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On de novo Appeal, Insurer Loses on Medical Necessity but Wins on Fee Schedule Issue: Allstate Insurance Company v Buffalo Neurosurgery Group.

This action pursuant to Insurance Law [section] 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 [section] 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 [section] 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.

Edited by Lawrence N. Rogak

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

Lawrence N. ("Larry") Rogak has been practicing insurance law since 1981. He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations. Lawrence N. Rogak LLC is listed in Best's Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers. A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

2019 NY Slip Op 03749 Decided on May 15, 2019 Appellate Division, Second Department
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Title Annotation:[COURTSIDE]
Author:Rogak, Lawrence N.
Publication:Insurance Advocate
Date:May 27, 2019
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