“Great Wall”​ Breached: NY PIP Acupuncturist Fee Schedule Thrown Into Doubt

In New York PIP practice, health care providers are paid according to the Workers Compensation Fee Schedule. But not all kinds of treatment are covered by the Fee Schedule; one of those is acupuncture treatment performed by a licensed acupuncturist. The Fee Schedule has acupuncture rates for physicians and chiropractors (with the chiro rate being lower than the physician rate), but not for acupuncturists.

Since 2007, courts and arbitrators have used the rule from a case called Great Wall Acupuncture v Geico, which held that licensed acupuncturists “may” be paid at the chiropractor rate. The permissive “may” has, heretofore, been taken as a rule. But now the Appellate Division, First Department, takes the pegs out from under that presumed rule.

In Global Liberty Ins. Co. of N.Y. v Acupuncture Now, P.C., 2019 NY Slip Op 08942, the No-Fault insurer brought a declaratory judgment action seeking a declaration that licensed acupuncturists are entitled to payment of no-fault insurance benefits only as set forth in the workers’ compensation fee schedule for chiropractors. Supreme Court, New York County denied summary judgment to the insurer, and the Appellate Division affirmed.

“In this action, plaintiff no-fault insurers seek to resolve, as a matter of law, the question of the fee schedule applicable to reimbursement of licensed acupuncturists who provide services to eligible individuals injured in motor vehicle accidents…. Where a service is reimbursable but the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with the charges permissible for similar procedures under schedules already adopted or established (11 NYCRR 68.5[b]). The superintendent has not adopted a fee schedule applicable to licensed acupuncturists, requiring consideration of “charges permissible for similar procedures under schedules already adopted or established.”

Global Liberty relied on a 2004 informal opinion letter of the Insurance Department, but that letter did not resolve the issue. It allows insurers to pay “the rates established for doctors and chiropractors,” instead of a higher “prevailing fee in the geographic location of the provider,” so long as there is a review “for consistency with the charges permissible for similar procedures” under either fee schedule (Ops Gen Counsel NY Ins Dept No. 04-10-03).

But, held the Court, “The opinion letter did not give any guidance as to which particular fee schedule should be applied to a licensed acupuncturist in any particular instance, although the Department was aware that the fee schedules for acupuncture services performed by chiropractors are lower than the fee schedules for such services performed by physicians.”

While courts have held that “an insurer may use the workers› compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which a licensed acupuncturist is entitled to receive» (citing Great Wall), “such holdings do not foreclose the use of the physician fee schedule in all cases.”

In any event, held the Court, “defendants raised an issue of fact as to whether the physician fee schedule should apply.” The defendant acupuncturists submitted evidence suggesting that licensed acupuncturists can, and should, be paid at the higher “physician” rate.

With summary judgment denied, the case goes back to Supreme Court for discovery, and possibly a trial, on the issue of whether these particular licensed acupuncturists should be paid at the physician rate or the chiropractor rate.

In a footnote, the Court wrote that “the Superintendent of Insurance [should] consider adopting a fee schedule including licensed acupuncturists to resolve the issue.”

Comment: There is a great deal of both arbitration and litigation in New York on the issue of the fee schedule for licensed acupuncturists, since no such fee schedule exists, nor will one exist until either the Insurance Department or the Workers Compensation Board adopts one. So now, many cases that used to be disposed of based on Great Wall will now have to be litigated to determine whether the L.Ac. is entitled to the physician rate or the chiropractor rate.

One last comment: Because this decision is from the Appellate Division, First Department, an argument can be made that it does not apply in the Second Department (Brooklyn, Queens, Richmond, Nassau, Suffolk and Westchester).