In this no-fault suit, plaintiff medical provider took an assignment of benefits from a Louisiana pedestrian who was struck by a New York vehicle (insured by GEICO) in Louisiana, where there are no PIP benefits. In its no-fault application, the provider mistakenly listed the claimant as the insured. At trial, plaintiff's attorney conceded that it had no proof that the claimant was the insured, and GEICO's defense was lack of coverage. The trial judge ruled that it was GEICO's burden to prove that the assignor was not insured by them, and that GEICO did not meet this burden despite a claims rep's testimony that her company records did not show this pedestrian as an insured. The Appellate Term reversed the trial court's judgment for plaintiff.

"Plaintiff, a provider of radiology services, submitted a claim to defendant for medical services rendered to plaintiff 's assignor, Julia Higginbotham. The claim was denied on coverage grounds, defendant asserting that its records indicated that Higginbotham was a pedestrian struck by a vehicle owned and operated by Linell McWilliams (an insured of defendant) in the State of Louisiana, where there is no no-fault coverage or obligation to pay firstparty benefits. At trial, defendant stipulated to plaintiff 's prima facie case, and the only issue litigated was defendant's lack of coverage defense. In support of its defense, defendant called one witness, a senior underwriter. The court subsequently rendered judgment in favor of plaintiff and awarded it the damages sought in the complaint." "We disagree with the trial court's conclusions that defendant's lack of coverage defense was predicated solely on inadmissible hearsay and that defendant, to establish its lack of coverage defense, was obligated to produce a witness with personal knowledge of the underlying accident. Defendant's witness, whose testimony showed that the subject accident occurred in Louisiana and involved a pedestrian (Higginbotham) who was struck by a motor vehicle owned and operated by a Louisiana driver (McWilliams), appropriately relied on the contents of the subject claims log, a business record which constitutes an exception to the hearsay rule."

"Plaintiff 's listing of Higginbotham as the insured party on its claim form — an apparent clerical error — did not obligate defendant to conduct an exhaustive search to exclude the possibility that Higgingbotham was defendant's insured, a status she never asserted to hold. While more than one insurer may be obligated to pay first-party no-fault benefits for a covered event (see Insurance Law § 5106[d]), the obligation remains upon the claimant, in the first instance, to supply sufficient information to an insurer in an NF-2 form to permit an insurer to determine whether the injured party is actually an insured. Not only did plaintiff fail to satisfy that obligation here, but plaintiff 's counsel readily admitted at trial that counsel had no inkling whether Higginbotham was defendant's insured."

"Since defendant demonstrated that the claim did not arise out of an insured incident, it established its lack of coverage defense (see generally Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]), and the complaint should have been dismissed."

2010 NY Slip Op 51638(U) Decided on September 21, 2010 Appellate Term, First Department

 Medical Necessity - MRIs

Elmont Open MRI & Diagnostic Radiology, PC a/a/o Gloria Haas v New York Cent. Mut. Fire Ins. Co.

"The trial of this no-fault action by Elmont Open MRI against New York Central Mutual Fire Ins. Co. presents two issues for determination: (1) plaintiff's proof of its prima facie case, and (2) defendant's defense that several MRIs were not medically necessary." "The first issue had to be tried because defendant would not stipulate to plaintiff's prima facie case. Such stipulations are customary in this Court. Nevertheless, defendant was within its rights to force plaintiff to meet its burden of making out a prima facie case. However, the precise extent of that burden was necessarily shaped and framed by defendant's proof in support of an earlier summary judgment motion." "In the Court's decision on that earlier summary judgment motion, it considered and decided two contested points. First, the Court found that defendant had established, as a matter of law, that it had issued timely denials of plaintiff's claims for no-fault benefits. The Court made this finding based upon an affidavit of defendant's senior nofault litigation examiner, attesting to defendant's claim handling practices following receipt of no-fault claims. The denials submitted with that affidavit indicate both the date of receipt of the claim and the date of the denial's issuance. The decision found that defendant had demonstrated, through 'evidentiary proof in admissible form,' that it issued denials within 30 days of receipt of plaintiff's claims. Accordingly, the decision concluded that defendant 'timely issued its denials,' thereby eliminating the need for further proof on that point."

"The Court's decision went on to determine, however, that defendant failed to sufficiently demonstrate that the services provided by plaintiff were not medically necessary. Accordingly, the decision denied summary judgment to defendant, setting the stage for this trial." "Against this background, plaintiff presented at trial unrefuted testimony from its medical biller, establishing a business-record foundation for introduction of plaintiff 's no-fault bills into evidence. See CPLR 4518. The bills show, among other things, the services provided by plaintiff, the date of service, plaintiff's charges, and the date of the bill. When considered together with defendant's previous proof as to when plaintiff's bills were received and when they were denied, plaintiff's evidence amply made out a prima facie case."

"Contrary to defendant's contention at trial, plaintiff did not need to submit any testimony respecting the mailing of its claims to establish their timeliness or to meet its initial burden of making out a prima facie case. By law, claims for health service expenses must be submitted to the insurer 'no . . . later than 45 days after the date services are rendered.' See 11 NYCRR 65- 2.4(c). The testimony from plaintiff's medical biller laid a proper foundation for the admission of business-record proof regarding the dates plaintiff's services were rendered. The affidavit of defendant's senior no-fault examiner admitted receipt of the bills. That admission left open only the issue of whether the bills that defendant received were 'admissible in evidence' as proof of the 'transaction[s], occurance[s] or event[s]' that were documented in the bills. See CPLR 4518; see also Bajaj v. General Assurance, 18 Misc 3d 25, 27-8 (App Term, 2007). When read together with denials which set forth the dates when the claims were received, it is evident that the claims were each received within the required 45 day period. No greater proof is required in such circumstances."

"Under applicable precedent, a provider can make out a prima facie case through proof that its claims were timely 'mailed and received and that payment . . . was overdue.' See Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 742-3 (2d Dept. 2004). But nothing in the law actually mandates proof of 'mailing' within 45 days. The regulations, instead, simply require that claims must be 'submitted' to the insurer in a timely fashion in order to trigger the insurer's duty to pay, deny, or seek verification of the claim. See 11 NYCRR 65-2.4(c). Consequently, plaintiff did not need to adduce proof of mailing in order to make out a prima facie case."

"Moreover, on the issue of the timeliness of plaintiff's claims, the Court properly took judicial notice of defendant's summary judgment papers. A court may take judicial notice, sua sponte, of the court's records and papers in a pending action. See Prince, Richardson on Evidence, §§2-202, 2-209 (11th Ed., Farrell). Those records and papers show, quite clearly, that defendant's examiner had made affirmative representations respecting the dates defendant had received plaintiff's claims, and effectively admitted the timeliness of plaintiff's claims. Statements made in an affidavit may sometimes constitute informed judicial admission; such admissions may be duly considered by a trial court in determining the facts relevant to an action. See Richardson on Evidence, supra, § 8-219. This was a classic case for doing so."

"The Court has carefully reviewed the decision in Bajaj v. General Assurance, supra, in reaching this conclusion. It sees nothing in that decision which precludes consideration of defendant's prior admissions as establishing part of plaintiff's prima facie case."

"In Bajaj, the Appellate Term merely ruled that an insurer's admitted receipt of a given claim is not tantamount to a 'concession of the facts asserted in plaintiff's claim forms . . .' 18 Misc 3d at 28. Under the logic of Bajaj, a defendant's admitted receipt of a given claim form will not be deemed to 'concede the facts set forth in the claim form with respect to the dates of service, the services rendered and the charges therefor.' However, the defendant's admission of receipt 'would serve . . . to acknowledge that this was the claim form that it received.'" "Thus viewed, although Bajaj did not directly address whether such an admission might extend to the date that claim was received, this Court sees no logical reason why an insurer should not be bound by its own admissions as to the date of receipt of given claims. Accordingly, I concluded at trial, and reiterate in this decision, that defendant's prior admissions eliminated the need for further proof as to when plaintiff's claim forms were mailed. Based upon the testimony from plaintiff 's biller laying a proper foundation for submission of plaintiff's claim forms as business records, plaintiff's proof satisfied its burden under Bajaj respecting the facts set forth in the claim forms. Defendant's admission of when the claims were received, in turn, proves that the claims were submitted to it in a timely fashion. Since defendant will not be allowed to repudiate its own prior admissions, the Court turns to the issue of defendant's medical necessity defense."

"Defendant's lack of medical necessity defense contests the necessity of four MRIs - - a cervical spine MRI, a lumbar spine MRI, an MRI of claimant's left elbow, and an MRI of claimant's left knee. (The necessity of a fifth test, a brain MRI, was not contested at trial.)" "Dr. Robert E. Costello, a chiropractor, testified in support of the defense. In his opinion, the two spine MRIs were performed prematurely and without adequate chiropractic justification. The elbow and knee MRIs, in turn, were deemed unnecessary for any chiropractic treatment. He explained that while chiropractors are allowed by law to examine a person's extremities, they cannot treat most elbow and knee injuries.

Accordingly, in Dr. Costello's view, the established practice in such cases is to refer the patient to an orthopedist, and leave to that specialist any decisions respecting diagnostic tests such as MRIs."

"Notably, medical records in evidence show that a neurologist, Dr. James N. Ligouri, examined claimant about a week before the MRIs and performed a neurologic evaluation. Based on that evaluation, his impression was that claimant was suffering from cervical and lumbosacral radiculopothy. In addition to recommending continued chiropractic care, Dr. Ligouri's plan included MRIs of the cervical and lumbar spine. Both tests, when performed, disclosed disc herniations."

"Dr. Ligouri also evaluated claimant's left elbow. After noting claimant's continued complaints of elbow pain and sensory loss in her left arm, Dr. Ligouri's 'impression' noted a need to rule out ulnar neuropathy. The MRI results were normal." "Other documents in evidence confirm that claimant was seen by an orthopedist after the elbow and knee MRIs were performed. The orthopedist reviewed the results of those tests in the course of making further treatment decisions. According to the orthopedist's evaluation, the knee MRI report included findings 'consistent with a tear of the anterior horn of the medical meniscus.' In view of claimant's continued symptoms, positive clinical findings, and positive MRI findings, the orthopedist concluded that 'arthroscopic surgery of [claimant's] left knee is indicated and recommended.'" "In the face of this evidence, the Court concludes that defendant has failed to prove its lack of medical necessity defense by a preponderance of evidence. Applying the test set forth in Nir v. Allstate Ins. Co., 7 Misc 3d 544, 546-7 (Civ Ct Kings Co 2005), the Court finds that defendant's peer review evidence lacked a sufficiently credible factual and medical basis, since it failed to meaningfully address the proof, cited above, that a neurologist and an orthopedist saw a need for, or relied upon, the results of the subject tests. Accordingly, judgment is rendered for the plaintiff."

Comment: The Appellate Term's ruling in Bajaj established that, at least in the Second Department, an insurer's admission that it received medical bills is not enough to get those bills into evidence because admission of receipt does not establish that the contents of the bills are true and correct. Therefore in the Second Department, a provider must bring a witness to trial to get the bills into evidence as business records. What this decision says is that where the insurer has admitted receipt of the bills, it is not necessary for the provider to give proof of mailing. Which, after all, makes sense: if the insurer issued a denial (or other acknowledgement of receipt of the bills), then obviously the bills were mailed. But "sense" plays a very small role in no-fault litigation. 2010 NY Slip Op 51588(U) Decided on August 31, 2010 District Court of Nassau County, 2nd District Ciaffa, J.