American Arbitration Association New York No-Fault Arbitration Tribunal In the Matter of the Arbitration between: Orthocare Tech, Inc (Applicant) - and - State Farm Mutual Automobile Insurance Company (Respondent) AAA Case No. 17-16-1029-2625 Applicant's File No. SS-23584 Insurer's Claim File No. 32716Q335 NAIC No. 25178 1. ARBITRATION AWARD I, Bryan Hiller, 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 04/11/2017 Declared closed by the arbitrator on 04/11/2017 Anthony Alton, Esq. from Samandarov and Associates, P.C. participated in person for the Applicant Chris Fingerhut, Esq. from Picciano & Scahill, P.C. participated in person for the Respondent 2. 3. The amount claimed in the Arbitration Request, $ 5,042.50, 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 Whether Applicant is entitled to reimbursement for dates of service November 14, 2015 through December 20, 2015 where Respondent claims bills not received? If the Applicant is entitled to reimbursement, whether Respondent's partial payment based on fee schedule grounds can be sustained? 4. Findings, Conclusions, and Basis Therefor Page 1/8
Applicant seeks reimbursement, along with interest and counsel fees, under the No-Fault Regulations, for the costs associated with durable medical equipment, specifically CPM and CTU devices, provided to the Assignor between November 14, 2015 and December 20, 2015 in connection with injuries allegedly sustained by Assignor in a motor vehicle accident on August 25, 2015. This decision is based upon the written submissions of counsel for the respective parties as well as oral argument at the hearing conducted on April 11, 2017. I have reviewed the documents contained in the Record as of the date of the hearing. In dispute are Applicant Orthocare Tech Inc's claims for services totaling $5,042.50 for dates of service November 14, 2015 through December 20, 2015. Respondent has claimed that they never received the bills at issue and therefore never paid or denied said bills. In the alternative, Respondent claims that the Applicant overbilled for the durable medical equipment at issue Assignor, a then 43 year old female, allegedly sustained injuries when she was involved in a motor vehicle on August 25, 2015. During the course of the treatment, Assignor was prescribed the durable medical equipment at issue in this matter for post-surgical rehabilitation between November 14, 2015 and December 20, 2015. In support of its position, Applicant submitted a claim for $5,042.50 for the durable medical equipment specified above, an assignment of benefits form and the prescription and delivery documentation. A review of the competent 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 or deny the claim within the requisite 30-day period (see Mary Immaculate Hospital v. Allstate Insurance Co., 5 A.D.3d 742, 774 N.Y.S.2d 564 (2nd Dept. 2004)). Respondent argued that the bills for these dates of service were not received till the AR-1 was received and thus the claims were never denied within the 30 day requirement. Applicant submitted an affidavit of mailing signed by Daniel Akilov, the office and mailing manager at Samandarov & Associates, the attorney for the Applicant. Applicant also submitted the stamped mailing log from the Floral Park Post Office. Respondent argues that the affidavit, among other things, does not included an explanation on why Eric Lyons is listed as the office manager, fails to explain that the law office mails their medical bills for them, fails to explain why the bill was not delivered to the post office on the same day it was generated and fails to establish the process for incoming mail. Respondent's counsel also noted that the affidavit originally submitted was related to verification responses and not bills and the affidavit discussed was an amended affidavit which just confused the situation. Lastly, Respondent's counsel contends that these bills and the affidavit of mailing from Daniel Akilov are part of a pattern of fraudulent mailing by Mr. Akilov, his law firm and this Applicant. Applicant's counsel argued that Respondent has not done anything to establish a pattern of fraudulent mailing or even an allegation of such pattern as there is no SIU Page 2/8
investigator affidavit alleging same. Further, Applicant's counsel argued that despite Respondent's claim, a wrong affidavit of mailing was only sent in less than one one-hundredth of one percent of all the cases that his office filed with No-Fault last year. Applicant has provided proof of mailing showing that the bills were mailed and received by the Respondent. Lastly, Applicant's counsel argued that the amended affidavit by Mr. Akilov dated November 26, 2015, taken in conjunction with the stamped Floral Park Post Office log from January 6, 2016 were sufficient to establish proof of mailing of the bills that were never answered by the Respondent. This Arbitrator finds that the proof of mailing is sufficient. It establishes personal knowledge of the mailing of the bills on January 6, 2016 as well as the customary and ordinary procedures for mailing in his office. The proof of mailing establishes the appropriate bills at issue, the appropriate mailing address of the Respondent and the USPS information as well as an acknowledgment that the mailing was never returned as undeliverable. Thus, Applicant's claims for the CPM and CTU rental from dates of service November 14, 2015 through December 20, 2015 are granted. Fee Schedule Respondent, at the hearing, argued that the maximum monthly rental fee for the items at issue should be determined by taking 1/6 of the Applicant's acquisition cost. Applicant contends that there is no fee schedule for these items and therefore the fee payable for these items is the usual and customary price charged to the general public. Respondent argued that the provided devices do not have a relative value or fee established in the New York State Workers Compensation fee schedule. As such, the New York State Medicaid fee schedule for durable medical equipment applies in this instance. Since the CPT codes at issue herein are not listed in the Medicaid DME fee schedule and that DME items that have not been assigned a maximum reimbursement amount in the New York State Medicaid program fee schedule are limited to a monthly fee of 1/6 of the actual acquisition cost for the item. Respondent submitted a fee coder affidavit from Certified Professional Coder Mercy Acuna dated April 27, 2016. In Ms. Acuna's affidavit, she argued the maximum permissible monthly rental charge for the equipment is one ninth of the maximum permissible charge for purchase of the appliance or supplies provided. She argued that no payment is recommended after 10 months as then DME should be purchased at that point. Lastly she argued that since no invoice was submitted reimbursement was recommended at $21.25 and $19.50 per day as so the maximum allowable fee would be $815.13. Applicant submitted a brief from Aaron Perretta, an attorney with the Applicant's attorney's office who is also a Certified Professional Coder. Attorney Perretta argued that the monthly rental charge for the CPM and CTU is the rental rate to the general public as ascertained by Ingenix with all the supporting information The crux of the arguments presented by the parties is whether the billing for the rental of the CPM and CTU should be governed by the price charged to the general public, Page 3/8
Applicant's position, or a monthly rental fee that does not exceed 1/6 of the item's acquisition cost, Respondent's position. Both parties have submitted a plethora of decisions in support of their position. Respondent relies heavily on the July 3, 2014 letter from Joanne Criscione of the New York State Department of Health and the recent court decision in Accelerated DME Recovery Inc v. State Farm, Index #706132/15 (Sup.Ct.Queens Co. 2015)(Modica, AJSC) where Judge Modica affirmed the lower arbitrator's and master arbitrator's award that DME items that do not have a MRA, the rental fees is to be calculated at 1/6 of the equipment providers acquisition cost. In upholding the arbitration award Judge Modica relies on a New York State Department of Health Area Office opinion letter, dated 7/3/14, which Judge Modica interpreted as establishing that the price for the CPM is to be calculated at 1/6 of the equipment providers acquisition cost. Applicant's counsel argues that Judge Modica's decision is not binding, and further submits a subsequent clarification from the author of the New York State Department of Health Area Office opinion letter, Joanne Criscione, dated June 8, 2016, wherein she states that her letter was not a determination establishing the reimbursement rate applicable to workers compensation claims. In this instance I find a recent decision by Arbitrator Maryann Mirabelli instructive on this issue. In Horizon Ortho Supply Corp. and Liberty Mutual Fire Insurance Company, AAA Case No. 17-15-1014-5105, Arbitrator Mirabelli reasons: "I have carefully re-reviewed 12 NYCRR Part 442.2, specifically section (g) which provides as follows: The Medicaid provider manual and the policy guidelines for durable medical equipment are not included as part of the durable medical equipment fee schedule used in workers' compensation cases except to the extent such documents contain the Medicaid durable medical equipment fee schedule. Neither New York State nor Medicaid has established a rental fee schedule for the CPM/CTU. It is therefore by default the proper fee that is charged to the public under 12 NYCRR 442.2 (b). After this regulation was enacted in 2007, it was no longer appropriate to bill 1/6 of the invoice amount. Currently, the 1/6th calculation is not "per the New York State Medicaid program" but is only included in the guidelines. Since the above codes are not listed in the New York Medicaid DME Fee Schedule, "the maximum permissible monthly rental charge for such equipment, supplies and services provided on a rental basis" would be "the monthly rental charge to the general public" per the above regulation. The New York State Medicaid Fee Schedule and the DME Provider Manual are two separate and distinct documents, only one of which is applicable herein. Had the Department of Health area office set a rental reimbursement limitation in the Medicaid DME fee schedule, as it has for other items, the limitation would apply to the instant claim. As there is no Page 4/8
such limitation in the Schedule, one cannot look to the DME Provider Manual and Policy Guidelines and the only limitation is the "rate available to the general public." 12 NYCRR 442.2(b). Upon review of the 12 NYCRR 442.2(b) and (g) it seems that the intention is to keep the Medicaid Fee Schedule and the Manual separate. Additionally, in light of the evidence presented by the Applicant specifically the letter by Ms. Criscione, I am no longer persuaded by Judge Modica's heavy reliance on the letter from the Department of Health. I am swayed by Applicant's submissions, especially the 6/8/16 clarification indicating Ms. Criscione's previous letter was not a determination by a Department of Health area office establishing the reimbursement rate applicable to Work Compensation claims. I concur with Arbitrator Mirabelli's rationale. It is clear that the items in dispute are not listed in the Medicaid DME fee schedule. The Medicaid DME fee schedule has listed CPT codes that have MRA's and some that do not. I find that reimbursement based on a monthly rental fee that does not exceed1/6 of the DME's acquisition cost applies only to the listed CPT codes without an MRA. In this instance this CPM and CPT code is not listed and thus is not subject to the monthly rental fee that does not exceed1/6 of the devices acquisition costs. Thus, the correct reimbursement rate is the rental price charged to the general public. Applicant has shown that the price they charged for the CPM and CTU is within the rental price charged to the general public. Respondent fails to show otherwise. Accordingly the Applicant's claim is granted in its entirety in the amount of $5,042.50. 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 Page 5/8
Accordingly, the applicant is AWARDED the following: A. Medical From/To Claim Amount Status Orthocare Tech, Inc 11/14/15-12/20/15 Awarded: $5,042.50 $5,042.50 Total $5,042.50 Awarded: $5,042.50 B. The insurer shall also compute and pay the applicant interest as set forth below. (The filing date for this case was 03/04/2016, which is a relevant date only to the extent set forth below.) Applicant is awarded interest pursuant to the no-fault regulations. See generally, 11 NYCRR 65-3.9. Interest shall be calculated "at a rate of two percent per month, calculated on a pro rata basis using a 30 day month." 11 NYCRR 65-3.9(a). A claim becomes overdue when it is not paid within 30 days after a proper demand is made for its payment. However, the regulations toll the accrual of interest when an applicant "does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations." See, 11 NYCRR 65-3.9(c).The Superintendent and the New York Court of Appeals has interpreted this provision to apply regardless of whether the particular denial at issue was timely. LMK Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 12 N.Y.3d 217 (2009). C. Attorney's Fees The insurer shall also pay the applicant for attorney's fees as set forth below Applicant is awarded statutory attorney fees pursuant to the no-fault regulations. See, 11 NYCRR 65-4.5(s)(2). The award of attorney fees shall be paid by the insurer. 11 NYCRR 65-4.5(e). Accordingly, "the attorney's fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or the court, subject to a maximum fee of $850." Id. The minimum attorney fee that shall be awarded is $60. 11 NYCRR 65-4.5(c). However, if the benefits and interest awarded thereon is equal to or less than the respondent's written offer during the conciliation process, then the attorney's fee shall be based upon the provisions of 11 NYCRR 65-4.6(i). For claims that fall under the Sixth Amendment to the regulation the following shall apply " If the claim is resolved by the designated organization at any Page 6/8
time prior to transmittal to an arbitrator and it was initially denied by the insurer or overdue, the payment of the applicant's attorney's fee by the insurer shall be limited to applicant is AWARDED the following:. 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant with whom the respective parties have agreed and resolved disputes, subject to 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, Bryan Hiller, do hereby affirm upon my oath as arbitrator that I am the individual described in and who executed this instrument, which is my award. 05/09/2017 (Dated) Bryan Hiller 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 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 7/8
ELECTRONIC SIGNATURE Document Name: Final Award Form Unique Modria Document ID: eaa27b60b16de4de55e8ee9200d48510 Electronically Signed Your name: Bryan Hiller Signed on: 05/09/2017 Page 8/8