MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co.

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[*1] MUA Chiropractic Healthcare, PLLC v State Farm Mut. Auto. Ins. Co. 2019 NY Slip Op 29375 Decided on December 6, 2019 District Court Of Suffolk County, Third District Hackeling, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law ยง 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on December 6, 2019
District Court of Suffolk County, Third District

MUA Chiropractic Healthcare, PLLC A/A/O Andrew Lowndes, Plaintiff,

against

State Farm Mutual Automobile Ins. Co., Defendant.



CV-904-18/HU
C. Stephen Hackeling, J.

Upon the following papers numbered 1-3



Read on this motion for summary judgment

Notice of Motion and supporting papers 1

Notice of Cross Motion and supporting papers 2

Answering Affidavits and supporting papers

Affirmation in Opposition to Cross-Motion

Replying Affidavits and supporting papers 3

Filed papers

Other

Plaintiff's cross- motion seeking summary judgment is granted. Defendant's motion, seeking an order dismissing the within complaint, upon the grounds that the Plaintiff billed amounts exceeding the NYS Workers Compensation Board Medical Fee schedule, is denied.

The facts are not in dispute. This sole issue presented for consideration by the Court is whether 11 NYCRR 65-3.8 (g)(1)(ii) is inconsistent with the express dictates of the New York Insurance Law and is therefore constitutionally void, as violative of Article 3 Sec. 1 of the New York State Constitution.

The Court notes that the New York State Attorney General was served with a copy of the Plaintiff's cross motion, pursuant to NY CPLR Sec. 1012 (b), but chose not to intervene to defend the constitutionality of 11 NYCRR 65-3.8 (g)(1)(ii), regarding the fee schedule defense, which provides:

(g) (1) Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:(i) when the claimed medical services were not provided to an injured party; or(ii) for those claimed medical services fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.Article 3, Sec. 1 of the New York State Constitution provides:, "The legislative power of the State shall be vested in the Senate and Assembly."

Sec. 5106(a) of the New York Insurance Law provides:

(a) Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied.

This Legislative statute establishes the legal doctrine that defenses to claims not raised within 30 days after receipt of a no fault claim are precluded. The preclusion rule has been consistently recognized and enforced by the Court of Appeals. See, Vivian Etienne Med. Care, P.C. v. Country-Wide Ins. Co., 25 NY3d 498 (NY 2015); Fair Price Med. Supply Corp. v. Travelers Indem. Co. 10 NY3d 556 (NY 2008); Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007); Presbyterian Hosp. V. Maryland Cas. Co., 90 NY2d 274 (NY 1997).

In 2013 the NYS Insurance Commissioner, under his rule making power, promulgated



regulation 65-3.8 which purports to remove fee schedule defenses from the statutory "preclusion doctrine". An administrative agency's rule making power is limited and may not circumvent or be contrary to the legislature's determination. See NYS Const. Art. 3, Sec 1, Nicholas v. Kahn, 47 NY2d 24 (NY1979). Such inconsistent regulations are "pre-empted" by statutory dictate. See gen., Boreali v. Axelrod, 71 NY2d 1 (NY1987). Removing the fee schedule defense from the statutory preclusion rule via regulation is an unconstitutional overreach, and shall be disregarded by this Court as being invalid and in contravention of the historical statutory thirty-day time period given to defendants to pay or deny claims (or be subject to preclusion).

Accordingly, the Defendant's fee schedule defense became non-viable 30 days after the claim was received without denial or demand for further verification. The Defendant's motion to dismiss is denied as moot and the Plaintiff's cross-motion seeking summary judgment is granted.

Settle judgment on twenty days notice.



Dated: December 6, 2019

Hon. C. Stephen Hackeling, J.D.C.

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