Blockbuster Decision Changes The No-Fault Landscape (Again)
The burden of a plaintiff medical provider assignee in proving its prima facie case in a no-fault action appears relatively simple; Plaintiff medical providers make "a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received [by the relevant insurance carrier], and that payment of no-fault benefits was overdue." Mary Immaculate Hosp. v. Allstate Ins. Co.1 Yet, this seemingly simple burden has been the subject of scores of appellate cases.
Recently, the Appellate Division, Second Department, in Viviane Etienne Medical Care v. Country-Wide Ins.,2 revisited this issue and clarified what is, and more importantly what is not, the plaintiff's prima facie burden. Before proceeding with the court's holding, a background of the genesis of this decision is in order.
Prima Facie Case
In 2006, the Appellate Term, Second and Eleventh Judicial Districts, in Dan Med. v. New York Cent. Mut. Fire Ins.,3 ruled that a plaintiff medical provider's motion for summary judgment should have been denied because it "failed to tender sufficient proof in evidentiary form to establish its prima facie case."4 Specifically, the court found, "The affidavit submitted by plaintiff's 'corporate officer' failed to demonstrate that he possessed sufficient personal knowledge of plaintiff's office practices and procedures so as to lay a foundation for the admission of the annexed documents [the billing forms] as business records (see CPLR 4518)."5
Moreover, addressing the argument that an insurer's denial of claim form or any other admission of receipt and non-payment of a claim established a medical provider's prima facie case, the court held, "To the extent defendant issued denial of claim forms (NF–10s) or admitted receipt of plaintiff's claim forms, such admissions did not concede the facts asserted in the claim forms and it remained plaintiff's burden to proffer such evidence in admissible form, which it failed to do."6
Then, in 2008, the issue raised in Dan Med., whether a plaintiff medical provider satisfied its prima facie burden by laying a proper foundation to satisfy the business records rule (CPLR 4518) for the admission of its billing forms, made its way to the Second Department, in Art of Healing Medicine v. Travelers Home & Mar. Ins.7 Affirming the Appellate Term, the Appellate Division in a brief decision held, "The plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law. The plaintiffs' medical service providers failed to demonstrate the admissibility of their billing records under the business records exception to the hearsay rule."8
What followed was a slew of no less than 99 Appellate Term decisions citing Art of Healing,9 almost all of which found that the plaintiff failed to satisfy its prima facie burden because its biller did not possess sufficient knowledge of the plaintiff's business practices so as to satisfy the business records exception to the hearsay rule.10 Several decisions, in particular, found that a third-party biller's affidavit was insufficient to satisfy the business records exception because the biller was not an employee of the plaintiff and did not possess personal knowledge of the plaintiff's business practices. For example, in Second Med. v. GEICO,11 the Appellate Term held that although plaintiff's motion was supported by affidavits of both the plaintiff's owner and its billing company's owner, plaintiff nevertheless failed to lay the requisite foundation for the admission of its bills and failed to prove that the billed-for services were actually rendered.12
Several Second Department Appellate Term decisions went even further than Art of Healing13 and imposed new, additional prima facie requirements. For example, in Jamaica Med. Supply v. Kemper Cas. Ins.,14 the Appellate Term denied plaintiff medical provider's summary judgment motion, finding plaintiff failed to prove, prima facie, that the billed-for supplies were actually delivered to the assignor.15
These cases were in stark contrast to holdings from the First Department, which did not require a plaintiff's bills be admissible as business records, or require the plaintiff to prove the billed-for services were rendered, in order to establish a prima facie case. Instead, the First Department held that proof of submission of plaintiff's claim forms and the non-payment (or non-timely denial) thereof was sufficient in a summary judgment context. For example, in Central Nassau Diagnostic Imaging v. GEICO,16 the court held plaintiff's prima facie case was properly established through its Notice to Admit, which the defendant failed to deny.
In North New York Medical Care v. New York Central Mutual Fire Insurance17 the court held the sworn statement of the plaintiff's billing manager that the claim forms were mailed to the insurer and not paid was sufficient to establish its prima facie case. In Socrates Psychological Services v. Lumbermans Mutual Casualty,18 the court held the plaintiff established entitlement to summary judgment by proof that it submitted its bills to the defendant and the defendant failed to pay, deny or request additional verification.19
Overruling 'Art of Healing'
Now, in Viviane Etienne Medical Care v. Country-Wide Ins.,20 the Appellate Division, Second Department, effectively overruled the Appellate Term, Second Department's rulings on this issue handed down over the past eight years. In this case, the plaintiff's summary judgment motion was supported by an affidavit of its third-party biller who averred that he prepared and mailed the plaintiff's bills to the defendant insurer. The civil court denied plaintiff's motion, finding it failed to satisfy its prima facie burden, and the plaintiff appealed.
Relying upon Art of Healing21 and its progeny, the Appellate Term affirmed, finding that plaintiff's third-party biller "failed to demonstrate that he had personal knowledge of the plaintiff's practices and procedures and that he was competent to testify about those practices and procedures."22 The Appellate Term concluded that since the plaintiff failed to lay the proper business record foundation to admit the billing forms in evidence, it failed to meet its prima facie burden, and its motion was therefore properly denied by the lower court.
The Second Department granted the plaintiff leave to appeal. In a majority opinion, the Second Department reversed the lower court and overruled Art of Healing,23 acknowledging that the business record requirement of that decision "obliging the plaintiff to establish the truth or the merits of the plaintiff's claim"24 was "an anomaly, a jurisprudential drift from this Court's well-established precedent"25 that "a plaintiff medical service provider makes a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed to and received by the relevant insurance carrier, and that payment of no-fault benefits was overdue."26