The Rogak Report: 03 Oct 2008 ** No Fault - Fee Schedule **
WHERE NO FEE SCHEDULE EXISTS FOR SERVICES, INSURER MAY ISSUE PAYMENT FOR 'SIMILAR' SERVICES AND TIMELY DENY ANY BALANCE
Forrest Chen Acupuncture Servs., P.C. a/a/o Melissa Lugo v. GEICO Ins. Co. 2008 NY Slip Op 07211 Decided on September 30, 2008 Appellate Division, Second Department Edited by Lawrence N. Rogak
Plaintiff no fault provided appealed from an order of the Appellate Term which had affirmed a Civil Court denial of its motion for summary judgment and granted the defendant's cross motion for summary judgment dismissing the complaint. The Appellate Division affirmed.
"The plaintiff's evidentiary submissions revealed that the defendant insurance company timely issued denial of claim forms in April and May of 2001, which partially denied payment upon the ground that no fee schedule existed for the treatment provided, and payment could thus be limited to a reasonable and customary fee. Although a timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law, here the defendant's denials of claim were issued on prescribed forms, and were not factually insufficient or vague. Under these circumstances, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law."
"Furthermore, the defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint by submitting evidentiary proof that no fee schedule for the reimbursement of acupuncture treatments existed in 2001, and that it properly limited payment to charges permissible for similar procedures under schedules already adopted. In opposition to the cross motion, the plaintiff failed to raise an issue of fact as to whether reimbursement for its acupuncture services was properly limited."
"The plaintiff further contends that the defendant failed to offer sufficient evidence in support of the 'similar procedure' it chose for comparison to the services offered by the plaintiff in arriving at the rate of reimbursement. This contention, however, is not properly before this Court, as it was not raised in the Civil Court, and was not addressed by the Appellate Term."
Comment: Because there is now an acupuncture fee schedule for services performed by medical doctors (and non-physician acupuncturists may charge at the chiropractor rate), this particular fact pattern will no longer occur. However, the general rule here is important: where no fee schedule exists for a service, the insurer may pay the rate for a similar service and issue a timely and proper denial for any charges which exceed the fee schedule.