Denial’s Use of Non-Statutory Language Does Not Make it Invalid

Denial’s Use of Non-Statutory Language Does Not Make it Invalid

Insurance Law 5106(c) pemits a de novo review of a No-Fault master arbitrator’s award over $5,000.  In this case, Allstate appealed from an arbitration award to a medical provider on both medical necessity and fee schedule issues.  Supreme Court ruled in favor of the provider on both issues.  But the Appellate Division reversed, finding that, while Allstate’s medical opinion was insufficient to overcome the presumption of medical necessity, it did prove that the charges were in excess of the fee schedule.­—LNR

This action pursuant to Insurance Law § 5106(c) arises from a motor vehicle accident that occurred on February 6, 2013. Christopher Krull allegedly was injured in the accident, and he underwent spinal fusion surgery performed by P. Jeffrey Lewis of the defendant, Buffalo Neurosurgery Group. The defendant, as assignee of Krull, submitted a claim to the plaintiff insurer for no-fault insurance benefits for the surgery and related care. The plaintiff denied the claim. The defendant submitted the matter to arbitration. The arbitrator determined that the defendant was entitled to no-fault compensation in the principal sum of $11,352.46, plus interest and attorney’s fees. The plaintiff appealed the award to a master arbitrator, who affirmed the award.

On August 19, 2015, the plaintiff commenced this action pursuant to Insurance Law § 5106(c) for a de novo determination of the defendant’s claims for no-fault insurance benefits. The plaintiff then moved for summary judgment on the complaint. In an order dated December 9, 2016, the Supreme Court denied the motion and, upon searching the record, awarded summary judgment to the defendant, concluding that the master arbitrator had properly affirmed the award of benefits to the defendant in the principal sum of $11,352.46, plus interest and attorney’s fees. The plaintiff appeals.

Insurance Law § 5106(c) permits a de novo adjudication of a no-fault insurance claim where the master arbitrator’s award is $5,000 or greater, exclusive of interest and attorney’s fees. Here, we agree with the Supreme Court’s denial of that branch of the plaintiff’s motion which was for summary judgment on so much of the complaint as, in effect, sought a determination that it was not obligated to pay the defendant no-fault benefits relating to Krull’s surgery, since the surgery was not medically necessary. The peer review reports submitted in support of that branch of the motion failed to demonstrate, prima facie, that the surgery performed on Krull was not medically necessary. In light of the plaintiff’s failure to meet its prima facie burden, we need not consider the sufficiency of the opposing papers on that issue.

We agree with the Supreme Court’s determination that the plaintiff established its prima facie entitlement to judgment as a matter of law on that branch of its motion which was for summary judgment on so much of the complaint, as, in effect, sought a determination that the amount of the benefits sought by the defendant was not in accordance with the workers’ compensation fee schedule. Contrary to the court’s determination, however, the defendant, in opposition to that prima facie showing, failed to raise a triable issue of fact. Accordingly, that branch of the plaintiff’s motion should have been granted.

Since the defendant’s submissions were not sufficient to establish that the arbitrator and the master arbitrator were correct in awarding the defendant no-fault insurance benefits in the principal sum of $11,352.46, the Supreme Court should not have searched the record and awarded summary judgment to the defendant.

2019 NY Slip Op 03749

Decided on May 15, 2019

Appellate Division, Second Department

?In a no-fault suit with several interesting issues, the Supreme Court has upheld a master arbitrator’s ruling that Merchants Preferred Insurance Company timely denied a hospital bill.

Claimant was helping his friend use a pickup truck to pull down dead trees. The truck was insured by Merchants.  The friend tied a strap around a dead tree and hooked it onto the truck’s hitch ball.  As the pickup truck’s owner moved the truck in order to bring down the tree, the tree fell on the claimant, causing injuries that required surgery.

The accident occurred on 10/10/2014.  Claimant retained counsel right away, but the first notice was provided to Merchants 34 days after the accident.

Strong Memorial Hospital sent a bill to Merchants for surgery that was performed on 10/20/2017.  There was no evidence as to when or how the bill was sent, but Merchants received it on 12/23/2014.  Merchants promptly denied the bill based on late notice of the accident.  Merchants’ denial language, according to claimant, deviated from the Regulations in that it stated that late notice would be excused upon a showing that it was “impossible” to comply with the time limit (the word “impossible” not being in the regulations).

Claimant filed for AAA arbitration.  After five hearings, with testimony from the claimant, the arbitrator issued an award upholding the denial.  Claimant appealed to a master arbitrator, who affirmed the lower arbitrator’s award and stated that he was doing so on the merits.  Claimant then filed this Petition to vacate the arbitration award.

In denying the Petition, the Court held that the claimant had not met his burden in establishing grounds to vacate the arbitration award.  “It is the Master Arbitrator’s role to assure that the arbitrator reached his decision in a rational manner, that the decision was not arbitrary and capricious, incorrect as a matter of law, in excess of policy limits or in conflict with other designated no fault arbitration proceedings….  Contrary to the allegations in the Petition, the denial of the claim was upheld on the basis of late notice of the claim and a timely denial thereof.”

Comment:  All the issues raised by claimant in the Petition were considered and rejected by the lower arbitrator and the master arbitrator.[IA]