The Office of General Counsel issued the following opinion on September 25, 2002, representing the position of the New York State Insurance Department.
RE: No-Fault Medical Fees.
When an insurance carrier terminates medical benefits for an eligible injured person in a motor vehicle accident, may a medical provider be reimbursed under that persons health insurance policy for additional services provided at the providers usual and customary fees, which exceed those established under the No-Fault fee schedule?
Generally no. The Department can not provide the inquirer with a definitive response since it did not submit sufficient facts providing the underlying basis for the denials of claim referred to and whether those denials would affect the availability of No-Fault benefits to the eligible injured person.
No specific fact pattern was provided.
In 1973 the New York Legislature enacted the Automobile Insurance Reparations Act ("the No-Fault law"). The purpose of the No-Fault law was to ensure that individuals injured in automobile accidents would be promptly compensated for their economic loss, irrespective of fault. Pursuant to N.Y. Ins. Law § 5102(a) (McKinney 2000) the term "basic economic loss" is defined as follows:
(a) up to fifty thousand dollars per person of the following combined items, subject to the limitations of section five thousand one hundred eight of this article:
(1) All necessary expenses incurred for: (i) medical, hospital . . . surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical and occupational therapy and rehabilitation; (iii) any 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; all without limitation as to time, provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of this injury. For the purpose of determining basic 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.
This provision identifies No-Fault benefits as the primary source of benefits for payment of health care services for the treatment of injuries arising out of a motor vehicle accident in New York, up to $50,000 per person (ie. "basic economic loss") subject to fee schedule limitations established under N.Y. Ins. Law § 5108 (McKinney 2000). That section provides, in relevant part, as follows:
(a) The charges for services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article and any further health service charges which are incurred as a result of the injury and which are in excess of basic economic loss, shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers compensation board for industrial accidents, except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge.
(b) The superintendent, after consulting with the chairman of the workers compensation board and the commissioner of health, shall promulgate rules and regulations implementing and coordinating the provisions of this article and the workers compensation law with respect to charges for the professional health services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article, including the establishment of schedules for all such services for which schedules have not been prepared and established by the chairman of the workers compensation board.
(c) No provider of health services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article may demand or request any payment in addition to the charges authorized pursuant to this section. Every insurer shall report to the commissioner of health any patterns of overcharging, excessive treatment or other improper actions by a health provider within thirty days after such insurer has knowledge of such pattern. (emphasis supplied)
Thus, pursuant to N.Y. Ins. Law § 5108(a) (McKinney 2000) the charges for health services which constitute basis economic loss and any further health services charges which are incurred as a result of the injury and which are in excess of basic economic loss, may not exceed the charges permissible under the No-Fault fee schedules, except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge.1Section 5108(c) further prohibits a provider from demanding or even requesting fees that are in excess of the No-Fault fee schedule.
Therefore, the payment of $50,000 in No-Fault benefits per person for basic economic loss under section 5102 and for all motor vehicle policies issued in New York must be paid by the No-Fault insurer in accordance with the mandated fee schedules before No-Fault coverage for that person is exhausted. Only upon exhaustion of available No-Fault benefits may an individual submit bills for reimbursement to his or her health insurer and, as previously stated, payment for health services rendered under the health policy must be limited by the fee schedules established pursuant to section 5108. However, N.Y. Comp. Codes. R. & Regs. tit. 11, § 68.8(a) (1997) (Regulation 83) provides as follows:
(a) No provider of health services specified in section 5102(a)(1) may demand or request any payment in addition to the charges permitted by the provisions of this Part. If the insured also possesses health insurance coverage and such health insurance contract does not exclude payment for no-fault benefits, payment by the health insurer for health services under such contract is restricted by the limitations of section 5108 of the Insurance Law, unless such limitation would impair the terms of a providers contract with the health insurer, in which case payment by the health insurer to the provider may be made in accordance with the providers contract; however, the provider may not receive duplicate payment. (emphasis supplied)
Thus, a provider may not be reimbursed under that persons health insurance policy for additional care at the providers usual and customary fees, which exceed those established under the No-Fault fee schedule, unless the exception contained in section 68.5 applies, or there is a contractual exception under a section 68.8(a) health policy.
The inquirer submitted several arguments in its inquiry that set forth legal assumptions without any legal support and that were based on several different factual scenarios that were not provided. In order for us to respond further, the inquirer was directed to provide us with a specific fact pattern, including whether an assignment of benefits from an eligible injured person to the provider has been executed.
For further information, you may contact Attorney Pascale Joasil at the New York City office.
1See also N.Y. Comp. Codes. R. & Regs. tit. 11, § 68.5 (1997)(Regulation 83) which provides as follows:
A charge in excess of the scheduled fee may be authorized by the insurer, the arbitrator of disputes involving health services or a court of competent jurisdiction, if such insurer, arbitrator or court finds that an unusual procedure or unique circumstance justifies the necessity for such charge. This exception to the fee schedule limitations shall not apply to charges for hospital inpatient services subject to a per diem rate in the hospital fee schedule.