ARBITRATION AWARD. Hearing(s) held on 01/09/2017, 06/13/2017 Declared closed by the arbitrator on 06/13/2017

Transcription

1 American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Stand Up MRI of Lynbrook (Applicant) - and - Country-Wide Insurance Company (Respondent) AAA Case No Applicant's File No. Insurer's Claim File No NAIC No ARBITRATION AWARD I, Dimitrios Stathopoulos, 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 01/09/2017, 06/13/2017 Declared closed by the arbitrator on 06/13/2017 Michael Tomforde, Esq. from Dash Law Firm, P.C. participated in person for the Applicant Jacob Marks, Esq. from Jaffe & Koumourdas LLP participated in person for the Respondent The amount claimed in the Arbitration Request, $ , 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 Assignor was then a 61-year-old male restrained driver of an automobile involved in a motor vehicle accident on 4/13/15. Consequently, the Assignor sustained injuries for which the Applicant herein rendered MRI services. Respondent denied the services based on the reasoning that the Applicant did not provide requested verification within 120 days of the request. Thus, the issue to be determined is: Whether Respondent's denial predicated upon the Assignor's failure to provide verification within 120 days should be sustained. Page 1/7

2 4. Findings, Conclusions, and Basis Therefor Applicant is seeking to be reimbursed the sum of $ for an MRI of the Assignor's lumbar spine on 7/7/15. This award is rendered upon the oral arguments of the parties and the documentary evidence submitted by the parties. The documentary evidence submitted by the parties consists of the documents contained within the American Arbitration Association's electronic case folder for this matter as of the above declared closed date by this arbitrator. Pursuant to 11 NYCRR (o) (1), 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. Prior to the commencement of the hearing I advised the parties that my wife's second cousin is a vice president at the Respondent's company. I further advised the parties that I could hear and determine the matter before me impartially and fairly. Neither party had any objection to me hearing the case. As synopsis of the evidence presented indicates Assignor was then a 61-year-old male restrained driver of an automobile involved in a motor vehicle accident on 4/13/15. Consequently, the Assignor sustained injuries for which the Applicant herein rendered MRI services. Upon receipt of the bill, Respondent on 9/1/15 and 10/2/15 requested from the Applicant a letter of medical necessity, the MRI films, original signed NF-3, licensing and corporate verification. Respondent contends that they did not receive all the items requested and issued a denial predicated on the Applicant's failure to provide the requested a verification within 120 days. 11 NYCRR Section (b) provides that an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the Applicant has not submitted all such verification under the Applicant's control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the The evidence submitted indicates that on 9/10/15, the Applicant forwarded a letter to the Respondent indicating that they are not in possession of the treating provider's medical documentation and they should seek same directly from the treating provider. The letter further informed the Respondent of who the treating provider was. Thereafter, on 9/28/15, 11/5/15 and 12/29/15 the Applicant forwarded to the Respondent the licensing and corporate documentation, MRI films and narrative reports from the treating physician. Applicant further objected to the request for corporate paperwork as improper Page 2/7

3 under the regulations. Respondent acknowledged receipt of these items and sent out further correspondence on 1/29/16 to Applicant that the matter still remains outstanding pending a letter of medical necessity and corporate verification. The Applicant submits an affidavit from its no-fault billing and collections manager, Shelly Limongelli detailing the Applicant's responses to the Respondent's verification requests. Respondent submits affidavits from Jessica Mena-Sibrian, a no-fault litigation/arbitration supervisor for Respondent, and Daisy Calixto, a no-fault fraud analyst for Respondent, who both attest that the corporate verification requests remain outstanding. Ms. Calixto further attests that the corporate verification was sought because of the following fraud indicators: provider using a PO Box without indicating or documenting the place/physical location where services were rendered; the listed owner is engaging in self referrals contrary to the public health law; and the management company is owned by the listed owner of the Applicant. Determination Respondent maintains that two items were not provided within 120 days of the requested information; a letter of medical necessity and corporate verification. With respect to the letter of medical necessity Applicant clearly advised Respondent that they are not in possession of this item, and that they should seek same from the treating provider. Applicant further provided the treating providers name to Respondent. Respondent has failed to submit any evidence that they requested this information from the treating provider. Moreover, one of the narratives submitted by the Applicant from the treating physician to the Respondent set forth the rationale for ordering the disputed MRI. Accordingly, the 120-day denial based upon the lack of a medical necessity letter is without basis. With the respect to the outstanding licensing and corporate verification, in Dynamic Medical Imaging, P.C., v State Farm Mutual Automobile Insurance Company, 29 Misc. 3d 278, 2010 NY Slip Op (Dist. Ct. Nassau County 2010), the court noted that the regulations do not give the insurer the right to ask an assignee to produce documents relating to the corporate structure or finances of a medical provider. In addition, nothing in the no-fault regulations permits an insurer to request an assignee to produce corporate organizational and financial documents. Notwithstanding same, in the seminal case of State Farm Mutual Automobile Ins. Co. v. Mallela, 4 N.Y.3d 313, 794 N.Y.S.2d 700, 702 (2005), the court held that insurers may withhold No-fault payments for medical services provided by fraudulently incorporated providers. The Mallela holding further set forth a standard of "good cause" that insurers must follow when investigating fraudulent incorporation defenses. The court further put the burden on the insurer to demonstrate that the provider has engaged in "behavior tantamount to fraud" to establish "good cause" to justify the investigation. Therefore, any request for additional verification to verify ownership, beyond the face of the licensing documents, must be justified by Respondent with an offer of proof showing "behavior tantamount to fraud". Page 3/7

4 In this instance, Respondent relies on the affidavit of Ms. Calixto to establish the good cause for the additional corporate verification requests. I find the affidavit fails to establish good cause for requesting said verification. In her affidavit, Ms. Calixto cites to various factors to demonstrate a good cause for requesting the corporate verification. However, she fails to submit any supporting documentary evidence in support of these factors to establish good cause. Therefore, I find that Respondent has failed to establish good cause for requesting the subject corporate verification from Applicant, and as such Respondent cannot sustain their 120-day denial on this basis. Accordingly, Applicant's claim is granted in its entirety. 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 Claim Amount Status Stand Up MRI of Lynbrook 07/07/15-07/07/15 Awarded: $ $ Total $ Awarded: $ Page 4/7

5 B. The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 04/06/2016, which is a relevant date only to the extent set forth below.) Since, the claim(s) in question arose from an accident that occurred on or after April 5, 2002, the insurer shall compute and pay the Applicant, the amount of interest at the rate of 2% per month, simple, and ending with the date of payment of the award. C. Attorney's Fees The insurer shall also pay the applicant for attorney's fees as set forth below The Respondent shall also pay the Applicant, an attorney's fee of 20%, in accordance with 11 NYCRR 4.6(e), but such fee shall not be less than $60.00 or more than $ However, if this case was filed on or after February 4, 2015, Respondent shall pay an attorney's fee of 20% with no minimum fee and a maximum fee of $1,360. 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, Dimitrios Stathopoulos, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 06/13/2017 (Dated) Dimitrios Stathopoulos IMPORTANT NOTICE This award is payable within 30 calendar days of the date of transmittal of award to parties. 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 Page 5/7

6 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 6/7

7 ELECTRONIC SIGNATURE Document Name: Final Award Form Unique Modria Document ID: 5e43ed5fbbf149e7af74b Electronically Signed Your name: Dimitrios Stathopoulos Signed on: 06/13/2017 Page 7/7