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

The following informal opinion was issued by the Office of General Counsel on June 11, 2001, representing the position of the New York State Insurance Department.

Re: No-Fault Health Service Reimbursement

Question Presented:

1. Assuming the following services and/or products are provided to an eligible insured person, are the following items covered by the No-Fault Law, i.e., is an insurer obligated to pay for these services and or products as No-Fault coverage expenses:

Acupuncture      Pet Therapy
Aromatherapy Reflexology
Boost Vitamin Drink Surface EMG’s for Soft Tissue Spinal Injuries
Hemp Therapy Spinal Ultrasound for Soft Tissue Spinal Injuries
Hypnosis Thermograph for Soft Tissue Spinal Injuries
Magnetic Therapy Visual Therapy
Meditation Water Therapy
Over the Counter Herbal Remedies Yoga
Paraffin Waxes

Conclusion:

In order for services to be reimbursable under No-Fault, such services must be medically necessary health services as enumerated under N. Y. Ins. Law § 5102 (McKinney 2000) and subject to the requirements of No-Fault Regulation 68, N.Y. Comp. Codes R. & Regs. tit. 11 § 65.15 when applicable. With respect to drugs, N.Y Ins. Law § 5102 (McKinney 2000) limits reimbursement under No-Fault to prescription drugs only. Over-the-counter drugs and products which may be purchased without prescription are not covered expenses.

Analysis

Whether a particular service rendered or product purchased is a covered expense eligible for reimbursement under No-Fault is governed by Section 5102(a)(1) as follows:

All necessary expense incurred for (1) medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical and occupational therapy and rehabilitation; (iii) and non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of this state; and (iv) any other professional health services…For the purpose of determining basis economic loss, the expenses incurred under this paragraph shall be in accordance with the limitations of section five thousand one hundred eight of this article.

The category of "any other professional health services" covered under Section

5102(a)(1)(iv) is implemented under Regulation 68, 11 NYCRR 65.15(o)(vi) as follows:

The term any other professional health services, as used in section 5102(a)(1)(iv) of the Insurance Law, this Part and approved endorsements, shall be limited to those services that are required or would be required to be licensed by the State of New York if performed within the State of New York. Such professional health services should be necessary for the treatment of the injuries sustained and within the lawful scope of the licensee's practice. Charges for the services shall be covered pursuant to schedules promulgated under section 5108 of the Insurance Law and Part 68 of this Title (Regulation 83). The services need not be initiated through referral by a treating or practicing physician.

In order for a service rendered to constitute a reimbursable health service, it must be a covered expense under either (A) or (B) below:

A) It falls under one of the enumerated categories included as expenses incurred pursuant to Section 5102(a)(i)(ii) and (iii), specifically including medical, hospital, surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; psychiatric, physical and occupational therapy and rehabilitation; or

It falls under the category of "other professional health services" under Regulation 65, 11 NYCRR 65.15(o)(vi). To be covered under this category, the service rendered must be:

A health service licensed under New York law or, when performed out-of-state, required to be licensed under New York law; and

When performed, such health service must fall within the lawful scope of the provider's license.

With respect to reimbursement for services which provide health-related products, such items are limited solely to prescription drugs and prosthetic devices which are enumerated under Section 5102(a)(1)(i).

When a health service or product is eligible for reimbursement under any of these categories, only those services and products determined to be medically necessary to treat those injuries arising out of the motor vehicle accident may, in fact, be reimbursed in accordance with Section 5108 and Regulation 83. Whereas Section 5102 and relevant provisions of Regulation 68 govern questions as to medically necessary services under No-Fault, Section 5108 governs the monetary value that is placed upon the performance of those services. Section 5108(a) specifically limits fees charged by providers of health services specified under Section 5102(a), whether those fees are part of, or in excess of, a claimant's basic economic loss, to the permissible charges established under the Workers' Compensation Board fee schedule (unless an insurer or arbitrator determines that unusual procedures or unique circumstances justify an excess charge).

Therefore, whether a service is reimbursable under No-Fault is not determined by whether such service is specifically reimbursable under the Worker's Compensation fee schedule. The fee schedules set ceilings upon the fees payable under No-Fault for the same services provided under Worker's Compensation. Section 5108(b) specifically acknowledges that there may be other health services, not included under the Worker's Compensation fee schedules, that are reimbursable under No-Fault, such as durable medical equipment, by granting authority to the Superintendent to promulgate fee schedules for such services. Alternately, where a necessary health service is not covered under the Worker's Compensation fee schedule, Regulation 83, 11 NYCRR 68.6, provides that where a professional health service is performed which is reimbursable under Section 5102(a)(1):

(a) if the superintendent has adopted or established a fee schedule applicable to the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule, subject to review by the insurer; or

if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent.

Ultimately, the question of whether an eligible service provided is reimbursable under No-Fault will be determined by whether the procedures billed for are medically necessary for the treatment of a claimant's injuries arising out of an accident, not whether fees for those services are specified and included under the Worker's Compensation fee schedule. With respect to determining medical necessity, an insurer must evaluate claims submitted in order to determine whether the providers of health services have met their burden of providing sufficient proof of claim to establish the medical necessity of the services performed.

With regard to the services the inquirer referred to, none of these services specified are reimbursable as covered health expenses unless they are specifically provided by health professionals who are licensed by the State of New York to perform such services, subject further to the requirement that the provision of these services must fall within the scope of the license issued. Where there is no statewide license which authorizes the performance of such services, the services are non-reimbursable under No-fault.

Note that, irrespective of the licensing question, the following services referred to are non-reimbursable as a matter of law:

Non-prescription drugs, as per Section 5102(a);

Surface EMGS, which the Worker's Compensation Board has determined to have no medically efficacy and are therefore non-reimbursable; and

Thermography, which is included in the Worker's Compensation schedule as a non-reimbursable service.

As previously stated, any properly licensed services provided are ultimately subject to factual determinations as to medical necessity. It would be appropriate for a carrier to utilize a reputable study or opinion from an accredited medical body or appropriate medical specialist as a basis for determining necessity when warranted, particularly when billing for new procedures.

For further information you may contact Supervising Attorney Lawrence Fuchsberg at the New York City Office.