The Office of General Counsel issued the following informal opinion on September 4, 2002, representing the position of the New York State Insurance Department.
Re: Assignment of No-Fault benefits to a doctor from an eligible injured person
When a No-Fault insurer denies a claim submitted by a doctor for health services provided to an eligible injured person who has assigned No-Fault benefits to the doctor, may the doctor pursue payment from the eligible injured person for the health services provided to such person after a No-Fault arbitrator has determined that the health services were not medically necessary?
No. Such action by the doctor would be prohibited by the prescribed assignment of benefits language contained in prescribed forms pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 65-3.11(b)(ii) & (iv) (2002) (Regulation 68-C).
There was an assignment of No-Fault benefits made from an eligible injured person to a doctor who provided health services to the eligible injured person. The insurer denied the claim because it determined that the health services were not medically necessary. The question assumes that the insurer's denial would be sustained by a No-Fault arbitrator. You then inquire as to whether the doctor may then pursue payment for the health services provided directly from the eligible injured person.
N.Y. Comp. Codes R. & Regs. tit. 11, § 65-3.11(b)(ii) & (iv) (2002) (Regulation 68-C) states:
(b) In order for a health care provider . . . to receive direct payment from the insurer, the health care provider . . . must submit to the insurer: (ii) for a health care provider, a properly executed assignment on the prescribed Verification of Treatment by Attending Physician or Other Provider of Service form (NYS Form NF-3) . . . or (iv) the prescribed No-Fault Assignment of Benefits form (NYS Form NF-AOB) contained in Appendix 13 . . . .
The relevant language of NYS Form NF-3 under item 21 concerning assignment of No-Fault benefits to a health care provider states:
I HEREBY ASSIGN TO THE HEALTH CARE PROVIDER INDICATED BELOW ALL RIGHTS, PRIVILEGES AND REMEDIES TO PAYMENT FOR HEALTH CARE SERVCIES PROVIDED BY THE ASSIGNEE TO WHICH I AM ENTITLED UNDER ARTICLE 51 (THE NO-FAULT STATUTE) OF THE INSURANCE LAW. THE ASSIGNEE HEREBY CERTIFIES THAT THEY HAVE NOT RECEIVED ANY PAYMENT FROM OR ON BEHALF OF THE ASSIGNOR AND SHALL NOT PURSUE PAYMENT DIRECTLY FROM THE ASSIGNOR FOR SERVICES PROVIDED BY SAID ASSIGNEE FOR IN[J]URIES SUSTAINED DUE TO THE MOTOR VEHICLE ACCIDENT, NOTWITHSTANDING ANY PRIOR WRITTEN AGREEMENT TO THE CONTRARY. THIS AGREEMENT MAY BE REVOKED BY THE ASSIGNEE WHEN BENEFITS ARE NOT PAYABLE BASED UPON THE ASSIGNOR'S LACK OF COVERAGE AND/OR VIOLATION OF A POLICY CONDITION DUE TO THE ACTIONS OR CONDUCT OF THE ASSIGNOR.
The relevant language of NYS Form NF-AOB concerning assignment of No-Fault benefits to a health care provider states:
I . . . "Assignor" hereby assign to . . . "Assignee" . . . all rights privileges and remedies to payment for health care services provided by assignee to which I am entitled under Article 51 (the No-Fault statute) of the Insurance Law . . . The Assignee hereby certifies that they have not received any payment from or on behalf of the Assignor and shall not pursue payment directly from the Assignor for services provided by said Assignee for injuries sustained due to the motor vehicle accident . . . notwithstanding any prior written agreement to the contrary . . . This agreement may be revoked by the assignee when benefits are not payable based upon the assignor's lack of coverage and/or violation of a policy condition due to the actions or conduct of the assignor.
The assignment language precludes the assignee health provider from pursuing payment from the assignor eligible injured person for health services provided after those services were not found to be medically necessary. Therefore, if an insurer denies a claim submitted by a doctor for health services provided to an eligible injured person who has assigned No-Fault benefits to the doctor, the assignee doctor may not pursue payment for the health services directly from the assignor eligible insured person.
For further information you may contact Senior Attorney Robert Freedman at the New York City Office.