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Park Slope Medical and Surgical Supply, Inc. As Assignee of John Laureano v. Travelers Insurance Company

July 12, 2012


Appeal from a judgment of the Civil Court of the City of New York, Kings County (Genine D. Edwards, J.), entered May 24, 2010.

Park Slope Med. & Surgical Supply, Inc. v Travelers Ins. Co.

Decided on July 12, 2012

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Miscellaneous Reports.


The judgment, after a non-jury trial, awarded plaintiff the principal sum of $2,016.46.

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the Civil Court for a new trial.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court, by order entered April 28, 2008, limited the trial to the issue of the medical necessity of the supplies provided. At the non-jury trial, defendant proffered the testimony of Dr. Susan Corcoran, the physician who had prepared the peer review report upon which the denial of the claim at issue had been based. Dr. Corcoran testified that she had obtained the facts of the case from, among other things, the claim form, the medical records (which she listed in her report), and the police accident report. The claim form was admitted into evidence without objection, but the court sustained plaintiff's objections to the admission into evidence of other documents, including the medical records. While Dr. Corcoran testified that she could conclude that certain items, such as the cervical pillow or the lumbar cushion, were not medically necessary based solely upon the information contained in the claim form--because she had never seen such equipment used to treat an injury of any sort--she ultimately did not attempt to proffer any testimony which would have required her to refer to documents which the court had previously held were inadmissible.

Defendant's employee, Jemma Keating, testified as to, among other things, defendant's practices and procedures when it receives medical documentation concerning an eligible injured person. When defendant sought, for the second time, to admit the medical documentation into evidence, the Civil Court again sustained plaintiff's objection. The court then granted plaintiff's motion for judgment in the entire amount sought in the complaint. A judgment was subsequently entered, from which defendant appeals.

The question before the court is whether defendant was entitled to have the medical records submitted to it by plaintiff (or plaintiff's assignor or other medical professionals who had provided services or supplies to plaintiff's assignor) admitted into evidence so as to enable Dr. Corcoran to testify regarding her expert opinion that the medical supplies at issue were not medically necessary--an opinion she reached after reviewing this medical documentation. We conclude, for the reasons set forth below, that the medical documentation should have been admitted into evidence and, thus, we reverse the judgment and remit the matter to the Civil Court for a new trial to afford defendant an opportunity to establish its defense of lack of medical necessity.

The basis for this action is plaintiff's claim that it provided medically necessary supplies to its assignor for injuries arising from a covered accident, and that it was not paid for these supplies. In a no-fault case, submission of a properly completed claim form is all that is needed to establish, prima facie, that the supplies at issue were medically necessary (see West Tremont Med. Diagnostic, P.C. v GEICO Ins. Co., 13 Misc 3d 131[A], 2006 NY Slip Op 51871[U] [App Term, 2d & 11th Jud Dists 2006]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]), and, upon a demonstration that the claim form is admissible pursuant to the business records exception to the hearsay rule (CPLR 4518), the claim form will constitute sufficient prima facie evidence of the fact and the amount of the loss sustained (see Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Here, in limiting the trial to the issue of the medical necessity of the supplies provided, the Civil Court implicitly found that plaintiff had established these elements. In other words, plaintiff, as the assignee of benefits under a no-fault insurance policy, demonstrated its entitlement, in the first instance, to recover payment for providing medical supplies to its assignor, without having to proffer any specific testimony or proof as to the facts underlying its claim, including the injury sustained or the treatment rendered by the prescribing physician, or to affirmatively demonstrate that the supplies were medically necessary. The burden then shifted to defendant to establish a lack of medical necessity.*fn1

However, recognizing that it would be impossible for an expert witness to proffer an opinion regarding the medical necessity of the supplies at issue without discussing the facts underlying the claim, plaintiff argues that defendant must now prove those facts itself before being allowed to present its defense that, based upon the information provided to it regarding the injury sustained and the treatment rendered, it had correctly denied the claim on the ground that the supplies were not medically necessary. We reject plaintiff's argument.

A no-fault insurer cannot know with certainty, merely based upon reviewing medical records, what injuries a patient sustained or how he was treated--it can only act on what it has been told. The insurer is, however, permitted to deny a no-fault claim based upon a peer review report which opines that there was a lack of medical necessity for the services or supplies provided (see Insurance Department Regulations [11 NYCRR] ยง 65-3.8 [b] [4]). It follows that an insurer is entitled, or even expected, to rely on the documents submitted to it by the eligible injured person (and such person's assignees, who stand in the shoes of the assignor [see Zeldin v Interboro Mut. ...

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