Burdens of Proof Under Regulations 68 and 83
December 14, 2009
There were a few decisions last week discussing the burdens of proof on various issues covered by AAA.
Elite Medical Supply and Geico Insurance Company, AAA Case No. 412009032148 (Thomas McCorry, Awarded December 11 2009) discussed the burden of proof each party has when a claim is denied based on a lack of medical necessity. This one, decided by Arbitrator McCorry, was a dispute over the timely denial of payment for a lumbar traction belt. Respondent was found to have met it’s initial burden of proof, as the denial was based on an IME in which the examining physician stated that there was no need for additional medical supplies. The burden therefore shifted to the Applicant/provider.
The provider stated on its letter of medical necessity that the belt prescription was “due to L-5 disc herniation with radiculopathy.” Arbitrator McCorry stated that he understood that description to be “the diagnosis rather than an explanation as for why the belt was being prescribed.” In making his decision, the Arbitrator stated:
“I find that the Respondent met its burden of shifting to the Applicant the burden of justifying the prescription of the lumbar traction belt. I find further that the Applicant by stating a diagnosis rather than an explanation or reason for the prescription, did not meet its burden of proof. “
The insurer’s denial was therefore upheld.
Conversely, the burden of proof regarding a fee schedule defense is, and remains, on the Respondent. It does not shift to the Applicant to justify the higher fee, and, similar to the advice given to the attendees at last month’s No-Fault seminar, is another good reason for Respondents to always be ready with the correct fee-schedule amount.
In Angela M. Patruno, LMT and Allstate Insurance Company, AAA Case No. 412009029305 (Kent Benziger, Awarded December 11, 2009) Respondent made a partial payment of the claim based on the argument that the fee scheduling for the massage therapist’s services – services not specifically provided for in the worker’s compensation fee schedule – was improperly high.
While Insurance Department Regulation No. 83, Section 68.5(b) permits a massage therapist to bill at the prevailing rate, that same regulation permits an insurer to reduce the bill if the insurer believes the bill is not consistent with similar procedures in the fee schedule. However, the Arbitrator here noted that this Regulation still requires that fee schedule issues must be resolved by arbitration or litigation, and that the Regulation does not shift the burden of proof to providers.
The respondent must therefore always come forward with competent evidentiary proof supporting its fee schedule defense – the applicant need not prove it deserves the charged amount simply because the insurer denied on that basis. See, eg Continental Med., P.C. v Travelers Indem. Co., 11 Misc 3d 145[A], 819 NYS2d 847 (1st Dept 2006). Arbitrator Benziger quoted the court’s decision in Power Acupuncture, P.V. v. State Farm, 11 Misc.3d 1065A (2006), in which the court rejected the insurer-defendant’s position that the plaintiff provider has the burden of justifying its fee:
“The contention is inconsistent with both the structure and clear meaning of the governing regulation, which states that the permissible charge ‘shall be the prevailing fee,’ only ‘subject to review by the insurer.’ (See 11 NYCRR § 68.5(b)). Whatever effect might be given the results of the insurer’s ‘review,’ the insurer that denies or reduces payment based upon such a review must bear the burden of, at least, coming forward with evidence that the provider’s fee is not ‘consistent with charges permissible for similar procedures.’ “
The Respondent argued that the fees should be similar to those of a physical therapist or physician conducted massage therapy. However, as the Respondent did not submit any affidavits, peer reviews or evidence that the education, training and expertise of massage therapists is similar or comparable to that of a physical therapist or physician, the Respondent was found to have failed to sustain its burden in demonstrating that the reduction in fee was proper, and Applicant was awarded its full claim at rates higher than the insurer thought proper.
So, whereas an insurer shifts the burden of proof by denying based on a lack of medical necessity, a denial based on fees allegedly not in accordance with the fee schedule does not, in itself, shift the burden. An applicant who performs services not specifically provided for in the fee schedule may bill at a rate without the burden of justifying the rate it chooses. Instead, the insurer has the burden of supporting its position that the applicant overcharged.
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Roy Mura
Bethany Mazur
Scott Mancuso
