Opinion
100092/08.
October 24, 2008.
Pursuant to CPLR 7511, petitioner The Travelers Indemnity Company s/h/a St. Paul Travelers Insurance Company ("Travelers") seeks to vacate arbitration awards ("Awards") issued by the master arbitrator and lower arbitrator because they were "arbitrary, irrational, contrary to applicable law and so imperfectly executed as to warrant vacatur and reversal" (Notice of Petition to Vacate Arbitration Award, at 1). Respondent Triborough Medical Supply, Inc. a/a/o Clarence Beckles ("Triborough") opposes the petition.
BACKGROUND
Triborough, a New York corporation, provided durable medical equipment ("DME") to people claimed to have been injured in automobile accidents (Petition ["Pet."], at ¶ 3). It demanded no-fault arbitration against Travelers pursuant to Insurance Law § 5106(b), (c), seeking $850.62 for DME furnished to Clarence Beckles on April 5, 2003, which was prescribed by Melchias Mukendi, M.D. ("Dr. Mukendi") of Sunset General Medicine Rehabilitation, P.C. ("Sunset") (Pet., at ¶¶ 4, 6).
Travelers responded to the demand before the AAA New York No-Fault Conciliation Center and submitted a timely denial of the disputed bill that was based on lack of medical necessity of the services provided (Pet., at ¶ 5). Travelers relied on a peer-review report from a physician and an affidavit by Dr. Mukendi. In his affidavit, Dr. Mukendi averred that:
"While at Sunset, [a manager and a representative of a DME supplier] gave me a list of DME that I was told to prescribe to most patients. I was required to prescribe these items even if there was no medical necessity to support the prescriptions. In addition, I was told that I should make referrals for consultants to other medical providers whose specialties appeared on the initial evaluation form. These referrals . . . were made regardless of medical necessity" (Pet., Ex. B).
Travelers also provided copies of correspondence sent to a federal magistrate judge related to fraud in the no-fault DME industry that related to a RICO suit in which one of the defendants was the wholesaler that provided the DME in this case (Pet., at ¶ 7).
After an April 27, 2007 hearing, an arbitrator awarded Triborough $850.62 exclusive of other costs and fees (Pet., Ex. D). The award acknowledged Travelers' timely denial based on a peer-review report by a physician. The arbitrator further explained that the sole issue was the "medical necessity" of the DME provided to Mr. Beckles. Based on the April 9, 2003 medical evaluation by Dr. Mukendi, which "specifically includes the medical equipment here in question in its 'Treatment Plan' and gives as its reason for same 'to alleviate pain and muscle spasm, to prevent stiffness, to improve blood circulation, to promote healing and restore normal joint mobility," the arbitrator concluded that Tri borough "met its burden to present a prima facie case of medical necessity for the equipment here in question and has adequately refuted [Travelers'] peer review" (Pet., Ex. D, at 2).
Travelers appealed the determination to a master arbitrator pursuant to New York State insurance regulations. Travelers asserted that the arbitrator failed to address Dr. Mukendi's affidavit, which described "his experience of being directed to provide [DME] in the absence of medical necessity" (Pet., Ex. E). Travelers was dissatisfied with the arbitrator's award that gave credence to a report whose author admitted to prescribing unnecessary care.
On appeal to the master arbitrator, only Travelers submitted a brief and pointed out, among other things, that (1) neither the prescription nor the medical records supported the equipment prescribed, (2) the cervical collar that was supplied to Mr. Beckles did not conform to the prescription and (3) the arbitrator "totally ignored" Dr. Mukendi's sworn affidavit that revealed his practice of prescribing treatment that was not medically necessary.
On October 3, 2007, a master arbitration award ("MAA") was mailed to the parties. The MAA provides:
"It is within the province of the arbitrator below to determine what evidence or testimony to accept or reject, and what inferences should be drawn as supported by the evidence.
"It has been held that a no-fault arbitrator is not required to justify his award, but rather, 'it must merely be evident that there exists a rational basis for it upon a reading of the record.' The arbitrator has shown a rational basis for the award rendered.
"It is well settled that the master arbitrator's role is not to conduct a de novo review of the matter originally presented to the arbitrator at the lower level. I find nothing in the papers of [Travelers] that would cause me to alter the original award rendered in this case. I cannot substitute my interpretation of the evidence or my judgment in place of the arbitrator" (Pet., Ex. H, at 2 [citations omitted] [emphasis in original]).
ANALYSIS
Travelers petitions for vacatur of the Awards, arguing that the master arbitrator erred in incorrectly interpreting the scope of review and in failing to address the sufficiency of the evidence (Pet., at ¶ 14). Travelers contends that having "failed to assess the adequacy of the evidence which culminated in the lower arbitrator's decision, the [MAA] lacked rationality. That is particularly so in this case in which the evidence before the lower arbitrator was unquestionably at odds with the decision which was rendered and lacking of any rationality" (Pet., at ¶ 20). Travelers seeks either outright dismissal of Triborough's claims or remand of the matter for further proceedings (see Reply Affirmation, at ¶ 6).
In opposition, Triborough urges that both Awards were rational. Triborough asserts that there is nothing irrational about the lower arbitrator's reliance on Dr. Mukendi's report, which "expressly established the medical necessity of the DME in question" (Affirmation in Opposition ["Opp."], at ¶ 15). Triborough further contends that Dr. Mukendi's affidavit "sheds no light as to whether the DME were prescribed for the sole purpose of defrauding [Travelers], rather than being medically necessary" (id.).
Based on the limited scope of review of arbitration awards — even when arbitration is compulsory — the Awards must be confirmed (see CPLR 7511[e] [upon denial of a motion to vacate the court "shall" confirm the award]). Travelers has not met its burden of establishing entitlement to vacatur. Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 (1981), makes plain that:
"A master arbitrator's powers of review do not encompass [extensive factual review, including weighing the evidence and assessing the credibility of medical reports], nor do they authorize [determination] of the weight of the evidence. . . . [Review] is limited to whether or not the evidence is sufficient, as a matter of law, to support the determination of the arbitrator" (see also Country-Wide Ins. Co. v May, 282 AD2d 298 [1st Dept 2001] ["even in the case of mandatory arbitration where the scope of review is greater, the courts will not set aside an award where . . . there is a rational view to support it"]).
Here, the evidence was sufficient. It was not irrational for the arbitrator, after holding a hearing, listening to the arguments of all counsel and reviewing the parties' submissions, to conclude that based on the medical evaluation, the DME was medically necessary. Dr. Mukendi's affidavit, while acknowledging that he was told to prescribe DME in "most" cases while working at Sunset, did not address the particular facts related to Mr. Beckles.
The physician performing peer review on behalf of Travelers, moreover, never personally saw Mr. Beckles.
Additionally, there is absolutely no indication that the master arbitrator did not examine the sufficiency of the evidence. Indeed, the MAA sets forth that it was within the arbitrator's province to "determine what evidence or testimony to accept or reject, and what inferences should be drawn as supported by the evidence" and that the master arbitrator could not substitute his "interpretation of the evidence or judgment in place of the arbitrator."
Accordingly, it is ORDERED that Travelers' motion to vacate the Awards is DENIED and the Awards are confirmed.
Settle Judgment.