Webster Ave. Med., P.C. v Travelers Prop. Cas.

[*1] Webster Ave. Med., P.C. v Travelers Prop. Cas. 2004 NY Slip Op 51526(U) Decided on August 6, 2004 Civil Court Of The City Of New York, Kings County Krauss, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 6, 2004
Civil Court of the City of New York, Kings County

WEBSTER AVENUE MEDICAL, P.C., Plaintiff

against

TRAVELERS PROPERTY CASUALTY, Defendant.



41481/04

Sarah L. Krauss, J.

On July 1, 2004, a conference before trial was held and stipulations on the record conceded that the proofs of claim were sufficient and timely made pursuant to 11 NYCRR 65-3.3[d]; 65-3.5[a] and that defendant timely served its denial pursuant to 11 NYCRR 65-3.8[c] .

The case was then adjourned to allow both parties time to brief the issues raised prior to trial, namely , the plaintiff raises the issues of: 1) the validity of the defendant's denials with respect to the notice given to plaintiff of the reason for the denial and, 2) with respect to the basis on which such denials were made, the qualifications of the peer review doctor on whose report and opinion such denials were based. In addition, should the court find that the defendant is not precluded from raising a "medical necessity" defense, the plaintiff challenges the defendant's proposed expert witness on the following five grounds: 1) Dr. Reichman's opinion as stated in his report is an attempt to justify a rejection of the claims based on a defense of lack of medical necessity after the fact, in that Dr. Reichman is not the doctor whose peer review report was the basis for the denial in the first instance; 2) the report itself does not address the issue that the services were not consistent with "generally accepted medical/professional practice"; 3) plaintiff alleges Dr. Reichman is unqualified to testify with regard to the claims for biofeedback services because he is not a licensed psychologist; 4) the defendant's have not properly disclosed Dr. Reichman as its expert pursuant to CPLR 3101(d)(1)(i) and finally; 5) the defendant has failed to show the unavailability of Dr. Elmore, the peer review doctor.

The defendant contends that not only was its denial based upon lack of "medical necessity" valid, but it also seeks a ruling by the court that it is the burden of the plaintiff to prove medical necessity in the first instance. In addition, the defendant contends that its proffered medical expert, Dr. Reichman is qualified to testify with respect to the issue of medical necessity.

Upon reviewing the parties well researched briefs with the respective case law submitted, it is the court's finding that this action can be decided as a matter of law by the resolution of the issue raised by the plaintiff, namely that the denial by the defendant, although timely made, did not preserve the defendant's right to maintain a defense at trial for lack of medical necessity. [FN1]

The denial submitted to the plaintiff provider on April 18, 2003 denying a claim for $2, 257.55 for psychological evaluation and treatment rendered to the plaintiff's assignor, Eugene Ramos on various dates between February 20, 2003 and March 12, 2003 and for twelve sessions of biofeedback performed between the dates of February 21, 2003 and March 12, 2003, stated : [*2]

"No-fault benefits for the above provider are being denied because the provider has failed to substantiate the necessity for the medical service rendered. Please see attached report by Andrew M. Elmore, PhD. Performed on April 11, 2003 of which this denial is based."

The report By Dr. Elmore was in fact dated April 15, 2003 and was based on the review of the bills submitted plus a review of a report by Scott Badgett, PhD., a medical necessity letter signed by Dr. Badgett, a document labeled "biofeedback intake report" dated 2/21/03, another letter of medical necessity regarding 'thermobiofeedback treatment'- unspecified as to the writer, a psychiatric report dated 2/26/03 signed by Vlad Meisher, M.D., emergency room records, a narrative report by Dr. Najmal Rana dated 2/18/03 a narrative report by a neurologist, Dr. Luba Karlin dated 2/25/03, two MRIs, a police report and the no-fault application. After reviewing all of this material, Dr. Elmore concluded in his report:

"Both psychological reports contain absolutely no specific psychological examination findings to suggest a basis existed for the provision of excessive psychological treatment and excessive biofeedback treatment. Bills for excessive biofeedback treatment are unaccompanied by any detailed clinical information to document by whom and under what professional conditions the biofeedback treatment in question was conducted. Bills for excessive psychological treatment and excessive biofeedback treatment are not accompanied by any detailed clinical session progress notes to document that the claimant participated in the psychological and biofeedback treatment as billed."

Subsequent to the initial denial, each denial of claim thereafter relies on the April 15, 2003 peer review report and for the same reason as stated in the denial of 4/18/03 to wit: that the provider has failed to substantiate the medical necessity for the medical services rendered.

The peer review of Dr. Elmore, upon which all the denials are based, essentially concludes that there was no medical necessity due to the lack of sufficient information upon which the reviewer could make such a determination. While the recitation of the documents listed in Dr. Elmore's peer review report and the comments made with regard to his estimation of their medical value in making the determination of medical necessity might have been the basis for requesting the medical provider to submit certain additional verification, no such verification was ever demanded of the provider. The reason given the provider, that the benefits were being denied because the provider failed to substantiate the necessity for the medical services was, therefore, not based on a review of any verification and was worded in such a way as to shift the burden of proof of necessity, in the first instance, on the plaintiff provider contrary to law.

Thus, the denial by the defendant insurance company fails to "fully and explicitly" set forth the reasons for the denial, as required in Section 31 of the NF-10 denial of claim form. As a result the denials, although timely, fail to set forth a factual basis and medical rationale sufficient to establish the absence of medical necessity and are not based on an attempt to verify the [*3]services rendered. Park Neurological Services, P.C. v. Geico Insurance, 2004 WL 1372824 (App. Term, 9th and 10th Jud. Dists.); see, also Amaze Med. Supply, Inc. v. Eagle Ins. Co., 2003 NY Slip Op 51701U (App. Term, 2nd and 11th Jud. Dists.) (Defendant failed to issue a proper denial on ground of lack of medical necessity because it did not, among other things, seek verification of the "proof of the fact and amount of loss sustained", citing Insurance Law § 5106 (a); 11 NYCRR 65-3.5 (a)). Accordingly, defendant is precluded from asserting the defense of lack of medical necessity.[FN2] Park Neurological Services, P.C., supra.

In light of the foregoing, the plaintiff is awarded a judgment of $ 4,153.92, plus statutory interest and attorney fees. This constitutes the decision, order and judgment of the court.

Dated:August 6, 2004

So Ordered:

_______________________

Sarah L. Krauss, J.C.C. Footnotes

Footnote 1: It must be noted that the defendant allocated 8 ½ pages of an 11 page brief to the argument that the plaintiff has the burden in the first instance, once the matter has been raised by a timely denial, to prove the medical necessity of the services rendered despite appellate case law to the contrary (Damadian MRI Elmhurst, P.C. v Liberty Mutual Insurance Co., 2003 NY Slip Op 51700U(App Term 9th and 10th Jud Dists, 2003); Choicenet Chiropractic P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672U; A.B. Medical Services PLLC v Geico Ins., 2 Misc 3d 26 (App Term 2d & 11 Jud Dists , 2003).

Footnote 2: A timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law. Amaze Medical Supply, Inc. v. Allstate Insurance Company, 3 Misc 3d 43, 779 NYS2d 715 (App. Term, 2nd and 11th Jud. Dists., 2004).