[*1]

Supreme Court, Kings County, July 30, 2004

APPEARANCES OF COUNSEL

Eliot Spitzer, Attorney General (Lewis A. Polishook of counsel), for defendants. Gary Tsirelman for plaintiffs.

{**5 Misc 3d at 953} OPINION OF THE COURT

Gloria Cohen Aronin, J.

In 1973, the New York State Legislature enacted the Comprehensive Motor Vehicle Insurance Reparations Act, the No-Fault Law, which is now codified as article 51 of the Insurance Law. The No-Fault Law provides a plan for compensating victims of automobile accidents for their economic losses without regard to fault or negligence. One of the purposes in enacting the No-Fault Law was to provide rapid payment for economic injury (see, Oberly v Bangs Ambulance, 96 NY2d 295, 296 [2001]).

Section 5106 (b) of the Insurance Law states that claimants injured in automobile accidents [*2]have the option of submitting any dispute involving the insurer’s liability to pay first-party benefits, or additional first-party benefits, the amount thereof, or any other matter concerning first-party benefits to arbitration pursuant to simplified procedures to be promulgated and approved by the Superintendent. Insurance Law § 5106 (c) provides for the appeals process from arbitral decisions.

Relevant Arbitration Regulations:

Pursuant to Insurance Law § 5106, the Commissioner has promulgated regulations governing optional arbitration procedures.

11 NYCRR 65-4.5 (o) (1) provides:

“The arbitrator shall be the judge of the relevance and materiality of the evidence offered, and strict conformity to legal rules of evidence shall not be necessary. The arbitrator may question any witness or party and independently raise any issue that the arbitrator deems relevant to making an award that is consistent with the Insurance Law and department regulations.”

11 NYCRR 65-4.2 (b) (3) provides:

“(i) The applicant shall submit all documents supporting the applicant’s position along with their request for arbitration. All such documents shall also be simultaneously submitted to the respondent. Following this original submission of documents, no additional documents may be submitted by the applicant other than bills or claims for ongoing benefits . . .

“(iv) Any additional written submissions may be made only at the request or with the approval of the arbitrator.”{**5 Misc 3d at 954}

The Complaint:

Plaintiffs are New York corporations that are applicants in arbitration disputes subject to the no-fault arbitration regulations. They commenced this action for a judgment declaring that 11 NYCRR 65-4.5 (o) (1) violates the Due Process Clauses of the United States and New York Constitutions and restraining arbitrators from invoking it at arbitration hearings. Plaintiffs claim that 11 NYCRR 65-4.5 (o) (1) and 65-4.2 (b) (3), taken together, prevent a claimant from submitting additional proof in response to new issues raised by arbitrators, and thus, violate the requirements of procedural due process. Plaintiffs further allege that the provisions of 11 NYCRR 65-4.2 (b) (3) (iv), which give the arbitrator discretion to accept additional written submissions, does not cure the due process violation because it gives the arbitrator discretion as to whether to accept supplemental papers, the approval is almost never granted by some arbitrators and the provision does not guarantee a right to supplemental oral argument. Finally, plaintiffs allege that although they have a right to appeal to a master arbitrator, the master arbitrators are bound by the same unconstitutional regulations.

Defendants currently move to dismiss arguing that plaintiffs cannot prove that the challenged regulation is facially unconstitutional and that plaintiffs lack standing to bring an “as applied” due process challenge because they failed to avail themselves of the procedural remedies available to them.

Due Process Considerations:

The Due Process Clauses of the United States and New York Constitutions require that ” ‘deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for [*3]hearing appropriate to the nature of the case’ ” (Brancato v City of New York, 244 F Supp 2d 239, 242 [SD NY 2003], quoting Mullane v Central Hanover Bank & Trust Co., 339 US 306, 313 [1950]). The procedural safeguards required by due process are flexible and vary with the circumstances and type of proceeding (see, Goss v Lopez, 419 US 565, 578 [1975]; Matter of Vector E. Realty Corp. v Abrams, 89 AD2d 453, 456-457 [1st Dept 1982]).

Arbitration is intended to be a more efficient and less expensive alternative to dispute resolution than a formal court procedure (see, British Ins. Co. of Cayman v Water St. Ins. Co. Ltd., 93 F Supp 2d 506, 516 [SD NY 2000]). To achieve this goal, arbitrators are permitted to provide relief without observing{**5 Misc 3d at 955} all of the rules that the court would be bound to follow (id.). While it is undisputed that arbitrators must give each of the parties to the dispute an adequate opportunity to present its evidence and argument (see, Tempo Shain Corp. v Bertek, Inc., 120 F3d 16, 19 [1997]; Hoteles Condado Beach, La Concha & Convention Ctr. v Union De Tronquistas Local 901, 763 F2d 34, 39 [1st Cir 1985]), arbitrators are not required to hear all the evidence proffered by a party (see, Tempo Shain Corp. v Bertek, Inc., supra at 20). Arbitrators are afforded broad discretion in determining whether “additional evidence is necessary or would simply prolong the proceedings” (id. at 19).

As there is no statutory requirement to the contrary, due process mandates only that plaintiffs be accorded “an opportunity ‘to be heard’ ” (Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753, 757 [1991]) and to submit evidence supporting their position, and that opportunity is provided (see, Matter of Akshar v Mills, 249 AD2d 786 [3d Dept 1998]; Vector E. Realty, 89 AD2d at 455 [1st Dept 1982]; see also, Yonir Tech., Inc. v Duration Sys. [1992] Ltd., 244 F Supp 2d 195 [SD NY 2002]).

In addition, the no-fault regulations provide further safeguards through the appellate process. Claimants may appeal adverse decisions to master arbitrators and may further seek judicial review of those decisions to ensure that arbitration decisions comport with constitutional requirements of due process (see, Insurance Law § 5106 [c]; 11 NYCRR 65-4.10; see also, Matter of Unigard Mut. Ins. Co. v Hartford Ins. Group, 108 AD2d 917 [2d Dept 1985]; Country-Wide Ins. Co. v Harnett, 426 F Supp 1030 [SD NY 1977]). In fact, two recent arbitral decisions show that procedural safeguards are effective. In Matter of Schuster (Peerless Ins. Co.) (AAA Case No. 17 R 991 31701, Oct. 31, 2003) and Matter of Alpine Med. Servs. P.C. (Allstate Ins. Co.) (AAA Case No. 17 R 991 29054 03, Oct. 30, 2003), the master arbitrators vacated the arbitrator’s decisions on the ground that the arbitrators should have permitted additional evidence for review.

Facial Constitutional Challenge:

A facial challenge requires the court to examine the words of the regulation without reference to the defendant’s conduct. A plaintiff may prevail only if he or she can establish that no set of circumstances exists under which the regulation would be valid (see, People v Stuart, 100 NY2d 412 [2003]; Matter of Wood v Irving, 85 NY2d 238, 244-245 [1995]; People v Bright, 71 NY2d 376, {**5 Misc 3d at 956}382 [1988]; see also, United States v Salerno, 481 US 739, 745 [1987]; Village of Hoffman Estates v Flipside, Hoffman Estates, Inc., 455 US 489, 495 n 5, 497 [1982] [a successful facial challenge means that the law is ” ‘invalid in toto—and therefore incapable of any valid application’ “]; McGowan v Burstein, 71 NY2d 729, 733 [1988]).

Here, 11 NYCRR 65-4.5 (o) (1) and 65-4.2 (b) (3), taken together, authorize the arbitrator to permit supplementation of the claimant’s submissions, they can be constitutionally [*4]applied in tandem and the facial constitutional claim must be dismissed. In fact, plaintiffs admit that there are situations where arbitrators can and do permit supplemental submissions pursuant to the regulations.

As Applied Due Process Challenge:

There is no evidence in the record that plaintiffs sought review before a master arbitrator of the arbitrations in question. Thus, plaintiffs do not have the standing to assert an as applied due process challenge since they did not exhaust their administrative remedies and have shown no exception to this rule (see, Matter of Rodriguez v Coughlin, 219 AD2d 876 [4th Dept 1995]). In any event, plaintiffs do not challenge any specific application of the regulations at issue and thus have no standing to assert an as applied challenge.

Accordingly, the defendants’ motion is granted, and the complaint is dismissed.

Civil Court, Kings County

72088/03

Donald Scott Kurtz, J.

Plaintiff moves, pursuant to CPLR §3212, for an order granting summary judgment on [*2]the ground that no issue of fact exists with respect to the plaintiff’s entitlement to No-Fault benefits for transportation services provided to Rafael Fuentes (hereinafter “the patient”) who was allegedly injured in a motor vehicle accident on May 6, 2001. Plaintiff claims that it provided necessary transportation services to the patient at a total cost of $1,650, of which $700 was paid, leaving a balance of $950.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact. Alvarez v. Prospect Hospital, 68 NY2d 320 (1986). In light of such a showing, if the party opposing the motion comes forward with evidence of issues of fact requiring a trial, the motion will be denied. Rebecchi v. Whitmore, 172 AD2d 600 (2d Dept 1991).

In order to establish a prima facie case of entitlement to No-Fault benefits, the plaintiff must submit proof of claim and amount of loss, together with a valid assignment. See Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2d Dept 2004); Damadian MRI In Garden City, P.C. v. Windsor Group Ins., 2 Misc 3d 138(A)(App Term, 2d & 11th Jud Dists 2004); Interboro General Hosp. v. Allcity Ins. Co., 149 AD2d 569, appeal dismissed 74 NY2d 792 (1989). In support of its claim, plaintiff submits several invoices addressed to defendant. Those invoices purport to establish that plaintiff provided the patient with transportation services sixty-six times between May 8, 2001 and October 18, 2001, at a rate of $25 per trip. Plaintiff was reimbursed by defendant in the amount of $700, leaving a balance of $950 owing. Plaintiff also submits the affidavit of Leonid Zayets, an employee and/or officer of plaintiff, wherein he states that plaintiff submitted the invoices to defendant together with proper No-Fault verification forms. However, plaintiff fails to attach said forms.

The alleged accident occurred on May 6, 2001. Therefore, this case falls under the No-Fault provisions of 11 NYCRR § 65.15 in effect on that date. Under the applicable regulations, a patient is entitled to up to $25 per day for “other reasonable and necessary expenses incurred as a result of the accident,” including necessary transportation expenses. 11 NYCCR § 65.8(g)(1)(3). Although the current No-Fault regulations allow the assignment of the right to collect payment for health services only, under the older, applicable regulations, a patient may assign the right to collect payment from an insurer to either an attending physician or “other provider of service…” 11 NYCRR 65.15(j)(1). See also, 11 NYCRR 65-3.11(a).

Plaintiff submits a purported assignment which provides as follows:

In consideration of services rendered or to be rendered to the above, named patient, I hereby authorize payment directly to the Transportation provider services of any and all first party no-fault automobile insurance benefits, to which I may be entitled, for services rendered by the provider, but not to exceed the provider’s regular charges for such services.

I further understand that if said sum is not collected I will remain personally liable. [*3]

This language operates only to authorize defendant to make payment directly to plaintiff and in no way assigns to plaintiff the right to sue to collect such payment in the place of the patient. Therefore, it is not a valid assignment, but merely an authorization for direct payment. See also, Rehab Medical Care of New York, P.C. v. Travelers Ins. Co., 188 Misc 2d 176 (App Term, 2d & 11th Jud Dists 2001) (wherein a statement containing the language “I hereby assign to the provider of services and/or his/her assignees so much of my first party No-Fault automobile insurance benefits and rights…” [emphasis added] was held to be an assignment of the right to sue as well as the right to be paid.)

Although the Court need not consider defendant’s remaining arguments in opposition to the motion, the Court notes that defendant argues that plaintiff has failed to prove medical necessity of the transportation services claimed. However, defendant fails to establish that such a defense was raised in a timely denial of the plaintiff’s claims. Absent such a denial, defendant has waived such a defense. See Amaze Medical Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 139(A) (App Term, 2d & 11th Jud Dists 2004); A.B. Medical Services Pllc v. CNA Ins. Co., 1 Misc 3d 137(A) (App Term 1st Dept 2004).

Accordingly, plaintiff has failed to establish a prima facie case of entitlement to judgment as a matter of law. Consequently summary judgment is denied.

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

Dated: July 22, 2004

DONALD SCOTT KURTZ

Judge, Civil Court

[*1]

Civil Court of the City of New York, Kings County, May 3, 2004

APPEARANCES OF COUNSEL

Teresa Spina, Woodbury (Kevin Barry of counsel), for defendant. Anatta Levinsky, P.C., Brooklyn, for plaintiff.

{**4 Misc 3d at 185} OPINION OF THE COURT

Ellen Gesmer, J.

{**4 Misc 3d at 186}Defendant has moved to dismiss plaintiff’s complaint pursuant to CPLR 3126 because plaintiff failed to appear at an examination before trial (EBT) scheduled by defendant. Defendant’s motion is granted unless the plaintiff appears for an EBT under the terms set forth below.

Procedural History and Facts

In this action, plaintiff is seeking payment of first-party no-fault benefits for medical equipment provided by it to Leonie Joiles, who assigned to plaintiff her rights to no-fault benefits from defendant, her insurer.^[FN*] The defendant timely denied payment, on the grounds of medical necessity, based on an independent medical peer review. [*2]

Plaintiff commenced this action on or about March 20, 2003. Simultaneously with the service of its answer on April 9, 2003, defendant served plaintiff with a demand for verified interrogatories and a notice to take deposition upon oral examination. The answers to the interrogatories were due 20 days later and the deposition was scheduled for June 18, 2003, more than 60 days later. At plaintiff’s request, defendant rescheduled the deposition to August 26, 2003. Plaintiff failed to appear.

Analysis

Although the CPLR permits a party to utilize both written interrogatories and oral depositions in pretrial discovery, a party should generally complete one form of discovery before invoking another (Giffords Oil Co. v Spinogatti, 96 AD2d 851 [2d Dept 1983]; Samsung Am. v Yugoslav-Korean Consulting & Trading Co., 199 AD2d 48, 49 [1st Dept 1993]). Indeed, the Second Department has held that “the noticing of an oral deposition prior to reviewing the answers interposed to the interrogatories and without a determination of the necessity for further disclosure, verges on an abuse of the judicial system.” (Barouh Eaton Allen Corp. v International Bus. Machs. Corp., 76 AD2d 873, 874 [2d Dept 1980].) In this case, although the defendant noticed the deposition at the same time that it sent the demand for {**4 Misc 3d at 187}interrogatories, it did not take any action to enforce its request for a deposition until well after receiving the interrogatories. Moreover, in support of its motion, defendant’s counsel affirmatively asserts that “the examination before trial of plaintiff is necessary and material in order to defend this action properly,” thus meeting the standard set by the Second Department for using a second discovery device (Katz v Posner, 23 AD2d 774, 775 [2d Dept 1965] [“If the device first chosen does not adequately disclose all evidence material and necessary to the prosecution or defense of the action (CPLR 3101), then the other available remedy may be utilized”]). Consequently, defendant has established a prima facie case that it is entitled to go forward with its deposition.

In opposition to defendant’s motion, plaintiff initially argues that it made a demand for verified interrogatories to which defendant did not respond. Plaintiff has failed, however, to show why defendant’s failure to respond to interrogatories would excuse its failure to attend a deposition or serve as a defense to a motion to compel. In any event, this argument is particularly weak because plaintiff’s deposition was scheduled for August 26, 2003, well before the responses to plaintiff’s demand for interrogatories were even due.

More substantially, plaintiff argues, relying on Ostia Med. v Government Empls. Ins. Co. (1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [Nassau Dist Ct 2003]) and Zlatnick v Government Empls. Ins. Co. (2 Misc 3d 347 [Civ Ct, Queens County 2003]), that defendant may not proceed with its deposition because it failed to advise plaintiff that its answers to defendant’s demand for verified interrogatories were “inadequate, incomplete or defective.” The court rejects this argument for several reasons.

First, unlike the plaintiff medical providers in Ostia and Zlatnick, the plaintiff in this case did not move for a protective order with regard to the deposition, pursuant to CPLR 3103, and still has not done so. While there is no absolute time limit for moving for a protective order, the [*3]court may imply a standard of reasonableness, especially where the time for the scheduled deposition has long passed (Philip v Monarch Knitting Mach. Corp., 169 AD2d 603 [1st Dept 1991]; see also Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:3). Plaintiff is in a particularly poor position to complain about being compelled to appear at the deposition since it took no action to object to the deposition either before it was scheduled or in the eight months since. While that would not prevent {**4 Misc 3d at 188}plaintiff from opposing this motion, it would certainly have been the better practice for plaintiff to move for a protective order rather than to just ignore defendant’s deposition notice.

Secondly, this court disagrees with the rulings in Ostia and Zlatnick that the burden is on the defendant insurance company to justify its need for a deposition. Indeed, that conclusion seems inconsistent with the holding in Ostia that a medical provider which brings an action in Civil Court to obtain no-fault benefits has the same discovery obligations under article 31 of the CPLR as any other litigant (Ostia, 2003 NY Slip Op 51560[U], *12; see also Albatros Med. v Government Empls. Ins. Co., 196 Misc 2d 656 [Civ Ct, Queens County 2003]). As set forth above, the general rule is that if a litigant determines that the responses to interrogatories from the other side do “not adequately disclose all evidence material and necessary to the prosecution or defense of the action,” then it may utilize depositions or any other available remedy, without first seeking court permission (Katz v Posner, 23 AD2d at 775). If the other party moves for a protective order, it must then bear the burden of showing that the discovery sought is not necessary, consistent with the well-established principle that “the burden of demonstrating an immunity from discovery is on the party asserting the immunity.” (Westhampton Adult Home v National Union Fire Ins. Co., 105 AD2d 627, 628 [1st Dept 1984]; see also Koump v Smith, 25 NY2d 287, 294 [1969]; Mavrikis v Brooklyn Union Gas Co., 196 AD2d 689, 690 [1st Dept 1993]; Jarvis v Jarvis, 141 Misc 2d 404, 406 [Sup Ct, NY County 1988].) The decisions in Ostia and Zlatnick improperly shift the burden to the party seeking discovery to justify a request for discovery, rather than imposing the burden on the party seeking to avoid discovery to show that the discovery sought is not necessary. In this case, plaintiff has certainly not met its burden of showing that the discovery sought is not proper.

Third, even if the court were to find that the burden is on defendant to show that the discovery is justified, it would find that defendant had met its burden. First, defendant has shown that it made a timely denial based on medical necessity, so defendant has preserved issues on which discovery is appropriate (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997]; Ostia, 2003 NY Slip Op 51560[U], *11). Secondly, plaintiff’s responses to defendant’s interrogatories are insufficient on their face for at least two reasons. As an initial matter, the responses to {**4 Misc 3d at 189}the interrogatories were not verified, and they fail to identify the name and address of the individual responding to the interrogatories; rather, they state only that they were answered by the plaintiff’s attorney. Consequently, as formulated, the interrogatories do not subject plaintiff or its principals to cross-examination, as would properly verified interrogatories. Finally, plaintiff fails to set forth any responses to the interrogatories concerning the medical necessity of the equipment provided. Since that is the crux of the issue in this case, defendant is entitled to conduct a deposition of plaintiff to obtain the information. [*4]

Conclusion

The nature and degree of the penalty to be imposed pursuant to CPLR 3126 against a party who has disobeyed a court order is a matter within the discretion of the court (Jaffe v Hubbard, 299 AD2d 395, 396 [2d Dept 2002]). Although the court has rejected plaintiff’s arguments, the court finds that plaintiff presented a good faith argument for its failure to attend the scheduled deposition. Accordingly, the court holds that the correct remedy in this case is to permit plaintiff an opportunity to appear for a deposition, subject to the penalty of dismissal of plaintiff’s case if it fails to do so. The plaintiff shall appear for a deposition at a date, time and place to be agreed to between the parties, or, failing agreement, at 10:00 a.m. on June 14, 2004 at the courthouse located at 141 Livingston St., Brooklyn, New York. In the event that plaintiff does not appear for a deposition on the date agreed to by the parties or on the date set by the court, defendant may settle an order on notice, pursuant to 22 NYCRR 208.33, dismissing the action.

Footnotes

Footnote *: The complaint does not allege that Ms. Joiles was injured in a car accident, which is an essential element of a claim under the No-Fault Law (Insurance Law § 5103). Accordingly, the court could dismiss the complaint sua sponte for failure to state a cause of action. The complaint refers to an annexed claim for payment, which was not attached to the copy of the complaint submitted with the moving papers. The claim for payment may have provided the missing information, since the denial of the claim refers to Ms. Joiles as the “injured person” and refers to an accident on May 18, 2000. Accordingly, the court will not dismiss the complaint, but cautions counsel to include the necessary allegations in their complaints.

Civil Court Of The City Of New York, Kings County

Index No. 40021KCV2003

Baker & Barshay, LLP ( Joaquin J. Lopez, Esq.) for plaintiff.

McDonnell, Adels & Goodstein, P.C.( Joel D. Epstein, Esq.) for defendant.

Manuel J. Mendez, J.

Plaintiff, Advanced Medical Rehabilitation, P.C., brings this action to recover $4298.37 for first party no-fault benefits provided to its assignor David Briggs, pursuant to the No-Fault provision of his insurance policy (see Insurance Law art 51). A plaintiff assignee will be awarded judgment upon establishing a prima facie case. To establish a prima facie case, plaintiff assignee must show there was a policy in effect issued by defendant insurer covering the treated person and motor vehicle collision in which the person was involved, an assignment of policy benefits, presentation of claims to the insurer for medical expenses arising from the collision and defendant insurer’s failure to deny the claims within 30 days. (11 NYCRR §65.15 (g) (6); Westchester County Medical Center v New York Central Mut. Fire Ins. Co., 262 AD2d 553, 555 [2nd Dept]; Neuro Care Center II v Allstate Insurance Co., NYLJ, Jan. 28, 2003, at 19, col 5; AB Medical Services PLLC v Progressive Insurance, 2003 NY Slip Op 50790[U], 2003 NY Misc. Lexis 463; S&M Supply inc., v Geico Insurance, 2003 NY Slip Op 51192[U], 2003 NY Misc. 1067; AB Medical Services PLLC v Highland Insurance Co., NYLJ, May 27, 2003, at 21, col 3 ).

Valid assignments of insurance benefits to plaintiff health care providers authorized by their patients are key to plaintiff’s recovery of those benefits (A.B. Medical Services PLLC v Highland, supra). To be valid, the assignor’s signature on the assignment of benefits must be authenticated (A.B. Medical Services PLLC v Highland, supra; Acevedo v Audubon Management, 280 AD2d 91 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2nd Dept 2003); Neuro Care Center II v Allstate Ins. Co., supra).

The mere signature of the person listed as the assignor on an assignment document does not authenticate that signature (Neurocare Center II, supra., citing Freeman v Kirkland, 184 AD2d 331, 332 [1st Dept. 1992]; Fanelli v Lorenzo, 187 AD2d 1004, 1005 [4th Dept 1992]). Authentication of the signatures of plaintiffs’ assignor requires an attestation by a person familiar [*2]with the assignor’s signatures identifying them as such (Acevedo v Audubon Mgt., 280 AD2d 91, 95 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2d Dept 2003); Neuro Care Center II, supra).

If a witness does not authenticate the executed assignment, it is inadmissible (Neurocare Center II, supra; citing People v Michallow, 201 AD2d 915 (4th Dept. 1994); People v Boswell, 167 AD2d 928 (4th Dept 1990) Wilson v Bodian, 130 AD2d 221 (2d Dept 1987).

Absent observing the assignor place his signature on the assignment, it is not sufficient that a witness merely recite that he is familiar with the assignor’s signature. (see Prince, Richardson Evidence §§9-103 at 703 [Farrell 11th ed] ). To admit the assignment in evidence, the witness must state, under oath, how it is that he has obtained familiarity with the assignor’s signature.

The assignee must establish that the claim was presented to the insurer (S&M Supply Inc. v Geico Insurance, 2003 NY Slip Op S1192[U]). Proof of mailing of the claim to the insurer may be established by testimony of the assignee’s employee who has personal knowledge that the claim was mailed (S&M Supply Inc., supra). Testimony of an employee regarding the general mailing practices of assignee’s office is insufficient (Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374, 726 NYS2d 443).

This case was tried by the Court on February 19, 2004. Plaintiff presented one witness, Ruben Paez, an assistant office manager at Advanced Medical Rehabilitation. Mr. Paez testified to the practices and procedures utilized by plaintiff when a new patient comes into the office. Although it is the regular practice of the office to have the patient fill out an intake form and sign any required documentation at the initial visit, in this particular case, Mr. Paez did not witness Mr. Briggs sign the assignment or any other document and is not familiar with his signature. Furthermore, the assignment is undated and Mr. Paez could not recall the date when this assignment was actually signed.

CPLR 4518(a) codifies the business record exception to the hearsay rule. It sets forth the foundational requirements necessary to overcome a hearsay objection to the admission of certain documents. The proponent of the evidence must establish that the act, transaction, occurrence or event was made in the regular course of business; that it was the regular course of such business to make such act, transaction, occurrence or event and the entry was made at the time of the act, transaction, occurrence or event or within a reasonable time thereafter.

The essence of the business records exception to the hearsay rule is that records systematically made for the conduct of a business, as a business are inherently highly trustworthy because they are routine reflections of day to day operations and because the “entrant’s obligation” is to have them truthful and accurate for purposes of the conduct of the enterprise (Williams v Alexander, 309 NY 283, 286; People v Kennedy, 68 NY2d 569, 510 NYS2d 853, [1986]).

The Business Record Rule was not intended to permit the receipt in evidence of entries made by third parties not engaged in the business or under any duty to report (Johnson v Lutz, 253 NY 124 [Ct App 1930]). The rule should not be extended so to admit a mere private memorandum, not made in the pursuance of any duty owing by the person making it (Johnson v Lutz, supra at 128; Pector v County of Suffolk, 259 AD2d 605, 686 NYS2d 789 [2nd Dept 1999]).

The assignment of benefits is inadmissible as a business record for a number of reasons. [*3]First, the witness did not see Mr.Briggs sign the assignment and is not familiar with his signature; therefore, he could not properly authenticate the signature. Secondly, the assignment is not dated and the witness could not recall the date it was signed; thus, it could not be said that the assignment was made at the time of the events reflected in it or within a reasonable time thereafter. Finally, the assignment of benefits was made by Mr. Briggs who is not an employee of assignee or a person under a duty to report. Mr. Briggs is merely a third party not engaged in the business and under no duty to report as mandated by CPLR 4518(a). Therefore the assignment is not a business record admissible under the business record exception to the hearsay rule as embodied in CPLR 4518(a).

Mr. Paez testified that the bills for services provided to Mr. Briggs were prepared and mailed by a separate entity. When questioned during direct examination and also while being voir dired on the admissibility of the medical bills, Mr. Paez stated…. “they are not prepared by us, they are prepared for us and mailed.” He has no personal knowledge that the bills were mailed, when they were mailed or to whom. He has no personal knowledge of the general business practice of this billing entity. He is not qualified to testify as to the record keeping of an entity to which he is not related as an employee and about events over which he has no personal knowledge (Standard Textile Company, Inc. v National Equipment Rental, LTD., 80 AD2d 911, 437 NYS2d 398 [2nd dept 1981]; S&M Supply, Inc., supra).

Mr. Paez is not the proper witness to lay a foundation for the admissibility of the billing records. Plaintiff should have called an employee of the billing entity who is familiar with the general business practice of this entity and has personal knowledge that the claim was mailed (Standard Textile Company, Inc. v National Equipment Rental, LTD., supra).

CONCLUSION

The assignment of benefits form is inadmissible. It is not a business record made in the regular course of business by a person with a business duty to report. Furthermore, it was not properly authenticated or dated.

The medical bills are inadmissible because the witness is not qualified to testify as to the record keeping practices of an entity to which he is not related as an employee and about events over which he has no personal knowledge.

Two essential elements in maintaining an action seeking the recovery of first party no-fault benefits are proof of assignment and proof that the claim was mailed to the insurer. Plaintiff has failed to prove these essential elements. Plaintiff has failed to make out a prima facie case of its entitlement to recover no-fault first party benefits. Therefore, this action must be and it is hereby dismissed.

This constitutes the decision and judgment of this Court.

Dated: March 16, 2004

[*4]

Manuel J. Mendez

J.C.C.

Decision Date: March 16, 2004

[*1]

Civil Court of the City of New York, Kings County, February 11, 2004

APPEARANCES OF COUNSEL

Baker & Barshay, LLP, Hauppage (Joaquin Lopez of counsel), for plaintiff. Peter C. Merani, New York City (Samuel Kamara of counsel), for defendant.

{**3 Misc 3d at 246} OPINION OF THE COURT

Ellen Gesmer, J.

{**3 Misc 3d at 247}Plaintiff Behavioral Diagnostics brings this action to obtain payment from defendant Allstate for services rendered by plaintiff to three of its patients, Marina Shaulov, Dwayne Dowdell and Maria Arevalo.^[FN*] All three patients are insured by defendant Allstate under New York State No-Fault Insurance Law § 5101 et seq., and all three assigned their insurance benefits to plaintiff. The court conducted a full trial of this matter on January 26, 2004 and makes the following findings.

Facts and Procedural History

Plaintiff’s assignors were all in motor vehicle accidents. They each received medical treatment from plaintiff Behavioral Diagnostics. The parties stipulated that the plaintiff had sent proper and timely verifications of claims, as required by the regulations of the Insurance Department (11 NYCRR 65-2.4), to Allstate; that plaintiff was the assignee of the three patients; and that the defendant had sent proper and timely denials of the claims, as required by 11 NYCRR 65-3.8. For each of the three patients, plaintiff sought payment from defendant for $194.57 for a diagnostic interview; $67.24 for “record evaluation”; $975.10 for seven hours of psychological testing; and $103.31 for “Interpretation/Explanation of Results.”

Allstate paid for the psychiatric interview for each patient, but denied payment of the other services based on its determination that they were not “medically necessary” as provided by 11 NYCRR 65-3.8 (b) (4).

Since the parties stipulated that the plaintiff had sent proper and timely verifications of claims, as required by 11 NYCRR 65-2.4, that plaintiff was the assignee of the three patients, and that the defendant had sent proper and timely denials of the claims, as required by 11 NYCRR 65-3.8, plaintiff met its burden of proving its claim (see Amaze Med. Supply Inc. v [*2]Eagle Ins. Co., 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]; Liberty Queens Med., P.C. v Liberty Mut. Ins. Co., 2002 NY Slip Op 40420[U] [App Term, 2d & 11th Jud Dists 2002]).

Consequently, the only issue to be determined at trial was whether the services rendered were medically necessary, as defined by Insurance Law § 5102 (a) (1). While there had been some uncertainty in the courts as to whether plaintiff bore the burden of showing medical necessity, or whether it was the defendant’s {**3 Misc 3d at 248}burden to show lack of medical necessity, it is now clear in this judicial district that the burden rests on defendant to prove that the services rendered were not medically necessary (Choicenet Chiropractic P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672[U] [App Term, 2d & 11th Jud Dists 2003]; A.B. Med. Servs. v GEICO Ins., 2 Misc 3d 26 [App Term, 2d Dept 2003]).

In support of its case, defendant presented the testimony of Dr. Michael Rosenfeld, who had conducted a peer review of the records of Ms. Shaulov, and Dr. Yakov Burstein, who had conducted peer reviews of Mr. Dowdell and Ms. Arevalo. Both Dr. Rosenfeld and Dr. Burstein are licensed psychologists with many years of experience in the field, and were qualified by the court to give expert testimony. Both Dr. Rosenfeld and Dr. Burstein testified that the diagnostic interviews were medically necessary. Dr. Burstein did not state any opinion as to the medical necessity for the record evaluation of Ms. Arevalo’s file. Both doctors testified with a reasonable degree of medical certainty that all of the other services rendered by plaintiff to the three patients were not medically necessary.

In rebuttal, plaintiff presented the testimony of Dr. Dimara Maksa, who has worked for plaintiff since June 2003, and became a co-owner of plaintiff in January 2004. The court qualified Dr. Maksa to render expert testimony. Dr. Maksa testified that all of the services rendered were medically necessary.

The Absence of a Definition of “Medical Necessity”

The No-Fault Insurance Law provides no definition for medical necessity. Rather, it states that claimants are entitled to recover for “basic economic loss,” which includes:

“(1) All necessary expenses incurred for: (i) medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical and occupational therapy and rehabilitation; (iii) any non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of this state; and (iv) any other professional health services; all without limitation as to time, provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses {**3 Misc 3d at 249}may be incurred as a result of the injury. For the purpose of determining basic economic loss, the expenses incurred under this paragraph shall be in accordance with the limitations of section five thousand one hundred eight of this article.” (Insurance Law § 5102 [a] [1].)

The regulations, which set out the mandatory provisions for approved policies under the act, provide no additional guidance, and merely repeat the language [*3]of the statute (11 NYCRR 65.12 [e] [2]).

There is no appellate case law as yet on the subject. The increasing litigation on the issue confirms the comment of one court that it is not a “simple” issue (Albatros Med. v Government Empls. Ins. Co., 196 Misc 2d 656 [Civ Ct, Queens County 2003]). The determination of the issue turns on credibility (General Psychiatric Evaluation & Care v Kemper Ins. Co., 1 Misc 3d 499 [Civ Ct, Queens County 2003]), since courts cannot rely solely on the examining physician (Oceanside Med. Healthcare v Progressive Ins., 2002 NY Slip Op 50188[U] [Civ Ct, Kings County 2002]; cf. Tudor v Metropolitan Life Ins. Co., 143 Misc 2d 180 [Nassau Dist Ct 1989]), but must consider whether the treatment had a “valid medical purpose” and resulted in an “actual medical benefit” (Sunrise Med. Imaging, P.C. v Liberty Mut. Ins. Co., 2001 NY Slip Op 40091[U], *4 [Nassau Dist Ct 2001]).

Courts have taken care that their attempts to fashion a definition of “medical necessity” are consistent with the dual (and potentially contradictory) goals of the No-Fault Insurance Law of providing full compensation to motor vehicle accident victims who suffered “serious injury,” while simultaneously containing costs (Oceanside Med. Healthcare, P.C. v Progressive Ins., 2002 NY Slip Op 50188[U] [Civ Ct, Kings County 2002], citing Oberly v Bangs Ambulance, 96 NY2d 295 [2001], and Licari v Elliott, 57 NY2d 230 [1982]). The Oceanside court noted with approval the definition adopted by the New Jersey Supreme Court in Thermographic Diagnostics, Inc. v Allstate Ins. Co. (125 NJ 491, 512, 593 A2d 768, 780 [1991]):

“a necessary medical expense under the Act is one incurred for a treatment, procedure, or service ordered by a qualified physician based on the physician’s objectively reasonable belief that it will further the patient’s diagnosis and treatment. The use of the treatment, procedure, or service must be warranted by the circumstances and its medical value {**3 Misc 3d at 250}must be verified by credible and reliable evidence. That standard, in our view, is consistent with the reparation objectives of the Act in that it would allow reimbursement for innovative medical procedures warranted by the circumstances that have demonstrable medical value but have not yet attained general acceptance by a majority of the relevant medical community.”

That definition was also discussed with approval in Elm Med., P.C. v American Home Assur. Co. (2003 NY Slip Op 51357[U] [Civ Ct, Kings County 2003]), and Medical Expertise v Trumbull Ins. Co. (196 Misc 2d 389, 395 [Civ Ct, Queens County 2003]). In Medical Expertise (at 395), Judge Siegal used the New Jersey definition to establish the following standard for determining the medical necessity of psychological tests: “could a psychologist hold an objective and reasonable belief that the tool used will further the patient’s diagnosis and treatment and whether that tool is warranted given the circumstances.” In Fifth Ave. Pain Control Ctr. v Allstate Ins. Co. (196 Misc 2d 801, 807-808 [Civ Ct, Queens County 2003]), Judge Agate, after considering the dictionary definitions and the text of a bill pending in the Legislature, formulated the following definition of medical necessity:

“treatment or services which are appropriate, suitable, proper and conducive to the end sought by the professional health service in consultation with the patient. It means more [*4]than merely convenient or useful treatment or services, but treatment or services that are reasonable in light of the patient’s injury, subjective and objective evidence of the patient’s complaints of pain, and the goals of evaluating and treating the patient.” (Id. at 807; internal quotation marks omitted.)

Consistent with this, Judge Agate went on to hold that “for treatment or services to be medically necessary, it must be reasonably determined by the health care professional in consultation with the patient, that the treatment or services are consistent with the patient’s condition, circumstances and best interest of the patient with regard to the type of treatment or services rendered, the amount of treatment or services rendered, and the duration of the treatment or services rendered.” (Id. [internal quotation marks omitted].)

Against this background, the court turns to the specific services at issue in this case.{**3 Misc 3d at 251}

Medical Necessity of Psychological Testing

Dr. Rosenfeld testified that, as a general matter, it is not medically necessary to conduct psychological tests at the intake stage unless the psychologist conducting the intake interview could not establish a diagnosis based on the clinical interview alone. In this case, Dr. Rosenfeld stated that the clinical interview of Ms. Shaulov had provided an adequate basis for formulating a diagnosis so it was not medically necessary to perform psychological tests. Dr. Rosenfeld further commented critically that the tests which were administered to Ms. Shaulov were self-reporting tests which essentially duplicated the clinical interview. He explained that, in those circumstances where a diagnosis could not be formulated based on the clinical interview alone, it would be most appropriate to perform psychological tests which were complementary to the interview, such as projective tests, rather than self-reporting tests.

Dr. Burstein testified similarly that it is generally not medically necessary to perform psychological tests when intake interviews are conducted, but that it may be appropriate to do so under certain circumstances. However, he testified that it was not medically necessary to perform psychological testing of either Mr. Dowdell or Ms. Arevalo because their mental status exams and intake interviews provided an adequate basis for planning their treatment.

Dr. Maksa, who became licensed as a psychologist in New York State in December 2003, has had no experience in clinical practice. She testified that she “felt” that it was necessary to conduct psychological testing for every patient. She based this on a study which she claimed showed that psychological testing is valid and that clinical interviews sometimes lead to erroneous diagnoses. She did not state any of her opinions with a reasonable degree of psychological certainty. Moreover, she did not cite any basis for her claim that it was necessary to perform psychological testing in every case in order to formulate a treatment plan, regardless of the content of the intake interview.

Essentially, plaintiff took the position that the standard of care requires that psychiatric testing be performed on every patient at the time of intake, regardless of the particular circumstances presented by the patient. In the context of the psychological tests at issue in this case, this court holds that psychological tests are medically necessary if either (1) they are within the standard of care for good and accepted medical practice for all patients in that circumstance, or (2) the treating physician {**3 Misc 3d at 252}made a reasoned and reasonable judgment, based on the particular [*5]circumstances of the patient, that the tests will assist the physician in formulating an accurate diagnosis and an appropriate treatment plan for the patient.

In order to apply this standard to these facts, the court must first assess the credibility of the doctors. The testimony of Dr. Rosenfeld and Dr. Burstein was credible, relevant and probative. Dr. Maksa, as the co-owner of the plaintiff, has an interest in the outcome of the action. In evaluating her testimony, I also considered that she has no clinical experience, and had been licensed for only one month at the time of trial. Accordingly, I do not credit her testimony that the standard of care required that psychological testing be performed on every patient at the time of intake. Moreover, Dr. Maksa did not successfully rebut the testimony of Dr. Rosenfeld and Dr. Burstein that the intake interviews of the three patients provided an ample basis for the formulation of a diagnosis and the establishment of a treatment plan. Indeed, Dr. Maksa demonstrated little familiarity with the records of the specific patients. She did not testify that the intake interviews created any uncertainty as to the diagnosis of the patients, nor did she testify that any of the psychological tests which were administered provided the treating doctors with any new information which affected their diagnoses or treatment plans for the patients. Moreover, while she testified that the Beck’s Anxiety Test may bring out different information than that elicited in a clinical exam, the plaintiff’s own claim forms indicate that the Beck’s Anxiety Scale was not administered to the patients in this case. Accordingly, the court holds that the psychological tests administered by the plaintiff were not medically necessary.

Medical Necessity of Record Review

Dr. Rosenfeld testified that since a psychologist should review records as an integral part of the diagnostic interview, it was not appropriate to bill for record evaluation as a separate item for Ms. Shaulov. Dr. Burstein testified similarly, with respect to Mr. Dowdell, that it was not necessary to examine medical records because the file did not list any medical records. Dr. Burstein did not testify as to the medical necessity of reviewing the medical records of Ms. Arevalo. Dr. Maksa did not rebut defendant’s showing that the record evaluations for Ms. Shaulov and Mr. Dowdell were not medically necessary. Indeed, when questioned about it, she responded, “What records?” Accordingly, the court finds that the record reviews were not medically necessary.{**3 Misc 3d at 253}

Medical Necessity of Explanation of Results

With regard to the billing for “Interpretation/Explanation of Results,” Dr. Rosenfeld testified that, ordinarily, psychologists will advise the patient of any findings as part of the initial consultation. Therefore, he testified that it would only be appropriate to bill separately for explaining results if the psychologist consulted with other family members, which would be appropriate, for example, if the patient were a minor. Dr. Rosenfeld noted that there was no documentation of any meetings with other family members. Similarly, Dr. Burstein interpreted the billing for “Interpretation/Explanation of Results” to mean that there had been a consultation with the patient’s family, but he noted that there was no entry in the files of either Mr. Dowdell or Ms. Arevalo that such a meeting had occurred. He also stated that family consultations are appropriate where the family’s cooperation with the treatment is essential, but the treatment plans in these cases did not require participation by the patients’ families. [*6]

In response, Dr. Maksa claimed that the billing for “Interpretation/Explanation of Results” reflected a charge for sending a letter to the patients regarding the results of the psychological tests. However, she did not introduce the alleged letters. Accordingly, I find that the “Interpretation/Explanation of Results” was not medically necessary.

Conclusion

Because defendant failed to proffer any testimony that the record evaluation of the file of Ms. Arevalo was not medically necessary, the court must find that it was medically necessary. The court holds that the remainder of the services billed by plaintiff were not medically necessary. Therefore, judgment should be entered in favor of the plaintiff in the amount of $67.24, together with statutory interest and attorneys’ fees, pursuant to 11 NYCRR 65.15 (h) and (i) and 65.17 (b) (6) (iii) and (v).

Footnotes

Footnote *: In its complaint, plaintiff sought payments on behalf of five of its patients, but stipulated at trial that it had settled its claims as to assignors La’lsha Hillian and Nino Palagashvili.