Plaintiff commenced this action to recover no-fault benefits for three MRIs of the brain, lumbosacral spine, and cervical spine. At trial, after the parties stipulated to the admission of documents to establish plaintiffs prima facie case, defendants expert medical witness, who had performed a peer review on defendants behalf, testified that the MRI services rendered to plaintiffs assignor were not medically necessary.

The Richmond County Civil Court found that since plaintiff diagnostic center merely performed MRIs pursuant to the instructions of its assignors examining physician, and did not itself physically examine the patient, it could not, as a matter of law, be denied first-party no-fault benefits based upon a lack of medical necessity. Accordingly, the court awarded judgment to plaintiff and this appeal ensued.

The Appellate Term reversed.

A plaintiff providers proof that it submitted completed claim forms setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue establishes a prima facie case of medical necessity on plaintiffs motion for summary judgment, thereby shifting the burden to defendant who, if not precluded, may establish the lack of medical necessity by submitting proof that the health benefits provided were not medically necessary.

Similarly, in the context of this trial, plaintiffs submissions established a prima facie entitlement to judgment as a matter of law by proof of the submission of the claim forms. The burden then shifted to defendant to come forward with sufficient evidence to rebut the presumption of medical necessitywhich attaches to plaintiffs claim forms.

Where the defendant insurer presents sufficient evidence to establish a defense based on the lack of medical necessity, the burden shifts to the plaintiff which must then present its own evidence of medical necessity.

Prior Decision Did Not Refute Experts Testimony

In the instant case, after plaintiff established its prima facie case, defendants expert, Dr. McDonald, presented unrebutted testimony to the effect that the MRIs for which the plaintiff sought payment were medically unnecessary. While the court below was free to assess and reject her uncontradicted expert opinion, the court never indicated that it was deciding the case based upon an evaluation of Dr. McDonalds testimony, but instead came to the conclusion that a diagnostic center, which performs MRIs at the request of an independent treating or examining physician, but which does not itself perform a physical examination upon a patient-assignor, may not, as a matter of law, be denied first-party no-fault benefits by an insurer which asserts a defense of lack of medical necessity. We disagree with the conclusion of the trial court.

Under the Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law art 51), more commonly known as the No-Fault Law, first party benefits are available to reimburse persons for basic economic loss resulting from injuries arising out of the use or operation of a motor vehicle (Insurance Law 5102 [b]).

Nowhere in the statutory or regulatory scheme is there any suggestion that services rendered by diagnostic centers or, for that matter, medical equipment suppliers, laboratories, or radiological facilities, all of which rely upon prescriptions or referrals from treating or examining medical providers, be exempt from the requirement that said services be medically necessary. 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 (see Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121 [1975]).

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.

Moreover, to permit medical providers to receive reimbursement even when the insurer has proven that the service provided was not medically necessary would encourage fraud, rather than combat it. In fact, the construction urged by plaintiff would require insurers to pay for MRIs of the entire spine when the insured suffered a broken toe, or for full body scans for broken arms.

In the exercise of our power to make new findings of fact (see CPLR 5501 [c]; see generally 5712[c][2]), based upon our review of the record, we find that after plaintiff made out its prima facie case, defendants experts testimony regarding the lack of medical necessity was sufficient to demonstrate a lack of medical necessity and, therefore, to shift the burden back to plaintiff to show that the MRIs were, in fact, medically necessary. Plaintiff, in response, failed to submit any evidence, such as the testimony of the referring physician or of its own medical expert, to establish that the services rendered to its assignor were medically necessary.

Accordingly, plaintiff was not entitled to judgment in its favor.

West Tremont Med. Diagnostic, P.C. a/a/o Janette Lamb-McCleod v GEICO Ins. Co. (2006 NYSlipOp 51871(U))(App. Term, 2 Dept)