New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on July 21, 2000, representing the position of the New York State Insurance Department.

RE: No-Fault Billing for Ambulette Services

Question Presented:

May a transportation company that has entered into a medical transportation agreement with another transportation company ("the sub-contractor") to provide ambulette services, that is covered by no-fault insurance, bill the no-fault insurer for ambulette services performed by the sub-contractor under such an agreement for a no-fault claimant?

Conclusion:

As the question is fact specific, there is no single answer that will be applicable to all the situations that may arise in which a no-fault claimant uses an ambulette. In each particular instance in which an ambulette is used the answer to the question depends upon whether the use of the ambulette service by the no-fault claimant constitutes a health expense under N.Y. Ins. Law § 5102 (a) (1) (McKinney Supp. 2000) or an other reasonable and necessary expense under N.Y. Ins. Law § 5102 (a) (3) (McKinney 1985). This determination turns upon whether there is a demonstrable medical necessity for the claimant's use of the ambulette as a means of transportation. If there were a demonstrable medical necessity for the ambulette service, it would constitute a reimbursable health expense. If there were not a demonstrable medical necessity for the ambulette service, it would not be reimbursable as a health service but would constitute an other reasonable and necessary expense.

Facts:

The inquirer explained the facts as follows:

"As our clients have pursued these contract negotiations, it has been determined that the transportation provided by our clients will be ambulette services. The transportation company is licensed to provide these services by all relevant agencies. By way of background, ambulette transportation is provided to those who need specialized medical transportation services but on a non-emergency basis (ambulance not needed). Physicians order ambulette transportation when necessary for the patient to obtain medical care, i.e. medical issues make taxi, livery service or public transportation insufficient.

As such, the services will be 'medically necessary' as that term is defined by the medical profession. We understand that reimbursable services are limited to those services that are necessary for the treatment of the injuries sustained and within the lawful scope of the licensee's practice. 11 NYCRR § 65.15(o)(1)(vi)."

The inquirer made assumptions that under Appendix 17-C, Part G, to Department Regulation No. 68, N.Y. Comp. of Codes, Rules & Regs. Title 65 (1997), the maximum charge for ambulette services is the local prevailing charge for those services, based on the most direct route, because ambulette services likely come within the category of "other common carrier transportation." The implication that arises from such assumption is that ambulette service is, in all instances, an incidental health expense for purposes of no-fault benefits.

Analysis:

As the scenario is described, it appears possible that the submission of fraudulent no-fault billings may be facilitated. For example, a taxi company could subcontract with another transportation company to provide ambulette services. Under such an arrangement, if taxi services, not ambulette services, are provided to the no-fault claimant, all that the no-fault insurer may be presented with is an assignment of a no-fault claim for ambulette services (assuming, of course, that there is a demonstrable medical necessity for the claimant's use of an ambulette). Under such circumstances, the no-fault insurer would have no basis upon which to question the bill it was presented. The insurer would be required to promptly pay the bill under the no-fault law even though, in fact, the bill is entirely fraudulent in that ambulette services were not rendered to the claimant. For purposes of response, however, this opinion will be written upon the assumption that any fraudulent activities, such as the foregoing, will not be engaged in by the parties to the subcontracting agreement.

The answer to the question posed depends upon the specific facts surrounding each instance in which an ambulette is used by a no-fault claimant. It must be determined whether the use of the ambulette constitutes an element of basic economic loss under N.Y. Ins. Law § 5102 (a) (1) (McKinney Supp. 2000) as incidental to a health expense, or whether it constitutes incurring an other reasonable and necessary expense under N.Y. Ins. Law § 5102 (a) (3) (McKinney 1985). This determination will turn upon whether there is a demonstrable medical necessity for the claimant's use of the ambulette as a means of transportation. This may explain why the decisions of New York no-fault arbitrators, when presented with the issue of whether transportation services via ambulette constitutes a health expense or an other reasonable and necessary expense, have reached different results. The facts presented in each instance may or may not reach the level of a demonstrable medical necessity.

If taking the position that the use of an ambulette service always constitutes "other common carrier transportation" under Department Regulation No. 68, N.Y. Comp. of Codes Rules & Regs. Title 65 (1997) Part G of Appendix 17-C and that, therefore, the rate is the local prevailing charge, we disagree. Part G establishes a fee schedule applicable to non-physician provided no-fault health services. It cannot be assumed that in every instance an ambulette service constitutes a health service expense under the no-fault law simply because the aforementioned fee schedule includes "other common carrier transportation" other than ambulance transportation. The general language in the title of Part G of the fee schedule accomplishes nothing of the sort.

One would assume too much in believing that when a physician orders ambulette transportation for a patient to obtain medical care that it is, therefore, medically necessary. The fact that a physician has deemed the use of an ambulette "medically necessary" is not controlling. While a physician’s orders would be evidence of medical necessity, it is up to the person making the determination to decide whether the ambulette was demonstrably medically necessary. The decision-maker, whether an insurer or a no-fault arbitrator, determines whether such proof offers sufficient demonstration of medical necessity, as a finding of fact.

Furthermore, ambulette services do not in every instance constitute "other professional health services" under N.Y. Insurance Law § 5102(a)(1)(iv), as addressed in the no-fault regulation at Part 65.15(o)(1)(vi). That sub-category of basic economic loss is only applicable if the ambulette service constitutes a professional health service rendered to the no-fault claimant.

If the use of the ambulette is found to be demonstrably medically necessary the transportation company may bill the no-fault insurer for the ambulette services provided, pursuant to the transportation agreement as above-described, in conjunction with an assignment of benefits from the no-fault claimant. On the other hand, if the use of the ambulette is found not to be demonstrably medically necessary it constitutes basic economic loss within the category of other reasonable and necessary expenses, up to a maximum of $25 per day.

For further information you may contact Associate Attorney Barbara A. Kluger at the New York City Office.