Harvey Family Chiro PT & Acup, PLLC v. Ameriprise Ins. Co.
| Decision Date | 15 June 2020 |
| Docket Number | CV-709494/18-BX |
| Citation | 126 N.Y.S.3d 883,68 Misc.3d 556 |
| Parties | HARVEY FAMILY CHIRO PT & ACUP, PLLC a/a/o Nour Shleiwet, Plaintiff, v. AMERIPRISE INSURANCE COMPANY, Defendant. |
| Court | New York Civil Court |
Plaintiff's counsel is Law Offices of Chris McCollum PC, 1100 Coney Island Ave Suite 211, Brooklyn, New York 11226.
Defendant's counsel is Bruno, Gerbino & Soriano, LLP, 445 Broad Hollow Road, Melville, New York 11747.
The plaintiff filed the instant action against the defendant seeking to recover assigned no-fault insurance benefits. The amount in dispute is $5,503.90.
The defendant now moves pursuant to CPLR 3212 for an order granting summary judgment in favor of the defendant on the grounds that (1) the plaintiff lacks standing to receive No-Fault reimbursement because it is not properly owned and controlled by licensed medical professionals as required by 11 NYCRR 65-3.16(a)(12) and State Farm v. Mallela , 4 N.Y.3d 313, 794 N.Y.S.2d 700, 827 N.E.2d 758 (2005) ; (2) the defendant timely and properly denied the claim as the medical treatment was not medically necessary; and (3) the defendant properly paid and denied the remainder of the claims pursuant to the New York State Workers' Compensation Fee Schedule.
The plaintiff opposes and cross moves for an order of summary judgment in favor of the plaintiff. The plaintiff also moves for an order deeming certain facts established pursuant to CPLR 3212(g), as to its prima facie case.
On a motion for summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law by advancing sufficient evidentiary proof in admissible form to demonstrate the absence of any material issues of fact. See Zuckerman v. City of New York , 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 (1980). Summary judgment is inappropriate where there are material issues of fact in dispute or where more than one conclusion may be drawn from the facts. See Friends of Thayer Lake LLC v. Brown , 27 N.Y.3d 1039, 33 N.Y.S.3d 853, 53 N.E.3d 730 (2016). In considering a motion for summary judgment, the court must view the evidence in a light most favorable to the party opposing the motion and must give that party the benefit of every favorable inference. See Negri v. Stop & Shop, Inc. , 65 N.Y.2d 625, 491 N.Y.S.2d 151, 480 N.E.2d 740 (1985).
Once a movant meets its burden, the burden is shifted to the opposing party to come forward with proof, again in evidentiary form, to show the existence of genuine triable issues of fact. See Piccolo v. De Carlo , 90 A.D.2d 609, 456 N.Y.S.2d 171 (3d Dept. 1982).
Pursuant to 11 NYCRR 65-3.16(a)(12), an insurer may withhold payment for medical services that a professional corporation provides, where there is a "willful and material failure to abide by" licensing and incorporation statutes, even if the services were provided by licensed health care providers. State Farm Mut. Auto. Ins. Co. v. Mallela , 4 N.Y.3d 313, 321, 794 N.Y.S.2d 700, 827 N.E.2d 758 (2005). A party may support a finding that a provider is not eligible for reimbursement under 11 NYCRR 65-3.16(a)(12) without meeting the traditional elements of common-law fraud. Andrew Carothers, M.D., P.C. v. Progressive Ins. Co. , 33 N.Y.3d 389, 405, 104 N.Y.S.3d 26, 128 N.E.3d 153 (2019). But in order to withhold payment, the violations of incorporation and licensing statutes must be "more than merely technical and ‘rise to the level of’ a grave violation such as fraud." Id. at 405-06, 104 N.Y.S.3d 26, 128 N.E.3d 153, citing Mallela at 322, 794 N.Y.S.2d 700, 827 N.E.2d 758.
Although Mallela is typically a defense mounted at trial, the defendant is free to use Mallela as a mechanism to keep claims open. High Definition MRI, P.C. v. Countrywide Ins. Co. , 2019 N.Y. Slip Op. 32009(U), 2019 WL 2995775 (Sup. Ct., N.Y. County 2019). In deciding a motion for summary judgment, the court must draw all reasonable inferences in favor of the nonmoving party and deny summary judgment if there is any doubt as to the existence of a material issue of fact. Branham v. Loews Orpheum Cinemas Inc. , 8 N.Y.3d 931, 932, 834 N.Y.S.2d 503, 866 N.E.2d 448 (2007). Where different conclusions may be reasonably drawn from the evidence, the motion should be denied. Sommer v. Federal Signal Corp. , 79 N.Y.2d 540, 555, 583 N.Y.S.2d 957, 593 N.E.2d 1365 (1992).
Defendant argues that plaintiff is not properly owned and controlled by licensed medical professionals, which is required by 11 NYCRR 65-3.16(a)(12). In support of its argument, defendant offers the affidavit of James Glampe, a special investigator in its SIU department. Glampe contends that in the examinations under oath on March 3, 2015 and August 16, 2016, Dr. Harvey "admitted" that he owns 97% of Harvey Family Chiro Pt & Acup Pllc, with a physical therapist owning 2% and an acupuncturist owning the remaining 1% of the PLLC. Dr. Harvey testified in March 2015 that "he was responsible for the day to day management of the company, and that the physical therapists and acupuncturist do not have general management responsibilities." Dr. Harvey testified in August 2016 that profits are distributed in accordance with the ownership shares. Defendant argues that this allows Dr. Harvey to receive a disproportionate share of the income from professions he is not licensed to perform. Dr. Harvey testified in August 2016 that 70% of the practice is chiropractic treatment, 20-25% is physical therapy, and 10% is acupuncture.
Plaintiff argues that the conduct at issue in Mallela and Carothers is easily distinguishable from the ownership structure and services provided at Harvey Family. Plaintiff argues that defendant merely objects to the ownership split at Harvey Family, but that fee splitting alone is not sufficient to mount a Mallela defense. In addition, plaintiff contends that such a fee split is permissible under Article 15 of the Business Corporation Law.
The Court now denies defendant's motion on the Mallela defense. Although Dr. Harvey owns a sizeable majority of plaintiff and receives income from services provided by professionals operating under different licenses, impermissible fee splitting alone is not a violation of a licensing requirement as required by Mallela . See H & H Chiropractic Servs., P.C. v. Metropolitan Prop. & Cas. Ins. Co. , 47 Misc. 3d 1075, 1079, 6 N.Y.S.3d 469 (Civ. Ct., Queens County 2015). In Mallela and Carothers , the Court was deeply concerned with the corporate practice of medicine by nonphysicians. Both cases involve physicians that essentially rented out their license to nonphysicians, who ran the day-to-day operations of the medical practices and received the bulk of the profits. Here, all owners are licensed to provide medical care. Nor does it appear that Dr. Harvey provides, supervises, or otherwise interferes with services that he is not licensed to render. However, the extreme equity distribution in the PLLC raises issues of fact for trial as to the level of control exerted by Dr. Harvey over services outside the scope of his license.
The claim form itself gives rise to a presumption of medical necessity. See Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co. , 7 Misc. 3d 18, 793 N.Y.S.2d 661 (App. Term, 2d Dept. 2004). The insurer may rebut the inference of medical necessity by proof in admissible form establishing that the health benefits were not medically necessary. See A Khodadadi Radiology, P.C. v. N.Y. Cent. Mut. Fire Ins. Co. , 16 Misc. 3d 131(A), 2007 WL 1989432 (App. Term, 2d Dept. 2007). The proof must provide a factual basis and medical rationale that the services were not medically necessary. See Delta Diagnostic Radiology, P.C. v. Integon Natl. Ins. Co. , 24 Misc. 3d 136(A), 2009 WL 2032922 (App. Term, 2d Dept. 2009). Once a defendant submits evidence establishing a lack of medical necessity for the services rendered, the burden shifts to the plaintiff to rebut the defendant's evidence. See Foster Diagnostic Imaging, P.C. v. Clarendon Nat. Ins. Co. , 33 Misc. 3d 138(A), 2011 WL 5572837 (App. Term, 2d Dept. 2011).
The Court finds that the defendant proved that it timely mailed the denial through the affidavit of its Litigation Examiner, Tara Piontek. Ms. Piontek's affidavit established that the defendant timely mailed its denial of claim form based upon standard office practice or procedure, designed to ensure that items are properly addressed and mailed.
Residential Holding Corp. v. Scottsdale Ins. Co. , 286 A.D.2d 679, 680, 729 N.Y.S.2d 776 (2001).
The Court finds that the defendant met its burden in establishing that the treatment was not medically necessary through the affidavits and reports of Daniel Sposta, D.C., L.Ac., and Sathish Modugu, M.D., CIME. Dr. Sposta's affidavit and affirmed report state that he is a licensed chiropractor and acupuncturist, and that he conducted an independent chiropractic and acupuncture examination of the assignor. Dr. Sposta's report states that he reviewed various medical records, including records from plaintiff, Jacobi Medical Center, and Stand-Up MRI of Yonkers. These records were annexed to defendant's motion. Dr. Sposta determined that continued chiropractic and acupuncture services in relation to assignor's motor vehicle accident were not medically justified and that treatment should have been discontinued. Dr. Sposta reported the assignor's complaints of pain, but noted that several test results were negative for pain. Dr. Modugu's affidavit and report state that he is a licensed physician and that he conducted an independent medical examination of the assignor. Dr. Modugu's report states that he reviewed various medical records and diagnostic studies, including records from plaintiff, claim forms, and Dr. Sposta's independent medical evaluation. These...
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