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Definitions of Medical Necessity

This issue is one which is frequently litigated in No-fault cases.
and with no controlling Appellate authority  is still wide open to interpretation. The question usually presents itself practically, since Judges frequently try to fit the facts of a case to whatever definition they settle on. That  presents an opportunity for the  attorney who bests understands this issue to prevent his own medical  effective in the light most favorable to his client, and to prepare a cross examination most disadvantageous to his adversary.

 

DEFINITIONS OF MEDICAL NECESSITY

The No-Fault Insurance Law at § 5102[a][1] provides that claimants are entitled to recover for "basic economic loss," including  "[a]ll necessary expenses incurred for: (i) medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical and occupational therapy and rehabilitation." (Insurance Law 5102[a][1]).

Likewise Regulation 68 at 11 NYCRR 65.12 provides that compensable medial expenses

“shall consist of necessary expenses for:

(a) medical, hospital (including services rendered in compliance with Article 41 of the Public Health Law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, X-ray, prescription drug and prosthetic services;

(b) psychiatric, physical and occupational therapy and rehabilitation;

(c) any nonmedical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of New York ; and

(d) any other professional health services.”

 

There is no further definition in the Insurance Law or the implementing regulations of  what “necessary” means or how to interpret it. Accordingly Judges continue to grapple with this issue, and there remains no pattern jury charge or appellate authority defining medical necessity. Courts looking at the issue tend to borrow heavily from other states or from federal definitions that are applied to other statutory indemnification schemes, whether Medicaid/Medicare or New Jersey ’s No Fault laws.

One of the earliest decisions can be found in Elm Medical, P.C. aao Tamara Feit v. American Home Assurance Company, 2003 N.Y. Slip Op. 51357U, 2003 N.Y. Misc. Lexis 1337 (Civ. Ct., Kings Cty, 2003),  wherein the court adopted the definition of “medical necessity” used by the New Jersey courts:


A necessary medical  expense under the [No Fault] Act is one incurred for a treatment, procedure, or service ordered by a qualified physician based on the physician's objectively reasonable belief that it will further the patient's diagnosis and treatment. The use of the treatment, procedure, or service must be warranted by the circumstances and its medical value must be verified by credible and reliable evidence.

 

In another early and  oft cited case, Fifth Avenue Pain Control Center v. Allstate Ins. Co., 196 Misc.2d 801, 807-808, 766 N.Y.S.2d 748 (Civ. Crt., Queens County 2003), Judge Agate  fashioned the following definition after considering the dictionary definitions and the text of a bill pending in the Legislature, formulated the following definition of medical necessity:

"treatment or services which are appropriate, suitable, proper and conducive to the end sought by the professional health service in consultation with the patient. It means more than merely convenient or useful treatment or services, but treatment or services that are reasonable in light of the patient's injury, subjective and objective evidence of the patient's complaints of pain, and the goals of evaluating and treating the patient."

 The inclusion of the requirement of ‘reasonable’ is welcome, since despite common misperception that term doesn’t actually appear in the Insurance Law, only ‘necessary’ does. Also welcome is the phrase ‘in consultation with the patient’ since one of the most common and rampant abuses is to heap treatment and tests on patients without their ever being made aware of what the ostensible purpose is or results are. This definition lends itself to a very workable pattern jury charge.  

In Behavioral Diagnostics aao Maria Arevalo et al. v. Allstate Insurance Company, 3 Misc.3d 246, 776 N.Y.S.2d 178 (Kings County 2004), J. Gesmer wrote an extensive opinion on the issue, summarizing most of the opinions of the Judges who had considered the question. This opinion specifically works a component of credibility into the question. One thing in particular to note is J. Gesmer’s reference to the dual and possibly conflicting goals of the No-fault law to not only provide prompt and stream lined payment but in addition to contain costs. The containing-costs goal is often ignored by Judges in their decisions, but Gesmer’s cite in support thereof to Licari v. Elliott, 57 N.Y.2d 230 (1982) invokes the Court of Appeals case underpinning  the entire application of the No Fault law and its threshold requirements to bodily injury cases. Licari is one of the most often cited and recognizable cases in New York .  

There is no appellate case law as yet on the subject. The increasing litigation on the issue confirms the comment of one court that it is not a "simple" issue (Albatros Medical, P.C. v. Government Employees Ins. Co., 196 Misc.2d 656, 766 N.Y.S.2d 309 ( Civ Ct , Queens County 2003). The determination of the issue turns on credibility (General Psychiatric Evaluation & Care, P.C. v. Kemper Ins. Co., 1 Misc.3d 499, 769 N.Y.S.2d 838 (Civ Ct, Queens County 2003 ), since courts cannot rely solely on the examining physician (Oceanside Med. Healthcare v. Progressive Ins., 2002 N.Y. Slip Op 50188[U] (Civ Ct, Kings County 2002); cf. Tudor v. Metropolitan Life Ins. Co., 143 Misc.2d 180, 539 N.Y.S.2d 690 (Nassau Dist Ct 1989 ), but must consider whether the treatment had a "valid medical purpose" and resulted in an "actual medical benefit" (Sunrise Medical Imaging, P.C. v. Liberty Mut. Ins. Co., 2001 N.Y. Slip Op 40091[U] [ Nassau Dist Ct 2001]).

 

Courts have taken care that their attempts to fashion a definition of "medical necessity" are consistent with the dual (and potentially contradictory) goals of the No-Fault Insurance Law of providing full compensation to motor vehicle accident victims who suffered "serious injury," while simultaneously containing costs (Oceanside Med. Healthcare v. Progressive Ins., 2002 N.Y. Slip Op 50188[U] [Civ Ct, Kings County 2002]; citing Oberly v. Bangs Ambulance Inc., 96 N.Y.2d 295 [2001], and Licari v. Elliott, 57 N.Y.2d 230 [1982])

 

 The Oceanside Court noted with approval the definition adopted by the New Jersey Supreme Court in Thermographic Diagnostics, Inc. v. Allstate Ins. Co., (125 N.J. 491, 512, 593 A.2d 768, 780 [1991] ): a necessary medical expense under the Act is one incurred for a treatment, procedure, or service ordered by a qualified physician based on the physician's objectively reasonable belief that it will further the patient's diagnosis and treatment. The use of the treatment, procedure, or service must be warranted by the circumstances and its medical value must be verified by credible and reliable evidence.

 

 That definition was also discussed with approval in Elm Medical, P.C. v. American Home Assurance Co., (2003 N.Y. Slip Op 51357[U] [Civ Ct, Kings County 2003] ), and Medical Expertise, P.C. ex rel. Moukha v. Trumbull Ins. Co, (196 Misc.2d 389, 395, 765 N.Y.S.2d 171 [Civ Ct, Queens County 2003] ).  

In the last case cited above, Medical Expertise, P.C. ex rel. Moukha v. Trumbull Ins. Co, (196 Misc.2d 389, 395, 765 N.Y.S.2d 171 (Civ Ct., Queens County 2003), Judge Siegel borrowed from the New Jersey definition described earlier to establish the following standard for determining the medical necessity of psychological tests:  

"could a psychologist hold an objective and reasonable belief that the tool used will further the patient's diagnosis and treatment and whether that tool is warranted given the circumstances."

As of the fall of 2005, there remains no agreed upon definition or pattern jury charge, or even appellate authority. Judges continue to cobble together approaches and definitions, with varying degrees of aptitude and success., in Citywide Social Work & Psychological Services, P.L.L.C. v. Allstate 8 Misc.3d 1025(A), (Civ. Crt. Kings County, 2005), Judge Arlene Bluth summarized the  three standards heretofore devised for psychological treatment cases.  

The first, which asks "could a psychologist hold an objective and reasonable belief that the tool used will further the patient's diagnosis and treatment and whether that tool is warranted given the circumstances" was announced in Medical Expertise, P.C. v. Trumbull Ins. Co., 196 Misc.2d 389, 395, 765 N.Y.S.2d 171 [Civ Ct, Queens County 2003]. The second standard, found in Citywide Soc. Work & Psychol. Servs., P.L.L.C. v. Travelers Indem. Co., 3 Misc.3d 608, 613, 777 N.Y.S.2d 241 [Civ Ct, Kings County 2004], focuses the court's inquiry on the "generally accepted medical/professional practice," while the third holds psychological tests to be medically necessary if "either (1) they are within the standard of care for good and accepted medical practice for all patients in that circumstance; or (2) the treating physician made a reasoned and reasonable judgment, based on the particular circumstances of the patient, that the tests will assist the physician in formulating an accurate diagnosis and an appropriate treatment plan for the patient" (Behavioral Diagnostics, 3 Misc.3d at 251-52, 776 N.Y.S.2d 178).

 

Judge Bluth goes on, however, to rely in her own case on what she claims is a credibility  analysis, observing that  “In essence, though, the question of the medical necessity of psychological testing turns on the credibility of the testifying doctors.”. She ultimately blasts the Plaintiff for failing to document anything comprehensive about the initial “comprehensive interview” underpinning the entirety of the treatment. In doing so she demonstrates what will likely be an inevitable trend of the judges hearing these cases, as it was for the arbitrators did before them, of  hammering out treatment specific quidelines that are considered reasonable or unreasonable in a give set of circumstances.    

In   Nir v. Travelers Ins. Co. 7 Misc.3d 1006(A), ( Civ. Crt. Kings County, 2005) Judge Nadelson  follows the  traditional approach of conjuring up a pattern jury-like charge from other sources, integrating the  definitions she found persuasive in  Medical Expertise, Behavioral Diagnostics and Fifth Avenue Pain[1], supra, to arrive at this definition;  

For an expense to be considered medically necessary, the treatment, procedure, or service ordered by a qualified physician must be based on an objectively reasonable belief that it will assist in the patient's diagnosis and treatment and cannot be reasonably dispensed with. Such treatment, procedure, or service must be warranted by the circumstances as verified by a preponderance of credible and reliable evidence, and must be reasonable in light of the subjective and objective evidence of the patient's complaints.

 

This definition is beneficial to the Defendant that this definition includes a requirement of reasonableness in light of objective evidence of a patients complaints, but would be more helpful if, like Fifth Avenue Pain, a requirement of consultation with the patient were included.

As to how a defendant may approach the framing of the issue of medical necessity for his trial, emphasis should be placed on demanding that the Plaintiff demonstrate objective complaints, reasonable treatment and client consultation. The attorney should be aware that Judges are struggling with this issue, often know little medicine and less anatomy, and be prepared to step into the vacuum to assist them.

Decisions of Arbitrators and other Judges who may have ruled on the same type of treatment and fact patterns may prove persuasive. In particular the current landscape presents attorneys with an attractive opportunity to establish through written professional guidelines and practice parameters that fact that their own experts opinions are consistent with  “the standard of care for good and accepted medical practice for all patients in that circumstance”, while the actions of the Plaintiff are not. While it is has generally not been applied writ large in no-fault cases, the Judges are well within their authority to take judicial notice of learned treatsies, texts and even journal articles. [2]



[1] Turning the Fifth Avenue  reasoning on its head, the  a Judge McMahon  in West Tremont Medical Diagnostics, P.C. v. GEICO 8 Misc.3d 423, 795 N.Y.S.2d 840 (Civ. Crt., Richmond County, 2005), somehow concluded that because radiology entities do not make determinations on their own regarding medical necessity, the treatments they provide could not be denied on grounds of medical necessity. Not surprisingly no other Court has deemed it advisable to follow rule likewise.

 

[2] A Judge in general is specifically authorized by statute to "consider any testimony document, information, or agreement on the subject whether offered by a party or discovered through its own research." Fisch on New York Evidence, 2nd Edition, Section 1068, pg. 606. In accordance with these principles, articles appearing in medical journals and texts, and not in the record, have been cited by the Court of Appeals (Perlmutter v. Beth David Hospital, 308 N.Y. 100, 106-107, 123 N.E.2d 792, 795, 796; People v. Richmond County News, 9 N.Y.2d 578, 581-584, 216 N.Y.S.2d 369, 371-373) and by the U. S. Circuit Court of Appeals of the District of Columbia (Durham v. United States, 94 U.S.App.D.C. 228, 214 F.2d 862, 45 A.L.R.2d 1430).