Civil Court of the City of New York, New York County
Dr. Stephen Matrangolo, D.C., P.C., as assignee of TINA ESPINOZO-HERNANDEZ and EDGAR HERNANDEZ, Plaintiffs,
Allstate Insurance Company, Defendant.
Attorney for Plaintiff, Leon Kucherovsky.
In-house attorney for Allstate not listed in e-courts.
Andrea Masley, J.
Plaintiff Dr. Stephen Matrangolo, DC, PC, a chiropractic practice, commenced this action in June 2007 for the recovery of no-fault benefits for services rendered to assignors Tina Espinozo-Hernandez and Edgar Hernandez for injuries arising from a car accident in December of 2006. The answer dated August 17, 2007 consists of six affirmative defenses including: (2) plaintiff lacks standing; (4) services provided by an independent contractor; and (6) the referral was an improper self-referral. After trial on June 9, 2011, the court reserved decision and the parties were directed to submit post-trial memoranda on issues raised but not resolved at trial. 
For the following reasons, the court finds that the Public Health Law §238-a does not apply to the electromuscular testing provided here and thus is not a bar to Dr. Matrangolo's claim. However, based on the testimony and evidence before it, the court finds that Dr. Matrangolo is not entitled to compensation for services provided by Dr. Brawner.
The parties stipulated at trial to all eleven outstanding health insurance claim forms for electromuscular testing services rendered in the amount of $2, 168.82 for Ms. Espinoza-Hernandez and $2, 807.64 for Mr. Hernandez. All services for assignor Tina Espinozo-Hernandez were rendered on December 11, 18, and 27 of 2006. For assignor Elgar Hernandez, services were rendered on December 18 and 27 of 2006, and on January 3 and 8 of 2007. Maria Ingrassia, Dr. Matrangolo's medical biller, the sole witness, testified for plaintiff that Baldwin Medical referred the assignors to Dr. Matrangolo for neuromuscular testing, that bills for plaintiff's services were timely submitted, and remain unpaid. Defendant stipulated to plaintiff's prima facie case and asserted, as affirmative defenses, that the referral to Dr. Matrangolo constitutes a violation of Public Health Law §238-a; and that plaintiff lacks standing since it is billing for services provided by a non-party physician. Plaintiff argued that defendant has failed to rebut its prima facie case and that Public Health Law §238 applies to physicians but not to chiropractors such as himself.
Defendant sought to introduce a lease between plaintiff and Baldwin Medical over objection from plaintiff. Defendant sought sanctions for plaintiff's non-compliance with its May 13, 2011 subpoena ad testificandum and duces tecum of Dr. Matrangolo which seeks the patient file for each AAO and the leases between Dr. Matrangolo and the referring provider for 2006, 2007 and 2008, records of payments made by Dr. Matrangolo to the referring provider; all correspondence between Dr. Matrangolo and the referring provider, all W-2 or 1099s issued by Dr. Matrangolo to the technician who administered the tests in 2006, 2007 and 2008; all documents regarding the financial relationship between plaintiff and the referring provider.
On cross-examination, Ms. Ingrassia identified Dr. Matrangolo's signature on the lease and defendant offered it into evidence as an admission against interest. Had plaintiff responded to defendant's trial subpoena, defendant could have offered the lease as a business record. However, by refusing to comply and not moving for relief from the subpoena, plaintiff robbed defendant of the opportunity to establish the requisite foundation. CPLR 4518. The lease had been identified by plaintiff in response to interrogatories which had been court ordered. Alternatively, defendant asked the court to make an adverse inference against plaintiff based on plaintiff's failure to respond to the trial subpoena and allow the lease into evidence.
The witness also identified Dr. Brawner as a doctor who is associated with Baldwin Medical but who is not an employee of Dr. Matrangolo.
Defendant read plaintiff's responses to interrogatories, as to the electromuscular testing of the AAOs, into the record. As to who administered the test to the AAOs, plaintiff responded Dr. Josephine Brawner. In response to the question how many people do the testing for Dr. Matrangolo, plaintiff responded Dr. Brawner. At trial, plaintiff objected to the interrogatories as evidence because plaintiff's counsel explained that Dr. Matrangolo made a mistake when he responded to the interrogatories; an employee not Dr. Brawner administered the tests here. The court struck plaintiff counsel's testimony. The court rejects all of plaintiff's attempts to change plaintiff's discovery responses in its post-trial brief. Plaintiff did not supplement its discovery or issue a correction. The time for testimony and evidence was at trial.
Exhibit A in evidence is a lease between Baldwin Medical Services PC and Dr. Stephen Matrangolo Corporation from January 1, 2007 to December 31, 2008. This lease was introduced at trial by defendant over plaintiff's objection. Plaintiff produced this lease in discovery. Indeed, plaintiff annexed the lease to plaintiff's post-trial memorandum as evidence of its compliance with discovery. Accordingly, there is no reason to believe the lease is not trustworthy. Plaintiff's objection to admission of the lease is curious since the existence of a valid lease in effect from January 1, 2007 establishes a safe harbor for plaintiff for those services rendered in 2007. However, having failed to produce in discovery or at trial a lease for 2006, plaintiff would not be entitled to the protection of Public Health Law §238-a (5)(b)(I). Therefore, if Public Health Law §238-a applied to plaintiff, then he would be entitled to reimbursement only for those services rendered after January 1, 2007. Accordingly, it is unnecessary to otherwise address the subpoena issues.
In its post-trial memorandum, defendant argues that Dr. Matrangolo rents space from the referring provider Dr. Brawner for purposes of rendering services for which he is referred, and that this relationship in and of itself constitutes an improper referral under Public Health Law §238-a. The absence of a lease for the 2006 calendar year, according to defendant, constitutes evidence of an improper referral. Lastly, defendant argues that plaintiff lacks standing since he billed for services rendered by Dr. Brawner, a physician non-party.
Public Health Law §238-a prohibits a practitioner from making a referral for services to a provider when the practitioner or an immediate family member of such practitioner has a "financial relationship" with the provider. Matrangolo v Allstate Ins. Co., 31 Misc.3d 129(A) (App Term, 1st Dept 2011). A financial relationship is defined in Public Health Law §238 as "an ownership interest, investment interest, or compensation arrangement." A compensation arrangement is defined as "any remuneration between a practitioner...and a health care provider." Public Health Law §238-a (5)(a). The statute is clear that compensation does not include payments for the rental or lease of office space if there is a written agreement signed by the parties, for a rental term of at least one year, consistent with fair market value in an amount that does not vary with "volume or value of any referrals of business between the parties." Public Health Law §238-a (5)(b)(I).
A plain reading of the statute supports plaintiff's interpretation that as a chiropractor, his services fall outside the ambit of Public Health Law ...