Thursday, October 12, 2006

Keeping It Real, Part I(a)

As implied yesterday, the decision in West Tremont Med. Diagnostic, P.C. v Geico Ins. Co., 2006 NYSlipOp 51871(U) (App. Term, 2d Dep't, 2006) will be interesting in light of the decision just a few months prior in Long Is. Radiology v Allstate Ins. Co., 2006 NY Slip Op 51090(U) (Sup. Ct., Nassau Cty., 2006). I know my posts are getting a bit long as of late, so I'll provide a cut for quicker readability of the front page here.

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Indeed, in Long Is. Radiology, Justice Phelan made explicit his understanding that West Tremont was under appeal. Moreoever, West Tremont is not binding authority upon the Supreme Court, the latter being a court of original jurisdiction. See, e.g., Westchester Med. Ctr. v. Liberty Mut. Ins. Co., 2006 NY Slip Op 50382U (Sup. Ct., Nassau Cty., 2006).

Nevertheless, at the very least, a split amongst courts has been presented to the Appellate Division, as Long Is. Radiology is currently under appeal. See, e.g., App. Div. Motion No. 2006-05943.

In his decision, Justice Phelan explains the background of the case as follows:

Plaintiff is a radiology office that performs MRI testing for persons involved in motor vehicle accidents and allegedly eligible for no-fault benefits. MRI testing is done pursuant to a prescription issued by the injured person's independent treating physician. For payment plaintiff receives an assignment of no-fault benefits from the injured person, and submits claims directly to one of the defendants. Defendants deny numerous claims for payment on the ground of an alleged "lack of medical necessity."

On this motion defendants argue that in the context of the no-fault statute and the regulations thereunder, "medical necessity" is a prerequisite for payment. They conclude therefore, that they have every right to deny plaintiffs' claims on the ground of "lack of medical necessity." This Court agrees with defendants' argument, but not their conclusion.
2006 NY Slip Op 51090(U).

The final sentence is not as hopeful for the carriers as it might appear. Although it was found that carriers could, indeed, defend the claims on the basis of a lack of necessity, it was held that they cannot do so against the radiology facilties directly. Instead, "[a]n insurer who can prove that a radiology test is unnecessary or duplicative, should be able to challenge through subrogation the treating physician or medical provider who prescribed the test." Id.

The Supreme Court based its holding upon the following rationale:

It is this Court's opinion that the results in West Tremont and Omega Diagnostic comport with the underlying intent of the no-fault statute, that claims be processed quickly and efficiently, and that economic losses be fully compensated. As noted in West Tremont, there is no statutory or regulatory pre-approval requirement for radiology tests requested by treating physicians in no-fault cases. Furthermore it makes no sense to argue "lack of medical necessity" against radiologists, because they do not assess medical necessity. Radiologists neither examine the no-fault patient, nor render a pre-test diagnosis. Any diagnostic opinion is based on the radiological test. To require radiologists to render a pre-test diagnosis would cause significant delay in treating the injured.

Under this rationale, if a no-fault patient (who we will assume is a layperson with no medical training) paid for her medical treatment out-of-pocket and then submitted timely and proper claims thereafter seeking reimbursement for same, a carrier could never defend on the basis of a lack of medical necessity. One can imagine the formulation of the argument: it makes no sense to argue "lack of medical necessity" against lay patients, because they do not assess medical necessity; that's why they go to doctors in the first place. This is an absurd conclusion that cannot stand without taking the entirety of the no-fault scheme down with it.

It also seems odd to your affirmant that the Court would give an ultimate finding that would, if implemented, double the amount of litigation in certain massive categories of no-fault claims while, as a predicate, recognizing that "[t]he court system is inundated with no-fault claims litigation." Id. Presumably, if the Long Is. Radiology decision became the rule, the court system would then be inundated with both no-fault claims litigation and subrogation claims litigation.

Can Long Is. Radiology withstand appeal? I either can't imagine so, don't want to imagine so, or both. To the extent that West Tremont is a factor, it should serve as a succinctly damning argument in favor of reversal. The Appellate Term said it all when they noted that "while it may be argued that a diagnostic center is in no position to establish the medical necessity of a prescribed MRI, it is well settled that the assignee stands in no better position than its assignor, and has no more right or claim than the assignor. If a claim is not assigned, and is submitted to the insurer directly by the eligible injured person, the insurer may assert a defense of lack of medical necessity which, if established, will shift the burden to the eligible injured person to provide his or her own evidence of medical necessity. If the defense may be asserted against the eligible injured person, it follows that it may be asserted against the provider as well." 2006 NYSlipOp 51871(U). Vague appeals to the underlying goals of no-fault, which could easily be molded to reach any conclusion under the sun,1 pale in comparison to the actual law.

Really, it's a shame that radiologists don't independently assess medical necessity and yet still face the lack thereof as a defense. It's also a shame that doctors also usually don't assess whether a patient's injuries were the result of an intentional collision,2 yet the appellate courts of this state have repeatedly held that they still must face the defense that such a thing occurred. See, e.g., Central General v. Chubb, 90 N.Y.2d 195 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751 (2d Dep't, 2002).

Does a no-fault fact pattern get any more heartbreaking than the following?:

On August 31, 2000, Aferdita Suljovic, a passenger in a vehicle operated by her husband, was injured when her husband intentionally caused the vehicle to go over an embankment while he exited the driver's side of the vehicle. Mr. Suljovic was indicted, inter alia, for attempted murder and ultimately pleaded guilty to assault in the second degree.[3]

Mrs. Suljovic was hospitalized at Westchester Medical Center (hereinafter WMC). As her assignee, WMC sought to recover no-fault benefits from the defendant, Mr. Suljovic's automobile insurer, for the services it rendered. The defendant issued a denial of coverage on the grounds, insofar as relevant to this appeal, that the occurrence was not an "accident" within the meaning of the no-fault endorsement in the policy and that Mrs. Suljovic's injuries did not arise out of the "use or operation" of a motor vehicle.
Westchester Med. Ctr. v. Travelers Prop. Cas. Ins. Co., 309 A.D.2d 927, 928 (2d Dep't, 2003).

The poor woman was almost murdered in a horrific manner and the hospital did the very thing hospitals are supposed to do. To be sure, the hospital had no part in the attempted murder, and it would have been cruel (and possibly some other things) for them to have refused to treat as soon as they found out her injuries were the result of an intentional act. But do they get reimbursed through no-fault? No. "The assault, committed through the use of a vehicle, was an intentional act, not an accident. Consequently, the...cause of action should have been dismissed." Id. The ability of a no-fault claimant or her assignees to assess a potential defense their claims has no relationship to the properness of a carrier employing such defenses. If the claims do not qualify, and the carrier has proven such in accordance with the applicable laws for proving a defense, that is the end of the judicial inquirty.

No-fault isn't just something where money gets tossed around for equitable reasons. It is based upon a contract, the terms of which are promulgated by the government. The contract has provisions. Those provisions are to be followed. The contract does not provide reimbursement for unnecessary services. The contract does not get changed around depending on whether those provisions would kinda sorta stink a little bit for an assignee of one of the parties thereto. Is this a revelatory stance? I think not, given decisions such as Westchester Med. Ctr. v. Travelers. And while the Appellate Term, 2d Dep't is no stranger to such wholesale no-fault contract re-writing,4 as I said yesterday, recent decisions appear to reverse that trend, or at least provide some balance. And, really, regardless of which party one is representing in a no-fault suit, is strict adherence to the laws and regulations really that bad of an idea?

MRI facilities giving a no-fault patient three MRIs a week after an accident are in no more of a sympathetic position than Mrs. Suljovic and Westchester Medical Center, and, in reality, are surely far less sympathetic. To hold that medical necessity defenses should be unavailable as against such MRI facilities due to unfairness is simply untenable in light of the result in Westchester Med. Ctr. and innumerable similar Appellate Division holdings. Well, it ain't keeping it real, at least.

1. Really, does requiring subrogation against the referring provider after losing a no-fault suit shorten or lengthen the claim procedure? One could argue for the opposite result of Long Is. Radiology without changing the rationale.

2. Though maybe psychologists can if they broach that subject.

[3. Presumably, Justice Phelan would have the carrier subrogate against Mrs. Suljovic's incarcerated husband.]

4. "While the holding of the majority results in a plenary trial on the issue of lack of medical necessity, the insurer will have no evidence to present on the issue of 'medical necessity,' as the eligible injured person never appeared for the IME and consequently the company never examined that person. The eligible injured person would not be entitled to summary judgment but the insurer has no possibility to defend at trial. This, of course, ignores 11 NYCRR 65-1.1 (d) which provides that "No action shall lie against the Company..." Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins., 7 Misc. 3d 18, 25 (App. Term, 2d Dep't, 2004), dissent of Golia, J.

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