American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Wert Specialty Orthopedic PC (Applicant) - and - Geico Insurance Company (Respondent) AAA Case No. 17-17-1056-8278 Applicant's File No. None Insurer's Claim File No. 0430313780101033 NAIC No. 22055 1. ARBITRATION AWARD I, Rhonda Barry, 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: EIP Hearing(s) held on 10/17/2017 Declared closed by the arbitrator on 10/17/2017 Peter Diconza,, Jr, Esq. from Peter J. Diconza Jr. P.C. participated in person for the Applicant Augustine Ardizzone, Esq. from Geico Insurance Company participated in person for the Respondent 2. The amount claimed in the Arbitration Request, $ 4,155.93, was NOT AMENDED at the oral hearing. Stipulations WERE made by the parties regarding the issues to be determined. The parties stipulated that the denial was timely. 3. Summary of Issues in Dispute Was a claim for a right shoulder arthroscopy properly and timely denied for lack of medical necessity pursuant to peer review? Did respondent sustain its burden of proof that the amount billed was in excessive of the NJ Fee Schedule? Page 1/9
4. Findings, Conclusions, and Basis Therefor The EIP is a 33 year old female injured as a rear seat passenger in a rear-end motor vehicle accident on 8/11/16. Applicant seeks $4,155.93 for a left shoulder arthroscopy on DOS 9/30/16. Respondent denied applicant's claim based upon lack of medical necessity according to the peer review of Howard Kiernan, MD, orthopedist. Applicant submits a rebuttal form the treating orthopedic surgeon, Sanford Wert, MD. Respondent further opines that the submitted claim was in excess of the NJ Fee Schedule. I have completely reviewed all timely submitted documents contained in the ADR Center record maintained by the American Arbitration Association and considered all oral arguments. No additional documents were submitted by either party at hearing. No witnesses testified at hearing. ANALYSIS Applicant has established its prima facie entitlement to reimbursement for no fault benefits based upon the submission of a properly completed claim form setting forth the amount of the loss sustained and that payment is overdue. Mary Immaculate Hospital v. Allstate Insurance Company, 5 AD 3d 742, (2 nd Dept. 2004). Westchester Medical Center v. Lincoln General Ins Co, 60 AD 3d 1045 (2 nd Dept. 2009). The burden now shifts to respondent to establish a lack of medical necessity with competent medical evidence which sets forth a clear factual basis (specifics of the claim) and medical rationale for denying the claim. Citywide Social Work and Psych Services, PLLC v. Allstate, 8 Misc. 3d 1025A (2005); Healing Hands Chiropractic v. Nationwide Assurance Co., 5 Misc. 3d 975 (2004). Respondent must offer sufficient and credible medical evidence that addresses the standards in the applicable medical community for the services and treatment in issue; explains when such services and treatment would be medically appropriate, preferably with understandable objective criteria; and why it was not medically necessary in the instance at issue. In order to prevail, respondent's peer review must address all of the pertinent objective findings contained in applicant's medical evidence. It must then clearly explain why, notwithstanding those findings, the disputed service was inconsistent with generally accepted medical or professional practices. Amaze Medical Supply Inc. v. Eagle Insurance Co, 2 Misc. 3d 128(A), Citywide Social Work, et al, v. Travelers Indemnity Company, 3 Misc. 3d 608. Where other reports in the insurer's papers contradict the conclusion of its peer review or that the service was not medically necessary, it has failed to make out a prima facie case in support of the defense of lack of medical necessity. Hillcrest Radiology Associates v. State Farm Mutual Automobile Insurance Company, 28 Misc. 3d 13 8(A), 200 NY Slip op. 51467 (U) 2010 WL 3258144 (App. Term 2 nd, 11th and 13th Dists. 2010). Page 2/9
Citing to the New York Shoulder Injury Medical Treatment Guidelines, Dr. Kiernan persuasively opines that 3 to 6 months of non-operative treatment should always be attempted prior to surgery. The EIP participated in only 17 physical therapy sessions before the left shoulder arthroscopy. Physical therapy is necessary to gain full range of motion; this requires stretching and strengthening to balance the musculature. The physical therapy provided to the EIP consisted of therapeutic exercise only. Dr. Kiernan also cites to the Journal of Bone and Joint Surgery which points out that non operative treatment should always be attempted first with a focus on increasing range of motion and improving scapular function. At hearing, respondent's counsel opined that the EIP sustained a partial tear for which conservative care was sufficient to allow the EIP to return to his activities of daily living without pain and with proper function. Applicant's counsel disagreed opining that conservative care does not repair a tear (partial or otherwise); a tear could be aggravated by activities of daily living, resulting in an even more significant injury. Rehabilitative treatment is palliative only. Counsel further argued that Dr. Kiernan's reliance on the Workers Compensation Guidelines is at best misplaced. The goal of the Guidelines (and its recommendation for conservative care) is to increase range of motion so as to return the EIP to the workforce as soon as possible while the goal of the no fault law is to return the patient to his pre-accident status. Therefore, Dr. Kiernan's reliance upon the Workers Compensation Guidelines is insufficient to sustain respondent's burden of proof. I agree with applicant to the extent that the Guidelines alone are not necessarily conclusive in no-fault cases. However, as Arbitrator Wiener noted, "I]t is logical to look at the only codified treatment guidelines in New York State, the New York State Worker's Compensation Board Treatment Guidelines. These guidelines developed by representatives of the Insurance Department, the Worker's Compensation board, the Department of Labor and most importantly highly qualified and respected medical professionals are codified and are contained in the New York codes, rules and regulations at 12 NYCRR part 324." (Elite Medical Care New York, PC v. Allstate Property Casualty Insurance Company, AAA # 412014018767, 10/27/14). The Guidelines offer persuasive information that may, in consideration of the factual situation presented, provide a generally accepted standard of care for the medical community as a whole, particularly when coupled with the peer reviewer's experience as a physician. In this case, Dr. Kiernan cites to additional medical authority to support his position. As a matter of fact, I find Dr. Kiernan's standard of generally accepted standard of medical practice is reasonable. However, his report is insufficient to sustain respondent's burden of proof because it fails to set forth a clear factual basis to support his determination that the surgery was medically unnecessary. As such he does not successfully correlate the medical necessity of the arthroscopy to this EIP. See, James Ligouri Physician, PC v. State Farm Mutual Automobile Insurance Company, 2007 NY Slip op 50465 (U) (NY Dist. Court 2007). Page 3/9
Specifically, Dr. Kiernan opines that the claimant did not receive any physical therapy prior to surgery and could not have completed an appropriate course of such treatment as the surgery was performed less than two months after the accident. Dr. Kiernan did not have the opportunity to review or consider the physical therapy progress notes indicating 25 sessions of physical therapy and progressively worsening complaints of pain. Nor does Dr. Kiernan comment on the MRI findings (9/2/16) indicating downward sloping acromion impinging on super spin out is tendon and low-grade partial tear of the supraspinatus tendon. Prior to the 8/11/16 accident the EIP had no complaints of pain to the left shoulder. She participated in one and a half months (25 sessions) of physical therapy without improvement. Immediately following the accident the EIP presented to Dr. Rhee (8/15/16) with severe left shoulder pain radiating to the left arm exacerbated by induction. Upon examination Dr. Rhee noted decreased range of motion to the left shoulder, crepitus, and positive apprehension sign, diminished reflexes and significantly diminished muscle strength to the left upper extremity. Dr. Wert's 9/16/16 evaluation noted decreased range of motion to the left shoulder with click, positive Hawkins and positive apprehension test. Based upon the results of MRI (an objective finding from an independent source), multiple examinations indicating worsening complaints of pain, positive clinical findings and the failure of 25 sessions of physical therapy Dr. Wert, as treating physician determined that arthroscopy was medically necessary. I agree. Dr. Wert's rebuttal is cogent. He persuasively explains that for this EIP, surgery was required to return the patient to his pre-accident status. Conservative care is for all intents and purposes a panacea; it eases pain without curing the condition. The EIP participated in 25 sessions (1 ½ months) of continuous failed physical therapy. Her condition worsened. As Dr. Wert noted, Dr. Kiernan never asked for or received the physical therapy records. His conclusion that she did not participate in any conservative care is simply incorrect. Citing to the National Institute of Health arthroscopic surgery may be recommended for torn or damaged cartilage ring ligaments, shoulder instability, torn biceps tendon, torn rotator cuff, bonus for inflammation, rheumatoid arthritis, boost tissue and shoulder impingement syndrome the right shoulder MRI revealed a partial tear of the supraspinatus tendon as well is impingement satisfying the criteria set forth by the National Institute of Health. After careful consideration of the party submissions and arguments at hearing I find that the right shoulder arthroscopic performed by Dr. Wert on 11/11/16 was not a deviation from generally accepted medical practice. Respondent has not sustained its burden of proof. I find for applicant and the claim is awarded. Fee Schedule The insurer has the burden of proving that the fees charged were excessive and not in accordance with the Worker's Compensation fee schedule. St. Vincent Medical Care PC Page 4/9
v. Countrywide Insurance Company, 26 Misc. 3d 146 (A), 907 NYS 2d 441 (App. Term 2d, 11th and 13th Dists. 2010). If the insurer fails to demonstrate, by competent evidentiary proof, that the claims were excess of the appropriate fee schedule, the defense of noncompliance cannot be sustained. See, Continental Medical PC v Travelers Indemnity Company, 11 Misc.3d 145(a), 819 NYS 2d 847 (App Term 1st Dept. 2006). In Surgicare Surgical v. National Interstate Ins. Co, 2015 NY Slip Op 24361 (App. Term 1 st Dept. 10/8/15), the appellate court affirmed the lower court's determination that, "when services are rendered outside of New York by any jurisdiction which utilizes a fee schedule, the insurer complies with section 68.6 by paying the "permissible" charge for that particular medical service, that is, the amount permitted by that jurisdiction's fee schedule. The court neither exceeds its "jurisdiction" nor subverts the plain language of section 68.6 by holding that an insurer complies with section 68.6 when the reimbursement amount is consistent with another state's fee schedule. Rather, this court merely adopts a reading of section 68.6 that comports with both the insurance Department's interpretation of its own regulations as well as the policy goals underlying New York's (not to mention New Jersey's) No Fault Law." I take judicial notice of the New Jersey fee schedule and find that it constitutes credible evidence of the prevailing fees in the geographic area or of the applicant. See also, Kingsbrook Jewish Medical Center the Allstate Insurance Company, 61 AD 3d 13 (2d Dept. 2009); LVOV Acupuncture PC v. Geico Insurance Company, 32 Misc. 3d 144 (A) (App. Term 2d, 11th and 13th Jud. Dists. 2011). Natural Acupuncture Health PC v. Praetorian Insurance Company, 30 Misc. 3d 132 (A), 2011 N Y slip op 50040 (U), (App. Term 1st Dept. 2011). Applicant billed CPT 29823 (arthroscopy, shoulder, surgical, extensive debridement), 29821 (arthroscopy, shoulder, surgical synovectomy complete), 29826 (arthroscopy, shoulder, surgical decompression of subacromial space with partial acromioplasty with coracoacromial ligament release when performed) and 29825 (arthroscopic, shoulder, surgical with lysis and resection of adhesions with or without manipulation). In its fee schedule audit, respondent recommended payment in full for CPT 29821 and CPT 29826. It denied CPT 29823 and CPT 29825 per the National Correct coding. "Comprehensive in most extensive procedure". NJAC 11:3-29.4 (g) specifically provides that the fee schedules shall be interpreted in accordance with the relevant chapters of the Medicare claims processing manual and the NCCI policy manual for Medicare services. Further, "artificially separating or petitioning what is inherently one total procedure into subparts that are integral to the whole for the purpose of increasing medical fees is prohibited. Such practices commonly referred to as "unbundling" or "fragmented" billing. Providers and payors use the National Correct Coding Initiative (NCCI) edits incorporated herein by reference Modify 59 and other NCCI associated modify should not be used to bypass an NCCI edit unless the proper criteria for use of the modifier are met." Page 5/9
Respondent has not offered the affidavit of a certified coder or any documentation to support its conclusion that CPT 29823 (debridement) and CPT 29825 (resection) are in fact included in either CPT 29821(synovectomy) or CPT 29826 (decompression). The code descriptors do not suggest that any of these procedures are inclusive in any another. The defense of fees not being in accordance with fee schedule must be rejected where the insurer fails to address how the amount charged by the provider was in excess of the fee schedule. See, Jesa Medical Supply, Inc. v. GEICO Ins. Co., 25 Misc. 3d 1098, 887 NYS 2d 482 (Civ. Ct. Kings County 2009). Applicant properly applied the multiple procedures rule in accordance with the New Jersey fee schedule. Applicant's claim is awarded in its entirety. 5. Optional imposition of administrative costs on Applicant. Applicable for arbitration requests filed on and after March 1, 2002. 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 Wert Specialty Orthopedic PC 09/30/16-09/30/16 Awarded: $4,155.93 $4,155.93 Page 6/9
Total $4,155.93 Awarded: $4,155.93 B. The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 03/07/2017, which is a relevant date only to the extent set forth below.) Based on the submission of a timely denial, interest shall be paid from 3/7/17, the date of filing, on the amount awarded of $4,155.93 at a rate of 2% per month, simple, and ending with the date of payment of the award subject to the provisions of 11NYCRR 65-3.9 (e). C. Attorney's Fees The insurer shall also pay the applicant for attorney's fees as set forth below As this matter was filed after February 4, 2015, this case is subject to the provisions promulgated by the Department of Financial Services in the Sixth Amendment to 11 NYCRR 65-4 (Insurance Regulation 68-D). Accordingly, the insurer shall pay the applicant an attorney's fee, in accordance with newly promulgated 11 NYCRR 65-4.6(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 Nassau I, Rhonda Barry, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 10/20/2017 (Dated) Rhonda Barry IMPORTANT NOTICE Page 7/9
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 65-4.10) 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 8/9
ELECTRONIC SIGNATURE Document Name: Final Award Form Unique Modria Document ID: d887cda1c252cd24cd79f29874270686 Electronically Signed Your name: Rhonda Barry Signed on: 10/20/2017 Page 9/9