Choice of law - and the deemer statute - it is just the beginning

Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 2009 NYSlipOp 29109 (App. Term 2d Dept. 2009)
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_29109.htm


I think someone out there knew it would be a matter of time before a "Trans-Hudson" (a term involving a New Jersey policy and New York loss) no-fault case would find its way into the court system. It just did. Not surprisingly, the court ruled New Jersey law would apply.

Factually, the case involved a New Jersey policy, New Jersey insured and a New York accident. There is a legion of case law out there that made this result preordained. There are, however, broader issues that this case represents. Arguably, a case predicated upon New Jersey law must be brought within two years of the last payment or two years fromthe date of loss, which ever is greater (New Jersey PIP Law). Stranger pedestrians, consistent with NJ Pip law, are exempted from coverage, upon the presentation of a proper policy endorsement. Furthermore, a provider must make a prima face case of medical necessity and causation to be entitled to no-fault benefits under New Jersey law.

But under New Jersey law, there are pre-certification requirements and sizable deductibles. While the standard New Jersey policy offers $250,000 in first-party benefits, the New Jersey fee schedule rules, in accordance with New Jersey's 1998 Automobile Insurance Cost Reduction Act (AICRA), do not allow certain services to be compensable. Case and point: CPT services and video fluoroscopy services are per se not compensable under New Jersey law. We all know this is not the case in New York. I will leave the policy determination as to whether these tests should be compensable to somebody else.

But, the deemer statute (Ins Law 5107) adds some wrinkles to this paradigm.

In fact, wouldn't the deemer statute mandate that the injured person (or his assignee) receive the benefit of the vast array of services, without the co-pays and pre-certs, that the New York fee schedule offers? Otherwise, the deemer statute is without force.

Consider the hypothetical no-fault statute that allows unlimited benefits, yet charges a 90% co-pay up to some indeterminate sum. Clearly, the deemer statute would mandate New York style benefits up until the first $50,000 that is paid out under the policy.

Therefore, it follows that in these "Trans-Hudson" cases, benefits up until the first $50,000 should be paid in accordance with the greater of the New Jersey or New York fee schedule. Should the sister-state's policy allow for first-party no-fault benefits in excess of $50,000 (this includes only New Jersey and Michigan), then that state's fee schedule rules would be in effect from dollar $50,0001 up until the policy limit. But, if the sister state's fee schedule rules are more beneficial to the Claimant that New York's fee schedule rules, then it would follow that the sister state's fee schedule rules would need to be followed.

But you can see that we have just touched the surface with these Trans Hudson cases... The details will need to be filled in at a later time.

Is it medically necessary?

In an indiscreet case which garnered a "u" cite, the Appellate Term, Second Department made its first foray into determining what evidence is sufficient to raise an issue of fact as to a service's medical reasonableness in opposition to a well supported peer review. The case on point is Park Slope Med. & Surgical Supply, Inc. v New York Cent. Mut. Fire Ins. Co. 2009 NY Slip Op 50441(U)(App. Term 2d Dept. 2009). The pertinent portion of the opinion went as follows:

"[i]n response to defendant's cross motion, plaintiff submitted an affidavit from Dr. Shapiro in which he stated that he disagreed with the peer review report and affidavit furnished by defendant because he concluded that the supplies provided were medically necessary. Since the affidavit of Dr. Shapiro demonstrated the existence of an issue of fact as to medical necessity"

It bears in mind that the "Dr. Shapiro" affidavit is boilerplate in nature, having seen a few of them. Yet, under the circumstances of this case, I cannot say the court was wrong in its holding.

Assume for argument sake that Defendant failed to annex the documents his expert relied upon in forming his file based review. This is probably a valid assumption knowing what these motions tend to look like. In this instance, the Court should have found that Defendant did not meet its burden, and should have actually granted Plaintiff summary judgment. A peer report in opposition to a summary judgment motion that does not disclose the peer documents the reviewer relied upon simply fails to raise a triable issue of fact. Yet, until the Appellate Term addresses that issue, it is fair to say that the Court really did not have a choice but to find that Plaintiff raised an issue of fact. Bewteen the lines, the court was asking how a Plaintiff could honestly oppose a file review without the file? Hopefully, the Court in the future will cite to Cariddi v. Hassan and skip the step of finding a medical provider's conclusory affidavit to be sufficient to oppose a non-supported peer report.

I suspect that this is just the beginning of the development as to this discreet area of no-fault law.

I would add this remark. The trend in New York practice has been to transform summary judgment motions from the traditional of "issue finding" into an exercise in "issue determination". In other words, the courts used to deny summary judgment motions should there be a specter of a factual issue lurking somewhere. Now, the motion court will determine the merits of the issue on a motion for summary judgment.

This above trend is remarkable since every lower court decision that discusses an SJ motion always cites to the Court of Appeals cases, which hold that even the specter of a triable issue of fact should defeat a summary judgment motion. Shakepearean overtones I suspect - appearance verses reality.

But in the modern realities of life, the courts are telling the litigants that if you want a plenary trial, you need to earn it. In no-fault we had this shoved down our throats through "Dan Medical" and "Contempt v. Geico" prior to "Delta v. Chubb" and "St. Vincent v. Geico." In the analogous 5102(d) land, "Toure" and "Pommels" proved this point too well. The list goes on and on...

Thus, we shall see how the lack of medical necessity jurisprudence develops. I just hope it does not suffer the same inconsistencies that we have found in the "EUO" default contexts.

MRI SCANS - from the NY Times

Since many PIP disputes center around MRI scans, it seems fit to discuss a New York Times article that involves the efficacy of MRI Scans. The piece was published on March 1, 2009 and is entitled: "Good or Useless, Medical Scans Cost the Same"

My question: Will this allow "discovery" or "additional verification requests" in relation to certain MRI's. For example, if a knee or shoulder MRI is a pre-requisite for surgery, will an insurance carrier seek the make, model and quality of the MRI machine as well as the actual films and deny the MRI (as well as the surgery) based upon the poor quality of the MRI machine and the films that result from the same? Read this article and ponder the above....

When Gail Kislevitz had an M.R.I. scan of her knee, it came back blurry, “uninterpretable,” her orthopedist told her.

Skip to next paragraph

Enlarge This Image

Images From Dr. Freddie Fu/University of Pittsburgh

A poor-quality scan of a ligament, left, and one of high quality. Many scans are done by machines that are a decade old.

Readers' Comments

Readers shared their thoughts on this article.

• Read All Comments (40) »

Her insurer refused to pay for another scan, but the doctor said he was sure she had torn cartilage that stabilizes the knee and suggested an operation to fix it. After the surgery, Ms. Kislevitz, 57, of Ridgewood, N.J., received a surprise: the cartilage had not been torn after all.

She had a long rehabilitation. And her insurer paid for the operation. But her knee is no better.

More than 95 million high-tech scans are done each year, and medical imaging, including CT, M.R.I. and PET scans, has ballooned into a $100-billion-a-year industry in the United States, with Medicare paying for $14 billion of that. But recent studies show that as many as 20 percent to 50 percent of the procedures should never have been done because their results did not help diagnose ailments or treat patients.

“The system is just totally, totally broken,” said Dr. Vijay Rao, the chairwoman of the radiology department at Thomas Jefferson University Hospital, in Philadelphia.

Radiologists say a decent M.R.I. scan should have clearly shown whether the cartilage in Ms. Kislevitz, a meniscus, was torn. But bad scans, medical experts say, are part of a growing problem with medical imaging.

Many factors contribute. Insurers pay the same for a scan done on a 10-year-old machine as one on the latest model, though the differences in the images can be significant.

Insurers do not distinguish between scans that are done poorly or done well or read by less- or more-qualified doctors. Aside from mammography, whose standards were established by a law that went into effect more than a decade ago, the field is largely unregulated. And increasingly, doctors refer patients to scanning centers they own and profit from.

Ten years ago, the age of a scanner might not have mattered so much. Now, said Dr. Gary Glazer, the chairman of radiology at Stanford, technology has advanced so much that the older scanner “is not the same machine.”

“I can tell you from my experience that between those extremes the gap is huge,” Dr. Glazer said.

Yet, he added, many scanning machines used today are a decade old.

Imaging centers can, if they choose, become accredited by the American College of Radiology. That requires, among other things, scanning a phantom, a device that simulates a body part. Technologists must also be certified, and there are standards for supervising physicians. And the scanners must be regularly assessed to ensure they are properly functioning.

But many centers are not accredited, although the percentage is not known because there is no national registry of imaging centers.

Accrediting will be partly addressed by a little noticed aspect of a wide-ranging Medicare law passed last year. After it goes into effect in 2012, Medicare will pay only for scans done at accredited centers. But imaging experts say the law fixes only part of the problem. High-tech scanning is complicated, and there is no consensus on objective measures to ensure quality. Even with the new law, there is still little assurance that scans will be appropriately ordered and interpreted or that a scanner will be up to date.

Radiologists are struck by the wide variation in the quality of scans, and they say there is little patients can do other than to ask why the scan is necessary and, if it is, to ask about accreditation, the credentials of the person reading the scan and the age of the scanner.

“The studies I see coming from the outside vary from marginal quality to very good quality,” said Dr. Chris Beaulieu, a Stanford radiology professor. “Some of it is related to equipment, and some is related to people with very good equipment who don’t know how to use it right. And on the interpretation side, there is also a very wide range of quality or accuracy, in my opinion.”

Interpretation can be crucial, Dr. Beaulieu added. “A good radiologist can sometimes accurately read scans off of a lower-quality scanner,” he said. “I see that all the time. A good radiologist and a lower-quality scan could be better than a bad radiologist and a good scan.”

But logical as it might seem to pay more for a better scan, there are problems. Health insurers have no way of knowing whether scans are good, said Susan Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group. Doctors, not insurers, receive the images and reports, and all insurers can do is notice if there are frequent requests to redo scans from a particular center.

“We see a lot of poor-quality scans,” said Dr. Freddie Fu, the chairman of the orthopedic surgery department at the University of Pittsburgh Medical Center. “I joke with the patients: The insurance pays the same amount of money for the scan. You get a hamburger somewhere else and a prime rib here for the same price.”

Another concern is the growing number of doctors who refer patients for imaging done by scanners they own and profit from. Studies have found that up to 3.2 times as many scans are ordered in such cases

In a recent report, the Government Accountability Office said nearly two-thirds of the money Medicare paid for imaging was for scans in doctors’ offices. And, the report added, doctors were receiving an ever larger part of their income from providing scanning services. Not only were patients more likely to have scans if a doctor did this, but the quality of some of the scans was questioned.

“No comprehensive national standards exist for services delivered in physician offices other than a requirement that imaging services are to be provided under at least general physician supervision,” the G.A.O. wrote.

Private health insurers were concerned, too. “These are alarming patterns that have also been observed in the private sector,” America’s Health Insurance Plans wrote in a response to the G.A.O.

It is clear why self-referral can be tempting, said Dr. Bruce Hillman, a radiology professor at the University of Virginia.

“It’s all profits,” Dr. Hillman said, adding that a group of doctors can make an extra $500,000 to $1 million a year simply by acquiring a scanner.

For now, radiologists said, patients and insurers are often in a bind.

“If you are going to buy a car,” said Dr. Beaulieu, the Stanford professor, “and you have a certain amount of money to spend, you know what you are getting. You know what you will get if you buy a Yugo or if you buy a BMW.”

But with imaging, Dr. Beaulieu said, “you don’t know: you might get a Yugo and you might get a BMW.”

How to defeat a Lack of medical necessity motion based upon a peer review

I encounter on many levels summary judgment motions predicated upon the defense that a service lacks medical necessity in accordance with a peer review which finds that a given service is medically unreasonable. Invariably, the motion only annexed the peer review.

The opponent to the motion now has to scramble to find the documents the peer reviewer examined, and then the opponent needs to retain an expert to review these records in order to conclude that the services were medically necessary.

I think we missed a step here. Why was the movant able to get away with attaching a FILE based review without annexing the file? Are we to throw caution to the wind and blindly trust the peer doctor's interpretation of the plaintiff's records? Indeed, the way plaintiffs win trials is through poking holes in the peer doctor's medical rationale viz a vi the plaintiff's medical records. Conversely, a defendant faced with a treating doctor will do the same thing to beat him or her.

Perhaps the better question is why, mister plaintiff did you not object to the defendant's putting the cart before the horse through his making a summary judgment motion without any documentaty evidence to support it?

Maybe the question that really needs to be answered is why we allow ourselves to accept shoddy practices and mediocrity under the guise of "volume"?

The Appellate Division, in 2006 believed that what has now been the norm in no-fault medical necessity motion practice was unsatisfactory in an analagous scenario and found that the movant who pulled the above stunt was unable to prima facie demonstrate his defense to the action.

In Cariddi v. Hassan 45 AD3d 516 (2d Dept. 2006), the Appellate Division held the following:

While Dr. Katz provided objective medical evidence in support of his diagnoses with respect to the plaintiff's complaints regarding **427 her ankle and lumbosacral spine, his only basis for concluding that the plaintiff's complaints regarding her hip were "unrelated" to the subject accident was that "doctors' notes reviewed do not indicate any problem to the left hip following this incident of 09/17/04 [and a]n MRI of the left hip and pelvis was not performed until 01/03/06 which is more than one year after the accident." However, Dr. Katz did not attach any of the prior medical records to his report, and the defendants otherwise failed to submit any such records in support of their motion, as they were certainly entitled to do (see Kearse v. New York City Tr. Auth., 16 A.D.3d 45, 47 n. 1, 789 N.Y.S.2d 281; Pagano v. Kingsbury, 182 A.D.2d 268, 271, 587 N.Y.S.2d 692). Therefore, Dr. Katz's report, standing alone, failed to establish, prima facie, that the plaintiff's alleged hip injury was unrelated to the subject accident

Of course, one caveat needs to be stressed. The failure to object to a moving party's reliance on materials not before the court is waived if not properly objected to. Unobjected to hearsay is competent evidence. Use it or lose it. Oh, and this does not apply to IME based motions.