Saddle Brook Surgicenter, LLC v. All State Ins. Co.

• Decision Date: 07 April 2015
• Docket Number: CV-702506-14/BX
• Citation: 8 N.Y.S.3d 875,2015 N.Y. Slip Op. 25099,48 Misc.3d 336
• Parties: SADDLE BROOK SURGICENTER, LLC, a/a/o, Hector Flores, Plaintiff, v. ALL STATE INSURANCE COMPANY, Defendants.
• Court: New York Civil Court

48 Misc.3d 336

8 N.Y.S.3d 875

2015 N.Y. Slip Op. 25099

SADDLE BROOK SURGICENTER, LLC, a/a/o, Hector Flores, Plaintiff

v.ALL STATE INSURANCE COMPANY, Defendants.

CV-702506-14/BX

Civil Court, City of New York, Bronx County.

April 7, 2015.

Josh Youngman, Esq., Peter C. Merani, P.C., New York, for Defendant.

Aaron J. Perretta, Esq., Cohen & Jaffe, LLP, Lake Success, for Plaintiff.

Opinion

PAUL A. GOETZ, J.

Plaintiff initiated this action against Defendant to recover assigned first-party no-fault benefits for medical services it provided on October 21, 2013, to its assignor for injuries sustained by its assignor resulting from a June 18, 2013 accident. Defendant now moves for summary judgment, pursuant to CPLR § 3212.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff's assignor, Hector Flores was involved in a motor vehicle accident on June 18, 2013. After the accident, Mr. Flores underwent outpatient surgery at Plaintiff's facility in Saddle Brook, New Jersey on October 21, 2013.

Plaintiff as the assignee of Mr. Flores submitted a claim to Defendant in the amount of $11,778.00. Defendant received the claim on November 29, 2013, and issued a payment in the amount of $1,629.75 on January 3, 2014. Defendant denied the balance of Plaintiff's claim by a denial of claim form dated January 3, 2014 and mailed no later than January 6, 2014, to Plaintiff. Defendant denied the balance of the claim because the amount billed exceeds the New Jersey fee schedule. Plaintiff commenced this action to recover the full $11,778.00 alleging that “[t]here has been no payment of the subject [b]ill” despite Defendant's payment of $1,629.75.

ARGUMENTS

Defendant seeks summary judgment on the ground that Plaintiff's bill exceeds the amount allowed under the New Jersey fee schedule in contradistinction to 11 New York Code, Rules and Regulations (“NYCRR”) § 68.1. Defendant annexes to its summary judgment motion an affidavit from a claims representative, who has received training in no-fault regulations and worker's compensation fee schedule and is a certified coder, describing how she determined that Plaintiff's bill for the medical services provided on October 21, 2013, exceed the New Jersey fee schedule. Defendant tacitly acknowledges that it did not issue it its denial for the balance of the claim within the 30 day time frame required under 11 NYCRR § 65–3.8 by arguing that the timeliness of its denial is irrelevant because a recent amendment to 11 NYCRR 65–3.8 makes the defense of billing above the fee schedule a non-waivable defense.

Plaintiff opposes Defendant's summary judgment motion arguing that appellate case law has explicitly established that failure to deny a bill within 30 days of its receipt precludes an insurance company from denying the claim. Plaintiff cites Mercury Cas. Co. v. Encare, Inc., 90 A.D.3d 475, 934 N.Y.S.2d 390 (1st Dept.2011) and Westchester Medical Center v. American Transit Ins. Co., 17 A.D.3d 581, 793 N.Y.S.2d 489 (2nd Dept.2005) for the proposition that “defenses predicated upon a proper rate of payment for services rendered must be preserved within a proper and timely denial of claim.” Plaintiff tacitly concedes that it billed above the New Jersey fee schedule but argues that because it is an out of state provider, 11 NYCRR § 68.6 governs not 11 NYCRR § 68.1 and 11 NYCRR § 68.6 does not constrain Plaintiff to billing at the rate set forth in the New Jersey fee schedule. According to Plaintiff, 11 NYCRR § 68.6 does not limit out of state providers to the provider's state's fee schedule rate but merely requires Plaintiff to charge for its services at the prevailing rate for its geographic location. Plaintiff asserts that if New York wanted to require out of state providers to charge at the fee schedule rate for their geographic location, the New York legislature would have explicitly mandated that fees for out of state medical services be billed at the fee schedule for the provider's geographic location. Plaintiff's opposition does not include an affidavit from an individual who is familiar with coding and fee schedules. Instead, Plaintiff posits that it need not submit an affidavit from someone with personal knowledge of coding and fees schedule issues because Defendant has failed to make a prima facie showing that it is entitled to summary judgment as a matter of law.

ANALYSIS

The proponent of a motion for summary judgment bears the initial burden of coming forward with evidence showing prima facie entitlement to judgment as a matter of law, and, unless that burden is met, the opponent need not come forward with any evidence at all. (Penava Mechanical Corp v. Afgo Mechanical Services, Inc.; Absolute Electrical Contracting, Inc. v. Uniqlo, USA, Inc., 71 A.D.3d 493, 896 N.Y.S.2d 349, 352 [1st Dept.2010], citing Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985] ; Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] )

Once the movant establishes prima facie entitlement to judgment, the burden shifts to the opposing parties to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action” (Zuckerman, at 560, 427 N.Y.S.2d 595, 404 N.E.2d 718 ). While “all facts must be viewed in the light most favorable to the non-moving party” (Vega v. Restani Construction Corp., 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 [2012], quoting Ortiz v. Varsity Holdings, LLC, 18 N.Y.3d 335, 339, 937 N.Y.S.2d 157, 960 N.E.2d 948 [2011] ), mere conclusory allegations or defenses are insufficient to defeat summary judgment (see Zuckerman, 49 N.Y.2d at 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 ).

Billing Rate

Under New York's no-fault insurance statutory and regulatory scheme a New York state medical provider may bill for eligible services in an amount not in excess of the amount allowed under the worker's compensation fee schedule. (N.Y. Insurance Law § 5108(a) ; 11 NYCRR § 68.1 ). “The purpose of the [no-fault] statute and the fee schedules promulgated thereunder is to ‘significantly reduce the amount paid by insurers for medical services, and thereby help contain the no-fault premium’ ” (Goldberg v. Corcoran, 153 A.D.2d 113, 118, 549 N.Y.S.2d 503 [2nd Dept.1989] [quoting Governor's Program Bill, 1977 McKinney's Session Laws of N.Y. at 2449, and citing Governor's mem. in support of Assembly Bill 7781–A] ).

However, for health services performed outside New York State, pursuant to 11 NYCRR § 68.6, the medical provider may charge for its services according to “the prevailing fee in the geographic location of the provider.” As noted above Plaintiff argues that if the New York legislature intended out of state providers to be limited to billing for their services at the applicable fee schedule for their geographic location, the legislature would have explicitly said so in section 68.6 rather than allowing the provider to bill at the prevailing fee for their geographic location.

The Court disagrees with Plaintiff's argument for three reasons. First, allowing Plaintiff to bill at a rate above the New Jersey fee schedule would undermine the purpose of the no-fault scheme, “to significantly reduce the amount paid by insurers ... [thereby helping] to contain the no-fault premium”. (Goldberg, 153 A.D.2d at 118, 549 N.Y.S.2d 503 ). Indeed, the circumstances of this case illustrate that point. Plaintiff billed $11,778.00 for the medical services it provided to its assignor on October 21, 2013. Defendant's certified fee coder determined, using New Jersey's fee schedule, that Plaintiff was entitled to a payment in the amount of $1,629.75 for the services Plaintiff provided on October 21, 2013, a $10,148.25 difference or over six times the amount allowed under the New Jersey fee schedule. If Plaintiff and those providers similarly situated were allowed to bill for their services at such an increased rate above what the fee schedule allows for their geographic location, no-fault premiums would likely increase, a result the no-fault statutory and regulatory scheme was designed to avoid. (Id. ).

In support of its argument that had the New York legislature intended out of state providers to limit their fees to the fee schedule for their geographic location it would have specifically said so in section 68.6, Plaintiff refers to New Jersey Administrative Code (“NJAC”) § 11:3–29.4(d)(2)'s which provides in pertinent part that “[w]hen the service or equipment is provided by reason of the election by the insured to receive treatment outside the State of New Jersey, the reasonable and necessary costs shall not exceed fees set forth in the fee schedules for the geographic location in which the insured resides.” Comparing section 68.6 with NJAC 11:3–29.4(d), Plaintiff concludes that “[h]ad the New York Legislature intended for the prevailing fee schedule' to act as the de facto rate by which medical services rendered outside of New York state are measured, it would have specifically enumerated such within [section 68.6 ] as the New Jersey legislature did with its Administrative Code.” However, Plaintiff misreads New Jersey's statute and thereby undercuts its argument. New Jersey's statute does not limit providers to the fee schedule amount for the providers' geographic location as Plaintiff suggests, but rather limits providers to the fee schedule amount where the claimant/insured resides. In this Court's opinion, New York's out of state provider reimbursement statute more accurately compensates out of state providers since it takes into account the economic vagaries of the providers' region rather than imposing on the provider the fee schedule rate of the claimant/insured which may not reflect the same economicconditions as the fee schedule in the provider's geographic location.

Moreover, Plaintiff's argument that if the New York legislature wanted to limit out of state providers to the fee schedule for their geographic location the legislature would have...