No-Fault Miscellany

, New York Law Journal

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Norman H. Dachs and Jonathan A. Dachs
Norman H. Dachs and Jonathan A. Dachs

In an article in this space written more than 13 years ago,1 we called to the attention of disgruntled attorneys, dissatisfied with the then-current state of affairs with respect to the litigation and/or arbitration of no-fault disputes, that a private alternative dispute resolution (ADR) company had entered the field. That organization, National Arbitration and Mediation (NAM), based in Great Neck, had announced that effective Aug. 1, 2000, it would begin accepting no-fault demands for arbitration, with a stated goal of providing claimants, health care providers and no-fault insurers with a "new, more cost effective and efficient alternative option for resolving no-fault disputes." Of course, both the insurer and the claimant were required to agree in advance to submit their dispute to this alternate forum. Although some insurers agreed in advance to submit to NAM whenever an applicant so requested, it does not appear that this program received wide acceptance.

Undaunted, NAM has recently decided to again venture into the murky waters of no-fault arbitration. In a recent press release, NAM announced that it will be administering the arbitration of no-fault claims, to resolve disputed medical claims between medical providers, claimants and auto insurance carriers. NAM states that "after insight and input from no-fault professionals, its no-fault program was specifically developed to reduce legal and administrative expenses for insurance companies, while providing an expeditious and cost effective claim resolution process for the applicants."

In view of the fact that it is believed that NAM's third-party personal injury division makes up approximately 70 percent of the New York market, its entry in the no-fault area, which is comprised of many of the same carriers and applicant firms, may well be a significant development. Of course, the proof of the pudding will be in the eating.

'Independent' Medical Exams

Coincidentally, in the same prior column, we took note of a Dateline NBC report that aired on June 23, 2000, and found that certain doctors who had been providing "paper reviews" for a certain well-known insurer were slanting their reports toward denial of claims—even to the point of "adjusting" previously written reports to conform to the wishes of the insurer that was paying their fees for such reports. Seemingly in response thereto, the Legislature passed the Injured Workers' Protection Act, Workers' Compensation Law §137 (effective March 19, 2001) which provided, inter alia, as follows:

• Independent Medical Examiners were to be paid according to the fee schedule established pursuant to Workers' Compensation Law §13. The intent of this change was to remove the financial incentive of many doctors to conduct hundreds of "IMEs" per year in order lucratively to supplement their income. In other words, the thought went, insurance companies would no longer be able to buy medical opinions.

• Claimants and their attorneys were required to be provided a copy of the examiner's medical report on the same day that the report was submitted to the insurer and the workers' compensation board. In this way, opportunities for forgery and/or unauthorized changes would be minimized.

• Doctors who conduct IMEs would have to be licensed to practice medicine in the state of New York, and board certified. In addition, the examinations would be required to take place in a medical facility and the claimant could only be examined by a doctor with a specialty in the area of the injury. This change was enacted to eliminate the practice of flying doctors in from out of state to conduct examinations in hotel rooms, a practice that was apparently prevalent in New York at that time.

• IME notices were required to advise the claimant that he or she had the right to videotape the examination or have a witness of their choice present throughout the examination.

• Any doctor, carrier or employer who causes, directs or encourages a report that differs substantially from the examining doctor's professional opinion would be guilty of fraud.

Lobbying efforts undertaken at that time to extend that legislation to medical examinations conducted in personal injury actions and to no-fault claims apparently fell on deaf ears, and no such rules were applied in those contexts. In light of recent adverse publicity involving physicians hired by insurers to conduct physical examinations who have been playing fast and loose with the truth in rendering their reports or in testifying at trial, it seems appropriate to suggest that the time has come to renew such efforts.

If, indeed, the Legislature is to consider such remedial legislation, we repeat the recommendation we made in 2000, designed to further discourage and avoid fraudulent practices and/or the appearance of unfairness: All defense medical examinations should be conducted by a panel of doctors selected by a committee consisting of representatives of the plaintiffs' and defendants' bar, paid by a fund contributed to by insurance companies, and assigned randomly. In this way, examining doctors will not be hired, paid or assigned by the insurer, and will, therefore, not be beholden to the insurer. The performances of these panel doctors should be reviewed on a regular basis for patterns indicative of prejudice or abuse. In that way, the "IME" can finally begin to be thought of as a truly independent medical examination. Both the plaintiffs' and defendants' bars will surely benefit from that improved perception.

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