The Office of General Counsel issued the following informal opinion on April 24, 2002, representing the position of the New York State Insurance Department.

Re: Health service billings by medical professional corporations

Question Presented:

May an insurance company refuse to pay a bill that is based upon the physician rate contained in the No-Fault fee schedule for a health service provided, where the bill has been submitted by a medical professional corporation ("a medical PC") as a No-Fault insurance claim, but the health service was not actually performed by the physician, but by a non-physician employee of the medical PC (for example, a chiropractor, acupuncturist or massage therapist) who is licensed or certified to perform the health service and who performed the service under the supervision of a physician?


Yes. An insurance company may refuse to pay a bill submitted by a medical PC as a No-Fault insurance claim when the fee billed for is in accordance with the physician rate in the No-Fault fee schedule for the health service provided, but the health service was actually performed, not by a physician, but by a non-physician employee of the medical PC. The medical PC may only bill at the fee schedule rate established for medically necessary services performed by the licensed treating provider who actually provides the health service.


The inquirer is a consultant in the health field working exclusively with "Multi-discipline offices," that operate as medical professional corporations ("medical PCs"). The inquirer provided us with a detailed schematic drawing of the structure and supervision hierarchy within such an office. The schematic indicates that the medical PC is run by a Supervising Owner Physician and Supervising Physician employees. The medical PC bills its patients and their insurance carriers for all services it provides as physician services. The services themselves, however, are performed by employees of the medical PC, who are licensed and registered as nurses, licensed practical nurses, physical therapists, chiropractors, physicians, acupuncturists, massage therapists and certified trainers. The inquirer specifies that those persons performing the health-related services, "…or [sic, are] under the direct and indirect supervision of a physician."

The inquirer informs us that, "[m]any insurance carriers are taking an aggressive stance to deny payment of services billed by the physician but performed by subordinate licensees such as Chiropractors, Acupuncturists and Physical Therapists and or Registered Nurses."

The inquirer asserts that, "Current opinion letters [of the Department] state that services performed by employed licensees or registered personnel should be billed as physician services." The inquirer asks whether the medical PCs he does consulting work for should continue to bill in this manner.


The inquirer has not specified a particular type or types of insurance claims with which the medical PCs are experiencing billing difficulties. For purposes of this response, we shall address the billing issue raised in the context of No-Fault insurance.

The inquirer supports his position by referring to a letter from Senior Insurance Examiner Freer to Dr. Morton Aizic of April 9, 1999, in which she stated that the Workers’ Compensation Board had advised the Department that:

…generally a chiropractor would not be authorized to charge the fees contained in the physical therapy fee schedule. However, in the situation in which you described, the chiropractor is not acting or billing as the primary provider of services. The services are being performed under the active and personal supervision of an authorized physician, the osteopath, and within the scope of such person’s specialized training and qualifications. Therefore, as long as the services being rendered are within the scope of the provider's chiropractic license, it would be permissible for the physician to bill for these services using the physical therapy fee schedule. It should also be noted that the State Education Department has stated that a physician may employ a chiropractor since the lawful scope of the practice of medicine subsumes the practice of chiropractic.

However, subsequent to Ms. Freer’s letter, the Department reviewed its position on this issue and, after consultation with the Department of Health ("DOH"), determined that as to No-Fault insurance billings, services provided by a chiropractor, whether or not performed under the direct and personal supervision of a physician, and regardless of any employment arrangement, must be billed in accordance with the fees contained in the chiropractic fee schedules. Services provided by chiropractors may not exceed the fees established under the chiropractic fee schedules when providing care and billing under the No-Fault law. The Department concluded that No-Fault insurance billings, under such specified circumstances (which are the same as those inherent in the billing methodology the inquirer posits, albeit applicable to various health care providers other than physicians, and not just chiropractors), cannot be made in accordance with physicians’ rates.

I have attached a letter dated March 7, 2001, from Joe Smeragliuolo, Principal Examiner of the Property Bureau, evidencing this determination and referencing DOH’s position that, although a New York State medical professional corporation can employ a licensed chiropractor, services performed by the chiropractor, even under the supervision or direction of a physician, should not be billed by the physician as physician services at physician rates. The DOH opined that to do so constitutes practicing the profession fraudulently under N.Y. Educ. Law § 6530(2)(McKinney 2001).

Thus, it is the position of this Department that under the New York No-Fault law health services must be billed at the applicable rate contained in the No-Fault fee schedule for the service when performed by the person who actually performed it. It is irrelevant, for purposes of the foregoing analysis under the New York No-Fault law, whether or not the person performing the service does so under the supervision of a physician. Their services may not be billed at the physician rate.

In conclusion, the medical PCs that the inquirer consults for should change their No-Fault billing practices accordingly, so as to be consistent with the foregoing advice so that the health services performed by non-physicians are not billed at physicians rates.

For further information you may contact Associate Attorney Barbara A. Kluger at the New York City Office.