We recently reported in our No-Fault Insurance Law Wrap-Up (NYLJ, Oct. 10, 2018 and Oct. 22, 2018) the New York State Worker's Compensation Board's (WCB) proposed changes to the WCB Medical Fee Schedule. As reported in the Dec. 26, 2018 NYS Register, the WCB has adopted, with some modification, the proposed changes, effective April 1, 2019. The changes are numerous, but can be categorized as follows:

(1) The regional conversion factors for all specialties are increasing. As the fee for a particular medical service is calculated by multiplying the applicable conversion factor by the relative value for that service, an increase in the conversion factor will result in in an increase in fees for medical providers billing for worker's compensation and no-fault claims.

(2) The daily RVUs (relative value units) for physical medicine modalities are increasing from 8 to 12 units per day. Likewise, if an initial or follow-up physical therapy evaluation is performed the same day that treatment modalities are performed, the daily maximum is increasing from 13.5 and 11 RVUs to 18 and 15 RVUs, respectively. This increase applies to physical and occupational medicine services performed by physicians, physical and occupational therapists, both self-employed and employed by a physician, and chiropractors. For example, the maximum daily reimbursement to a self-employed physical therapist performing physical therapy in Region IV (New York City and most of Long Island) is, under the 2012 fee schedule, $61.60 (7.7 regional conversion factor x 8 RVUs). Under the new fee schedule, the same medical provider's daily maximum will increase to $114.60 (9.55 regional conversion factor x 12 RVUs).

(3) Changes to numerous CPT (Current Procedural Terminology) codes, to wit: (a) the addition of new codes, (b) the change in relative value of certain codes, (c) changes in description of services of certain codes and (d) the deletion of certain codes. One significant CPT code change concerns nerve conduction velocity (NCV), a neurodiagnostic test usually performed in conjunction with electromyography (EMG). Under the 2012 fee schedule, NCV is billed using CPT codes 95900-95904, depending on which nerves are tested (sensory or motor) and whether F-wave studies are included. Under the new fee schedule, CPT codes 95907-95913 are used, depending only on the number of nerves tested. If, for example, a physician were to test five sensory and five motor nerves with F-wave in Region IV, the reimbursement would be $1,364.70 under the 2012 fee schedule. Performing the same test in the same region under the new fee schedule would result in reimbursement of $510.44, which, notwithstanding the increase in the regional conversion factor, is an approximate 63 percent reduction from the 2012 fee schedule.

(4) The addition or change to several ground rules. One such change, General Ground Rule 16, governs reimbursement for out-of-state treatment. As we reported in a previous No-Fault Insurance Law Wrap-Up (NYLJ, June 11, 2015), in Surgicare Surgical v. National Interstate Insurance Company, 46 Misc.3d 736 (NYC Civ. Ct., Bx. Cty. 2014), aff'd. 50 Misc. 3d 85 (App. Term 1st Dept. 2015), the injured person was a New York resident who claimed no-fault benefits under a New York policy. The medical services in that case were performed in New Jersey, and the defendant insurer argued that the New Jersey no-fault fee schedule, which was lower than New York's for the service performed, should govern. The relevant regulation was 11 NYCRR 68.6, which provided at that time: “If a professional health service reimbursable under section 5102(a)(1) of the Insurance Law is performed outside New York State, the permissible charge for such service shall be the prevailing fee in the geographic location of the provider.” The court agreed with the insurer and ruled that the New Jersey no-fault fee schedule should be deemed “the prevailing fee” in New Jersey. Thus, pursuant to that decision, medical services performed out-of-state, such as in New Jersey, for New York no-fault claimants were properly reimbursed at the other state's no-fault rate, which sometimes was less than in New York and sometimes more than in New York, depending on the particular services billed.

Subsequently, the governing regulation, 11 NYCRR 68.6, was amended to provide that for out-of-state, non-emergency medical care rendered to a New York resident, reimbursement would be limited to the lesser of (1) the amount billed by the medical provider, (2) the amount allowed under the New York fee schedule in the region with the highest applicable amount (Region IV) and (3) the prevailing fee (such as a no-fault fee schedule) in the geographic location of the medical provider.

Now, the new fee schedule appears to once again change the rule for New York residents treating out-of-state. General Ground Rule 16, as found in the new fee schedule, provides:

A claimant who lives in New York State may treat with a qualified or Board authorized out-of-state medical provider when such treatment conforms to the Workers' Compensation Law and Regulations, the MTG's and the Medical Fee Schedule. Payment shall be made to the medical provider as set forth herein and using the regional conversion factor for the zip code where the claimant resides.

In other words, General Ground Rule 16 provides that such out-of-state treatment, which at one time would have been reimbursed in accordance with the other state's no-fault fee schedule, and then at a later time, at the lower of the other state's or New York's Region IV rate, will now be reimbursed at the New York rate in the region in which the injured person resides. Of course, the medical treatment guidelines and other rules unique to worker's compensation claims, as set forth in the ground rule, would not apply to no-fault claims. However, nothing in this ground rule appears to preclude the remainder of it, to wit, a qualified out-of-state medical provider who treats a New York resident should be reimbursed at the rate applicable in the region where the patient resides.

(5) Another change is General Ground Rule 19, which notes that there are separate fee schedules for chiropractors, podiatrists and psychologists, and states that such providers should not use the CPT codes contained in the general medical fee schedule, but should consult with their own corresponding fee schedules. Similar ground rules are contained in those providers' fee schedules. While this may at first appear to be an inconsequential rule, some have argued that it ignores the fact that there are certain services within the scope of these medical providers' licenses for which they are fully capable and authorized to perform, but are listed only in the general medicine fee schedule. Thus, it is argued, by instructing these medical providers to bill using only CPT codes in their respective fee schedules, they are essentially precluded from performing certain essential services on behalf of their patients.

Moreover, as noted in our Oct. 22, 2018 No-Fault Insurance Law Wrap-Up, the rationale given by the Worker's Compensation Board in formulating this ground rule was (a) “It is not a new rule as chiropractors are currently prohibited from billing outside of the Chiropractic Fee Schedule in Workers' Compensation cases” and (b) “Manipulation under anesthesia [one of the services for which chiropractors are qualified to perform but which is contained only in the general medical fee schedule] is not recommended under the Medical Treatment Guidelines. Accordingly, no changes have been made in response to these comments.” Assessment of Public Comment Oct. 3, 2018. The problem with these responses, some say, is that they are inapplicable to, and do not address the impact this change would have on no-fault insurance claims.

Pursuant to the amended Worker's Compensation regulations (12 NYCRR 329-1.3, 333.2, 343.2 and 348.2), the amended fee schedule, including amendments to the podiatry, chiropractic and psychology fee schedules, took effect, for worker's compensation claims, for services performed on or after April 1, 2019. Insurance Law §5108 and 11 NYCRR 68.1 are the statutory and regulatory authorities that govern the applicability of the Worker's Compensation Fee Schedule to No-Fault claims. In contemplation of anticipated increases in claims payments and to “mitigate the effect of unforeseen rate increases” (DFS Rule Making Activities, id. No. DFS-26-18-00002-EP, published in the NYS Register on June 27, 2018, p. 32) the Department of Financial Services (DFS) determined to delay the implementation of the fee schedule changes for no-fault claims for eighteen months. Thus, in June 2018, DFS issued a proposed new subsection (b)(2) to Section 68.1 to provide generally that when charges for health services are increased in the Worker's Compensation Fee Schedule, any such increase shall not be effective for no-fault claims until eighteen months later. Then, in February 2019, DFS withdrew that proposed amendment and replaced it with a new amendment to Section 68.1. The new amendment provides specifically that the amendments to the Worker's Compensation Fee Schedule that were passed in December 2018 by the Worker's Compensation Board would take effect for No-Fault claims for services rendered on or after Oct. 1, 2020.

Additionally, the new amended regulation provides that General Ground Rule 19, discussed above (requiring that chiropractors, podiatrists and psychologists bill only under their own respective fee schedules), and corresponding ground rules 10, 16 and 13 in the chiropractic, podiatry and behavioral health fee schedules, respectively, would take effect on April 1, 2019. See DFS Rule Making Activities, id., No. DFS-08-19-00003-E, published in the NYS Register on Feb. 20, 2019, p. 5 and Feb. 27, 2019, p.16. The rationale given by DFS for not delaying these ground rules for 18 months is “Per the Chair [of the Worker's Compensation Board], these rules are not new but clarification of existing rules; therefore, the Superintendent [of DFS] determined it was not necessary to delay their implementation.” Id. at p. 17, Regulatory Impact Statement. Some have questioned this rationale, arguing that even if these rules are not new to worker's compensation claims, they are certainly new to no-fault claims.

The full impact of these fee schedule changes on future treatment, billing practices and claims handling remains to be seen. Moreover, it is anticipated there will be a number of litigable issues arising out of these changes. One thing most all practitioners can agree upon is that counsel for both insurers and medical providers will certainly need to familiarize themselves with, and keep abreast of legal decisions concerning, these changes, in order to properly advise their clients.

Post-Judgment Interest Continues to Accrue at No-Fault Rate

Interest on overdue no-fault claims accrues at the rate of 2 percent per month. 11 NYCRR 65-3.9(a). B.Z. Chiropractic, P.C. v. Allstate Ins. Co., 62 Misc. 3d 1223(A) (Sup. Ct. Qns. Cty. 2019), concerned post-judgment interest in a no-fault action. In a related Civil Court action involving the same parties, the court granted the plaintiff medical provider's summary judgment motion, and plaintiff entered judgment with the court in 2001 for $8,847.49. The plaintiff did not seek to enforce the judgment until 2015, at which time the interest amount had far surpassed the principal amount. Two issues raised by the defendant insurer in both the Civil Court action and this Supreme Court declaratory action were: (1) whether interest should have been stayed due to the plaintiff's delay in enforcing the judgment and (2) whether CPLR 5004, providing for post-judgment interest in a civil action at the rate of 9 percent per year, would apply in this matter. Both questions were answered in the negative. As to the first question, the Appellate Term, in an appeal of the Civil Court action, held that the plaintiff did not prevent the defendant from paying the judgment and therefore, interest should not have been stayed. As to the second question, the Supreme Court, in this declaratory action, held that although CPLR 5004 provides for post judgment interest at 9 percent per year, where, as here, the No-Fault Statute and governing regulations provide for a different interest rate (2 percent per month), that different rate would apply post-judgment. Moreover, under the “old” No-Fault regulations (prior to April 5, 2002) applicable to this case, interest was compounded at 2 percent per month. Thus, according to the court, plaintiff's unpaid $8,847.49 judgment properly grew to an amount in excess of $227,000. Clearly, the lesson from this case is that a defendant who ignores or delays paying a duly entered judgment does so at its own peril, as interest will continue to accrue, sometimes at a tremendous amount, until the judgment is paid.

David M. Barshay is a member of Sanders Barshay Grossman in Garden City. Steven J. Neuwirth, a member of the firm, assisted in the preparation of this article.