The Rogak Report: 06 May 2008 (Part II) ** No Fault - Prima Facie Case **
MEDICAL BILLER'S INABILITY TO AUTHENTICATE PATIENT RECORDS MEANS IT CANNOT ESTABLISH PRIMA FACIE NO-FAULT CASE
Second Med., P.C. a/a/o Marvin Calender v. Auto One Ins. Co. 2008 NY Slip Op 28169 Decided on May 2, 2008 Civil Court Of The City Of New York, Kings County Sweeney, J. Edited by Lawrence N. Rogak
Plaintiff Second Medical, P.C. , as assignee of Marvin Calender, commenced this action to recover assigned first-party no-fault benefits. The trial of the action took place on December 20, 2007. The only witness to testify was Inga Lev, the president of Maugust, Inc., the company that does plaintiff's medical billing.
The issue presented was whether Ms. Lev's testimony was sufficient to establish the admissibility of the underlying no-fault claim form, which incorporated information contained on medical records which were neither offered nor admitted in evidence and which were never shown to be admissible under any hearsay exception. "The court answers this question in the negative."
"Ms. Lev testified that once a week, someone from plaintiff's office would deliver to her a number of patient files. Each file contained one or more medical reports which described the nature of the services that plaintiff purportedly provided to a particular patient. Each file also contained an executed assignment of benefits form and information identifying the insurer who was responsible for payment of first-party no-fault benefits."
"Either Ms. Lev or one of her co-workers would prepare no-fault claim forms based upon the information contained on the documents contained in patient files and mail the claim forms to the insurers responsible for payment of the first-party no-fault benefits along with an executed assignment. Ms. Lev gave no testimony concerning the practices and procedures that plaintiff utilized in creating the documents contained in the patient files."
"Ms. Lev testified that she prepared the no-fault claim form in this action pursuant to the above procedures and mailed it to the defendant with an executed assignment on November 20, 2002. She testified that as of the date of trial, the first-party no-fault benefits due and owing were not paid. In its denial of claim form, which was received in evidence, defendant acknowledged receiving the claim form on November 25, 2002. When plaintiff's counsel offered the claim form in evidence, defendant's counsel objected arguing that Ms. Lev failed to lay a proper foundation for its admission as a business record pursuant to CPLR 4518[a]."
"Relying primarily on Pine Hollow Medical, P.C. v. Progressive Casualty Insurance Company, 13 Misc 3d 131(A) [App Term 2nd & 11th Jud Dists 2006], plaintiff's counsel argued that since Ms. Lev established plaintiff had a business duty to Maugust to deliver the patient files and that Maugust routinely relied on the medical reports and other documents contained in the files and fully incorporated them into no-fault claim forms which it created in the regular course of its business, a proper foundation for the admission of the claim form as a business record was laid."
"A plaintiff provider establishes a prima facie entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing form had been mailed and received, and that payment of no-fault benefits was overdue. It is now clear that this language should not be interpreted as dispensing with the requirement that the provider tender evidentiary proof of the transaction sued upon in admissible form (Bajaj v. General Assur. 18 Misc 3d 25, 27-28, 852 NYS2d 576, 577 - 578 [App Term, 2nd & 11th Jud Dists] ). Thus, to prevail in an action to recover first-party no-fault benefits, the provider must proffer evidence in admissible form establishing the facts asserted in the underlying no-fault claim form. To the extent defendant issued denial of claim forms (NF-10s) or admitted receipt of plaintiff's claim forms, such admissions did not concede the facts asserted in the claim forms and it remained plaintiff's burden to proffer such evidence in admissible form, which it failed to do."
"Here, plaintiff attempted to prove the facts asserted in the claim form by offering it as a business record pursuant to CPLR 4518[a]. CPLR 4518[a], which sets forth the criteria for admission under what is commonly referred to as the business record exception to the hearsay rule, provides: 'Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter. . . .'"
"The three foundation requirements of CPLR 4518[a] are 'first, the record must be made in the regular course of business-reflecting a routine, regularly conducted business activity, needed and relied on in the performance of the functions of the business. Second, it must be the regular course of business to make the record-in other words, the record was made pursuant to established procedures for the routine, habitual, systematic making of such a record. Finally, the record must have been made at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter, assuring that the recollection is fairly accurate and the entries routinely made' (People v. Cratsley 86 NY2d 81, 89, 653 NE2d 1162, 1166, 629 NYS2d 992, 996 , citing Kennedy, 68 NY2d, 569 579-580, 510 NYS2d 853, 503 NE2d 501  )."
"It is well settled that in order to lay these foundational requirements, the proponent of the record must call as a witness someone with knowledge of the maker's business practices and procedures. The witness need not have made the record or even be familiar with the record. It is not even required that the witness be a current or former employee of the business that created the record. However, unless the witness demonstrates some familiarity with the particular record keeping procedures of the business that created the record such that he can state that the record he received was made in the regular course of that business, that it was in the regular course of that business to make the record and that it was made contemporaneously with the events recorded in the record, the record is inadmissible."
"Here, Ms. Lev did not demonstrate any familiarity with plaintiff's business practices and procedures. Accordingly, she did not establish that the documents contained in Mr. Calender's patient file were business records within the meaning of CPLR 4518[a]. Further, she did not establish the admissibility of the file documents under any other hearsay exception. Since all the documents contained in Mr. Calender's patient file constituted inadmissible hearsay, it necessarily follows that the no-fault claim form, which incorporated these records, is also hearsay."
"Plaintiff's reliance on Pine Hollow Medical, P.C. is misplaced. In Pine Hollow Medical, P.C., the court stated that 'it is well-settled that where an entity routinely relies upon the business records of another entity in the performance of its own business . . . , and fully incorporates said information into records made in the regular course of its business. . . , the subsequent record is admissible notwithstanding that the preparer lacked personal knowledge of the information's accuracy' . While this is a true statement of law, it was never demonstrated in this case that the documents contained in the patient files which Ms. Lev and her co-workers routinely relied upon and fully incorporated into the no-fault claim forms qualified as business records within the meaning of CPLR 4518[a]. The root of plaintiff's argument appears to be that the term 'business records' as used in Pine Hollow Medical, P.C. means any records, including records that may constitute hearsay. The premise of plaintiff's argument is without logic or support and is belied by the cases cited in Pine Hollow Medical, P.C."
"In all the cases cited in Pine Hollow Medical, P.C., where documents were admitted in evidence through the testimony of a witness who was neither a current or former employee of the person or entity that created the documents, the witness had demonstrated his or her familiarity with the business practices and procedures pursuant to which the documents were created. These witnesses were therefore able to qualify the documents as business records. In People v. Cratsley, the foundation witness testified that the I.Q. test report that was admitted in evidence was prepared by an independent psychologist as an initial evaluation of a client, that it was conducted in accordance with her employer's requirements and on her employer's behalf, that the report was prepared at the time the examination took place and that the examination was conducted to fulfil certain statutory and regulatory requirements with which she was familiar (86 NY2d at 88, 653 NE2d at 1166-1167, 629 NYS2d at 996-997). In People v. DiSalvo, the foundation witness testified that he was familiar with the specific business practices and procedures of the dump site facility that created the records which the court admitted in evidence (284 AD2d at 548-549, 727 NYS2d at 147). In Plymouth Rock Fuel Corp. v. Leucadia, Inc., the foundation witness testified that the fuel oil delivery tickets that were admitted as evidence were prepared by contract drivers that were hired by his company who had a business duty to record certain information on the tickets, including the amount, location and date of fuel delivered (117 AD2d at 728, 498 NYS2d at 454)."
"Here, plaintiff laid absolutely no foundation for the admission of the documents contained in Mr. Calender's patient file. To accept plaintiff's interpretation of Pine Hollow Medical, P.C. , this Court would have to conclude that these documents were admissible notwithstanding that plaintiff had never demonstrated that the informant had personal knowledge of the acts, events and occurrences that the records document and was under a business duty to report them to the entrant. This court would also have to conclude that it was not necessary for the plaintiff to demonstrate that it was within the scope of the entrant's business duty to record the acts, transactions and occurrences and that each participant in the chain producing the records, from the initial declarant to the final entrant, was acting within the course of regular business or that the declarations contained in the records were admissible through some other hearsay exception. As stated by the Court of Appeals in Matter of Leon RR, 48 NY2d 117, 122-23, 421 NYS2d 863, 397 NE2d 374 : "To constitute a business record exception to the hearsay rule, the proponent of the record must first demonstrate that it was within the scope of the entrant's business duty to record the act, transaction or occurrence sought to be admitted. But this satisfies only half the test. In addition, each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception. Thus, not only must the entrant be under a business duty to record the event, but the informant must be under a contemporaneous business duty to report the occurrence to the entrant as well (Richardson, Evidence [10th ed-Prince], § 299). The reason underlying the business records exception fails and, hence, the statement is inadmissible hearsay if any of the participants in the chain is acting outside the scope of a business duty."
"Unless some other hearsay exception is available, admission may only be granted where it is demonstrated that the informant has personal knowledge of the act, event or condition and he is under a business duty to report it to the entrant."
"In sum, since the documents contained in Mr. Calender's patient file constituted hearsay, the no-fault claim form which was based on the information contained in these documents is also hearsay. Hearsay cannot be transformed into non-hearsay simply because a business routinely relies upon it and integrates it into its own records."
"Inasmuch as plaintiff did not proffer evidence in admissible form establishing the facts asserted in the claim form, plaintiff did not make out a prima facie case."
Judgment was for the defendant.
Comment: This is an important decision, relevant to all no-fault suits where the only witness for plaintiff is the medical biller.