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STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

James J. Wrynn
Superintendent

OGC Op. No. 09-11-05

The Office of General Counsel issued the following opinion on November 30, 2009, representing the position of the New York Insurance Department.

Re: Limitations on No-Fault Attorney Fees

Questions Presented:

1. When one or more no-fault assignee health care providers contest the denials or partial payments issued by an insurer for bills submitted for health services rendered to an assignor injured person eligible for no-fault benefits under a motor vehicle insurance policy in a single legal proceeding in arbitration or court which results in an award of benefits to one or more of the health care providers, is each health care provider entitled to a minimum attorney fee based upon the aggregate sum of all bills awarded reimbursement to each provider in that legal proceeding?

2. Where the legal proceeding involves more than one person injured in the same motor vehicle accident, all of whom are treated by the same assignee health care provider, how is the attorney fee determined?

Conclusion:

1. Yes, in a single no-fault legal proceeding, each assignee health care provider of a person injured in a motor vehicle accident is entitled to a minimum attorney fee based upon the aggregate sum of all bills awarded reimbursement to each provider in the proceeding.

2. In a single no-fault legal proceeding, the assignee health care provider is entitled to an attorney fee, subject to the limitations set forth in Article 51 of the New York Insurance Law and the regulations promulgated thereunder, for each injured person that the provider treated.

Facts:

The inquiry is of a general nature, without reference to particular facts.

Analysis:

11 NYCRR § 65-4.6 (Regulation 68-D) establishes the amount of attorney’s fees reimbursable by an insurer and sets forth limitations on the amount of attorney’s fees that an insurer may be required to pay for services necessarily performed in the resolution of no-fault disputes.

When an attorney of an applicant for benefits commences a court action or initiates arbitration to resolve a claim dispute and receives an award of benefits, 11 NYCRR § 65-4.6(c) establishes that “the minimum attorney’s fees payable pursuant to this subpart shall be $60.” Furthermore, 11 NYCRR § 65-4.6(e) states that “for all other disputes subject to arbitration,” which includes the initiation of court actions to resolve payment disputes, “the attorney’s fee shall be limited as follows: 20 percent of the amount of first party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.” Thus, the attorney fee is 20% of the amount of no-fault benefits awarded from the total number of individual bills disputed in either a court action or arbitration (subject to a minimum fee of $60 and a maximum fee of $850), regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured. The calculation is discussed in greater detail in OGC Opinion 03-10-04 (October 8, 2003). The New York Court of Appeals recently confirmed this method of determining attorney fees “based on the aggregate of all bills for each insured” in LMK Psychological Servs., Pc.C. v. State Farm Mut. Auto. Ins. Co., 12 N.Y.3d 217, 223 (2009).

Since the attorney fee is limited to 20% of the first-party benefits awarded by an arbitrator or court to a health care provider, subject to the $850 cap, each health care provider treating the same injured person is entitled to a minimum attorney fee based upon the aggregate sum of all bills awarded reimbursement. Thus, the attorney fee in each legal proceeding is generally limited to a $60 minimum and $850 maximum for the total amount of first-party benefits awarded in the proceeding to each health care provider for health services provided to the same eligible insured person.

This calculation is also applied to the award of first-party benefits for each injured person’s claim in a given legal proceeding to determine the attorney fees that a health care provider may receive. When a health care provider receives an award of benefits in a single legal proceeding for claims resulting from the treatment of more than one person injured in the same motor vehicle accident, so that there are multiple assignors, the same calculation is applied to the total award of first-party benefits for health services rendered to each injured person in the legal proceeding in order to determine the amount of attorney fees the provider may receive, so that the provider is entitled to an attorney fee for each of the injured persons that provider has treated. Thus, each fee would be calculated as 20% of the total amount of benefits awarded to the provider in the same legal proceeding, subject to the $850 cap, based upon the aggregate claims for health services rendered to each injured person.

For further information, you may contact Principal Attorney Lawrence M. Fuchsberg at the New York City office.