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 31516(U) May 31, 2012 Sup Ct, 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] .r cA SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK PRESENT: HON. DENISE L. SHER Acting Supreme Court Justice GOVERNMENT EMPLOYEES INSURANCE CO. GEICO INDEMNITY CO. , GEICO GENERAL INSURANCE CO. and GEICO CASUALTY CO. Plaintiffs TRIAL/IAS PART 31 NASSAU COUNTY Index No. : 16313/11 Motion Seq. No. : 01 Motion Date: 03/08/12 - against - VANGUARD MEDICAL GROUP PLLC AMENDED DECISION and ORDER Defendant. The following papers have been read on this motion: Papers Numbere Order to Show Cause. Affirmations and Exhibits and Memorandum of Law Affirmation in Opposition and Memorandum of Law and Exhibits Reply Affirmation and Exhibit Upon the foregoing papers , it is ordered that the motion is decided as follows: Plaintiffs move , pursuant to CPLR 9 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 99 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. Plaintiffs ' Affirmation in Support Exhibit A See 11; 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 milion in non- physician generated facility" fees or " offce- based" costs - claims which See plaintiffs have to date declined to pay. Plaintiffs ' Affrmation in Support 4; Plaintiffs 26- 28. Affrmation in Support Exhibit A Plaintiffs ' denials are predicated on the assertion that , pursuant to allegedly governing regulations promulgated by the Department of Health (" DOH"), only providers duly licensed under Article 28 of the Public Health Law are authorized to bil No- Fault cariers for officebased facility fees. See Plaintiffs ' Affirmation in Support Exhibit A 30- 38; New York State Insurance Law , 99 5102(a)(I), 5108; 10 NYCRR 99 86:- 4.1(a), 709. 5(b)(3)(b); 11 NYCRR 99 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 performed - there is no dispute that it is not an Article 28- licensed surgical facility or hospital. See Plaintiffs ' Affirmation in Support Exhibit A See also 38; Defendant' s Memorandum of Law p. 5; 10 NYCRR 9 86- 1(a); Public Health Law 99 230-d(1)(c)-(h), 2801 , 2801-a. In light of plaintiffs ' refusal to pay the disputed facility 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 Court actions and thirty (30) arbitrations , all of which , plaintiffs claim , are curently pending. Plaintiffs ' Affirmation in Support Exhibit A [* 3] ~~ 28- 29; Plaintiffs ' Reply to Counterclaim , ~ 1 st Affirmative Defense. By Order to Show Cause with temporary restraining order , plaintiffs previously moved for: (1) a stay of all the currently pending arbitrations and lawsuits; and (2) a preliminar injunction enjoining defendant from commencing any further no- fault arbitrations and lawsuits pending the resolution of the subject , facility fee dispute. Upon the submission of plaintiffs ' Order to Show Cause , Nassau Supreme Court 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 9 2201 as authority for their application , CPLR 9 2201 generally applies to stays issued in matters actually pending before (e. the motion Court Dept. 2010); v. , Peluso Red Rose Rest., Inc. 78 A.D. 3d 802 , 910 N. Y.S. 2d 378 (2d St. Paul Travelers Ins. Co. (Supreme Court , v. Nandi 1145(A), 15 Misc.3d 841 N. Y.S.2d 823 Queens County 2007); Siegel , New York Practice (4 ed), 9 256 at 435- 436. McGee 25 Misc.3d 1232(A), 906 N. See also New York Cent. Mitt. Ins. Co. v. (Supreme Court , modifed on diferent grounds 8TA. Kings County 2009), 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 injury if the provisional relief is withheld , and (3) a balancing of the equities in the movant's favor. Y.S. 2d 261 (2d Dept. 2012). Perpignan v. Persaud 91 A. 3d 622 936 See also Berkoski v. Board of Trustees of Inc. Vi!. of See ," [* 4] Southampton 67 A.D. 3d 840 889 N. Y.S.2d 623 (2d Dept. 2009); Fine Arts Housing, Inc. 4 N. Y.3d 839 800 N. Y.S. 2d 48 (2005); Y.2d 860 , 552 N. Y.S. 2d 918 (1990); Nobu Next Door, LLC v. Aetna Ins. Co. v. Capasso, 75 Doe v. 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 Court. " 91- 54 Gold Road, LLC v. Cross-Deegan Realty Corp. 93 A.D. 3d 649 939 N. Y.S.2d 555 (2d Dept. 2012); Cooper v. Board of White Sands Condominium 89 A.D. 669 931 N. Y.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 9 230- , defendant should nevertheless be viewed as " free standing ambulatory center " for the puroses of assessing its entitlement to a facility fee - a distinct type of health care provider for which an Aricle 28 operating .lcence is required. See Plaintiffs ' Affirmation in Support Exhibit A ~~ 20- 24; Public Health Law 99 2801 , 2801-a; 10 NYCRR 99 86- 4.40(b), 86- 1(a) and (b), 600. , 709. 5(b)(3), 755.1; 11 NYCRR 952. 5;12 NYCRR 9329. 5. Questions See also Department of Health " ~~ 33- 34 (June 5 , 2008 revision); Office Based Surgery - Frequently Asked cf New York State Ass n of Nurse Anesthetists v. Novello 2 N. Y.3d 207 , 778 N:Y. 2d 123 (2004). Plaintiffs thereafter claim that , since defendant does not possess an Article 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 cannot accept assignments or recover the disputed facility fees from No- Fault carriers. See 11 NYCRR 9 65- 3. 16(a)(12), 65- 11(a), and (b)(2); One Beacon Ins. Group, LLC v. Midland Medical Care, pc. 54 A.D. 3d 738 , 863 N. 2d 728 , "," ," [* 5] (2d Dept. 2008). Plaintiffs further reason that the regulations governing the recovery of facility fees authorize only Aricle 28- licensed facilities to bil for these See cannot do so because it does not have an Aricle 28 license. Support Exhibit A ~~ 32- 36. Plaintiffs ' Affirmation in 10 NYCRR99 86- 4. 1 (a), 86-4.40, 709. 5(b)(3); See also One supra; cf State Farm Mut. Auto. Ins. Beacon Ins. Group, LLC v. Midland Medical Care, P. Co. v. Mallela 4 N. Y.3d expenses and that defendant 313 , 794 N. 2d 700 (2005). Plaintiffs ' claims are unpersuasive. More specifically, plaintiffs ' foundational contention lacks support in the record assertion that defendant - an OBS-accredited facility - is in effect actually its an Article 28 standing surgical center " which , plaintiffs then circuitously claim , lacks a proper license. Plaintiffs ' Affrmation in Support Exhibit A ~~ 29- 30. 231- d. 11 (a) See and (b)(2); 10 NYCRR 709. 5(b)(3). Nor is defendant an unlicensed See Defendant , however , is not a " free standing ambulatory surgery " within the meaning of the Public Health Law. 65- 3.16(a)(12), 65- 3. free See also 11 NYCRR 9 Public Health Law 9 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 facilityis a statutorily distinct species of health care provider , separately constituted pursuant to 9 230- d of the Public Health Law , in which specified surgical and non-surgical procedures may be performed. Law 9 6530(48). Questions E.g., See also supra ~~ 4 , 8- Public Health Law 99 230- d(1)(c)-(h), 2998-e; Education Deparment of Health Office Based Surgery - Frequently Asked , 33- 34. Article 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. Based Surgery - Frequently Asked Questions See supra ~ 33. Deparment of Health Office [* 6] 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 9 5102(a)(1). Nor do plaintiffs claim that facility fees , in general , are not among those included within the definition of " Basic economic loss " defined by section 9 5102( a)( 1) of the Insurance Law. State Farm Ins. Co. , supra as See Upper East Side Surgical; P LLC at 2. Rather, plaintiffs claim , in substance , that allegedly applicable regulations and fee schedules do not authorize facility fee recoveries other than to entities licensed pursuant to Aricle 28. Although the regulations on which plaintiffs rely contain Workers Compensationderived " PAS" fee schedules which apply to Article 28 licensed entities (see Insurance Law 9 5108(a)and (b); 10 NYCRR 99 86- 4.40 , 86- 1(a), 800. 8; 11 NYCRR 9 68.1 (a)), the regulations do not state that they are applicable to OBS facilities. Similarly, they do not provide that only Article 28 facilities are entitled to bil for facility fees under Insurance Law 9 51 02(a)(1) or that an OBS entity - or any other No- Fault provider - is precluded from recovering facility fees except pursuant to their specified terms and rate schedules. See Upper East Side Surgical, PLLC v. State Farm Ins. Co. 34 Misc. 3d. 1219(A), 2012 WL 335774 (District Court , 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 9 68. 5(b) provides , in sum , that if a health service is reimbursable under Insurance Law 9 5102(a)(1) - but the superintendent has not established a fee schedule applicable to that specific provider - reimbursement is then 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 Acupuncture v. Great Wall GEICO Gen. Ins. Co. 16 Misc. 3d 23 842 N. Y.S. 2d 131 (Supreme Cour [* 7] Appellate Term , Second Department 2007). Recently, in Upper East Side Surgical, PLLC State Farm Ins. Co. , supra the Court v. considered essentially the same OBS- facility fee issue raised here. The Court 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 95102(a)(1). Since , however , fee schedules applicable to OBS providers had not been issued the facility rate issue effectively defaulted to the provisions of 9 68. 5(b) - under which fees would then be payable based on prevailng rates in the involve geographic area. Side Surgical, PLLC v. State Farm Ins. Co. , supra See Upper East at 3. Contrar to plaintiffs ' assertions , the fact that defendant allegedly utilzed the PAS fees codes in submitting bils does not establish that it is therefore an Article 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 Court holding relied upon by plaintiffs contains no factual content or E.g. explanatory legal analysis and is therefore lcwking in precedential import and authority. v. Synergy First Medical PLLC Finally, plaintiffs DOH (see GEICO - Misc. 3d -' (Civil Cour , Bronx County 2011). ' reliance on a 2006 opinion letter issued by General Counsel for the Plaintiffs ' Memorandum of Law ExJibit C- 3) - which predates the 2008 enactment of the " OBSstatute " (Public Health Law 9 230- 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 9 5102(a)(1). 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 parties involved. Specifically, the DOH observed that " (w)hether a third party insurer will pay a facility fee is a matter of negotiation between the insurer and the OBS practice See Office Based Surgery; [* 8] Frequently Asked Questions , ~ 43 accord General Counsel Opinion 10- 16- 2008 York Insurance General Counsel Opinion No. 10- 16- 2008 (#1), New (2008). The Court 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 9 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 , pursuant to CPLR 996301 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 further ORDERED that the previously granted temporar restraining order contained in plaintiffs ' February 2012 Order to Show Cause is hereby VACATED. This constitutes the Decision and Order of this Court. DENISE L. SHER , A. Dated: Mineola , New York May 31 , 2012 INTE.RED 2012 I4 co etlRfteJ"8I JUN 0 1 CONtY

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