The newly-shaven David M. Gottlieb, Esq. has a great post over at No-Fault Paradise about the oral arguments before in the Court of Appeals in LMK Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 46 A.D.3d 1290 (3d Dep't, 2007)
Based on David's post, both State Farm/Rivkin Radler and the Insurance Dep't. appear to be in The Twilight Zone. When it comes to interest, the argument is that providers should file suit immediately once a claim is denied and/or overdue. When it comes to attorney's fees, however, providers should apparently wait until all treatment is finished to consolidate all bills into a single suit to avoid exhausting the attorney's fees.
And, really, let's be honest: the concept of "exhaustion" of attorney's fees is just made up. They invented it out of nowhere for this litigation. Just look at the provisions concerning attorney's fees in the Regs:
11 NYCRR § 65-4.6(b)(1) provides that, in a specific scenario, "[i]f the resolved claim was initially denied, the attorney’s fee shall be $80." § 65-4.6(b)(2) provides "[i]f the resolved claim was overdue but not denied, the attorney’s fee shall not exceed..." The word "claim" in these provisions only makes sense if a claim is an individual bill. Otherwise, each "claim" could have a mixture of bills that were denied and not denied, and these provisions would write themselves out of existence.
Moreover, § 65-4.6(e) provides that "[f]or all other disputes subject to arbitration, subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850." Thus, at a minimum, each time a court or arbitrator resolves a matter and grants payment to the provider, there is a maximum of $850. There is no "coverage limit" of $850 in attorneys per patient, per provider. This appears nowhere in the Insurance Law, the Mandatory PIP Endorsement, or anywhere else in the Regs.
It is disappointing, but not surprising, that a carrier would attempt to fabricate a new category of coverage limit where none actually exists.
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4 comments:
Even if a provider waited until the end of treatment to submit all his bills, according to the Krinick/State Farm/Ins Dept argument, there would only be one $850.00 attorney fee available. So holding onto the bills rather than submitting them in a timely matter (per the regs) wouldn't make a difference as far as attorney fees are concerned.
It's that providers would have to hold onto the bills before submitting them, but rather hold onto all unpaid bills before filing suit. This would be the only way to ensure that the attorney's fees are not exhausted such that a provider would be stuck looking for an attorney that would be willing to sue without the guarantee of statutory attorney's fees.
What about the providers' real perspective on this?
Most attorneys collect fees from the settlement/suit amount (and sometimes higher fees for interest collected). Furthermore, a high percentage of claims are settled for less than the full amount (statutory fees are indexed to the settlement amount).
Typically, providers end up with 60-80% of their claims 1 to 3 years after they initiate the suit. "Holding onto unpaid bills before filing suit" is not really limiting to providers; it's the fact that they receive less than what they are entitled to years after when they are entitled to it.
On the other hand, the point that Damin referenced is just another red herring (by the carriers). The outcome of LMK, has no effect on statutory fees defined in the regs. (That attempt will come in the future legislative revisions of the regs)
It is always advised that you submit your bills right away. Though each state is different, there, they all have timeliness to claim reimbursement.
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