Government Empls. Ins. Co. v Avanguard Med. Group PLLC

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Government Empls. Ins. Co. v Avanguard Med. Group PLLC 2012 NY Slip Op 31331(U) May 3, 2012 Supreme Court, Nassau County Docket Number: 16313/11 Judge: Denise L. Sher Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SCAN SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK PRESENT: RON. DENISE L. SRER Acting Supreme Cour Justice TRIAL/IAS PART 31 NASSAU COUNTY GOVERNENT EMPLOYEES INSURACE CO. GEICO INDEMNITY CO. , GEICO GENERA INSURANCE CO. and GEICO CASUALTY CO. Index No. : 16313/11 Motion Seq. No. : 01 Motion Date: 03/08/12 Plaintiffs - against - VANGUARD MEDICAL GROUP PLLC Defendant. The followin papers have been read on this motion: Papers Numbered Order to Show Cause. Affrmations and Exhibits and Memorandum of Law Affirmation in Opposition and Memorandum of Law and Exhibits Reply Affrmation and Exhibit Upon the foregoing papers, it is ordered that the motion is decided as follows: Plaintiffs move , pursuant to CPLR g 2201 , for an order staying all pending actions arbitrations and proceedings commenced by the defendant as against plaintiffs wherein defendant seeks to recover No- Fault benefits for facility fees; and move , pursuant to CPLR gg 6301 and 6311 , for a order enjoining defendant from commencing any new actions , arbitrations or proceedings against plaintiffs seeking reimbursement for facility fees pending resolution of this within action. Defendant opposes the motion. In November of2011 , plaintiffs commenced the within declaratory judgment action as [* 2] against defendant. Defendant is an accredited " Office Based Surgical Facility" (" OBS") and domestic professional service corporation formed under section 230- d of the Public Health Law. See , 6- 11; Plaintiffs ' Affirmation in Support Exhibit A Plaintiffs ' Affirmation in Support 16- 17. Exhibit D According to plaintiffs , over the past several years they have received some three hundred (300) No- Fault claims from defendant , in which defendant has requested approximately $1.3 millon in non- physician generated facility" fees or " offce- based" costs - claims which See plaintiffs have to date declined to pay. Plaintiffs ' Affirmation in Support 4; Plaintiffs 26- 28. Affirmation in Support Exhibit A Plaintiffs ' denials are predicated on the assertion that , pursuant to allegedly governing regulations promulgated by the Deparment of Health (" DOH"), only providers duly licensed under Article 28 of the Public Health Law are authorized to bil No- Fault cariers for officebased facilty fees. See 30- 38; New York State Plaintiffs' Affrmation in Support Exhibit A Insurance Law , gg 5102(a)(I), 5108; 10 NYCRR gg 86- 4.1(a), 709.5(b)(3)(b); 11 NYCRR gg 65- 3(a)(12), 65- 3.16(a)(12), 68.1(a); Plaintiffs ' Emergency Affirmation 5. Although defendant is an accredited , physician-owned OBS - in which certain surgical procedures may be performed - there is no dispute that it is not an Article 28- 1icensed surgical facilty or hospital. See 38; Defendant's Memorandum of Law p. 5. Plaintiffs ' Affrmation in Support Exhibit A See also 10 NYCRR g 86- 4. 1 (a); Public Health Law gg 230-d(I)(c)-(h), 2801 , 2801-a. In light of plaintiffs ' refusal to pay the disputed facilty fees , defendant has commenced a series of lawsuits and arbitrations arising out of the unpaid bils , including to date , some one hundred eighty (180) New York City Civil Cour actions and thirt which , plaintiffs claim , are currently pending. See (30) arbitrations , all of Plaintiffs ' Affirmation in Support Exhibit A [* 3] ~~ 28- 29; Plaintiffs ' Reply to Counterclaim , ~ 1 sl Affirmative Defense. By Order to Show Cause with temporar restraining order , plaintiffs previously moved for: (1) a stay of all the currently pending arbitrations and lawsuits; and (2) a preliminar no- fault injunction enjoining defendant from commencing any fuher arbitrations and lawsuits pending the resolution of the subject , facility fee dispute. Upon the submission of plaintiffs ' Order to Show Cause , Nassau Supreme Cour Justice Karen V. Murphy temporarily granted the foregoing relief pending the hearing of the underlying motion , which is now before this Cour. The motion should be denied. Preliminarily, although plaintiffs cite to inter alia CPLR g 2201 as authority for their application , CPLR g 2201 generally applies to stays issued in matters actually pending before (e. the motion Cour Dept. 2010); v. , Peluso Red Rose Rest. , Inc. 78 A.D.3d 802 , 910 N. Y.S. 2d Nandi 15 Misc. 3d 1145(A), 841 N. v. St. Paul Travelers Ins. Co. 378 (2d S.2d 823 (Supreme Cour, Queens County 2007); Siegel , New York Practice (4th ed), g 256 at 435- 436. McGee 25 Misc. 3d 1232(A), 906 N. See also New York Cent. Mut. Ins. Co. v. (Supreme Court , Kings County 2009), modifed on diferent grounds 87 A. S.2d 774 3d 622 , 928 Y.S.2d 360(2d Dept. 2011). Since here , the motion is to enjoin actions and arbitrations pending in different fora , the motion is properly viewed as one for a preliminar injunction. St. Paul Travelers Ins. Co. v. Nandi, supra. par seeking the drastic remedy of a preliminar injunction has the burden of demonstrating, by clear and convincing evidence , (1) a likelihood of ultimate success on the merits , (2) the prospect of irreparable injur if the provisional relief is withheld , and (3) a balancing ofthe equities in the movant's favor. S.2d 261 (2d Dept. 2012). See also Berkoski Perpignan v. v. Persaud 91 A.D.3d 622 , 936 Board of Trustees of Inc. Vi!. of See ," [* 4] Southampton 67 A. D.3d 840 , 889 N. Y.S.2d 623 (2d Dept. 2009); 4 N. Y.3d Fine Arts Housing, Inc., Y.2d 860 , 552 N. 839 , 800 N. Y.S.2d Doe S.2d 918 (1990); v. 48 (2005); Nobu Next Door, LLC Aetna Ins. Co. v. Capasso, 75 Axelrod 73 N. Y.2d 748 536 N. Y.S. 2d 44 (1988). The decision to grant or deny a preliminar injunction lies within the sound discretion of the Supreme Cour. 9l- 54 Gold Road, LLC 939 N. Y.S.2d 555 (2d Dept. 2012); 669, 931 N. v. v. Cooper Cross-Deegan Realty Corp. 93 AD.3d 649 Board of White Sands Condominium 89 AD. S.2d 696 (2d Dept. 2011). With these principles in mind , and upon the exercise of its discretion , the Cour agrees that plaintiffs have failed to establish their entitlement to the drastic injunctive relief requested. Plaintiffs ' claims are primarily based on the theory that , although duly created as an OBS facility pursuant to Public Health Law g 230- , defendant should nevertheless be viewed as " free standing ambulatory center" for the puroses of assessing its entitlement to a facility fee - a distinct See tye of health care provider for which an Article 28 operating licence is required. Plaintiffs ' Affrmation in Support Exhibit A ~~ 20- 24; Public Health Law gg 2801 , 2801-a; 10 NYCRR gg 86- 4.40(b), 86- 4.1 (a) and (b), 600. , 709. 5(b)(3), 755. 1; 11 NYCRR g 52. 5;12 NYCRR g 329. 5. Questions See also Department of Health " ~~ 33- 34 (June 5 , Novello 2 N. Y.3d 207 , 778 N. 2008 revision); Office Based Surgery - Frequently Asked cf New York State Ass n of Nurse Anesthetists S.2d 123 (2004). Plaintiffs thereafter claim that , since defendant does not possess an Aricle 28 license (which an OBS is not required to have , in any event), it is therefore an unlicensed entity within the meaning of No- Fault regulations and canot accept assignments or recover the disputed facility fees from No- Fault cariers. One Beacon Ins. Group, LLC v. See 11 NYCRR g 65- 3. 16(a)(l2), 65- 11(a), and (b)(2); Midland Medical Care, P. 54 AD. 3d 738 863 N. Y.S.2d 728 ," ," [* 5] (2d Dept. 2008). Plaintiffs further reason that the regulations governing the recovery of facility fees authorize only Article 28- licensed facilities to bil for these expenses and that defendant See cannot do so because it does not have an Article 28 license. Support Exhibit A ~~ 32- 36. v. Beacon Ins. Group, LLC Co. v. Mallela 4 N. Y.3d 10 NYCRR gg 86- 4.1(a), 86- 4.40 , 709. 5(b)(3); See also One supra; cf State Farm Mut. Auto. Ins. Midland Medical Care, P. 313 , Plaintiffs ' Affirmation in 794 N. Y.S.2d 700 (2005). Plaintiffs ' claims are unpersuasive. its More specifically, plaintiffs ' foundational contention lacks support in the record assertion that defendant - an free OBS-accredited facility - is in effect actually an Article 28 standing surgical center" which , plaintiffs then circuitously claim , lacks a proper license. See Plaintiffs ' Affrmation in Support Exhibit A ~~ 29- 30. Defendant , however , is not a " free standing ambulatory surgery" within the meaning of the Public Health Law. See 65- 3.16(a)(12), 65- 3.11(a) and (b)(2); 10 NYCRR 709.5(b)(3'). 231- d. Nor is defendant an unlicensed See also 11 NYCRR g Public Health Law g entity. There is no dispute that defendant has complied with whatever State- imposed accrediting requirements are applicable to OBS facilities and that it possesses the appropriate operating approvals. Further, and as the differing licensing, accrediting and oversight requirements suggest an OBS facility is a statutorily distinct species of health care provider , separately constituted pursuant to g 230- d of the Public Health Law, in which specified surgical and non-surgical E.g., procedures may be performed. See also Law g 6530(48). Questions supra ~~ 4 Public Health Law gg 230- d(l)(c)-(h), 2998-e; Education Deparment of Health Office Based Surgery - Frequently Asked 33- 34. Aricle 28 facilities , on the other hand , include inter alia hospitals , diagnostic/treatment centers and " free standing " ambulatory surgery centers , which are subject to distinct licensing and oversight requirements. See Deparment of Health Office [* 6] Based Surgery - Frequently Asked Questions," ~ 33. supra Significantly, plaintiffs do not dispute that defendant is a duly accredited OBS entity, whose status as such generally qualifies it as a health care provider entitled to bil cariers for No- Fault expenses pursuant to Insurance Law g 5102(a)(l). Nor do plaintiffs claim that facilty fees , in general , are not among those included within the definition of " Basic economic loss " defined by section g 5102(a)(l) as See Upper East Side Surgical, PLLC of the Insurance Law. at 2. Rather , plaintiffs claim , in substance , that allegedly applicable State Farm Ins. Co. , supra regulations and fee schedules do not authorize facility fee recoveries other than to entities licensed pursuant to Article 28. Although the regulations on which plaintiffs rely contain Workers Compensationderived "PAS" fee schedules which apply to Aricle 28 licensed entities 86- 4.40 , 86- 1(a), 800. 8; 11 NYCRR 5108(a) and (b); 10 NYCRR (see Insurance Law g 68.1 (a)), the regulations do not state that they are applicable to OBS facilities. Similarly, they do not provide that only Aricle 28 facilities are entitled to bil for facility fees under Insurance Law 5102(a)(I) or that an OBS entity - or any other No- Fault provider- is precluded from See Upper recovering facility fees except pursuant to their specified terms and rate schedules. East Side Surgical, PLLC v. State Farm Ins. Co. 34 Misc. 3d.1219(A), 2012 WL 335774 (District Cour , Nassau County 2012); Defendant' s Affirmation in Opposition Exhibit C. Nor is the absence of a pre-existing rate schedule applicable to OBS facilities dispositive of defendant' s recovery rights. Notably, 11 NYCRR g 68.5(b) provides , in sum , that 51 02(a)(I) - but the if a health service is reimbursable under Insurance Law superintendent has not established a fee schedule applicable to that specific provider - reimbursement is then to be made in conformity "with the prevailing fee (rate) in the geographic location of the provider.. See Upper East Side Surgical, PLLC v. State Farm Ins. Co. , supra; cf Great Wall [* 7] v. Acupuncture GEICO Gen. Ins. Co. 16 Misc. 3d 23 842 N. Y.S. 2d 131 (Supreme Cour Appellate Term , Second Deparment 2007). Recently, in Upper East Side Surgical, PLLC the Cour State Farm Ins. Co. , supra, v. considered essentially the same OBS- facilty fee issue raised here. The Cour noted that the PAS fee schedules were , by their terms , applicable only to Aricle 28 facilities , but that OBS facilities were nevertheless legally entitled to recover facility fees pursuant to Insurance Law ~ 5102(a)(l). Since , however , fee schedules applicable to OBS providers had not been issued the facility rate issue effectively defaulted to the provisions of g 68. 5(b) - under which fees See Upper East would then be payable based on prevailing rates in the involve geographic area. Side Surgical, PLLC v. State Farm Ins. Co. , supra at 3. Contrar to plaintiffs ' assertions , the fact that defendant allegedly utilized the PAS fees codes in submitting bils does not establish that it is therefore an Aricle 28 facility or that OBS entities in general are not entitled to recover facility fees from No- Fault providers. The See id. three-sentence , Civil Cour holding relied upon by plaintiffs contains no factual content or explanatory legal analysis and is therefore lacking in precedential import and authority. E.g. Misc.3d -' (Civil Cour , Bronx County 2011). Synergy First Medical PLLC Finally, plaintiffs DOH (see v. GEICO ' reliance on a 2006 opinion letter issued by General Counsel for the Plaintiffs ' Memorandum of Law Exhibit C- 3) - which predates the 2008 enactment of the " OBS statute " (Public Health Law ~ 230- d) - is unpersuasive. A review of the opinion letter reveals that it does not address No- Fault reimbursement issues , where statutory mandates compel carriers to pay properly reimbursable expenses. See Insurance Law ~ 5102(a)(I). In any event , and as to the matters it did consider , the DOH took the position that facility fees are permissibly recoverable to the extent contractually agreed upon by the paries involved. Specifically, the DOH observed that " (w)hether a third part insurer wil pay a facility fee is a [* 8] matter of negotiation between the insurer and the OBS practice. Frequently Asked Questions , ~ 43 accord See Office Based Surgery; General Counsel Opinion 10- 16- 2008 York Insurance General Counsel Opinion No. 1 0- 16- 2008 (#1), New (2008). The Cour has considered plaintiffs ' remaining contentions and concludes that they do not support an exercise of the Court' s discretion in favor of granting the injunctive relief sought. Accordingly, it is ORDERED that the plaintiffs ' motion , pursuant to CPLR ~ 2201 , for an order staying all pending actions , arbitrations and proceedings commenced by the defendant as against plaintiffs wherein defendant seeks to recover No- Fault benefits for facilty fees; and , pursuant to CPLR g g 6301 and 6311 , for a order enjoining defendant from commencing any new actions arbitrations or proceedings against plaintiffs seeking reimbursement for facility fees pending resolution of this within action is hereby DENIED. And it is furer ORDERED that the previously granted temporar restraining order contained in plaintiffs ' Februar 2012 Order to Show Cause is hereby VACATED. This constitutes the Decision and Order of this Cour. ENISE L. SHER, A. Dated: Mineola , New York May 3 2012 ENTERED MAY 08 2012 NASSAU COUNTY COUNTY CLERK'S OFFICE

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