David M. Barshay
David M. Barshay ()

The burden of a plaintiff medical provider assignee in proving its prima facie case in a no-fault action appears relatively simple; Plaintiff medical providers make “a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received [by the relevant insurance carrier], and that payment of no-fault benefits was overdue.” Mary Immaculate Hosp. v. Allstate Ins. Co.1 Yet, this seemingly simple burden has been the subject of scores of appellate cases.

Recently, the Appellate Division, Second Department, in Viviane Etienne Medical Care v. Country-Wide Ins.,2 revisited this issue and clarified what is, and more importantly what is not, the plaintiff’s prima facie burden. Before proceeding with the court’s holding, a background of the genesis of this decision is in order.

Prima Facie Case

In 2006, the Appellate Term, Second and Eleventh Judicial Districts, in Dan Med. v. New York Cent. Mut. Fire Ins.,3 ruled that a plaintiff medical provider’s motion for summary judgment should have been denied because it “failed to tender sufficient proof in evidentiary form to establish its prima facie case.”4 Specifically, the court found, “The affidavit submitted by plaintiff’s ‘corporate officer’ failed to demonstrate that he possessed sufficient personal knowledge of plaintiff’s office practices and procedures so as to lay a foundation for the admission of the annexed documents [the billing forms] as business records (see CPLR 4518).”5

Moreover, addressing the argument that an insurer’s denial of claim form or any other admission of receipt and non-payment of a claim established a medical provider’s prima facie case, the court held, “To the extent defendant issued denial of claim forms (NF–10s) or admitted receipt of plaintiff’s claim forms, such admissions did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do.”6

Then, in 2008, the issue raised in Dan Med., whether a plaintiff medical provider satisfied its prima facie burden by laying a proper foundation to satisfy the business records rule (CPLR 4518) for the admission of its billing forms, made its way to the Second Department, in Art of Healing Medicine v. Travelers Home & Mar. Ins.7 Affirming the Appellate Term, the Appellate Division in a brief decision held, “The plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law. The plaintiffs’ medical service providers failed to demonstrate the admissibility of their billing records under the business records exception to the hearsay rule.”8

What followed was a slew of no less than 99 Appellate Term decisions citing Art of Healing,9 almost all of which found that the plaintiff failed to satisfy its prima facie burden because its biller did not possess sufficient knowledge of the plaintiff’s business practices so as to satisfy the business records exception to the hearsay rule.10 Several decisions, in particular, found that a third-party biller’s affidavit was insufficient to satisfy the business records exception because the biller was not an employee of the plaintiff and did not possess personal knowledge of the plaintiff’s business practices. For example, in Second Med. v. GEICO,11 the Appellate Term held that although plaintiff’s motion was supported by affidavits of both the plaintiff’s owner and its billing company’s owner, plaintiff nevertheless failed to lay the requisite foundation for the admission of its bills and failed to prove that the billed-for services were actually rendered.12

Several Second Department Appellate Term decisions went even further than Art of Healing13 and imposed new, additional prima facie requirements. For example, in Jamaica Med. Supply v. Kemper Cas. Ins.,14 the Appellate Term denied plaintiff medical provider’s summary judgment motion, finding plaintiff failed to prove, prima facie, that the billed-for supplies were actually delivered to the assignor.15

These cases were in stark contrast to holdings from the First Department, which did not require a plaintiff’s bills be admissible as business records, or require the plaintiff to prove the billed-for services were rendered, in order to establish a prima facie case. Instead, the First Department held that proof of submission of plaintiff’s claim forms and the non-payment (or non-timely denial) thereof was sufficient in a summary judgment context. For example, in Central Nassau Diagnostic Imaging v. GEICO,16 the court held plaintiff’s prima facie case was properly established through its Notice to Admit, which the defendant failed to deny.

In North New York Medical Care v. New York Central Mutual Fire Insurance17 the court held the sworn statement of the plaintiff’s billing manager that the claim forms were mailed to the insurer and not paid was sufficient to establish its prima facie case. In Socrates Psychological Services v. Lumbermans Mutual Casualty,18 the court held the plaintiff established entitlement to summary judgment by proof that it submitted its bills to the defendant and the defendant failed to pay, deny or request additional verification.19

Overruling ‘Art of Healing’

Now, in Viviane Etienne Medical Care v. Country-Wide Ins.,20 the Appellate Division, Second Department, effectively overruled the Appellate Term, Second Department’s rulings on this issue handed down over the past eight years. In this case, the plaintiff’s summary judgment motion was supported by an affidavit of its third-party biller who averred that he prepared and mailed the plaintiff’s bills to the defendant insurer. The civil court denied plaintiff’s motion, finding it failed to satisfy its prima facie burden, and the plaintiff appealed.

Relying upon Art of Healing21 and its progeny, the Appellate Term affirmed, finding that plaintiff’s third-party biller “failed to demonstrate that he had personal knowledge of the plaintiff’s practices and procedures and that he was competent to testify about those practices and procedures.”22 The Appellate Term concluded that since the plaintiff failed to lay the proper business record foundation to admit the billing forms in evidence, it failed to meet its prima facie burden, and its motion was therefore properly denied by the lower court.

The Second Department granted the plaintiff leave to appeal. In a majority opinion, the Second Department reversed the lower court and overruled Art of Healing,23 acknowledging that the business record requirement of that decision “obliging the plaintiff to establish the truth or the merits of the plaintiff’s claim”24 was “an anomaly, a jurisprudential drift from this Court’s well-established precedent”25 that “a plaintiff medical service provider makes a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed to and received by the relevant insurance carrier, and that payment of no-fault benefits was overdue.”26

Analyzing New York’s no-fault statutory and regulatory scheme, the court further held, “the plaintiff established, prima facie, its entitlement to judgment as a matter of law by demonstrating that its prescribed statutory billing forms used to establish proof of claim (see 11 NYCRR 65–1.1) were mailed to and received by the defendant and that the defendant failed to either timely pay or deny the claims.”27 Taking careful measure to ensure its holding would not be misconstrued or misunderstood, the court further stated what is not the plaintiff’s prima facie burden, to wit, “the plaintiff is not required to show that the contents of the statutory no-fault forms themselves are accurate or that the medical services documented therein were actually rendered or necessary. Stated another way, the plaintiff is not required to establish the merits of the claim to meet its prima facie burden.”28

Taking another extra step, the court provided, in almost tutorial fashion, a method in how a plaintiff can establish its prima facie case. Thus, “The billing agent will (1) attest that he/she personally sent the billing forms to the insurer, that the insurer received the same, and that the insurer failed to pay or deny the claim within the requisite 30-day period, or (2) set forth the procedures customarily utilized in the ordinary course of its business regarding the mailing/receipt of such forms and that the insurer failed to pay or deny the claim within the requisite 30-day period.”29

The court then instructed that even where a defendant fails to proffer proof of a timely denial, it may nevertheless raise an evidentiary objection to plaintiff’s proofs, but such objection is limited to challenging the proof of mailing and receipt, and the defendant’s alleged failure to pay or timely deny.30 Thus, the Second Department renewed its prior holdings31 and realigned the courts within that department with the other three judicial departments.32

Although the court in Viviane Etienne addressed a plaintiff’s prima facie burden in a summary judgment motion, the burden at trial must be similar, to remain consistent with the no-fault statutory and regulatory scheme. The only exception, of course, is that at trial the plaintiff will not be required to establish the lack of a defense, to wit, the failure of the defendant to timely or properly deny the claim or request proper and timely additional verification.33

David M. Barshay is a member of Baker Sanders in Garden City. Steven J. Neuwirth, a member of the firm, assisted in preparing this article.

Endnotes:

1. 5 AD3d 742 (2d Dept. 2004). See also Westchester Med. Ctr. v. Progressive Cas. Ins. Co., 89 AD3d 1081 (2d Dept. 2011).

2. 977 NYS2d 292 (2d Dept. 2013).

3. 14 Misc.3d 44 (App Term 2d & 11th Jud Dists 2006).

4. Id. at 47.

5. Id. at 46 (citations omitted).

6. Id. at 47.

7. 55 AD3d 644 (2d Dept. 2008).

8. Id. at 644.

9. Art of Healing Medicine v. Travelers Home & Mar. Ins., supra.

10. 977 NYS2d, at 301.

11. 2012 NY Slip Op 50236(U) (App Term 2d, 11th & 13th Jud Dists 2012).

12. See also Westchester Med. Ctr. v Government Empls. Ins., 2012 NY Slip Op 50398(U) (App Term 9th & 10th Jud Dists 2012).

13. Supra.

14. 30 Misc.3d 142 (App Term 9th & 10th Jud Dists 2011).

15. See also Comfort Supply v. GEICO Gen. Ins., 2011 NY Slip Op 52358(U) (App Term 9th & 10th Jud Dists 2011).

16. 28 Misc3d 34 (App Term 1st Dept. 2010).

17. 2004 NY Slip Op 51453(U) (App Term 1st Dept. 2004).

18. 2004 NY Slip Op 50690(U) (App Term 1st Dept. 2004).

19. See also Fair Price Med. Supply v. St. Paul Travelers Ins., 2007 NY Slip Op 27173 (App Term 1st Dept. 2007).

20. 977 NYS2d 292 (2d Dept. 2013).

21. 55 AD3d 644 (2d Dept. 2008).

22. 31 Misc3d, at 24.

23. Supra.

24. 977 NYS2d, at 302.

25. 977 NYS2d, at 301.

26. Id.

27. 977 NYS2d, at 303.

28. 977 NYS2d, at 302.

29. Id.

30. 977 NYS2d, at 303.

31. See, Westchester Med. Ctr. v. Progressive Cas. Ins., 89 AD3d 1081 (2d Dept. 2011); Westchester Med. Ctr. v. GMAC Ins. Co. Online, 80 AD3d 603 (2d Dept. 2011).

32. Sunshine Imaging Assn./WNY MRI v. Government Empls. Ins., 66 AD3d 1419 (4th Dept. 2009); Countrywide Ins. v. 563 Grand Med., 50 AD3d 313 (1st Dept. 2008); LMK Psychological Servs. v. Liberty Mut. Ins., 30 AD3d 727 (3d Dept. 2006).

33. Urban Radiology v. GEICO Gen. Ins., 2013 NY Slip Op 50850(U)(App Term 2d, 11th & 13th Jud Dists 2013) (“at a trial, unlike upon a provider’s motion for summary judgment, a provider is not required to ‘show that there is no defense to the cause of action or that the cause of action or defense has no merit’ (CPLR 3212 [b]). Rather, it is defendant’s burden to show that it has a meritorious defense…and that such a defense is not precluded [citations omitted]“).