Appellate Division holds that No-Fault law does not require insurers to reimburse office-based surgery centers accredited under Public Health Law § 230-d for facility fees

Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 2015 NY Slip Op 01413 (App. Div., 2nd Dept. 2/18/2015)

In a case of first impression, the Appellate Division, Second Department has held that the No-Fault law does not require insurers to reimburse office-based surgery centers accredited under Public Health Law § 230-d for facility fees.  In doing so, the court distinguished facilities accredited under PHL § 230-d from hospitals and ambulatory surgery centers, which are specifically authorized to bill for facility fees under the No-Fault law, holding that “absent express statutory or regulatory authorization, a no-fault insurer is not required to pay a facility fee for office-based surgery performed in a practice and setting accredited under Public Health Law § 230-d.” The Court also noted that facilities accredited under PHL § 230-d are not subject to the same stringent regulation and oversight imposed on hospitals and ambulatory surgery centers by PHL Article 28.

The primary basis for the court’s determination is the fact that there is no fee schedule established for PHL § 230-d facility fees and they therefore do not qualify as basic economic loss covered under the No-Fault law. The court acknowledged that the No-Fault regulations provide for reimbursement of services that do not appear in the fee schedule but declined to apply that provision to the facility fees in question “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.” Thus, the court states that if PHL § 230-d facilities are to be entitled to No-Fault benefits for facility fees the Legislature or the Department of Financial Services must act to amend the regulations.

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