OBS FACILITY FEES

OBS FACILITY FEES

GEICO v. Avanguard, 2016 WL 1247701

The Court of Appeals issued its ruling in this long awaited matter on the question of whether an Office Based Surgery Practice (OBS) can recover a facility fee.  Unfortunately for OBS practices, the Court held that the “regulatory framework” does not mandate payment for OBS facility fees.

Specifically the Court said:

Avanguard’s argument misses the mark because the basic economic loss provided for under Insurance Law § 5102 (a) (1), is subject to the limitations of section 5108, which provides that charges for services “shall not exceed the permissible charges” promulgated under the Chair’s schedules. Here, no existing schedules provide reimbursement for OBS facility fees. Moreover, since facility fees are specifically mentioned and intended to be paid to hospitals and ASCs, the absence of such language with regard to OBS facilities is no mere oversight.

This statement does not adequately address the the fee schedules were last changed before the OBS law existed (2007).  Also, wouldn’t the Workers Compensation Board have “deliberately” stated its intent to omit something?  What about acupuncture and Great Wall, wasn’t that a similar circumstance to this?

The Court further punted to the legislature and the WCB Board:

As the statutory language illustrates, the legislature capped total payments for basic economic loss, and delegated the determination of fee rates to the Chair and the Superintendent. Neither administrator has chosen to include OBS facility fees in the regulatory schedules. It is not for this Court to decide, contrary to Avanguard’s contention, whether this is a “good idea” or if it would be better for patients covered by no-fault insurance, and for the efficient management of our health care system, to require reimbursement of OBS facility fees as a means to ensure that OBS facilities continue to be viable options for patients. “These policy determinations are beyond our authority and instead best left for the legislature” (People v Jones, 2016 WL 633954, — NE3d — [2016], citing Manouel v Bd. of Assessors, 25 NY3d 46, 54 [2015]).

It appears that once the Court decided that a facility fee was not a medical service covered under Insurance Law 5102 and specifically 11 NYCRR 68.5[b], it was an uphill battle.

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