ARBITRATION AWARD. Anthony Alton, Esq. from Samandarov and Associates, P.C. participated in person for the Applicant

Transcription

1 American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Orthocare Tech, Inc (Applicant) - and - Allstate Insurance Company (Respondent) AAA Case No Applicant's File No. SS Insurer's Claim File No NAIC No ARBITRATION AWARD I, Corinne Pascariu, the undersigned arbitrator, designated by the American Arbitration Association pursuant to the Rules for New York State No-Fault Arbitration, adopted pursuant to regulations promulgated by the Superintendent of Insurance, having been duly sworn, and having heard the proofs and allegations of the parties make the following AWARD: Injured Person(s) hereinafter referred to as: Assignor Hearing(s) held on 03/02/2017 Declared closed by the arbitrator on 03/02/2017 Anthony Alton, Esq. from Samandarov and Associates, P.C. participated in person for the Applicant Adam Kass, Esq. from Peter C. Merani Esq. participated in person for the Respondent The amount claimed in the Arbitration Request, $ 5,101.50, was NOT AMENDED at the oral hearing. Stipulations WERE NOT made by the parties regarding the issues to be determined. Summary of Issues in Dispute Background Assignor is a male who was 49-years-old when he was injured as a pedestrian struck by a motor vehicle on June 5, Following the accident, he went by ambulance to the emergency room at Elmhurst Hospital where he was treated and released. On September 1, 2015, he presented to Robert Haar, M.D., an orthopedic surgeon, with complaints of pain to his left shoulder. On November 3, 2015, assignor underwent a left shoulder arthroscopy which was performed by Dr. Haar. Subsequent to the arthroscopy, Applicant provided assignor with a sheep skin pad and from November 10, 2015 to December 21, 2015, Applicant leased a continuous passive motion machine (CPM) to Applicant, collectively durable medical equipment (DME). Reimbursement for the Page 1/8

2 arthroscopy as well as the related services including the DME was denied based on a peer review report by Regina Hillsman, M.D. dated December 30, Applicant seeks $ in reimbursement for the DME provided. Issue The issue is whether Respondent was justified in denying Applicant's bill based on the ground of lack of medical necessity. 4. Findings, Conclusions, and Basis Therefor The case was decided on the submissions of the parties as contained in the ADR Center maintained by the American Arbitration Association and the oral arguments of the parties' representatives. There were no witnesses. I reviewed the documents contained in the file for both parties and make my decision in reliance thereon. Prima Facie To receive payment of a claim, Applicant "need only file a 'proof of claim' (11 NYCRR 65.11(k)(3)), and the insurers are obliged to honor it promptly or suffer the statutory penalties." Dermatossian v. New York City Transit Authority, 67 N.Y.2d 219, 224, 501 N.Y.S.2d 784, 787 (1986). Furthermore, the No-Fault law requires a carrier to either pay or deny a claim for No-Fault benefits within thirty (30) days from the date an applicant supplies proof of claim. See, Insurance Law 5106 (a) and 11 NYCRR In support of its position, Applicant submitted a claim for $ , as amended, for the DME provided, an assignment of benefits form and contemporaneous medical documentation. A review of the evidence in the record reveals that Applicant established a prima facie case of entitlement to reimbursement of its claim, by submitting evidence that the prescribed statutory billing form was mailed and received, and that the Respondent failed to either pay the claim within the requisite 30-day period. Mary Immaculate Hospital v. Allstate Insurance Co., 5 A.D.3d 742, 774 N.Y.S.2d 564 (2nd Dept. 2004). Respondent timely denied reimbursement of the durable medical equipment, asserting that the procedure was not medically necessary based upon the peer review report by Dr. Hillsman. Collateral Estoppel Page 2/8

3 "Under the doctrine of collateral estoppel, a party is precluded from relitigating an issue which has been previously decided against it in a prior proceeding where it had a full and fair opportunity to litigate the issue (see D'Arata v. New York Cent. Mut. Fire Ins. Co., 76 N.Y.2d 659 [1990]). 'The two elements that must be satisfied to invoke the doctrine of estoppel are that (1) the identical issue was decided in the prior action and is decisive in the present action, and (2) the party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior issue (see Kaufman v. Lilly Co. [65 N.Y.2d 449, 455 (1985)])' ( Luscher v. Arrua, 21 AD3d 1005, 1007 [2005]). 'The burden is on the party attempting to defeat the application of collateral estoppel to establish the absence of a full and fair opportunity to litigate' ( D'Arata, 76 N.Y.2d at 664; see also Kaufman, 65 N.Y.2d at 456)." Uptodate Medical Service, P.C. v. State Farm Mutual Automobile Ins. Co., 22 Misc.3d 128(A), 880 N.Y.S.2d 227 (Table), 2009 N.Y. Slip Op (U) at 2, 2009 WL (App. Term 2d & 11th Dists. Jan. 9, 2009). In the case of Amer. Ambulatory Surgery Center DBA Surgery Center of Oradell v. Allstate Ins. Co., AAA Case no (9/5/16 (Corinne Pascariu, Arb.), I previously decided whether the subject arthroscopy was medically necessary. In my prior award, I determined that Dr. Hillsman's peer report failed to meet the burden of persuasion and, as such, that Respondent failed to establish that the procedure was not medically necessary. At the hearing, counsel for Respondent argued that collateral estoppel does not apply because they provided an addendum by Dr. Hillsman to the peer review. First, I will not consider the addendum as Respondent had a full and fair opportunity to litigate the issue in the prior action. See, Buechel v. Bain, 97 NY2d 295, , cert denied 535 US 1096 (2002). See, also, McDonald v. Capital Dist. Transp. Authority, 137 AD2d 923, 924; 524 NYS2d 888 (3rd Dept. 1988). Second, even if I entertained the addendum I would not find it sufficient to establish that the DME was not medically necessary as neither the peer report nor the addendum make any reference whatsoever to DME at issue. In short, I find that the prior decision has collateral estoppel effect on this claim. The identical issue was raised in the previous proceeding. Thus, I find that collateral estoppel applies. Having found in favor of Applicant I will address Respondent's argument concerning the proper rate of reimbursement for the DME. Fee Schedule Defense Applicant billed $ for the DME at issue. Respondent asserts that Applicant billed in excess of the fee schedule and argued that Applicant is only entitled to the amount allowed under the Medicaid Fee Schedule, which allows for reimbursement Page 3/8

4 based upon either a listed Maximum Reimbursement Amount (MRA), or based upon the provider's cost in acquiring the equipment when the fee schedule does not provide a listed MRA. Therefore, they maintained that the proper reimbursement amount for DME rentals is the lower of the monthly rental charge to the general public or the price determined by the NYS DOH, neither of which may exceed the amount determined using the Medicaid Fee Schedule. CPM machines are not assigned MRA in either the DME fee schedule or the NYS Medicaid Fee Guidelines. As such, Respondent argued that the rental is calculated at 1/6 of the provider's acquisition cost. Absent an acquisition invoice to establish the proper reimbursement amount, the time to pay or deny Applicant's bill has not begun. Applicant needed to provide an invoice for the equipment to be used to calculate Applicant's "acquisition cost." Applicant did not provide these invoices. Accordingly, Applicant did not did not establish proof of claim or meet its prima facie burden under 11 NYCRR 65-3,8 (g) (1). In response, Applicant, argued the New York State Department of Health has not set or determined any reimbursement rate for the rental of DME, and the no-fault system has not adopted the Medicaid Guidelines which recommend reimbursement based on 1/6 of the acquisition costs for items that do not have an MRA. This is evidenced by a letter from NYS DOH concerning this issue in which they indicate that they have adopted the Medicaid reimbursement policy for the rental of items that do not have a listed MRA. Moreover, in support of the amount billed Applicant provided an affidavit from its fee coder, Aaron Perretta, who notably also is an attorney with with their office, and a statistical analysis by Ingenix/Optum Coding. Mr. Perretta, relying on Ingenix asserted that the correct billable amount for the CPM leased is $ per day, more than the amount billed by Applicant, $ per day. Findings The local New York State Health Department office has not determined a set fee for the durable medical equipment at issue. In accordance with 12 NYCRR 442.2(b), the correct fee should be the monthly rental charge to the general public. It is Respondent's burden to prove that the usual and customary price charged to the general public is different than the actual price billed by the Applicant herein. Medical Records Retrieval/DBA Kamara Supplies/Desmond Smalls v. Farmers Ins. Co., AAA Case No , (Tali Philipson, Arb. Sept. 1, 2015). Case law further dictates that Respondent has the burden of coming forward with competent evidentiary proof to support its fee schedule defenses. See, Robert Physical Therapy PC v. State Farm Mutual Auto Ins. Co., 2006 NY Slip 26240, 13 Misc.3d 172, 822 N.Y.S.2d 378, 2006 N.Y. Misc. LEXIS 1519 (Civil Ct, Kings Co. 2006). If Respondent fails to demonstrate by competent evidentiary proof that a plaintiff's claims were in excess of the appropriate Page 4/8

5 fee schedules, defendant's defense of noncompliance with the appropriate fee schedules cannot be sustained. See, Continental Medical PC v. Travelers Indemnity Co., 11 Misc.3d 145A, 819 N.Y.S.2d 847, 2006 NY Slip Op 50841U, 2006 N.Y. Misc. LEXIS 1109 (App. Term, 1st Dep't, per curiam, 2006). Respondent offered nothing into evidence to contradict Applicant's assertion the correct billable amount for the CPM leased is $ per day. Likewise, Respondent provided no evidence of the "usual and customary price charged to the general public". I find that Respondent failed to prove that the Applicant was billing in excess of the "usual and customary price charged to the general public" at the time the CPM unit was rented and the pad provided. Accordingly, after a careful review of the records and consideration of the parties' oral arguments, I find for the Applicant and award $ in full satisfaction of this claim. 5. Optional imposition of administrative costs on Applicant. Applicable for arbitration requests filed on and after March 1, I do NOT impose the administrative costs of arbitration to the applicant, in the amount established for the current calendar year by the Designated Organization. 6. I find as follows with regard to the policy issues before me: The policy was not in force on the date of the accident The applicant was excluded under policy conditions or exclusions The applicant violated policy conditions, resulting in exclusion from coverage The applicant was not an "eligible injured person" The conditions for MVAIC eligibility were not met The injured person was not a "qualified person" (under the MVAIC) The applicant's injuries didn't arise out of the "use or operation" of a motor vehicle The respondent is not subject to the jurisdiction of the New York No-Fault arbitration forum Accordingly, the applicant is AWARDED the following: A. Medical From/To Amount Status Orthocare Tech, Inc 11/10/15-12/21/15 $5, Awarded: $5, Total $5, Awarded: $5, Page 5/8

6 B. The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 04/21/2016, which is a relevant date only to the extent set forth below.) Interest runs from 4/21/2016, the filing date for this case, until the date that payment is made at two percent per month, simple interest on a pro rata basis using a thirty-day month. C. Attorney's Fees The insurer shall also pay the applicant for attorney's fees as set forth below As the claim was filed subsequent to the Sixth Amendment to 11 NYCRR 65-4 (Insurance Regulation 68-D) which took effect on February 4, 2015, Attorney's Fees shall be calculated pursuant to the amended terms, as follows: 20 percent of the amount of first-party benefits, plus interest thereon, subject to a maximum fee of $1,360. [11 NYCRR (d)]. There is no minimum fee. D. The respondent shall also pay the applicant forty dollars ($40) to reimburse the applicant for the fee paid to the Designated Organization, unless the fee was previously returned pursuant to an earlier award. This award is in full settlement of all no-fault benefit claims submitted to this arbitrator. State of New York SS : County of Nassau I, Corinne Pascariu, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 03/26/2017 (Dated) Corinne Pascariu IMPORTANT NOTICE This award is payable within 30 calendar days of the date of transmittal of award to parties. Page 6/8

7 This award is final and binding unless modified or vacated by a master arbitrator. Insurance Department Regulation No. 68 (11 NYCRR ) contains time limits and grounds upon which this award may be appealed to a master arbitrator. An appeal to a master arbitrator must be made within 21 days after the mailing of this award. All insurers have copies of the regulation. Applicants may obtain a copy from the Insurance Department. Page 7/8

8 ELECTRONIC SIGNATURE Document Name: Final Award Form Unique Modria Document ID: cdeffae1c523a3fa a400cc8b4 Electronically Signed Your name: Corinne Pascariu Signed on: 03/26/2017 Page 8/8