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

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

OGC Op. No. 08-08-03

The Office of General Counsel issued the following opinion on August 25, 2008, representing the position of the New York State Insurance Department.

Re: Application of Ground Rule 8 of the New York State Workers’ Compensation Radiology Fee Schedule to the Reproduction Cost of a Magnetic Resonance Imaging (“MRI”) Film Necessary to Determine Whether a “Serious Injury” Exists

Question Presented:

Does Ground Rule 8 of the New York State Workers’ Compensation Radiology Fee Schedule apply when an insurer seeks a reproduction of a magnetic resonance imaging (“MRI”) film to determine whether a covered person has sustained a “serious injury” under Article 51 of the New York State Insurance Law?

Conclusion:

No. Ground Rule 8 of the New York State Workers’ Compensation Radiology Fee Schedule does not apply when an insurer seeks a reproduction of an MRI film to determine whether a covered person has sustained a “serious injury” under Article 51 of the Insurance Law (otherwise known as the “no-fault insurance law”).

Facts:

The inquirer states that he is a supervisor in the special investigations unit of ABC Insurance Agency, LLC (“ABC”), a managing general agent for XYZ Insurance Company (“XYZ”), and that the inquirer is attempting to verify injuries and corresponding treatment with regard to a civil third-party bodily injury liability action filed against an XYZ insured on behalf of a covered person. The covered person allegedly sustained a “serious injury” under Article 51 of the Insurance Law while traveling in a vehicle insured by the adverse insurer at the time of the injury. The covered person received no-fault insurance benefits under the adverse insurer’s policy.

The inquirer further states that two different interpretations of the covered person’s MRI were submitted to ABC, and in order to ascertain which interpretation of the MRI is correct, ABC needs to obtain a reproduction of the MRI film. The covered person provided ABC with an authorization to obtain the MRI film. However, when ABC submitted its request for a reproduction to the MRI facility, the MRI facility requested that XYZ pay the MRI facility five hundred dollars for the reproduction. The inquirer informed the MRI facility that a five-dollar charge was appropriate pursuant to OGC Opinion 08-04-08 (April 4, 2008). That opinion concluded that pursuant to the Workers’ Compensation Board’s interpretation of Ground Rule 8 of its Workers’ Compensation Radiology Fee Schedule, an assignee health service provider only may charge an automobile insurer five dollars for the first sheet of MRI duplicating film or the first compact disk (“CD”), and three dollars for each additional sheet of film or CD necessary, to verify a no-fault insurance claim. However, the MRI facility here asserts that Ground Rule 8 does not apply.

Therefore, the inquirer asks whether Ground Rule 8 of the Workers’ Compensation Radiology Fee Schedule applies when an insurer seeks a reproduction of an MRI film to determine whether a covered person has suffered a “serious injury” within the meaning of Article 51 of the Insurance Law.

Analysis:

Pursuant to the no-fault insurance law, as set forth in Article 51 of the New York State Insurance Law, a person who incurs personal injuries arising out of the use or operation of a motor vehicle is entitled to payments of up to $50,000 for “basic economic loss,” which as defined in Insurance Law § 5102(a), includes, but is not limited to, payments for medical, hospital, surgical, nursing, dental, ambulance, x-ray, prescription drug, and prosthetic services. However, under Insurance Law § 5108, health service charges for, and in excess of, basic economic loss cannot exceed the charges permissible under the Workers’ Compensation Board’s fee schedules. Insurance Law § 5108 states in pertinent part that:

(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.

Furthermore, Insurance Law § 5104(a) prohibits a right of recovery for (1) non-economic loss,1 unless the injured person has suffered a serious injury;2 or (2) basic economic loss “in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state.”

The inquirer relies on OGC Opinion 08-04-08 to assert that an insurer is only required to pay an MRI facility five dollars for the first sheet of MRI duplicating film or the first CD, and three dollars for each additional sheet of film or CD. In OGC Opinion 08-04-08, the inquirer questioned how much an assignee health service provider may charge an automobile insurer to reproduce an MRI film that is necessary to verify a no-fault insurance claim, and not, as is the case here, to verify a serious injury within the meaning of the no-fault insurance law. The Department relied on the Workers’ Compensation Board’s interpretation of Ground Rule 8 of the Workers’ Compensation Radiology Fee Schedule to conclude that if the MRI facility furnishes reproductions in lieu of the original films, then the provider may charge the motor vehicle insurer five dollars for the first sheet of duplicating film or CD, and three dollars for each additional sheet of film or CD.

In the situation presented here, the covered person received no-fault insurance benefits for his or her basic economic loss from the adverse insurer, and is now suing the XYZ insured for non-economic losses by asserting that he or she sustained a serious injury. Pursuant to Insurance Law § 5108(a), the Workers’ Compensation Board’s fee schedules only apply to health service charges for, and in excess of, basic economic loss. Therefore, since ABC seeks a reproduction of the MRI film to determine whether the covered party is entitled to non-economic losses, not basic economic losses, Ground Rule 8 of the Workers’ Compensation Radiology Fee Schedule does not apply, and the MRI facility is not bound by OGC Opinion 08-04-08.

As the Insurance Law and regulations promulgated thereunder are silent as to the permissible fee for a reproduction of an MRI film in the situation presented here, it was suggested that the inquirer may wish to contact the New York State Department of Health for further guidance. It was also suggested that the inquirer may wish to investigate whether the reproduction that he seeks is discoverable under the New York Civil Practice Law and Rules.

For further information, you may contact Attorney Joana Lucashuk at the New York City office.

___________________________________________________________________________________________________

1  Insurance Law § 5102(c) defines “non-economic loss” as “pain and suffering and similar non-monetary detriment.”

2  Insurance Law § 5102(d) defines “serious injury” as:

a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.