Arbitrator Finds No-Fault Insurer Engaged in Unfair Claims Practices

Saturday, July 28, 2007 | 0

By Larry Rogak

Dohyung Kim's Physical Therapy v. Global Liberty Insurance Co. of New York, AAA case no. 412007009949, Assessment no. 17 991 07900 07 (Jodi Brackman, Arbitrator)

In this arbitration over physical therapy bills, Global Liberty denied the claims on the basis that the claimant was working at the time of the accident and that therefore workers' compensation should be the primary source of benefits. The insurer also contended that the treatment was concurrent with other medical care.

The Arbitrator held, "... I have come to the conclusion that the workers compensation defense was waived by Respondent's actions prior to its denial based on an IME, and that the failure to receive requested verification made its denial premature.

"Respondent could have, and in fact should have, raised the workers compensation defense at the outset, i.e., when the Assignor filed its NF-2 ... Further its inherent admission of medical necessity by virtue of its payment of some of the claims denudes the probity of the arguments related to the failure of the Claimant to provide requested verification. It is well settled that the Respondent has no duty to pay or deny a claim under Regulation 68 until all requested verification is received. Thus, the denial was premature, and its issuance deprives Respondent of the right to receive it after the fact.

"As to the concurrent care defense... the Respondent paid for chiropractic care, and then denied the physical therapy treatment on the concurrent care basis.... It is common knowledge that chiropractors are licensed to conduct spinal manipulations, but are not licensed to treat other parts of the body. The initial physical therapy evaluation indicated that the Assignor herein had knee, leg and shoulder injuries as well as lumbosacral injuries. Thus, even if the physical therapy touched upon the spine, there were additional reasons for physical therapy in addition to the spinal care. Further, physical therapy is designed to strengthen the body after an injury or surgery, while chiropractic is designed to realign presumably misaligned spines. Thus, the concurrent care defense was without merit.

"As to the IME cutoff, I find that this defense is unavailing as well. The examination was conducted by a neurologist who was not qualified to determine whether or not physical therapy was necessary. Further, the neurologist determined that restrictions of ranges of motion were self-induced rather than functional, without explaining how he came to that determination. That, in turn, deprives the examination itself of credibility.

"Finally, there are numerous other arguments raised in a brief submitted by Respondent such as the fact (as alleged) that original signatures were not on assignments and/or bills that it received. In this case the Respondent apparently made verification requests on these subjects, which was well within its rights to do, but it did not wait for those requests to be responded to. Rather, it denied the claim prematurely. By doing so, I find that the Respondent's actions were in violation of the prescription to conduct its claims practices fairly, and the remedy for this is to grant the claim."

The claim was granted in its entirety.

Lawrence N. Rogak is an insurance defense attorney in New York. He writes The Rogak Report, a daily insurance law newsletter, and his insurance law articles appear in several industry publications. For more information see www.Rogak.com. His new book, Rogak's New York No-Fault Law & Practice can be purchased by clicking here.

-------------------------------

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.