In re GLOBAL LIBERTY INSURANCE CO., v. THERAPEUTIC PHYSICAL THERAPY, P.C, 2017 WL 985383
Respondent sought recovery for physical therapy services provided to its assignor before April 1, 2013, and petitioner insurer disclaimed parts of the claim on the ground that it had already reimbursed a different provider for “eight units” for services on some of the same dates. Respondent checked the box on the prescribed disclaimer form indicating that it was relying on a “fee schedule” defense, specifically the “eight unit rule.” The lower arbitrator held that respondent was precluded from asserting its defense because the disclaimer was insufficiently specific in that the other provider was not named. Respondent appealed to the master arbitrator, arguing that it adequately preserved its defense. The master arbitrator, without addressing the issue of preservation, incorrectly found that the lower arbitrator had “considered the fee schedule defense” and “determined that [r]espondent failed to provide evidence as to the other provider.”
The master arbitrator’s award was arbitrary, because it irrationally ignored the controlling law presented on the preservation issue (Matter of Global Liberty Ins. Co. v. Professional Chiropractic Care, P.C., 139 AD3d 645, 646 [1st Dept 2016]; see generally Matter of Smith [Firemen’s Ins. Co.], 55 N.Y.2d 224, 232 [1982] )—namely, that an insurer adequately preserves its fee schedule defense “by checking box 18 on the NF–10 denial of claim form to assert that plaintiff’s fees [were] not in accordance with the fee schedule” (Megacure Acupuncture PC v. Lancer Ins Co., 41 Misc.3d 139[A], 2013 N.Y. Slip Op 51994[U], *3 [App Term, 2d Dept 2013] [internal quotation marks omitted] [alteration in original]; Surgicare Surgical v. National Interstate Ins. Co., 46 Misc.3d 736, 745–746 [Civ Ct, Bronx County 2014], affd sub nom. Surgicare Surgical Assoc. v. National Interstate Ins. Co., 50 Misc.3d 85 [App Term, 1st Dept 2015] ). Accordingly, we remand the matter to the extent indicated.
What about the principle set forth in General Accident Insurance Group v. Celia Cirucci et al., 46 N.Y.2d 862 (1979) which stands for the principle that although an insurer may disclaim coverage for a valid reason the disclaimer must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated?