Is This Covered?

A disturbing case was issued by the Appellate Division, Second Department on March 4, 2015 involving a "livery exclusion" from liability coverage under an automobile policy. Regulation 11 NY ADC 60-1.2, issued by the New York State Department of Financial Services, allows an insurance carrier to exclude claims from liability coverage, for an accident "while the motor vehicle is used as a public or livery conveyance". N.Y. Cent. Mutual Fire Insurance. Co. v. Byfield, (2015 NY Slip Op 1805), found the insurance carrier's disclaimer invalid indicating, "The facts adduced at the hearing warranted the conclusion that, while Geico's insured might have been employing his mini-van to transport a passenger "for hire" at the time of the accident, his use of the vehicle for such purpose entailed a "single isolated use".  Citing a 1966 case, National Grange Mut. Ins. Co. v. Cervantes, 25 A.D.2d 471, the Court stated a single use of a vehicle for hire has been held not to make out use as a 'public livery or conveyance'.

In this matter, the Additional Respondent insured, Joseph Addy, admitted that one year prior to the date of the subject accident he was a cab driver, but he did not have a license issued by the Taxi and Limousine Commission. On the night of the accident, Mr. Addy arrived at the Jamaica train station with the intention of operating as a cab driver. He admitted that when he arrived at the corner of Archer Avenue and Sutphin Boulevard he waited in line for fares that night. Geico's insured, Joseph Addy, testified that he did in fact pick up Jose Cuevas at the train station in Jamaica and agreed to drive him to his hotel for $7.00 "in order to pay for gas for his car".

It is submitted,  by going to the Long Island Rail Road Jamaica station, and waiting in the gypsy cab line, Mr. Addy "was making his service available to the general public." It is also submitted, the Appellate Division's reliance on National Grange Mut.  Ins. Co. v. Cervantes, supra, is inappropriate as it was based upon the older version of 11 NYCRR 60-1.2, which did not contain the exclusion language of "for a fee". As such, the basis for the Court's determination is fatally flawed. Whether the Court of Appeals will agree to hear this issue is pending. The Court in Byfield creates a conflict with the Fourth Department case of United Services Auto. Ass'n v. Reid, 255 AD 2d 990 (4th Dept. 1998), which stated that the exclusion contained in 11 NYCRR 60-1.2(a):

"must be interpreted no more broadly than the authorized "livery" exclusion, which was designed to exclude coverage where the motor vehicle is being operated as a taxicab (see Hunt Leasing Corp. v. Universal Underwriters Ins. Co., 123 A.D.2d 602, 603, 506 N.Y.S.2d 886), or otherwise being offered "indiscriminately" to the general public and not limited to use by only certain persons or on particular occasions (American Fid. Fire Ins. Co. v. Pardo, 32 A.D.2d 536, 537, 299 N.Y.S.2d 521; see also, American Motorists Ins. Co. v. Travelers Ins. Co., 158 Misc.2d 257, 260-261, 604 N.Y.S.2d 475)."

Read the decision here.

Coverage Question:

Q: If the insured operator is a police officer, injured in a line of duty automobile accident, can the officer present a claim for "SUM" (Supplementary underinsured motorist benefits) after being offered the policy limits of the adverse owner's liability insurance?

A: YES (for the moment)

In 2013, the Second Department ruled: "Police vehicles fall within the definition of a "motor vehicle" under VTL § 125 because they constitute a "vehicle operated or driven upon a public highway which is propelled by any power other than muscular power," and they do not fall within any of the exclusions provided in the statute. Thus, the police vehicle at issue here falls within the definition of a "motor vehicle" under the uninsured/underinsured motorist endorsement. The plaintiff will be entitled to SUM coverage.  See Matter of State Farm Mutual Auto. Ins. Co. v Fitzgerald, 112 A.D.3d 166 Appellate Division, Second Department  2103.

However, as of April 1, 2014, the Court of Appeals granted leave to appeal this decision and issued a stay of the underlying judgment (22 N.Y.3d 1168). On March 31, 2015, the Court issued a decision noting, "Re-argument ordered and case set down for argument during a future session of this Court." 

(--- N.E.3d ----, 2015 WL 1423542). Stay tuned.

Read the decision here.

Are Outpatient "Facility Fees" Covered?

Q. Are "Facility Fees" for an "office-based surgery" covered under the New York's No-Fault statute?

A. No - See Government Employees Ins. Co. v. Avanguard Medical Group, PLLC, 2015 NY Slip Op 01412 decided on February 18, 2015 by the Appellate Division, Second Department.

The Court, in framing the opinion posed, "This appeal presents an issue of first impression, namely, whether a no-fault insurer must pay, as a component of first-party benefits for 'basic economic loss' (Insurance Law § 5102[a]), a 'facility fee' in connection with 'office-based surgery' performed in a practice and setting accredited under Public Health Law § 230-d(i)(h). A 'facility fee' is a charge for the use of a medical facility, its staff and equipment. It is separate from the fee to which a physician or other medical professional is entitled for performance of the medical procedure itself."

The facts of the case were: 

"Mark Gladstein, an anesthesiologist, performs 'office-based surgery' (Public Health Law § 230-d[i][h] ) at an office in Brooklyn owned by the defendant, Avanguard Medical Group, PLLC.  Dr. Gladstein is an owner of Avanguard. (The facility and the Doctor both had proper certifications.)

Under Public Health Law § 230-d(1)(h), 'office-based surgery' means any surgical or other invasive procedure, requiring general anesthesia, moderate sedation or deep sedation, and any liposuction procedure where such surgical or other invasive procedure or liposuction is performed by a licensee in a location other than a hospital, as such term is defined in article twenty-eight of this chapter, excluding minor procedures and procedures requiring minimal sedation.

Dr. Gladstein bills for his performance of 'office-based surgery' through a professional corporation, Metropolitan Medical and Surgical, P.C. (hereinafter Metropolitan). Separate and apart from that billing, Avanguard seeks to collect a facility fee from no-fault insurers for the use of its Brooklyn office where the office-based surgery is performed. The 'facility fee' is a charge for the cost of providing technicians, medical assistant[s] ... [and] equipment, such as X-ray and ultrasound equipment, for office-based surgery.

The 'facility fee' was not found in the  worker's compensation fee schedule. Avanguard  argued entitlement to the 'facility fee' under 11 NYCRR 68.5, which provides a mechanism for setting a fee for necessary services for which no fee schedule is specifically set forth in the Workers' Compensation fee schedules.   

If a professional health service is performed, which is reimbursable under section 5102(a)(1) of the Insurance Law, but is not set forth in fee schedules adopted or established by the superintendent, and (a) if the superintendent has adopted or established a fee schedule applicable to the provider, then the provider shall establish a fee or unit value consistent with other fees or unit values for comparable procedures shown in such schedule, subject to review by the insurer; or (b) if the superintendent has not adopted or established a fee schedule applicable to the provider, then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent (11 NYCRR 68.5.)"

The Court denied the application for reimbursement of "facility fees".

"Under this regulation, a provider may be entitled to reimbursement in situations when there is no fee schedule for a particular service. Avanguard cannot accurately assert that there is no existing fee schedule that determines the amount of a facility fee. Indeed, it is undisputed that Avanguard has consistently billed GEICO for 'facility fees' based on the existing fee schedule and 'PAS' codes that are applicable to Public Health Law article 28 ambulatory surgical centers (see 10 NYCRR 86-4.1, 86-4.40). Accordingly, there is indeed a fee schedule for 'facility fees'. That schedule, however, it is not applicable to Avanguard. Thus, a prerequisite to the application of the default provision is absent.

The conclusion that the default provision is inapplicable makes sense in light of its purpose. The default provision relates to particular procedures that do not appear on any existing fee schedule (see 11 NYCRR 68.5[a], [b] ). A 'facility fee' is not a fee for a particular medical procedure, but a blanket charge added to the billing for all procedures. In other words, Avanguard contends that, under the default regulation, an entire category of fees should be deemed compensable. We reject such a broad interpretation of the default provision, because the obvious intent of the default provision is to fill in discrete gaps in the schedules, not to make an entirely new category of service compensable (11 NYCRR 68.5).

We decline to read the default provision so broadly for another reason. We glean no legislative intent to require payment of 'facility fees', which are part of the comprehensive statutory and regulatory framework under Public Health Law article 28 pertaining to specific types of medical facilities, to practices and settings entirely separate from Public Health Law article 28. Article 28 facilities are subject to detailed and extensive requirements governing the establishment, licensing, and operation of facilities (see e.g. 10 NYCRR 400.18, 709.5: 10 NYCRR Part 755). Avanguard is not an Article 28 facility.

Avanguard's remaining contention does not require extensive discussion. Avanguard contends that in 2007 the Legislature created a new class of medical facility, an 'office-based surgical facility' when it enacted Public Health Law § 230-d (see L 2007, ch 365, § 2). Further, it asserts that its accreditation under Public Health Law § 230-d entitles it to a 'facility fee'. As we have already discussed, however, only Article 28 facilities are entitled to a 'facility fee' under the existing no-fault laws and regulations. Thus, we need not decide whether the Legislature created a new class of medical facility under Public Health Law § 230-d when it required accreditation of practices and settings in which 'office-based' surgery is performed. Further, it would be improper for us, on our own, to determine that a facility such as Avanguard is entitled to a benefit of Public Health Law Article 28 when it is not subject to the significant regulatory burdens and costs of that Article. Instead, it is for the Legislature and the Commissioner of Financial Services to determine whether the laws and regulations should be changed to entitle an accredited Public Health Law § 230-d facility to a 'facility fee'."

Read the decision here.

Admissibility of NYS Trooper's Testimony

Q. Can a New York State Trooper, called to the witness stand by the defense, testify that the plaintiff's actions, according to the report he prepared, were a "contributing factor" to the accident?

A. No - see Watch v Gertsen, (2015 NY Slip Op 01794) issued on March 04, 2015 by the Appellate Division, Second Department.

"In this action to recover damages for personal injuries, the plaintiffs contend that they sustained personal injuries while each was operating a motorcycle when a vehicle owned by the defendant, Glenn A. Gertsen, and operated by the defendant Florence M. Gertsen, collided with at least one of the plaintiffs' motorcycles. At trial, a New York State Trooper who responded to the accident scene testified. Over the plaintiffs' objections, defense counsel was permitted to elicit testimony from the Trooper that the Trooper had indicated on the police accident report he prepared, that each of the plaintiff motorcyclists was a contributing factor to the accident, and that he had made no such notation with respect to the defendant driver. We agree with the plaintiffs that the Trooper's testimony concerning the notations in his accident report regarding who was at fault in the happening of the accident constituted inadmissible hearsay  (see Sanchez v. Steenson, 101 AD3d 982, 983; Hagicostas v. National Frgt. Sales, 226 A.D.2d 584, 585; Conners v. Duck's Cesspool Serv., 144 A.D.2d 329; Murray v. Donlan, 77 A.D.2d 337, 347; cf. Miller v. Alagna, 203 A.D.2d 264, 265). Furthermore, contrary to the defendant's contention, the record does not demonstrate that the plaintiffs stipulated to the admission of the Trooper's opinion. The admission of the Trooper's opinion testimony constituted prejudicial and reversible error because it bore on the ultimate issue to be determined by the jury, i.e., which of the parties was at fault in the happening of the accident (see CPLR 2002; Sanchez v. Steenson, 101 AD3d at 983; Cheul Soo Kang v. Violante, 60 AD3d 991; Noakes v. Rosa, 54 AD3d 317, 318; Hatton v. Gassler, 219 A.D.2d 697; Conners v. Duck's Cesspool Serv., 144 A.D.2d at 330; Quaglio v. Tomaselli, 99 A.D.2d 487, 488)."

Read the decision here.