ARBITRATION AWARD. Hearing(s) held on 09/07/2016, 01/31/2017 Declared closed by the arbitrator on 01/31/2017

Transcription

1 American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Engracia O. Lazatin, M.D. dba Advanced Multi-Medicine & Rehab (Applicant) AAA Case No Applicant's File No. - and - Allstate Insurance Company (Respondent) Insurer's Claim File No. NAIC No. ARBITRATION AWARD NF I, Donna Ferrara, 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 "EA". 1. Hearing(s) held on 09/07/2016, 01/31/2017 Declared closed by the arbitrator on 01/31/2017 Steven Athan, DC, employee, from Engracia O. Lazatin, M.D. dba Advanced Multi-Medicine & Rehab participated in person for the Applicant Marcia Brin, Esq. from Allstate Insurance Company participated in person for the Respondent 2. The amount claimed in the Arbitration Request, $ , was AMENDED and permitted by the arbitrator at the oral hearing. Applicant reduced the amount in dispute to $548.87, pursuant to the New York Medical Fee schedule. Stipulations WERE NOT made by the parties regarding the issues to be determined. 3. Summary of Issues in Dispute Whether Applicant established entitlement to No Fault compensation for physical therapy for Assignor on dates of service March 17, 2014 to June 4, Page 1/8

2 Whether Respondent properly denied payment based on the "8 unit rule." Whether Respondent's denials were legally sufficient to assert a defense of lack of medical necessity and a denial of further medical services. 4. Findings, Conclusions, and Basis Therefor I have reviewed the file with regard to this matter contained in the ADR Center record of the case maintained by the American Arbitration Association. This decision is based on my review of that file, as well as the arguments of the parties at the hearing. The dispute arises from the underlying motor vehicle accident of February 20, 2014, wherein Assignor, a 60 year old female, was injured. She was the restrained driver and she did not go to the hospital for emergency care. Assignor is presently receiving physical therapy. There are 8 bills in dispute. Applicant submitted the bills to Respondent. For dates of service March 17, 2014 to May 15, 2014, Respondent reduced payment passed on the "8 unit rule." For dates of service May 30, 2014 to June 4, 2014, Respondent denied payment "based upon an independent medical examination." Applicant establishes a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received by Respondent and that payment of no-fault benefits were overdue." Mary Immaculate Hospital v. Allstate Insurance Company, 5 A.D. 3d 742, 774 N.Y.S.2d 564 (2 nd Dept. 2004). This matter was continued from September 7, 2016, for Applicant to submit a statement by Assignor that the 2 names listed for Assignor are one and the same person, which was done. Interest was stayed. Applicant's counsel argued at the hearing of this matter that there was no proof to sustain the 8 unit rule defense. Respondent's counsel argued that 8 units are determined by the total treatment of the patient per day across all providers and that Respondent also paid B & A Chiropractic. In regard to the bills denied on the 8 unit rule defense, there were 13 dates of service billed at $67.60, for a total of $ Respondent paid $532.73, leaving the amount of $ in dispute. The eight-unit rule is based on Ground Rule 11 of the Physical Medicine chapter of the Workers' Compensation Medical Fee Schedule. That ground rule provides that when multiple physical medicine procedures and/or modalities are performed on the same day, reimbursement is limited to eight relative value units. The rule appears not only in the Medical Fee Schedule but also in the Chiropractic Fee Schedule. By law, the Workers' Page 2/8

3 Compensation fee schedules apply to No-Fault. Insurance Law The ground rules in the Workers' Compensation fee schedules do also apply to No-Fault. 11 NYCRR 68.1(b)(1). Respondent received bills in regard to Assignor for the same dates of service from both Applicant, and B & A Chiropractic, both medical providers located at 1065 Old Country Road, Suite 214, Westbury, New York. Respondent submitted payment screens and denials for both entities in support of its contention that it paid for services to different providers on the same day. Thus, I sustain Respondent's denial based on the 8 unit rule and payment of these bills is denied. At the hearing this arbitrator raised an issue whether the language used in Respondent's NF-10 Denial of Claim forms for dates of service May 30, 2014 to June 4, 2014, sufficed to assert a defense of lack of medical necessity or that further services were not needed. "The arbitrator may... 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 (o)(1). This No-Fault insurance regulatory provision was validly enacted. Matter of Medical Society v. Serio, 100 N.Y.2d 854, 872, 768 N.Y.S.2d 423, 434 (2003). The text in the denial which Respondent's counsel argued was sufficient to allege lack of medical necessity for further medical services was as follows: "New York No-Fault benefits have been denied based upon an independent medical examination," and "As per the findings of the physical examination conducted by Dr. Frank Oliveto, MD on 5/12/2014, all orthopaedic, physical therapy, physical medicine & rehabilitation (PMR), pain management, prescription medication and related claims benefits were denied effective 5/28/2014." Respondent also raised a fee schedule defense. As my colleague Arbitrator Aaron Maslow wrote in the arbitration case of Caring Mind Medical P.C. a/a/o "VS" v. Allstate Property and Casualty Ins. Co., AAA Case No (Feb 11, 2014), which was affirmed on appeal by Master Arbitrator Victor J. D'Ammora, (April 25, 2014), and as I agreed with Arbitrator Maslow in the arbitration case of Premier Physical Medicine & Rehabilitation v. Allstate Insurance Company, AAA Case No (June 24, 2015), which was affirmed on appeal by Master Arbitrator Robyn D. Weisman (September 15, 2015), wherein Arbitrator Maslow and I were adjudicating denial of claim forms issued by the same insurer as in the present case: The Insurance Department regulations governing No-Fault claims processing, in 11 NYCRR (e), provide that an insurer must "[c]learly inform the applicant of the insurer's position regarding any disputed matter." The Court of Appeals has held: Although an insurer may disclaim coverage for a valid reason (Insurance Law, s 167, subd. 8) the notice of disclaimer must promptly apprise the claimant with a high degree of specificity of the ground or grounds on Page 3/8

4 which the disclaimer is predicated. Absent such specific notice, a claimant might have difficulty assessing whether the insurer will be able to disclaim successfully. This uncertainty could prejudice the claimant's ability to ultimately obtain recovery. In addition, the insurer's responsibility to furnish notice of the specific ground on which the disclaimer is based is not unduly burdensome, the insurer being highly experienced and sophisticated in such matters. General Accident Insurance Group v. Cirucci, 46 N.Y.2d 862, 864, 414 N.Y.S.2d 512, 514 (1979). While a denial need not set forth a medical rationale, A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co., 39 A.D.3d 779, 835 N.Y.S.2d 614 (2d Dept. 2007), it must not be factually insufficient, conclusory, or vague. Nyack Hospital v. Metropolitan Property & Casualty Ins. Co., 16 A.D.3d 564, 791 N.Y.S.2d 658 (2d Dept. 2005). "New York No-Fault benefits have been denied based upon an independent medical examination," and "As per the findings of the physical examination conducted by Dr. Frank Oliveto, MD on 5/12/2014, all orthopaedic, physical therapy, physical medicine & rehabilitation (PMR), pain management, prescription medication and related claims benefits were denied effective 5/28/2014", is invalid as lacking a sufficiently detailed factual basis; such a basis for denial is too vague and ambiguous to alert the claimant as to the actual grounds. Mega Supply & Billing, Inc. v. American Transit Ins. Co., 9 Misc.3d 1116(A), 808 N.Y.S.2d 918 (Table), 2005 N.Y. Slip Op (U), 2005 WL (Civ. Ct. Kings Co., Eileen Nadelson, J., Oct. 3, 2005). Moreover, the denial does not convey the specific grounds or a legally sufficient defense. It clearly does not convey that the examination was negative and no further treatment was necessary. The defense herein did not clearly inform the Applicant of the reasons for denying payment. Merely stating that the service was denied based upon the Independent Medical Examination (IME) report is legally insufficient. It does not indicate whether the IME doctor found the services medically necessary or not. One cannot presume that an IME doctor will find services to be medically unnecessary. The prescribed Form NF-10, promulgated by the Insurance Department, does contain boxes which can be used to indicate lack of medical necessity. Box 19 is for "Excessive treatment, service or hospitalization," and Box 21 is for "Unnecessary treatment, service or hospitalization." Neither of these boxes was checked. Instead, Respondent utilized Box 22 ("explained below") to set forth its statement concerning the IME. However, its brief statement did not fully and explicitly set forth the reason for denying payment. While it is true that the IME by Dr. Oliveto concluded that medical justification had not been established, there is nothing before me to establish that the IME report was sent to Applicant contemporaneously with the denial form. Had it been sent and incorporated by reference in the denial, I would not find the denial to be legally insufficient in explicating the defense of lack of medical necessity for further services. Page 4/8

5 Where a defense of lack of medical necessity is not raised in a denial, it is waived. Palladium Car & Limo Service Corp. v. Liberty Mutual Insurance Co., 4 Misc.3d 1021(A), 798 N.Y.S.2d 346 (Table), 2004 N.Y. Slip Op (U), 2004 WL (Civ. Ct. Kings Co., Donald Scott Kurtz, J., July 22, 2004). The within denial did not allege lack of medical necessity. While a denial does not have to establish a prima facie defense, Keith v. Liberty Mutual Ins. Co., 118 A.D.2d 151, 503 N.Y.S.2d 441 (2d Dept. 1986), it cannot be factually insufficient, conclusory, or vague. Nyack Hospital v. Metropolitan Property & Casualty Insurance Co., 16 A.D.3d 564, 791 N.Y.S.2d 658 (2d Dept. 2005). The reference to the IME report is too vague. The denial here does not allege that the IME doctor found further services to be medically unnecessary. Therefore, I find that the denial was legally insufficient for the purpose of alleging a defense of lack of medical necessity for future medical services. The arbitration claim is granted in the amount of $ Interest: The insurer shall compute and pay the Applicant the amount of interest computed at the rate of 2% per month, but for the period September 7, 2016, to January 31, 2017, as interest was stayed as of that date due to Applicant's request to continue the matter. 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. Amount Amount Amount Page 5/8

6 B. Claimed Amended Awarded Medical $ $ $ TOTAL $ $ $ The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 12/02/2015, which is a relevant date only to the extent set forth below.) Applicant's award shall bear interest at a rate of two percent per month, calculated on a pro rata basis 30-day month from the date when payment became overdue, pursuant to 11 NYCRR (a). Interest shall run from the filing date until the date of payment. C. Attorney's Fees The insurer shall also pay the applicant for attorney's fees as set forth below This case is subject to the provisions as to attorney fee promulgated in the Sixth Amendment to 11 NYCRR 65-4 (Insurance regulation 68-D). 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 Suffolk I, Donna Ferrara, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 03/01/2017 (Dated) Donna Ferrara 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: 0423ede666b6a33583f74603effb06bb Electronically Signed Your name: Donna Ferrara Signed on: 03/01/2017 Page 8/8