Ahmed Salem (a named health care provider on several of the NF-3 forms) is the owner of plaintiff, but Mr. Salem allegedly admitted under oath that he is not the owner. Defendant also argued that the NF-3 forms were not pleadings and could not be amended as of right. Plaintiff responded by indicating that the subject treatment was performed in 2002 predating the 2004 NF-3 form. This Court reserved its decision on defendant’s motion.

The applicable insurance regulations regarding direct payment of no-fault benefits establishes that “an insurer shall pay benefits upon assignment directly to providers of health care services ” 11 NYCRR 65-3.11(a). Pursuant to this regulation defendant asserted that the plaintiff is not a “provider”. In support of this contention defendant alleged that the NF-3 forms submitted by plaintiff did not identify the relationship between the plaintiff and the treating physicians.

Defendant also argued that there is contradictory evidence regarding Mr. Salem’s relationship with the plaintiff.

Defendant is correct. No-fault benefits must be paid directly to providers of services. A.B. Medical Services PLLC v. Liberty Mutual Insurance Company, 9 Misc 3d 36 (2nd Dept. 2005); Rockaway Boulevard Medical P.C. v. Progressive Insurance, 9 Misc 3d 52 (2nd Dept. 2005); A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C. v. Countrywide Insurance Company, 10 Misc 3d 249 (NY Civ. Ct Kings County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1061(A) (NY Civ. Ct Queens County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1069(A) (NY Civ Ct Queens County 2005). [*2]

If it is demonstrated that the billing entity or its employees are not the actual health care providers then they are not entitled to payment of no-fault benefits directly from the insurance company. A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C., supra; Rockaway Boulevard Medical P.C., supra; Health and Endurance Medical P.C. v. State Farm Mutual Automobile Ins., 2006 NY Slip Op. 51191(U) (App. Term 2nd & 11th Jud. Dists. 2006); Boai Zhong Yi Acupuncture Services v. Allstate Insurance Co., 2006 NY Slip Op. 51288(U) (App. Term 2nd & 11th Jud. Dists. 2006). Moreover, this defense cannot be waived and is not subject to preclusion for failure to timely deny. Rockaway Boulevard Medical P.C., supra; M.G.M. Psychiatry Care P.C. v. Utica Mutual Insurance Company, 2006 NY Slip Op. 51286(U) (App. Term 2nd & 11th Jud. Dists. 2006).

However, as in Multiquest PLLC, 10 Misc 3d 1061(A), supra, the defendant herein failed to provide any competent evidence that Mr. Salem was an independent contractor and not plaintiff’s employee. In addition, the defendant predicated its motion to dismiss upon the insufficiency of the NF-3 forms, without proving that it requested verification of the information provided therein. Rockaway Boulevard Medical P.C., supra. Hence, defendant’s motion must fail.

Turning to the trial, the plaintiff proffered the testimony of Viktoria Beylana, an employee of Maugust, Inc. Plaintiff hired Maugust Inc. to handle its billing and collection matters. Ms. Beylana testified that she received all of the medical paperwork from the plaintiff then prepared and mailed the bills. She also handled plaintiff’s incoming mail, denials and verification requests. Ms. Beylana responded to denials by submitting further information to the insurance company. Ms. Beylana identified nine bills and two letters to the defendant, which were marked into evidence. She had no knowledge as to the employment relationship of the health care providers and the plaintiff. Plaintiff’s counsel never questioned Ms. Beylana about an assignment of benefits form nor did Ms. Beylana identify same. Absolutely no evidence was presented regarding assignment of benefits. Upon the plaintiff resting, the defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case.

The insurance regulations prescribe when a health care provider may receive direct payment from an insurer. 11 NYCRR 65-3.11(b). Specifically, the provider must have a properly executed assignment. 11 NYCRR 65-3.11(b)(2)(i). It is axiomatic that such assignment must be proved before the provider is entitled to receive “assigned” no-fault benefits. A.B. Medical Services PLLC Daniel Kim’s Acupuncture P.C. D.A.V. Chiropractic P.C. v. State Farm Mutual Automobile Insurance Company, 4 Misc 3d 141(A) (App. Term 9th&10th Jud. Dists. 2004); Siegel, M.D. v. Progressive Casualty Ins. Co., 6 Misc 3d 888 (NY Civ. Ct Kings County 2004); Vista Surgical Supplies, Inc. v. Utica Mutual Insurance Co., 7 Misc 3d 833 (NY Civ. Ct Kings County 2005); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct Kings County 2004); Multiquest, PLLC, 10 Misc 3d 1069(A), supra. In the instant case, the plaintiff did not introduce evidence of a “properly executed assignment”. Thus, plaintiff failed to prove a prima facie case of entitlement to no-fault benefits.

This Court is aware of the many summary judgment decisions that have found that the defendant waives its right to raise the deficiencies in the assignment of benefits forms when the denial was untimely and/or did not allege such defects. Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564 (2nd Dept. 2005); Nyack Hospital v. Encompass Insurance Company, 23 AD3d 535 (2nd Dept. 2005); Chiropractic Neurodiagnostics, P.C. v. Travelers Indemnity Co., 11 Misc 3d 644 (NY Civ. Ct New York County 2006); SZ Medical P.C. v. Country -Wide Insurance Company, 2006 NY Slip Op. 26194 (App. Term 2nd & 11th Jud. Dists. 2006); Delta [*3]Diagnostic Radiology, P.C. v. Progressive Casualty Insurance Co., 11 Misc 3d 136(A) (App. Term 2nd & 11th Jud. Dists. 2006); Hospital for Joint Diseases v. Allstate Insurance Company, 21 AD3d 348 (2nd Dept. 2005); Multiquest PLLC, 10 Misc 3d 1061(A), supra. However, those decisions discuss deficiencies in the forms. This Court is faced with rendering a decision in a bench trial of a no-fault action where there is lack of proof of an assignment. To be certain, a broad interpretation of a “technical defect” in the claim forms as discussed in Chiropractic Neurodiagnostics, P.C., supra, does not include the scenario where, at trial, there is no proof of an assignment at all.

Certainly, this Court is not being called upon to assume or speculate that an assignment existed in this matter. Accordingly it is,

ORDERED that, judgment should be entered in favor of defendant and the complaint is dismissed.

This constitutes the decision and order of the Court.

Dated: July 13, 2006 __________________________________

Genine D. Edwards, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, June 21, 2006

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff. Melli, Guerin & Wall, P.C., New York City, for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

The above-captioned three cases were consolidated for trial before this court on June 5, [*2]2006. On that date, counsel for both parties stipulated to the facts set forth below, taking the joint position that what remained were issues of law. On June 12, 2006, counsel for both parties submitted briefs on the following issues: (1) May a physical therapist use a billing code found in the medicine fee schedule where such services do not appear in the physical medicine fee schedule? and (2) May a physical therapist bill for range of motion and muscle testing when an evaluation and management are billed for on the same day? After considering the parties’ stipulations and briefs, the court makes the following findings.

Findings of Fact

The three cases before this court on stipulated facts all involve claims for first-party no-fault benefits for physical therapy services rendered to plaintiff’s assignors. Defendant paid some claims and denied others, and plaintiff sued to recover the unpaid amounts. Except as noted, in all three cases the parties stipulated to plaintiff’s prima facie case and to defendant’s timely denial of the bills in question.

For the claims brought under index number 46885/05, the parties stipulated that as to the bills for assignor David Cardoza, plaintiff is entitled to judgment in the amount of $317.84 plus statutory interest, costs, and attorney’s fees. The balance of those bills, totaling $651.04, remains in dispute and were denied based on denial code 129: “This procedure is not listed in the NY state [sic] fee schedule for this provider specialty. If reported with an evaluation and management service, this procedure is inclusive.” As to the bills for assignor Ayodele Sunmola, the parties stipulated that plaintiff is entitled to judgment in the amount of $476.76 plus statutory interest, costs, and attorney’s fees. The balance of those bills, totaling $976.56, remains in dispute and were denied based on the same denial code, 129.

For the claims brought under index number 47943/05, the parties stipulated that as to the bills for assignor Avis Brown, plaintiff is entitled to judgment in the amount of $158.92, plus statutory interest, costs, and attorney’s fees. The balance of the charges, totaling $325.52 ($166.60 $158.92), were denied under denial code 129 and remain in dispute. As to the bills for assignor Tamara Reynolds, the parties stipulated that a partial payment of $45 was made, leaving a balance of $577.84. The latter charges were denied on the basis that range of motion and muscle testing cannot be billed separately from evaluation and management, and that portion of the bill remains in dispute. As to the bills for assignor Issa Vincent, the parties stipulated that plaintiff is entitled to judgment in the amount of $643.36 (portion of the bill for March 30, 2004 in the amount of $158.92 and the entire bill for April 21, 2004 for $484.44) plus statutory interest, costs and attorney’s fees. The balance of $325.52 was denied based upon denial code 129 and remains in dispute.

Finally, for the claims brought under index number 47945/05, the parties stipulated that as to the bills for assignor Orlando Simpson, plaintiff is entitled to judgment in the amount of $158.92, plus statutory interest, costs, and attorney’s fees. The balance of $325.52 was denied based upon denial code 129 and remains in dispute. As to the bill for assignor Pierre Durisile, defendant agreed to furnish plaintiff’s counsel with proof that the claimed amount of $495 was paid, and that plaintiff is entitled to judgment in full but will not collect on that bill if defendant produces a cancelled check within 45 days of the date of the stipulation. As to the bills for assignor Rhonda Moore, the parties stipulated that a partial payment of $83.32 was made, leaving [*3]a balance of $539.52. Defendant denied those charges on the basis that range of motion and muscle testing cannot be billed separately from evaluation and management, and that portion of the bill remains in dispute.

Conclusions of Law

The workers’ compensation fee schedules were adopted by the Superintendent of Insurance for use by those making and processing claims for no-fault benefits. These are contained in a volume entitled Official New York Workers’ Compensation Medical Fee Schedule. The medical fee schedule consists of seven sections: evaluation and management, anesthesia, surgery, radiology, pathology and laboratory, medicine, and physical medicine. In addition to the medical fee schedule, the book contains separate schedules appended for psychology, chiropractic, and podiatry. Each service or procedure has a CPT (current procedural terminology) code, and the codes in each section fall in consecutive numerical ranges. At the center of this dispute are the physical medicine and medicine sections of the medical fee schedule.

The workers’ compensation regulations state that the “medical fee schedule is applicable to medical, physical therapy and occupational therapy services . . . Sections containing rates for medicine, physical medicine, anesthesia, surgery, radiology, pathology and laboratory, and evaluation and management services are included.” (12 NYCRR 329.1.) In other words, the entire volume is open to use by various medical professionals (including, for example, physician assistants and nurse practitioners), as well as physical and occupational therapists. Physical therapists are not limited to any one section. The introduction to the medical fee schedule volume explains that “[t]he schedule is divided into sections for structural purposes only. Physicians are to use the sections that contain the procedures they perform, or the services they render.” (See Official New York Workers’ Compensation Medical Fee Schedule, Introduction and General Guidelines, at 1.) Clearly, the division of medical services into different sections is not to establish who can bill for a particular service but to organize those services in a logical format so that providers can easily locate the information they need.

With this in mind, the court turns to the merits of defendant’s denials. Since the parties stipulated to plaintiff’s prima facie case, it was defendant’s burden to come forward with “competent evidentiary proof” supporting its fee schedule defenses. (See Continental Med., P.C. v Travelers Indem. Co., 11 Misc 3d 145[A], 2006 NY Slip Op 50841[U] [App Term, 1st Dept 2006]; see also Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U], *2 [App Term, 2d & 11th Jud Dists 2004]; Power Acupuncture P.C. v State Farm Mut. Auto. Ins. Co., 11 Misc 3d 1065[A], 2006 NY Slip Op 50393[U], *4-5 [Civ Ct, Kings County 2006].) This defendant has not done.

The court first addresses the denials that were based on the first sentence of denial code 129, to wit, “This procedure is not listed in the NY state fee schedule for this provider specialty.” On its face, this denial makes no sense: Unlike for chiropractors, podiatrists, and psychologists, there is no fee schedule specifically designated for physical therapists. Just because most of the services physical therapists provide are included in the physical medicine section does not make that section a physical therapy fee schedule.

Even if this court were to make the leap defendant does and assume that the physical medicine section is the equivalent of a physical therapist’s fee schedule, defendant has still failed [*4]to establish that its defense has any merit. Defendant argues that it was improper for plaintiff to use CPT codes contained in the medicine section of the fee schedule. This argument is based on the assumption that the medicine section is for use by physicians only. As explained above, however, the medical fee schedule—with all seven of its component sections—applies to a host of practitioners, including physical therapists. There is simply no bar to a physical therapist using a code from the medicine section where the services performed are found there instead of in the physical medicine section. That is precisely what happened here.

There are no CPT codes in the physical medicine section directly corresponding to the range of motion and muscle testing plaintiff performed. In contrast, there are CPT codes for those services in the medicine section. Specifically, code 95831 is for “[m]uscle testing, manual (separate procedure); extremity (excluding hand) or trunk, with report” (Official New York Workers’ Compensation Medical Fee Schedule at 299) while code 95851 is for “[r]ange of motion measurements and report (separate procedure); each extremity (excluding hand) or each trunk section (spine)” (at 299). Plaintiff opted to use those codes;^[FN1] defendant argues that plaintiff should have stayed within the physical medicine section and used one of two codes contained therein: code 97750 (“Physical performance test or measurement [e.g., musculoskeletal, functional capacity], with written report, each 15 minutes” [at 311]), or code 97799 (“Unlisted physical medicine/rehabilitation service or procedure,” with a relative value to be established “By Report” submitted by the provider [at 311]). Certainly, plaintiff could have used one of these codes. But since the exact services rendered by plaintiff appear in the medicine section, plaintiff chose to use those codes instead.

Defendant’s counsel has identified no law—and this court has found none—holding that a physical therapist cannot bill under the medicine section of the medical fee schedule. This court’s plain reading of the Official New York Workers’ Compensation Medical Fee Schedule and the relevant regulations lead it to conclude that a physical therapist is permitted to use CPT codes found in any section, including the medicine section. In Introna v Allstate Ins. Co. (890 F Supp 161, 165-166 [ED NY 1995], affd 99 F3d 402 [1995]), discussed by both parties herein, the court permitted the plaintiff, a chiropractor, to use codes outside of the chiropractic fee schedule—even though there exists a separate fee schedule designated exclusively for providers of chiropractic. The court need not go that far here, as physical therapists are included within the purview of the medical fee schedule which includes both the medicine and physical medicine sections. Therefore, physical therapists may use a code from the medicine [*5]section to bill for a service not specifically listed in the physical medicine section.

The court further notes that defendant’s defense that plaintiff’s use of codes was improper is belied by the fact that defendant paid for an office visit (Oct. 2, 2002) for assignor Tamara Reynolds which was billed under CPT code 99211—a code which does not appear in the physical medicine section but rather in the evaluation and management section.^[FN2] Defendant offered no explanation as to why it is willing sometimes to accept and pay a physical therapist using a code outside the physical medicine section and at other times objects to the code and rejects the bills.

The court now addresses the other charges in dispute, namely, the range of motion and muscle testing for which payment was denied on the basis that such testing cannot be billed separately from evaluation and management.^[FN3] Having carefully considered the parties’ briefs, the court determines that this defense raises an issue of fact rather than an issue of law, and defendant has not set forth any facts in admissible form to support its argument. Defendant’s counsel is not competent to opine on whether range of motion and muscle testing is generally included in an office evaluation by a physical therapist. Defendant opted not to commission a peer review and move thereupon for summary judgment, or to proceed to a live trial at which it could present witnesses and evidence. Instead, counsel proceeded only on briefs. In the absence of any testimony by a competent medical professional, this court cannot determine whether plaintiff’s charges were medically appropriate. Since it was defendant’s burden to make out its defense, the court finds that defendant has failed to carry its burden.

The court notes that even if defendant were correct that the defense turns on a question of law, defendant has not shown any basis in law to support its defense. While defendant points out that certain fees for chiropractic treatment are included in evaluation and management sessions under the chiropractic fee schedule, it identifies no such rule in the medical fee schedule which is at issue here.

For the foregoing reasons, the court finds that plaintiff is entitled to judgment for the disputed amounts. Accordingly, the court awards judgment as follows:

Under Index Number 46885/05:

a)

For assignor David Cardoza, $968.88 ($317.84 stipulated amount plus $651.04 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Ayodele Sunmola, $1,453.32 ($476.76 stipulated amount plus $976.56 awarded herein) plus statutory interest, costs, and attorney’s fees.

Under Index Number 47943/05:

a)

For assignor Avis Brown, $484.44 ($158.92 stipulated amount plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Tamara Reynolds, $577.84 plus statutory interest, costs, and attorney’s fees.

c)

For assignor Issa Vincent, $968.88 ($158.92 and $484.44 stipulated amounts plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

Under Index Number 47945/05:

a)

For assignor Orlando Simpson, $484.44 ($158.92 stipulated amount plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Pierre Durisile, $495 plus statutory interest, costs, and attorney’s fees.

c)

For assignor Rhonda Moore, $539.52 plus statutory interest, costs, and attorney’s fees.

Accordingly, plaintiff is awarded judgment against defendant in the amounts set forth above.

Footnotes

Footnote 1: Plaintiff did not, however, bill at the physician’s rates for its services. Rather, plaintiff asserts that it multiplied the “relative value” for the services as listed on the medicine fee schedule by the conversion factor for physical therapists. (See Introna v Allstate Ins. Co., 890 F Supp 161, 164 [ED NY 1995], affd 99 F3d 402 [1995] [“Conversion factors are provider- and procedure-specific; that is, they apply only to the category of health care provider and type of treatment for which they were established”].) Thus, the charges assessed by plaintiff were lower than what a physician would have charged for the same services. Clearly, plaintiff was not trying to obtain a windfall by billing under the medicine section; it was not billing as a doctor; it was just using the code. In any event, defendant does not object to the amounts charged, only to the codes used.

Footnote 2: In its brief, plaintiff contends that defendant also paid for an office visit under code 99211 for assignor Rhonda Moore. However, neither defendant’s denials nor the parties’ stipulated facts supports this contention.

Footnote 3: It appears that these denials are based upon the second sentence of code 129: “If reported with an evaluation and management service, this procedure is inclusive.”

Civil Court of the City of New York, Kings County

46907/2005

Sylvia G. Ash, J.

Plaintiff, a health care provider, rendered medical services to the assignors in connection with injuries sustained as a result of separate automobile accidents that occurred in September of 2003. At the time of the alleged accidents, Defendant was the first-party no-fault carrier responsible for payment of any claims properly submitted. Plaintiff brought this action to recover first-party no-fault benefits for the medical services rendered to its assignors. A trial on this matter was conducted jointly.^[FN1]. The trial commenced on February 6, 2006 and was heard on consecutive days until its conclusion on February 9, 2006. At issue as to assignor Reggie Delmar, is $484.44. At issue as to assignor Mario Rodriguez is $968.88, for a total of $1,453.32. Based on the credible evidence adduced at trial this Court makes the following findings of fact and conclusions of law.

In accordance with the applicable no-fault rules, Plaintiff submitted the required no-fault claim forms indicating the fact and amount of the loss sustained for each of its assignors, and Defendant timely denied said claims based on the fact that the alleged automobile accidents were not covered.^[FN2]. For each of its assignors Plaintiff submitted claims for the following services, Inclinometry Range of Motion procedures (code 95851), and Manual Muscle Testing procedures (code 95831). Defendant denied said claims. As a basis for its denial of each of these claims Defendant asserted two reasons. First, for the Inclinometry Range of motion procedures, Defendant contends that the “procedure is not listed in the NY state fee schedule for this provider specialty. If reported with an evaluation and management service, this procedure is [*2]inclusive.” Second, for the Manual Muscle Testing procedures, Defendant contends the “procedures referenced by the provider’s office were used more than what is normally expected per visit.” (See Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

In light of the parties stipulating to Plaintiff’s prima facie case, and Defendant’s timely denial of the claims submitted, the only remaining issue for this Court to determine is whether the Defendant met its burden by demonstrating that Plaintiff was not entitled to recover for the claims submitted based on the fact that the procedures were not listed in the fee schedule for the provider, and based on the fact that the procedures were used more than what is expected per visit.

To 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 in the use or operation of a motor vehicle. The legislature controlled costs by incorporating into the no-fault scheme the fee schedules established by the Worker’s Compensation Board for industrial accidents. Worker’s Compensation fee schedules were divided into various sections, including Medicine, Physical Therapy, Anesthesia, Surgery, Radiology, and Pathology in the medical fee schedule. 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”). Each procedure listed in the fee schedule is assigned a number representing its “unit value.” To determine the maximum fee a provider may charge for any given procedure, the unit value assigned to that procedure is multiplied by a dollar amount conversion factor. Conversion factors are provider specific. Hence, the conversion factors apply only t the category of health care provider and type of treatment for which they were established (see Introna v. Allstate Insurance Co., 890 F.Supp.161).

The Worker’s Compensation fee schedules are adjusted by the superintendent of the Insurance Department (see Insurance Law §5108). One adjustment made by the superintendent is for health services not set out in the schedules. When a charge for a reimbursable service has not been scheduled by the superintendent, although a fee schedule has been set for the profession of the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule subject to review by the insurer (see 11 NYCRR 68.6(a); Studin v. Allstate Insurance Co, 152 Misc 2d 221).

During trial in the instant matter, Plaintiff submitted bills indicating that, Inclinometry Range of Motion procedures (CPT code 95851), and Manual Muscle Testing procedures (CPT code 95831), were performed on the assignors. In its post-trial memorandum of law on this issue, Plaintiff demonstrated by using a chart, the precise method for calculating the charges for the expenses. Specifically, Plaintiff indicated that it did in fact locate the procedures that were performed on the assignors within the Worker’s Compensation schedule, under CPT codes, 95851 and 95831. Plaintiff using the “comparable procedures” method then billed the insurer at a rate comparable for a physical therapists rate for providing these services. Defendant failed to [*3]introduce any evidence on this issue at trial or in its post-trial memorandum of law to establish that the services rendered were in fact not scheduled services, or as the defendant stated in its denial “…not listed in the NY state fee schedule for this provider specialty.”

In addition to reviewing the record and the post-trial memoranda of the parties, the Court conducted an investigation of the fee schedule. Both of the above-referenced procedures listed in the bills submitted by the Plaintiff in this case were in fact listed in the schedule (see Worker’s Compensation Board Fee Schedule of medicine Fees, Page 32). Pursuant to the chart utilized by Plaintiff in its post-trial memorandum of law, the court is satisfied that Plaintiff billed the insurer at the appropriate physical therapist rate of the services rendered, and as such, is entitled to recovery for the expenses. Defendant offered no proof to the contrary, and as such, has failed to maintain this defense.

The Court will now address Defendant’s contention that the “procedures referenced by the provider’s office were used more than what is normally expected per visit,” (see Joint Exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively). It is the Court’s position that this defense amounts to one of lack of medical necessity. It is well settled that where Defendant’s timely denial raises the lack of medical necessity defense but fails to support same with an Independent Medical exam (hereinafter “IME”), a peer review, an IME report, or other supporting documentation that is factually sufficient and non-conclusory, this defense will fail )Amaze Med. Supply Inc. v. Allstate Ins. Co., 3 Misc 3d 43 [App Term 2d & 11th Jud Dists. 2004]. As such, Defendant failed to preserve this defense for trial. Assuming arguendo Defendant had preserved this defense for trial, Defendant failed to call any expert witnesses at trial to testify regarding this issue. Nor did Defendant attempt to introduce any documents into evidence regarding this issue. As such, Defendant’s argument fails in its entirety as there is absolutely no basis in the record upon which the Court could make the determination that the procedures referenced by the Plaintiff in its claim forms were “..more than what is normally expected per visit” (see Joint exhibits 1 and 2 in evidence, Defendant’s denial of claim for each assignor respectively).

Based on the foregoing, judgment is to be entered in favor of the Plaintiff in the amount of $1,453.32, plus statutory interest and reasonable attorney fees.

This constitutes the decision and order of this Court.

DATED:Brooklyn, NY

May 30, 2006

_____________________________

SYLVIA G. ASH

JUDGE, CIVIL COURT

Footnotes

Footnote 1: This matter was tried jointly with index numbers 46906/05, 46927/05, 46933/05, and 48354/05.

Footnote 2:The parties stipulated on the record to Plaintiff’s prima facie case and that Defendant issued timely denials. [*4]

Civil Court of the City of New York, Kings County

96268 KCV 2004

Delores J. Thomas, J.

In the instant action plaintiff, a medical supplies provider, sues to recover $2,882.85 for medical supplies provided to its assignor Barry Galleh for injuries stemming from an auto accident on March 3, 2004.

At trial, the parties stipulated to plaintiff’s prima facie case and defendant’s timely denial of claim. The parties further agreed that the only issue for trial would be defendant’s defense of lack of medical necessity. The parties also stipulated the following documents into evidence:

Plaintiff’s Exhibits:

1A – Invoice dated May 20, 2002 for $1,532.85

1B – Invoice dated April 10, 2004 for $ 1,350.00

2A – Prescription from Oleg Barshay, D.C. dated March 5, 2004

2B – Prescription from Oleg Barshay D.C. dated April 19, 2004

3 – April 13, 2004 chiropractic report from Oleg Barshay for Barry Galleh

Defendant’s Exhibits:

A1 – NF10 dated May 10, 2004

A2 – NF10 dated June 1, 2004

B1 – Peer Review dated May 5, 2004

B2 – Peer Review dated May 28, 2004

The supplies at issue were: cervical pillow, Philadelphia tracheotomy cervical collar, TLSO Dorso-lumbar surgical supply, lumbar cushion, bed board, egg crate mattress, thermophone, EMS Unit, EMS accessory Kit, EMS belt, massage and an infra-red heating lamp (Exhibit 1A & 1B).

At trial, defendant called Ronald A. Csillag, a doctor of chiropractic [“D.C.”] the person who performed the per review. Dr. Csillag was qualified without objection as an expert in the practice of chiropractics. Dr. Csillag testified that the cervical pillow prescribed for the assignor is usually prescribed for injuries which are chronic in nature. He described the assignor’s injury as being acute and opined that the pillow was not needed and that the patient could have simply been instructed to roll up a towel and use it with the same benefit. In the peer review report, Dr. Csillag indicated that the effectiveness of cervical pillows in whiplash associated disorders is inconclusive and cites as authority several publications, (i.e. Whiplash Associated Disorders, [*2]Spine 1995, 20 (85); 25-73s Clinical Evidence BMJ Publishing Group, page 232-2003).

With regards to the lumbosacral belt and cervical collar, Dr. Csillag testified and wrote in the peer review report that these supplies were unnecessary because these devices work through immobilization and this type of support is not consistent with the trend in the management of lumbar sprains. He also wrote and testified that current scientific research documents the importance of early range of motion as mobility enhances recovery (see Defendant’s Exhibit B-1, pg. 4). Dr. Csillag cited the text, Physical Medicine and Rehabilitation: State of the Art Reviews: Vol. 9(3) October 1995 as supporting authority(Id.). Dr. Csillag further testified that many of the medical supplies were unnecessary because there was no indication from the treating doctor how to use them or to what areas to apply the device. He further opined that the patient was undergoing physical therapy, chiropractic care, acupuncture, message therapy and adjunctive therapy and that the massager, infrared heating lamps, EMS Unit and associated EMS equipment represented a duplication of services.

Plaintiff did not call a witness but as indicated the report of Dr. Barshay was admitted into evidence as Plaintiff Exhibit 3. The Initial Diagnosis portion of the report indicates:

1. Traumatic cervical sprain/strain with cervical myofascitis and possible radicular involvement, complicated by C4-C5 and C5-C6 bulging disc (MRI finding).

2. Traumatic Lumbar sprain/strain with intermittent radiating sciatic neuralgia, concomitant with Lumbar myofascitis (MRI finding pending).

3. Post traumatic cervicogenic headaches.

4. Head and right knee contusion.

5. Multiple intersegmental functional dysarthroses of the cervical thoracic and lumbar vertebral motor units.

The report also list a patient management plan, to wit: “The treatment in this case was directed toward conservative chiropractic management. This consisted of specific vertebral adjustments to correct functional dysarthroses and adjunctive therapy in the form of manual intersegmental traction. To enhance recovery, manual massage therapy and acupuncture by a licensed therapist was incorporated into the treatment plan. The frequency of treatments is 2-3 times a week. The patient was also advised to wear an orthopedic lumbosacral support and cervical collar to minimize pain and prevent a re-injury. A TENS unit was given to the patient and after a two week trial was proven to be effective for pain management.”

Since the only issue for trial was whether the supplies provided to the assignor were medically necessary, defendant bore the burden of proof on this issue (A.R. Medical Art. P.C. v. State Farm Mut. Auto Ins. Co., 11 Misc 3d 1057 [A][Civ. Ct., Kings Co. 2006]; CityWide Social Work & Psychological Servs. v. Travelers Indem. Co. 3 Misc 3d 608 [Civ. Ct., Kings Co., 2004]; Elm Medical P.C. v. American Home Assurance Co., 2003 NY Slip Op. 51357 [U], 2003 WL 22471156 [Civ. Ct., Kings Co., 2003]; Fifth Ave. Pain Control Ctr. v. Allstate Ins. Co., 196 Misc 2d 801 [Civ. Ct., Queens Co., 2003]).

A no-fault insurer defending a denial of first party benefits on the ground that the billed for services or equipment/supplies were not “medically necessary” must show that the services or supplies/equipment provided were inconsistent with generally accepted medical/professional practices. The opinion of the insurer’s expert, standing alone, is insufficient to carry the insurer’s burden of proving that the services or supplies/equipment were not “medically necessary”

[*3](CityWide Social Work & Psychological Servs. v. Travelers Indem. Co. , supra at 609; Ultimate Med. Supplies v. Lancer Ins. Co., 7 Misc 3d 1002 [A] [Civ. Ct., Kings. Co. 2004]).

In United Medical Supplies v. Lancer Ins. Co., supra, plaintiff had supplied its assignor with certain medical equipment (i.e. TENS Unit, LSO, etc) pursuant to a prescription. Defendant denied payment based upon a peer review. At trial, the peer review doctor, Dr. Moshkovski, testified that based upon her experience none of the prescribed durable medical equipment was necessary. She cited no authority other than her own experience. Judge Alice Fisher Rubin found it clear that Dr. Moshkovski admitted to never having prescribed any of the subject medical equipment with the sole exception of ice packs, on no basis other than her own opinion. Thus, the court held that such an opinion was biased against the prescribing doctor so as to make the peer review a nullity and not credible.

The instant case is at opposite with the facts of United Medical Supplies v. Lancer Ins. Co. supra. Here Dr. Csillag opinion as to whether the various medical supplies were necessary was based not only upon his experience but based upon medical authority cited in the peer review reports (Defendant’s Exhibit B, page 4). Dr. Csillag wrote in his report and testified that the type of lumbar support prescribed was no longer used to manage lumar sprains because it immobilized that portion of the body and the current trend in treatment was to allow mobility because mobilization fostered recovery. Dr. Csillag also testified that the massager, infrared heating lamp, EMS unit and associated EMS equipment was a duplication of services available and provided through the physical therapy, chiropractic care, acupuncture, message therapy and adjunctive therapy that the assignor was to have begun as of the April 13, 2004 report.

Considering the testimony of Dr. Csillag at trial coupled with the contents of the peer review reports of May 5, 2004 (Defendant’s Exhibit B1) and May 28, 2004 (Defendant’s Exhibit B2) the Court finds defendant has proven its defense that the supplies were not medically necessary. The burden now shifts to plaintiff to refute defendant’s evidence.

As previously indicated, plaintiff did not call a doctor but relied upon its cross examination of Dr. Csillag and the report of Dr. Barshay. It is undisputed that a chiropractor may prescribe the supplies which are the basis of this litigation (ABC Med. Mgt. v, GEICO Gen. Ins. Co., 3 Misc 3d 181 [Civ. Ct., Queens Co., 2003]) and such may be justified in light of the patient’s overall condition (Id); herein, however, there is no evidence in the record to refute defendant’s expert witness’ testimony (cf A.R. Med. v. State Farm, supra) and to explain why the medical supplies were necessary.

In A.R. Med. v. State Farm, supra plaintiff also did not call the treating doctor; however, in that case the treating doctor had issued a Letter of Medical Necessity, which was stipulated into evidence, in which he clearly set forth the reasoning and purpose for the conduction of the NCV/EMG test that were at issue.

The April 13, 2004 report from Dr. Barshay merely sets forth what the finding of the patient’s examination were, the diagnosis, a management(treatment) plan and a prognosis. This Court has no way of knowing why these supplies were prescribed. Viewing Dr. Barshay’s report (Plaintiff’s Exhibit No. 3), the only portion that may be read as giving any indication of why the supplies were prescribed appears in the Patient Management section where Dr. Barshay indicated, “The patient was also advised to wear an orthopedic lumbosacral support and cervical collar to minimize pain and prevent a re-injury.” In light of the reasoning set forth in the peer [*4]review and the testimony at trial, plaintiff evidence in rebuttal is insufficient to prove medical necessity for the supplies.

Accordingly, judgment for defendant, the summons and complaint are dismissed.

Defendant shall serve a copy of this decision/order with Notice of Entry upon the appropriate clerk and the plaintiff within 15 days after receipt.

This constitutes the decision and order of the Court.

DATED: May 16, 2006

Brooklyn, New York

DELORES J. THOMAS

Judge Civil Court

Civil Court of the City of New York, Kings County

KCV29614/2005

Plaintiff by Baker, Sanders, Barshay, Grosssman, Fass Muhlstock & Newwirth

Defendant by Nicolini, Paradise, Ferretti & Sabella

Richard Velasquez, J.

In this action, plaintiff, Universal Open MRI of the Bronx, PC, seeks to recover first-party no-fault benefits in the amount of $1,842.26 from defendant State Farm Mutual Auto Ins. for health care services rendered to its assignor(s) who were allegedly injured in an automobile accident. Defendant denied plaintiff’s claims on the basis that the alleged injuries “do not arise out of an insured incident.” The trial was held before this Court on February 14, 2006. At the start of the trial, the parties stipulated to plaintiff’s prima facie case and defendant’s denial based on the ground of lack of coverage due to no true accident. Defendant State Farm presented one witness, State Farm Special Investigative Unit (SIU) investigator Don Willsey. Plaintiff did not present any witnesses.

The trial then proceeded on defendant’s defense of lack of coverage. SIU investigator Willsey testified that after receiving the file on Mr. Julio Garcia, assignor herein, he performed a preliminary investigation of the claim and tried to contact the parties involved in the alleged accident, including the insured in this case and the assignor, Mr. Garcia, with no success. In addition, he testified that as part of his preliminary investigation, he reviewed the police accident report and intended to interview the police officer who arrived at the scene, but did not as someone from his office had previously interviewed said officer. Mr. Willsey also testified that as part of his investigation, he obtained information from the National Insurance Crime Bureau (NICB) which serves as a clearing house for data from insurance companies concerning claims made against insurance policies, and State Farm’s Frequency Tracking System, an internal database of all claims made against State Farm policies. As for State Farm’s Frequency Tracking System, he testified that data from prior losses may be retrieved using an individual’s name, social security number, address, date of birth, and vehicle identification number (VIN), to determine any connection between the parties involved in the current claim with prior claims against State Farm. His research concluded that: “the owner of claimant vehicle had a prior claim history; owner and driver of the vehicle were not insured.”

Plaintiff objected to defendant offering this information into evidence and, after voir dire of Mr. Willsey, moved to preclude this testimony on several grounds including [*2]hearsay. This Court ruled in plaintiff’s favor on the hearsay objection to the admittance into evidence of Frequency Tracking System results. Mr. Willsey further testified that he received the file for investigation “shortly” after the alleged accident, sometime in September or October of 2002. When cross-examined about the gap in time (approximately four months) between the incident in question and his receipt of the Garcia file, he stated that a prior investigator had been assigned to the case.

Mr. Willsey also testified that he attempted to interview the parties involved in the incident, but was unable to do so. Having had no success in interviewing the parties, Mr. Willsey recommended to his attorney that Examinations Under Oath (EUO) be scheduled for the parties involved in the incident. According to Mr. Willsey, none of the parties involved in the alleged accident appeared for EUO’s.

Based on all of these factors together with the fact that the insured’s vehicle was not at the accident scene at the time the police arrived, Mr. Willsey determined that the accident was staged and therefore it was not a covered accident. Thus, he recommended the subject claim be denied.

DISCUSSION

Generally, an insured seeking to recover for a loss under an insurance policy has the burden of proving that a loss occurred and also that the loss was a covered event within the terms of the policy. A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Co., 7 Misc 3d 822, 795 NYS2d 843 [Civ. Ct. Kings County 2005] citing Gongolewski v. Travelers Ins. Co., 252 AD2d 569, 675 NYS2d 299 [2d Dept. 1998]. Whatever the risk or loss covered, it has long been the insured’s burden to prove coverage under the policy. A.B. Medical Services, id. at 825. In an action for first-party no-fault benefits, an insured’s proof is relatively simple a properly completed claim by the provider of medical services or supplies makes out a prima facie showing of coverage. Amaze Medical Supply Inc., v. Eagle Ins. Co., 2 Misc 3d 128 (A), 754 NYS2d 918, 2003 NY Slip. Op. 51701[U][App. Term, 2d and 11th Jud. Dists.]. As in the related area of “medical necessity”, the plaintiff’s prima facie showing establishes a “presumption of coverage”. A.B. Medical Services, id at 825. Once the plaintiff makes a prima facie showing, the burden of explanation or of “going forward with the case” falls upon the defendant. Mount Sinai Hosp. V. Triboro, 263 AD2d 11, 699 NYS2d 77 [2d Dept., 1999].

No-fault insurance policies cover only vehicular accidents. A deliberate collision is not a covered accident. State Farm Mutual Automobile Ins. Co. V. Laguerre, 305 AD2nd490, 759 NYS2nd 531 [2nd Dept.2003]; Allstate Insurance Co.v. Massre, 14 AD3rd 610, 789 NYS2d 206 [2nd Dept. 2005]. When a collision is an intentional act, not an accident, there is no coverage “regardless of whether the intentional collision was motivated by fraud or malice.” Government Employees Ins. Co. v. Shaulskaya, 302 AD2nd 522, 523, 756 NYS2nd 79 [2nd Dept. 2003].

Standard of Proof in Summary Judgment Context

The law is well settled in a no-fault summary judgment context that the insurer need only demonstrate to the court that it had a “founded belief” that the alleged accident was intentionally caused in order to survive a summary judgment motion by plaintiff-provider. Amaze Medical Supply Inc. V. Lumbermens Mutual Cas. Co., 10 Misc 3d 127(A), 809 NYS2d 480 (Table), 2005 WL 3115289 citing Central Gen. Hosp. V. Chubb Group of Ins. Cos., 90 NYS2d 195, 199 (1997). However, defendant-insurer’s founded belief is usually [*3]not enough to obtain judgment on its own. To win on its summary judgment motion, defendant must make a prima facie “lack of coverage” showing and if plaintiff does not come forward to rebut defendant-insurer wins. Central Gen. Hosp., id at 199; A.B.Medical Services, PLLC, supra at 825. In addition, this Court recognizes that for the purposes of summary judgment motions, parties are permitted, within limits, to rely on otherwise inadmissible information. Zuilkowski v. Sentry Insurance A Mutual Company, 114 AD2d 453, 494 NYS2d 363 [1985]. However, what is admissible at this stage of litigation will not necessarily be admissible at trial.

Standard of Proof at Trial

At trial, the question remains just how much “admissible evidence” the defendant-insurer must produce to satisfy its evidentiary burden where nonpayment of a no-fault claim is based on a collision being a non-covered event. The second question concerning this Court is whether the elements of fraud must be proved where a claim has been denied based on 11 NYCRR 65-3.8 (e)(2) “circumstances of the accident not covered by no-fault”.

There have been several recent well-reasoned decisions regarding the standards of proof for “fraud” or “no true accident”, as well as a discussion of whether allegations of fraud are necessary in the context of a no-fault denial based on “no true accident”. Three of these decisions have been particularly helpful in analyzing the complexities involved in no-fault cases where the defense against payment of claims is lack of coverage based on allegations of fraud or that the collision was intentionally caused: A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Co., supra ; JSI Expert Service v. Liberty Mutual Ins. Co., 7 Misc 3d 1009(A), 801 NYS2d 235 [Civ. Ct., Kings County 2005]; and V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc 3d 334, 2006 WL 16289 [Civ. Ct., Kings County 2006]. After thorough review and consideration of each of these opinions, this Court has decided that it must determine first whether the tort of common law fraud must be proved where a denial is based on 11 NYCRR§65-3.8(e)(2) “circumstance of the accident not covered by no-fault”; and second, the standard of proof for a staged accident, or “no true accident”.

Should Fraud be Litigated in a No-Fault Trial?

In JSI Expert Service v. Liberty Mutual Ins. Co., supra , the defense raised for nonpayment of claims was fraud.^[FN1] There, citing Rudman v. Cowles Communications, 30 NY2d 1 (1972), Judge Bailey-Schiffman found that “proof of fraud must be made by clear and convincing evidence.” Indeed, the standard of proof for the tort of common law fraud has long been viewed as requiring proof beyond a preponderance of the evidence as will be discussed below. This Court is concerned, however, that proving the elements of common law fraud by clear and convincing evidence where nonpayment of a no-fault claim is based on a collision being an intentional act, is not what 11 NYCRR §65-3.8 envisioned.

The intent of the no-fault law as found at 70A NY Jur.2d Insurance § 1774 (updated March 2006) is as follows:

The purposes of this statute were to remove a vast majority of claims arising from [*4]vehicular accidents from the sphere of common-law tort litigation, and to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of such accidents. [emphasis added].

Our Court of Appeals has upheld the constitutionality of the No-Fault law and in so doing stated, inter alia: …”it was concluded in all reports that the tort system was plagued by long delays in claim payment. The tort system places an inordinate strain on the State’s court systems and judicial resources. The No-Fault law sought to cure these ills by guaranteeing prompt and full compensation for economic losses…and to reduce the long delays experienced under judicial procedures and to lessen the burden on our State Courts.” Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1, 340 NE2d 444 [1975].

A review of the elements of the tort of common law fraud demonstrates why proving fraud by clear and convincing evidence in a no-fault trial is inconsistent with the purposes of No-Fault law, and why it is not necessary to allege fraud as a defense for refusal to pay a no-fault claim.

To sustain a cause of action based on actual fraud, the plaintiff had to establish that (1) the defendant made material representations that were false, (2) the defendant knew the representations were false and made them with the intent to deceive the plaintiff, (3) the plaintiff justifiably relied on the defendant’s representations, and (4) the plaintiff was injured as a result of the defendant’s representations. Cerbanono v.Price, 7 AD3d 479, 775 NYS2d 585 [2d Dept. 2004]. (See also, Giurdanella v. Giurdanella, 226 AD2d 342, 640 NYS2d 211; Matter of Garvin, 210 AD2d 332, 620 NYS2d 400).

Clearly, proving these elements (and proving them by clear and convincing evidence) will consume a significant amount of trial time and could be very costly.

Clear and Convincing Standard vs. Preponderance of the Credible Evidence

While common law fraud must be proved by clear and convincing evidence, as Judge Bailey-Schiffman found in JSI Expert Service, the standard common to most civil cases is a preponderance of the credible evidence. What, then, distinguishes civil cases where a preponderance of the credible evidence standard of proof is sufficient, and those where the issue to be decided must meet the clear and convincing standard?

The case of In the Matter of Father Philip K. Eichner v. Dillon, 73 AD2d 431, 426 NYS2d 517 [2d Dept. 1980] sheds light on the distinction between the two types of civil cases. In Eichner, a priest brought a proceeding to have a religious brother (in a chronic vegetative state) declared incompetent, and to obtain judicial approval for withdrawal of extraordinary life-sustaining measure consisting of a respirator. The Eichner court grappled with the standard of proof necessary to determine whether the Priest, Eichner, had the requisite legal authority to make the decision that life-support should be removed from the religious brother. There the court reasoned:

[W]e cannot abide by the suggestion that a preponderance of the credible evidence’ standard, common to most civil proceedings, would be sufficient here. Rather we elect the [*5]middle tier standard of proof, that of clear and convincing evidence. …[T]his standard is appropriate where the interests at stake are deemed to be more substantial than mere loss of money.’ Similarly, the clear, unequivocal and convincing standard of proof [is used] to protect particularly important individual interests in various civil cases. Id. at 523.

Eichner cites to examples of cases where “the clear and convincing evidence” standard is utilized only where the “interests at stake” are deemed more significant than ordinary”: reformation of a contract (Ross v. Food Specialities, 6 NY2d 336, 189 NYS2d 857, 160 NE2d 618); a filiation proceeding (Commissioner of Public Welfare of City of NY v. Ryan, 238 App. Div. 607, 265 NYS 286); an action based upon a claim against a deceased, (Matter of Cady, 211 App. Div. 373, 207 NYS 385); in deportation proceedings (Woodby v. Immigration and Naturalization Serv., 385 US 278, 87 S.Ct. 483, 17 L.Ed.2d 362); and for a claim of fraud (United States v. American Bell Tel. Co., 167 US 2224, 17 S.Ct. 809, 42 L.Ed. 144).

No-Fault Regulation 11NYCRR 65-3.8(e)(2)

No-fault regulations provide for a denial of a claim for the following reasons:

(1) no coverage on the date of accident;

(2) circumstances of the accident not covered by no-fault; or

(3) statutory exclusions pursuant to section 5103(b) of the insurance law. Id. at 11 NYCRR 65-3.8 (e).(emphasis added)

If an insurer has a “founded belief” that the alleged accident was not a true accident, it can deny the claim based on 11 NYCRR 65-3.8(e)(2). At trial, the insurer must show, through admissible evidence, facts and circumstances leading a trier of fact to conclude that more likely than not, the circumstances of the collision are not covered by no-fault. If this threshold is reached, the burden shifts to the plaintiff to rebut the defendant’s case. Nowhere in the no-fault statute or regulations is there a requirement that in order to prevail on denial of a claim pursuant to 11 NYCRR 65-3.8(e), common law fraud must be proved. In fact, as Judge Jack Battaglia in A.B. Medical Services, PLLC v. State Farm Mutual Automobile Insurance company, supra , and Judge Arlene Bluth in V.S. Medical Services, P.C. v. Allstate Insurance Company, supra , point out: “Damages resulting from a deliberate collision are not covered by no-fault insurance regardless of the existence of fraudulent motivation.” V.S. Medical Services, Id. At 3. Judge Bluth goes on to state: “Put another way, the no-fault policy only covers accidents; it does not cover deliberate incidents. It does not matter whether the incident was a deliberate mugging, an attempted murder, a product of road rage, or a cold calculated scheme to defraud the insurance company. If it was deliberate, it is not a covered incident under the no-fault policy.”

While our appellate courts commonly invoke the term “fraud” when discussing the defense of “staged accident”, it is a “lack of coverage” they are discussing not necessarily fraud. It seems to make no difference why the incident occurred. If it were made to happen, then it is not an accident and therefore not a covered accident. See State Farm V. Laguerre, 305 AD2d 490, 491, 759 NYS2d 531 [2d Dept. 2003].

In the instant matter, defendant contends that the evidentiary burden for defeating a summary judgment motion “founded belief” (incident was staged) should apply in a trial context. This Court disagrees. As mentioned earlier, to win on its own summary [*6]judgment motion, defendant must make a prima facie “lack of coverage” showing and if plaintiff does not go forward to rebut, then summary judgment is granted to defendant-insurer. Central General Hospital v. Chubb Group of Ins. Co.,90 NY2d 195, 199 [1997].. Moreover, this court is concerned that “fact or founded belief” as the evidentiary burden in no true accident cases contravenes the intent of the No-Fault insurance law. Such a minimal showing would allow routine denial of claims by insurers and open the floodgates to permit insurers who have not timely denied a claim to use a “no true accident” defense (understanding that the standard of proof is minimal) and defeat the primary purposes of the no fault law.

As far as the shifting burdens of proof in a no-fault staged accident or intentional collision case, Judge Jack Battaglia provides an excellent analysis in A.B. Medical Services. The bottom line is that in a “staged accident” case, the defendant has the burden of “coming forward” with proof in admissible form that a staged accident occurred; The plaintiff bears the burden of persuasion and rebutting defendant’s evidence, or the plaintiff “succumbs”. This Court finds that the standard of proof is “preponderance of the evidence”, often defined as the existence of the “fact” being more probable than its non-existence. After all the evidence has been presented, the trier of fact must decide whether the evidence preponderates in favor of the plaintiff or defendant.

CONCLUSION

In this trial, defendant failed to come forward with proof in “admissible form” to establish the “fact” or the evidentiary “foundation” to buttress its belief that the injuries alleged by the assignor did not arise from an insured accident. Defendant failed to adduce sufficient admissible evidence to rebut the presumption of coverage that attaches to the plaintiff’s properly completed claim form.

While SUI investigator Willsey’s testimony is entitled to some weight (see Travelers Indemnity Co. V. Morales, 188 AD2d 350, 351, 591 NYS2d 27 [1st. Dept. 1992], it is clear to this Court that much of the information that SUI investigator Willsey relied upon in his testimony was hearsay and was not admissible due to the lack of appropriate foundation. The defendant sought to introduce information obtained from the National Insurance Crime Bureau (NICB) in establishing its case of intentional collision, but failed to lay any foundation or make any showing that would support the admissibility of this information.

In addition, Mr. Willsey testified that as part of his investigation, he utilized State Farm’s Frequency Tracking System to determine any prior loss history of any of the parties and/or any of the vehicles involved in the present incident. His search revealed that the owner of claimant vehicle had a prior claim history with State Farm and that the owner and driver were not insured. Again, this Court concluded that without the requisite foundation, this information is inadmissible hearsay.

Defendant also asserts an inference of intentional collision should be made by the alleged failure to cooperate by the assignor and /or other parties involved in this incident and the fact that the insured vehicle was not at the scene of the accident at the time police arrived. The fact that the vehicle was not at the scene of the accident is not determinative of anything. Even though defendant-insurer may wish to use failure to cooperate as one indicia of “no true accident” instead of as a defense, it did not offer any admissible evidence as to plaintiff’s assignors’ failure to cooperate.

Based upon the testimony at trial and the acts discussed above, this Court [*7]concludes that the defendant has failed to come forward with evidence of a staged accident or that the loss giving rise to this action was intentional, and thus the burden of persuasion was never shifted to plaintiff. Accordingly, judgment for plaintiff in the sum of $1,842.26, together with statutory interest and attorney’s fees. This constitutes the decision and order of the Court.

Dated: May 11, 2006 ________________________________

RICHARD VELASQUEZ, J.C.C.

Footnotes

Footnote 1:“Defendant denied plaintiff’s claims on the basis that [w]e do not provide coverage for any insured’ who has made fraudulent statements or engaged in fraudulent conduct in connection with the accident or loss for which coverage is sought under this policy.'” JSI Expert Service, id at 237.

Civil Court of the City of New York, Kings County

41550/05

Delores J. Thomas, J.

In this action brought to recover no-fault benefits, plaintiff moves for summary judgment in the sum of $3,383.38 plus statutory interest together with statutory attorney’s fees.

The No-Fault Law provides for payments for medical services provided to a person injured as a result of an accident arising out of the use or operation of a motor vehicle. To recover first-party benefits, a claimant must demonstrate a prima facie entitlement to summary judgment by setting forth proof that it submitted a claim, the fact and amount of losses sustained, and that payment of benefits is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept]).

In support of its motion, plaintiff submits an assignment of benefits form, denial of claim forms, and an affidavit from defendant’s billing manager, Yelena Medvedik, stating that the [*2]carrier issued denials more than thirty days after receipt of the bills. The court finds plaintiff has established its prima facie entitlement to summary judgment. Therefore, the burden shifts to defendant to demonstrate a triable issue of fact to withstand summary judgment (see Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]).

An untimely denial precludes defendant from interposing most defenses including the defense of lack of medical necessity (Amaze Med. Supply, Inc. v. Eagle Insurance Co., 2 Misc 3d 139 [A], 2004 NY Slip Op 050279 [U] [App Term, 2d & 11th Jud Dists]). However, an untimely denial does not preclude a defendant from asserting the defense that the injuries do not arise out of a covered accident or a defense premised on staged accident fraud (see Central General Hosp. v. Chubb Group of Insurance Cos., 90 NY2d 195 [1997]; Matter of Metro Med. Diagnostics v. Eagle Insurance Co., 293 AD2d 751 [2002]). To withstand summary judgment, the insurer must come forward with proof in admissible form to establish the basis for its belief that there is no coverage (see Mount Sinai Hospital v. Triboro Coach, Inc., 263 AD2d 11 [2d Dept 1999]). A “founded belief” cannot be based upon unsubstantiated hypotheses and supposition (see A.B. Medical Services v. Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d & 11th Jud Dists 2003]).

The denial of claim forms state as the reason for denial: “Our investigation, including the results of a low impact study conducted by this company, has shown that the injuries you allege are not related to the motor vehicle accident of March 23, 2003, and are inconsistent with a collision of this nature. Therefore, our company hereby denies your entire no-fault claim based on the fact that the personal injuries do not arise out of the auto accident referred to above. The medical necessity of services provided has not been established.” To support its claim of a lack of causal nexus between the accident and the injuries allegedly sustained in the accident of March 23, 2003, defendant submits the affidavit of Alfred Cipriani, a technical consultant employed by SEA Limited, a consulting company which prepared an accident analysis report (low impact study) for defendant. The accident analysis report accompanies the affidavit (Exhibit F, annexed to Affirmation in Opposition).

Plaintiff maintains defendant’s proof does not constitute competent evidence sufficient to defeat its motion. Plaintiff argues Mr. Cipriani’s affidavit is not in admissible form as it was executed in Maryland, before a Maryland notary, and fails to comply with CPLR 2309 (c). Furthermore, plaintiff states defendant has failed to offer any evidence that the automobile collision was based on fraud.

One opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to raise a triable issue of fact. Here, in opposition to the motion, defendant relies upon an affidavit that is signed and notarized outside of New York and an accident analysis report which is annexed to the affidavit. The low impact study itself is unsworn and appears to incorporate hearsay evidence such as a Police Accident Report and refers to a transcript of a recorded statement of assignor Tumarov which is not annexed to the report.

Pursuant to CPLR 2309 (c):

“An oath or affirmation taken without the state shall be treated as if taken within the state if it is accompanied by such certificate or certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if [*3]such deed had been acknowledged before the officer who administered the oath or affirmation.”

In Ford Motor Credit Company v. Prestige Gown Cleaning Services (193 Misc 2d 262 [Civ Ct, Queens County 2002]) the court noted the distinction between “a certificate of authentication which certifies the identity and authority of the person who took the acknowledgment of proof” and a certificate of conformity which “certifies that the manner in which the acknowledgment or proof was taken conforms with the laws of the appropriate jurisdiction.” An affidavit that is signed and notarized outside New York State is required to be accompanied by a certificate of conformity (see Discover Bank v. Kagan, 8 Misc 3d 134 [A], 2005 NY Slip Op 51171 [U] [App Term, 2nd & 11th Jud Dists]; Citibank (S.D.) N.A. v. Suen, 11 Misc 3d 126 [A], 2005 NY Slip Op 52262 [U] [App Term, 2d & 11th Jud Dists]; Boai Zhong Yi Acupuncture Services v. New York Central Mutual Fire Ins. Co., 8 Misc 3d 1011 [A], 2005 NY Slip Op 51058 [U] [Civ Ct, Queens County]).

Therefore, this court concurs with plaintiff and finds defendant has failed to submit any competent evidence to support its defense that the injuries are not related to the accident. The affidavit is insufficient pursuant to CPLR 2309 (c). The Accident Analysis Report is inadmissible on its own or as an attachment to the affidavit.

Accordingly, plaintiff’s motion for summary judgment is granted. The clerk is directed to enter judgment in favor of plaintiff in the sum of $3,383.38 together with statutory interest and attorney’s fees.

This constitutes the decision and order of the Court.

Dated:Brooklyn, New York

March 30, 2006

DELORES J. THOMAS

Judge Civil Court

Civil Court of the City of New York, Kings County

36916/03

Arlene P. Bluth, J.

Plaintiff’s instant motion for summary judgment calls upon this Court to clarify what facts a first-party No-Fault plaintiff must set forth in order to establish that its claim is “overdue.”

Plaintiff argues that “overdue” means “not paid,” and so the affidavit in support of the motion must only state that the bills have not been paid. Defendant urges that a bill is “overdue” only if it has not been paid or properly denied, and so the affidavit in support of plaintiff’s motion must so state. [*2]For the following reasons, this Court agrees with defendant, and since plaintiff’s motion did not address the denials, plaintiff has failed to fulfill its burden and the motion is denied.

In this action, plaintiff New York Craniofacial Care, P.C. seeks to recover first-party No-Fault benefits in the amount of $12,253.28, plus statutory interest, costs, and attorneys fees, for healthcare services allegedly rendered to its assignors, Maria Vega, Christopher A. Mendez, Daniel Rodriguez, Marsha Rasin, and Julio Suazo. According to the attorney’s affirmation in support of this motion, plaintiff seeks summary judgment only on the claims pertaining to Ms. Vega, Ms. Rasin, and Mr. Suazo, for the sum of $6,122.75. Plaintiff argues that its claims were submitted to defendant, have not been paid, and are now overdue. Defendant opposes the motion on the grounds that plaintiff has not made out its prima facie case, and that, in any event, defendant timely denied the claims pertaining to Ms. Rasin and Mr. Suazo and settled the claims pertaining to Ms. Vega.

A healthcare provider in a No-Fault case for first-party benefits establishes its prima facie entitlement to summary judgment as a matter of law by submitting proof in admissible form demonstrating that the prescribed statutory claim form, setting forth the fact and amount of the loss sustained, was submitted to the defendant, and that payment of no-fault benefits is overdue. See 11 NYCRR § 65-3.8(a)(1),(c); Careplus Med. Supply, Inc. v Allstate Ins. Co., 9 Misc 3d 128(A), 2005 NY Slip Op 51525(U), [App Term, 2nd & 11th Jud Dists]; Contemp. Med. Diag. & Treatment, P.C. v GEICO, 6 Misc 3d 137(A), 800 NYS2d 344 [App Term, 2d and 11th Jud Dists 2005]. Specifically, subsection 65-3.8(a)(1) of the regulations provides that “No-Fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim . . .” 11 NYCRR § 65-3.8(a)(1). Subsection 65-3.8(c) then states: “Within 30 calendar days after proof of claim is received the insurer shall either pay or deny the claim in whole or in part.” Id. at § 65-3.8(c).

The provider must make out its case in its own moving papers by setting forth the facts entitling the movant to summary judgment. Only if the plaintiff makes out its prima facie case does the burden shift to the defendant to raise a triable issue of fact. See Cugini v System Lumber Co., Inc., 111 AD2d 114, 489 NYS2d 492 [1st Dept 1985]; Victor Gribenko, M.D., P.C. et al. v Allstate Ins. Co., 10 Misc 3d 139(A) [App Term, 2nd & 11th Jud Dists 2005]; A.B. Med. Servs., P.L.L.C. et al. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 127(A), 801 NYS2d 229 [App Term, 2nd & 11th Jud Dists 2005].

In support of this motion, plaintiff submits two affidavits. In the first, Fenelly Olivares states that he is the person responsible for submitting plaintiff’s No-Fault claims and that he personally mailed the subject claims to defendant on April 3, May 15, and May 23 of 2002. Thus, his affidavit establishes that the claims were submitted to defendant. See Comprehensive Mental v. Lumbermans Mut. Ins. Co., 4 Misc 3d 133(A) [App Term, 9th & 10th Jud Dists 2004]; Amaze Medical Supply Inc. v. Allstate Ins. Co., 3 Misc 3d 133(A) [App Term, 2nd & 11th Jud Dists 2004].

The second affidavit is from Rachael Newton, the person responsible for handling and tracking whatever response is forthcoming from the insurers on the claims. Ms. Newton states that “[d]efendant did not pay plaintiff’s claims that are the subject of this lawsuit within thirty (30) days. [*3]Accordingly, plaintiff’s claims are now overdue and owing.” Although Ms. Newton would know, her affidavit is absolutely silent as to whether plaintiff received any denials, and if so, on which of the claims. These are material omissions because if defendant timely issued a valid denial of plaintiff’s claims, plaintiff would not be entitled to summary judgment simply because the claims remained unpaid. A claim that has been timely (and validly) denied is not due. Of course, if it is not due, it cannot be overdue. If, on the other hand, plaintiff had shown in its moving affidavit that there were no denials, or that the denials were late or otherwise invalid and thus a nullity, plaintiff’s claims would be overdue, and plaintiff would be prima facie entitled to judgment. None of those facts, however, may be gleaned from Ms. Newton’s affidavit.

At oral argument, plaintiff’s counsel urged that plaintiff need not mention anything about denials at all. Rather, counsel argued, all that is necessary is for plaintiff to state that the claims have not been paid and thus are overdue. In support of her argument, counsel relied upon the language of subsection 65-3.8 (a)(1), quoted above, which defines an overdue claim as one that has not been paid within 30 days of submission. See 11 NYCRR § 65-3.8(a)(1). This Court, however, believes that 11 NYCRR § 65-3.8(a)(1) cannot be read in a vacuum. Subsection 65-3.8(c) makes clear that the 30-day rule entails a failure to pay or deny the claim within 30 days. To wit, “[w]ithin 30 calendar days after proof of claim is received the insurer shall either pay or deny the claim in whole or in part.” 11 NYCRR § 65-3.8(c). The problem with plaintiff’s counsel’s approach is that it invites providers to bring disingenuous summary judgment motions alleging that their claims are overdue even when they are well aware that they received valid, timely denials.

Plaintiff’s counsel correctly noted that the Appellate Term routinely uses the phrase “that payment of no-fault benefits is overdue” when enumerating the elements of plaintiff’s prima facie case. See, e.g., PDG Psychological, P.C. v Utica Mut. Ins. Co., 2006 NY Slip Op 50246(U) [App Term, 2nd & 11th Jud Dists]; Ocean Diagnostic Imaging, P.C. v Allstate Ins. Co., 10 Misc 3d 145(A) [App Term, 2nd & 11th Jud Dists 2006]; Ocean Diagnostic Imaging, P.C. v AIU Ins. Co., 10 Misc 3d 139(A) [App Term, 9th & 10th Jud Dists 2005]. In the Court’s view, however, that phrase is merely a shorthand for “that the claim has not been paid or denied within 30 days.” Indeed, some Appellate Division cases make that connection clearer. For example, in Mt. Sinai Hospital v Allstate Insurance Co., the Second Department opined that “sufficient evidentiary proof was submitted to establish, prima facie, that the defendant, Allstate Insurance Company . . . did not pay or deny Mount Sinai’s claim for no-fault medical payments within 30 days as required by 11 NYCRR 65-3.8(c).” Mt. Sinai Hosp. v Allstate Ins. Co., 2006 NY Slip Op 00490, —- NYS2d —- [2nd Dept]. Similarly, in Nyack Hospital v General Motors Acceptance Corp., the Second Department found that the plaintiff had “established its prima facie entitlement to summary judgment by demonstrating that the defendants received the subject billing forms, and failed to either pay or deny the claim within the requisite statutory time frame.” Nyack Hosp. v Gen. Motors Acceptance Corp., 2005 NY Slip Op 10107, 808 NYS2d 399, 402 [2nd Dept]. Since a claim is overdue only if it has been neither paid nor properly denied, and plaintiff states only that its claims were not paid, plaintiff has not made out its prima facie case.

By its holding, this Court is not increasing the burden of a plaintiff healthcare provider moving for summary judgment in a No-Fault case. Indeed, once the plaintiff sets forth that its claim has not been paid or timely denied, the defendant must still come forward with competent [*4]proof to rebut that assertion in order to defeat the motion. All this Court is requiring is that the plaintiff make clear in its moving papers that it is entitled to judgment on its claims. The fact that the plaintiff’s claims have not been paid does not, in and of itself, entitle the plaintiff to summary judgment as a matter of law.

The Court recognizes that a statement that “the claim has not been paid or timely denied” is boilerplate, and the absence of such a statement may seem like a mere technicality. But it is not. Every statement in an affidavit is sworn to under the penalties of perjury. If the affiant knows that there was a timely denial of the unpaid claim, then it would be perjurious to state that “the claim has not been . . . timely denied.” Indeed, under that circumstance, it would be improper for the provider to seek summary judgment based on untimeliness of the denial, although it would be free to move based upon some other ground.

By requiring plaintiff to set forth the basis of its entitlement to summary judgment, the Court is merely holding plaintiff to the requirements of CPLR Section 3212. Although amended and recodified over the years, the essence of the moving plaintiff’s burden has not changed since the enactment of Rule 113 of the Rules of Civil Practice, Section 3212’s predecessor, over 85 years ago: Someone with personal knowledge must swear or affirm both to the material facts which entitle plaintiff to judgment and must also address the known defenses. Under Rule 113, the plaintiff had to affirmatively “stat[e] . . . his belief that there is no defense to the action.” ^[FN1] Under CPLR Section 3212(b), the affidavit in support “shall show that there is no defense to the cause of action or that the cause of action or defense has no merit.” CPLR § 3212(b). What the difference may be between “stating” (Rule 113) and “showing” (3212(b)) is an interesting question (see Farrell v Shelby Mut. Ins. Co., 18 Misc 2d 459, 461,189 NYS2d 66 [Sup Ct, Erie County 1959]), but the Court need not determine it here because this plaintiff neglected any mention of a defense at all. Ms. Newton’s affidavit neither states nor shows that there is no defense or that the defenses have no merit. Indeed, since proper denials would constitute a defense to the action, plaintiff’s failure to address whether the claims were denied makes the moving affidavit not only insufficient but disingenuous as well.

Ms. Newton’s affidavit is deficient in several other respects as well. First, according to plaintiff’s counsel’s affirmation, the instant motion relates only to the claims for three of the five assignors in this case, yet the affidavit fails to set forth this material fact. Second, the affidavit fails to specifically reference which of the seven claims from the three assignors it addresses, or the amounts thereof. Third, the affidavit does not make clear whether the ground for the motion is the same, or different, for each of the seven claims from the three assignors. When a suit combines [*5]multiple claims and/or assignors, it is incumbent upon the moving party to identify in the affidavit each claim and/or assignor to which the motion is directed, and the reason the movant is entitled to judgment upon each one. See Smith v City of New York, 288 AD2d 369, 370, 733 NYS2d 474 [2d Dept 2001] (denying summary judgment motion where proponents “fail[ed] to specifically address each separate claim” with appropriate proof). Rather than do so here, plaintiff submitted an affidavit that could have been attached to any motion for summary judgment between these parties.^[FN2]

Based on all of the foregoing, the Court finds that plaintiff has not made out its prima facie case for entitlement to summary judgment as a matter of law. Therefore, the Court need not reach the sufficiency of defendant’s opposition.

Accordingly, plaintiff’s motion is denied.

This is the Decision and Order of the Court.

Dated:

ARLENE P. BLUTH

Judge, Civil Court

ASN by_______ on ________

Footnotes

Footnote 1: Rule 113, which first came into effect in 1921, provided as follows: “Summary Judgment. When an answer is served in an action to recover a debt or liquidated demand arising, 1. On a contract, express or implied. . . the answer may be struck out and judgment entered thereon on motion, and the affidavit of the plaintiff or any other person having knowledge of the facts, verifying the cause of action and stating the amount claimed, and his belief that there is no defense to the action; unless the defendant by affidavit, or other proof, shall show such facts as may be deemed, by the judge hearing the motion, sufficient to entitle him to defend.”

Footnote 2: The affidavit states: “This Affidavit is being submitted in support of NEW YORK CRANIOFACIAL PC’s application for a judgment against ALLSTATE INS. CO.” (emphasis in original).

Civil Court of the City of New York, Kings County

106648 / 04

Jack M. Battaglia, J.

Plaintiff appeared by Gary Tsirelman, Esq, Greg Lansky, Esq., and Massimiliano Valerio, Esq. of Gary Tsirelman, P.C.; Defendant appeared by Robert B. Brown, Esq. and Samuel K. Rubin, Esq. of Picciano and Scahill, P.C.

A licensed acupuncturist is entitled to recover assigned first-party no-fault benefits based upon the “prevailing fee [for licensed services] in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established” by the Superintendent of Insurance. (See 11 NYCRR §68.5[b].) The provider bears the burden of coming forward with evidence of the “prevailing fee” in its geographic location, while the insurer has the burden of coming forward with evidence that the provider’s fee is not “consisten[t] with charges permissible for similar procedures.”

Power Acupuncture, PC is seeking to recover from State Farm Mutual Automobile Insurance Company the total unpaid balance on six bills submitted to the insurer, which amount the parties have stipulated to be $800.24. Each of the bills describes the service rendered as “acupuncture”, and seeks compensation at the rate of $100.00 for each treatment session. The insurer paid on each bill at the rate of $42.84 per session, staing that “[t]his base fee was calculated according to the New York Workers’ Compensation Board Schedule of Medical Fees. (New York Workers’ Compensation Board Schedule of Medical Fees, Page 9.)”

At a trial, of sorts, held on September 16 and September 28, 2005, each party presented one witness. Power Acupuncture offered the testimony of Elyse Josephs, a licensed acupuncturist, who described generally the theory and practice of acupuncture, the training and licensing requirements for acupuncturists, and the certification requirements for physicians and chiropractors who render acupuncture services. (See, generally, Education Law §§8211, 8216[3].) State Farm offered the testimony of Donna Frederick, one of its claims representatives, who described the insurer’s practice of paying for acupuncture services rendered by licensed acupuncturists at the rate provided in the Workers’ Compensation Board fee schedule for [*2]acupuncture services rendered by a physician.

The parties recognized at trial that the resolution of their dispute depended essentially on an interpretation and application of the No-Fault Law (see Insurance Law §5102 et seq.) and the Superintendent of Insurance’s implementing regulations. Specifically, the issue is whether a licensed acupuncturist is entitled to be paid based upon the “prevailing fee” charged by acupuncturists for licensed services, or based upon the fee provided for payment of acupuncture services rendered by a physician. The parties agreed to submit briefs arguing their respective views of the law and regulations. They also agreed, for this case only, that, if the Court determined that Power Acupuncture is entitled to be paid based upon the “prevailing fee”, the fee shall be deemed to be $100.00 per session. This Court has since held in another case that the provider bears the burden of coming forward with evidence as to the “prevailing fee”. (See AVA Acupuncture P.C. v Elco Administrative Services Co., 10 Misc 3d 1079[A], 2006 NY Slip Op 50158[U], *6-*8 [Civ Ct, Kings County].)

Section 5102(a)(1) of the No-Fault Law defines “basic economic loss” as including “[a]ll necessary expenses incurred for…professional health services”, “subject to the limitations of” §5108 of the Law. (See Insurance Law §5102[a][1].) Section 5108 provides that the Superintendent of Insurance “shall promulgate rules and regulations implementing and coordinating the provisions of” the No-Fault Law and the Workers’ Compensation Law “with respect to charges for the professional health services specified in” §5102(a)(2), “including the establishment of schedules for all such services for which schedules have not been prepared and established by the chairman of the workers’ compensation board.” (See Insurance Law §5108[b].) But the “charges for services specified in” §5102(a)(1) “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board.” (See Insurance Law 5108[a].)

Under the statute, therefore, if a charge for a covered “professional health service” is found in a Workers’ Compensation schedule, that is the permissible charge under the No-Fault Law; but, if there is no charge for the service found in a Workers’ Compensation schedule, the charge is to be determined by the regulations of the of the Superintendent of Insurance. Some uncertainty arises, however, because the No-Fault Law speaks in terms of covered services, whereas the Workers’ Compensation schedules establish fees according to the licensed status of the provider. As will appear, acupuncture services rendered by a certified physician are compensated at a different fee under the Workers’ Compensation schedules than acupuncture services rendered by a certified chiropractor, and, most importantly for present purposes, there is no coverage under the Workers’ Compensation schedules for acupuncture services rendered by a licensed acupuncturist.

The Superintendent’s no-fault regulations are not entirely successful in dissipating any uncertainty, as this action illustrates. They provide, in the first instance, that “[c]harges for [professional health] services shall be covered pursuant to schedules promulgated under section 5108 of the Insurance Law and Part 68 of this Title (Regulation 83).” (See 11 NYCRR §65-[*3]3.16[a][6].) In Part 68, the Superintendent adopts the “existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board”, and, “[i]f a fee schedule has been adopted for a licensed health care provider, the fee for services provided shall be the fee adopted or established for that licensed health care provider.” (See 11 NYCRR §68.1[a], [b][2].) A “licensed healthcare provider” is defined as a “licensed healthcare professional acting within the scope of his or her license or an entity properly formed in accordance with applicable law and acting within the scope of its license.” (11 NYCRR §68.1[b][3].)

When acupuncture services are rendered by a certified physician or chiropractor, the determination of the permissible charge is relatively clear. There is a Workers’ Compensation Medical Fee Schedule and a Workers’ Compensation Chiropractic Fee Schedule (as well as schedules for podiatry and psychology.) The respective fee schedules provide a “unit value” or “relative value” for described services and a “conversion factor” for each of four geographic regions. The permissible charge is determined by multiplying the relative value for the service by the conversion factor, which is a monetary amount identified by the zip code of the provider. Both the Medical Fee Schedule and the Chiropractic Fee Schedule describe four acupuncture services, two with electrical stimulation and two without, two for the initial 15 minute “one-on-one contact with the patient” and two for additional 15 minutes of contact. The relative values are the same for each of the services in both the Medical Fee Schedule and the Chiropractic Fee Schedule.

A physician, however, will be entitled to a higher fee for each of the described services, because the conversion factors for physicians range from $6.49 to $8.45 across the four regions, whereas those for chiropractors range from $4.44 to $5.78. For example, when the relative value for an initial 15 minute contact for acupuncture without electrical stimulation rendered by a physician, i.e. 3.55, is multiplied by the conversion factor for physicians in Region IV (where Power Acupuncture is located), i.e. $8.45, the permissible charge is $30.00, whereas when the same relative value is multiplied by the conversion factor for chiropractors in Region IV, i.e. $5.78, the permissible charge is $20.52. The difference presumably reflects the relative market values for the services in various geographic areas.

But what about acupuncture services rendered by a licensed acupuncturist, for whom there is no “dedicated” Workers’ Compensation fee schedule. In a section of the regulations titled “[e]stablishment of certain health provider schedules”, the Superintendent of Insurance “establishes fee schedules for professional health services referred to in” §5102(a)(1) “for which schedules have not been prepared and established by the chairman of the Workers’ Compensation Board.” (11 NYCRR §68.2[a].) Those schedules are to be found in Appendix 17-C. (See id.) In Appendix 17-C, the Superintendent establishes fee schedules for various dental, social work, therapy, optometric, and thermographic services, but not for any acupuncture services.

In a section titled “[h]ealth services not set forth in schedules”, the Superintendent prescribes the method for determining the permissible charge for such services, first for when the Superintendent “has adopted or established a fee schedule applicable to the provider” (see 11 [*4]NYCRR §68.5[a]), and then for when the Superintendent has not done so (see 11 NYCRR §68.5[b]). For our purposes, the Superintendent has not “adopted” a fee schedule applicable to licensed acupuncturists, since none has been established by the chairman of the Workers’ Compensation Board, and the Superintendent has not as yet “established” a fee schedule applicable to licensed acupuncturists, as was done in Appendix 17-C for other providers that were not covered by a Workers’ Compensation Fee Schedule.

In such circumstances “the permissible charge for such service shall be the prevailing fee in the geographic area of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent.” (11 NYCRR §68.5[b].) Indeed, in two opinions, dated, respectively, January 5, 2004 and October 6, 2004, the Office of General Counsel of the New York State Insurance Department reaches the same conclusion. (See also Great Wall Acupuncture, P.C. v Geico General Ins. Co., 8 Misc 3d 1019(A), 2005 NY Slip Op 51199[U], *2 [Civ Ct, Kings County].)

State Farm argues nonetheless that the statute and regulations “are clear that where there is a scheduled service (acupuncture) but an unscheduled provider (licensed acupuncturist) the provider is limited to the fee identified for the scheduled service absent a showing of unusual procedures or unique circumstances.” (See Defendant’s Trial Memorandum of Law, at 7.) In doing so, State Farm characterizes the Insurance Department’s opinions as “erroneously perpetuat[ing] a mistake and application of [its own] regulation.” (See id., at 14-15.) In this latter regard, State Farm’s position is clearly and seriously at variance with the mandate that we give deference to the opinions of the Superintendent. (See Medical Society of State v Serio, 100 NY2d 854, 863-64 [2003].)

On its own merits, moreover, State Farm’s argument ignores the reasonably clear fabric of the Superintendent’s regulations, as well as its own failure, if not inability, to explain why, assuming its position were correct, the licensed acupuncturist should be compensated according to the conversion factor for a physician rather than for a chiropractor. The proposition is not self-evident, either logically or legally, and there was no evidence at trial to support it.

It is true, no doubt, that, even under the applicable regulation, the insurer may “review” the acupuncturist’s charges “for consistency with charges permissible for similar procedures already adopted or established by the superintendent.” (See 11 NYCRR §68.5[b].) For a number of reasons, however, that qualification to payment on a “prevailing fee” basis cannot help State Farm here. First, that is not the basis on which Power Acupuncture’s charges were reduced, as stated in State Farm’s denials. It is clear from the denials that the “fee was calculated according to the…Schedule for Medical Fees”, and, as has been demonstrated, that was wrong. More importantly, neither in the denials nor at trial was there any showing that, even ignoring the identity and status of the practitioner, the acupuncture services that were rendered were “similar” to the services described in the fee schedule and associated with the particular relative value used in the calculation. [*5]

State Farm contends that “the claimant would have the burden to show that the reduction is not consistent with the fees for such scheduled services.” The contention is inconsistent with both the structure and clear meaning of the governing regulation, which states that the permissible charge “shall be the prevailing fee”, only “subject to review by the insurer.” (See 11 NYCRR §68.5[b].) Whatever effect might be given the results of the insurer’s “review”, the insurer that denies or reduces payment based upon such a review must bear the burden of, at least, coming forward with evidence that the provider’s fee is not “consisten[t] with charges permissible for similar procedures.” (See id.)

To the extent that State Farm is contending that, generally, the fee for a service described in any fee schedule can never be higher than the maximum fee that would be permissible for any provider for whom there is such a schedule, or that, specifically, a licensed acupuncturist is never permitted a fee for any service described in the physician’s fee schedule that is higher than the fee permitted for the physician, those contentions are not supported by either the statute or current regulations. The statute provides only that, when there is an applicable Workers’ Compensation fee schedule, the fee for no-fault benefits may not exceed the amount determined by that schedule, “except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge” (see Insurance Law §5108[a]); and, when there is no such applicable fee schedule, the Superintendent need only “consult[]” and “coordinat[e]” with the chairman of the Workers’ Compensation Board in establishing an appropriate fee (see Insurance Law §5108[b]). Although the Superintendent may well have the authority to promulgate regulations that would provide as State Farm contends, that authority has not been exercised.

Specifically, the statute that authorizes a certification program for physicians and others who are not licensed acupuncturists, is subject to the proviso that “such certified acupuncturists do not represent themselves as licensed acupuncturists.” (See Education Law §8216[3].) The statute clearly reflects at least an assumption that the acupuncture services rendered by a certified physician and those rendered by a licensed acupuncturist are not the same. On this record, that statutory assumption is enough to require rejection of State Farm’s practice of automatically reducing bills submitted by licensed acupuncturists to the fees permissible for certified physicians.

Given the conclusions required by this record to resolve this case, it is both unnecessary and inappropriate for the Court to address Power Acupuncture’s other arguments concerning, what it calls, the “Review Clause”, including the questions raised concerning its constitutionality and its meaning and application. (See Post-Trial Memorandum, at 15-32.) The Court notes, moreover, that, although it may have the jurisdiction to pass on most, if not all, of those questions in the context of an action seeking payment of one or more bills, such an action does not appear to this Court to be the most appropriate vehicle for a full exploration and considered resolution of those questions. [*6]

It appears to this Court that those healthcare providers and insurers regularly participating in no-fault first-party benefits litigation have chosen litigation strategies that involve litigating and relitigating the same issues in hundreds, if not thousands, of actions before different Civil Court and District Court judges, crowding out the types of actions the limited-jurisdiction courts were designed to resolve. The Court recognizes and appreciates that, in this action, the parties took a somewhat different tack, and have clearly expended significant effort to brief a wide range of questions that are raised by the statute and regulations as they apply to the services rendered by licensed acupuncturists. It seems true, nonetheless, that a broader-scoped proceeding in Supreme Court one in which a number of providers and insurers might participate would be a more appropriate forum for resolution of the constitutional and other questions raised by this, and other, no-fault actions.

The Court has noted Plaintiff’s counsel’s request for an attorney fee in excess of the limitations generally applied to no-fault disputes. (See 11 NYCRR §65-4.6.) And, again, the Court recognizes the effort made by counsel for both parties. But this case has not been resolved on the issues that attracted much of Plaintiff’s counsel’s attention. In the world of no-fault, moreover, where the parties do not want for creativity in raising new questions for the courts to resolve, there is a real risk that the exception to the limitations will render the rule meaningless.

Judgment is awarded to Plaintiff for $800.24, with statutory interest and attorney fees, plus costs.

March 20, 2006__________________________

Judge, Civil Court

[*1]

Civil Court of the City of New York, Kings County, March 7, 2006

APPEARANCES OF COUNSEL

Marylou A. Paolucci, Smithtown, for plaintiffs. Bruno, Gerbino, & Soriano, LLP, Melville, for defendant.

OPINION OF THE COURT

Karen Rothenberg, J.

In this action to recover no-fault first-party benefits for services provided to its assignor for an accident that occurred on December 8, 2000, plaintiffs establish a prima facie entitlement to summary judgment by proof that they submitted to defendant the statutory claim forms, setting forth the fact and the amount of the losses sustained ($4,427.36, $2,490.78, $1,945.56, $505.50, $208.25, and $500) and that payment of no-fault benefits was overdue (see A.B. Med. Servs. PLLC v Country-Wide Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50255[U] [App Term, 2d & 11th Jud Dists 2005]). The burden then shifts to the defendant to rebut plaintiffs’ prima facie case by the submission of proof in admissible form sufficient to raise a triable issue of fact (see A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86[*2][App Term, 2d & 11th Jud Dists 2004]).

In regard to the claim of G.A. Physical Therapy in the amount of $208.25, defendant submits evidence of an arbitral award in its favor which denied no-fault benefits to this claimant for a bill dated March 21, 2001. There is no dispute that this is the same bill being litigated in this action. The prior arbitral award should be accorded res judicata effect against plaintiff in this action. It is well settled that res judicata and collateral estoppel are applicable to arbitration awards, including those rendered in disputes over no-fault benefits, and will bar relitigation of the same claim or issue (see Matter of Ranni [Ross], 58 NY2d 715 [1982]; Monroe v Providence Washington Ins. Co., 126 AD2d 929 [3d Dept 1987]). While defendant did not move for summary judgment dismissing this claim on these grounds, the court has authority to grant summary judgment to a nonmoving party if justified by the record. (CPLR 3212 [b].) Accordingly, plaintiff, G.A. Physical Therapy P.C.’s claim for $208.25 is dismissed.

In regard to the bills for services rendered by A.B. Medical Services PLLC, Daniel Kim’s Acupuncture P.C., and Royalton Chiropractic P.C., defendant submits evidence that in December 2001, prior to the commencement of this litigation, plaintiffs submitted these claims to the American Arbitration Association (AAA). Defendant also submits evidence that in August 2003 it received notification from AAA that plaintiffs withdrew these claims with prejudice. Defendant argues therefore that plaintiffs are precluded from maintaining these actions. In reply, plaintiffs’ counsel contends that it was plaintiffs’ intention to withdraw the claims with prejudice only from arbitration and without prejudice to litigation. Counsel’s argument is without merit. Regardless of their intentions, plaintiffs are bound by their election to arbitrate their claims and are precluded from maintaining this litigation.

Pursuant to Insurance Law § 5106 (b) “[e]very insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits . . . to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.” Once the election is made to arbitrate a claim for first-party no-fault benefits, the right to litigate future claims arising out of the same accident is foreclosed (see Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260 [1985]). In Roggio (supra), the Court of Appeals dismissed the plaintiff’s complaint for first-party benefits holding that a claimant, denied recovery in arbitration as to certain medical bills, cannot then resort to the courts to seek recovery of later medical bills that arise out of the same accident. The Court’s rationale being to prevent claimants “flit[ting] between forums for the resolution of issues or items of damage arising from a single injury . . . [which] would represent an intolerable drain on our resources for dispute resolution, senselessly prolonging controversies and inviting inconsistent adjudications.” (Roggio at 263.) The Court further reasoned that by providing claimants “an option to litigate after disappointments in arbitration [would] obviously [be] inconsistent with [the] legislative purpose” of the No-Fault Law. (Roggio at 264.)

After Roggio, courts have invariably held that the election to arbitrate a claim for first-party benefits, waives the right to litigate all subsequent claims that arise out of the same [*3]accident (see Cortez v Countrywide Ins. Co., 17 AD3d 508 [2d Dept 2005]; Gaul v American Employers’ Ins. Co., 302 AD2d 875 [4th Dept 2003]; Gibeault v Home Ins. Co., 221 AD2d 826 [3d Dept 1995]).

In Roggio, and the other cited cases, the issue involved litigation of subsequent claims after an arbitral award on an initial claim. In this matter the issue involves litigation of claims originally submitted to arbitration where no arbitral award was made. Nevertheless, in this judicial district, at least, it appears that once the claim is submitted to arbitration, it must be adjudicated in that forum. In Rockaway Blvd. Med. P.C. v Progressive Ins. (2003 NY Slip Op 50938[U] [App Term, 2d & 11th Jud Dists 2003]), the plaintiff’s claim at arbitration was dismissed without prejudice to plaintiff renewing its application for arbitration upon production of a proper assignment. Instead, the plaintiff commenced litigation of the claim. The court, citing Roggio, dismissed the complaint and held that “once a claimant chooses arbitration, it cannot resort to the courts.” (At *2.)

In light of the above, this court is reluctant to limit Roggio to its precise facts. Accordingly, once a claim for first-party benefits is submitted to arbitration, the claimant is bound by that election and cannot reopt for litigation, even if the merits of the matter were not reached. Accordingly, while defendant did not move to dismiss these claims, the court, after review of the record, is awarding summary judgment to the defendant dismissing these plaintiffs’ claims for bills in the amounts totaling $4,427.36, $2,490.78, and $505.50.

The remaining bills submitted by D.A.V. Chiropractic P.C. in the amounts of $189.54, $302.12, and $1,999.12, and Square Synagogue Transportation Inc., in the amount of $500, were not the subject of a prior arbitration. As to these bills, defendant’s denials, except for the bill in the amount of $1,999.12, are untimely on their face. Defendant contends that these claims were properly denied based upon the assignors’ failure to attend independent medical examinations (IMEs). Defendant however, fails to produce competent proof in admissible form that it made timely verification requests for IMEs, extending the 30-day period within which it must pay or deny the claims (see Ocean Diagnostic Imaging P.C. v New York Cent. Mut. Fire Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51772[U] [App Term, 2d & 11th Jud Dists 2005]). The affidavit of defendant’s no-fault claims representative, Cathy Symonds, is deficient and fails to establish that requests for IMEs were timely mailed to the assignors (see Careplus Med. Supply Inc. v Gen. Assur. Co., 7 Misc 3d 126[A], 2005 NY Slip Op 50429[U] [App Term, 9th & 10th Jud Dists 2005]). Even assuming that defendant submitted proper proof of mailing of the initial IME requests, defendant has failed to demonstrate that it complied with a timely follow-up request (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]). In light thereof, defendant is precluded from asserting its defense of the assignors’ nonappearance at scheduled IMEs for these three claims. In regard to the bill in the amount of $1,999.12, it is undisputed that defendant timely denied the claim. This denial, like the others, was based upon the assignors’ nonappearance for IMEs. Although the denial was timely, the defendant’s failure to follow up its request for verification, makes the denial “ineffective to avoid preclusion” (see King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U], *3 [App Term, 2d[*4]& 11th Jud Dists 2005]).

Based on the foregoing, plaintiffs’ motion for summary judgment is granted in part and denied in part. Judgment shall be entered in favor of plaintiffs, D.A.V. Chiropractic P.C. in the amounts of $2,490.78 and Square Synagogue Transportation in the amount of $500, plus statutory interest and attorney’s fees as provided by Insurance Law § 5106 (a) and the regulations promulgated thereunder, as well as costs and disbursements. Defendant is awarded summary judgment dismissing the remainder of the claims.

Civil Court, Kings County

33911/02

Karen Rothenberg, J.

Defendant State Farm Mutual Auto Ins. Co. (hereinafter “State Farm”) moves pursuant to CPLR 3211(a)(5) to dismiss the plaintiffs’ actions on the grounds that plaintiffs are collaterally estopped from maintaining the actions in light of a declaratory judgment entered in Supreme Court. After review of the papers submitted herein, this court hold that collateral estoppel is not applicable and the plaintiffs are not bound by the declaratory judgment.

In 2002, plaintiffs, as assignees of Marie Paul and Estella Amilcar, commenced these actions to recover first-party no-fault benefits for medical services provided to the assignors for an accident that occurred on February 21, 2001. On March 12, 2003, State Farm commenced a declaratory judgment action in Supreme Court, Kings County for a determination that it was not obligated to provide coverage for the accident. These assignors, but not the assignees, were among the persons served in the declaratory judgment action. State Farm moved for a default judgment against the parties based upon their failure to appear, and said motion was granted by order of the Hon. Laura Jacobson entered in the Clerk’s Office of the Supreme Court on April 12, 2004. The default order provided that “State Farm Mutual Auto Ins. Co. has no obligation to provide UM, SUM or PIP benefits to the …. passengers, Estella Amilcar [and] Marie Paul…”, and [*2]stated that the “loss of 2-21-01 was intentional and therefore an uncovered event.”

Defendant argues that the declaratory judgment should be entitled to collateral estoppel effect, thereby precluding plaintiffs from maintaining these actions for no-fault benefits. Collateral estoppel, or issue preclusion, may be applied in a subsequent action to prevent a party or those in privity, from relitigating an issue decided in a prior adjudication. (see Ryan v New York Tel. Co., 62 NY2d 494, 478 N.Y.S.2d 823). In order to invoke collateral estoppel it must be shown that (1) there was a full and fair opportunity to contest the decision that is alleged to be dispositive in the present action and (2) the issue in the present proceeding is identical to that decided in the prior proceeding. (see Langdon v. WEN Management Co., 147 AD2d 450, 537 N.Y.S.2d 603).

For collateral estoppel to be applied, it must be established that plaintiffs, who were not parties to the previous action, are privy to the prior judgment. (see Green v. Santa Fe Industries, Inc., 70 NY2d 244, 519 N.Y.S.2d 793). The determining factor is the point in time when the relationship between the party to the prior litigation and the person(s) claimed to be a privy is formed. In the assignor-assignee context, “privity must have arisen after the event out of which the estoppel arises.” Gramatan Home Investors Corp., v. Lopez, 46 NY2d 481 at 486, 414 N.Y.S.2d 308 at 312. As the Court of Appeals in Gramatan, cited supra, explained:

“an assignee is deemed to be in privity with the assignor where the action

against the assignor is commenced before there has been as assignment. In

that situation, at the time the assignee succeeded to the rights of the assignor, the subject matter of the assignment was then embroiled in litigation and was

subject to the claims of the third parties and the assignee is charged with notice

that his rights to the assignment are subject to competing claims. Conversely

an assignee is not privy to a judgment where the succession to the rights affected

thereby has taken place prior to the institution of the suit against the assignor.”

(Gramatan Home Investors Corp., v. Lopez, supra, at 486; 312.)

In the instant situation, since assignments were made prior to the commencement of the declaratory judgment action against the plaintiffs’ assignors, plaintiffs are not bound by the terms of the judgment. Moreover, in light of the fact that the declaratory judgment was obtained by default, there was no actual litigation on the merits, and therefore there is no identity of issues between this action and the prior determination in the declaratory judgment action. (see Zimmerman v. Tower Ins. Co., 13 AD3d 137, 788 N.Y.S.2d 309; Chambers v. The City of New York, 309 AD2d 81, 76 N.Y.S.2d 708).

In light of the foregoing, the defendant’s motion is denied in its entirety.

This constitutes the decision/order of the court.

March 3, 2006 ———————————————————-

DateJudge, Civil Court