Opinion
Index No. 532234/2022
02-09-2023
American Transit Insurance Company, Petitioner, v. Right Choice Supply, Inc., A/A/O FANNY MUNOZ, Respondent.
Larkin Farrell LLC (David Fair of counsel), for petitioner.
Larkin Farrell LLC (David Fair of counsel), for petitioner.
Aaron D. Maslow, J.
The following numbered papers were read on this petition:
Petition (NYSCEF Doc No. 1)
Notice of Petition (NYSCEF Doc No. 2)
Exhibit A - Arbitration Award (NYSCEF Doc No. 3)
Exhibit B - Master Arbitration Award (NYSCEF Doc No. 4)
Exhibit C - Respondent Right Choice Supply, Inc.'s Arbitration Request Form and Arbitration Submission (NYSCEF Doc No. 5)
Exhibit D - Petitioner American Transit Insurance Company's Arbitration Submission and Master Arbitration Brief (NYSCEF Doc No. 6)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 7)
Request for Judicial Intervention (NYSCEF Doc No. 8)
Affidavit of Service (NYSCEF Doc No. 9)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 10)
Affidavit of Service (NYSCEF Doc No. 11)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 12)
Issue Presented
The No-Fault Insurance regulations provide that a master arbitrator may vacate a hearing arbitrator's award where it is "incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)" (11 NYCRR 65-4.10 [a] [4]). Considering this, does it constitute an error of law where the hearing arbitrator makes a finding of medical necessity without adhering to Pan Chiropractic, P.C. v. Mercury Ins. Co. (24 Misc.3d 136 [A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]) and its progeny case law which hold that in the context of a summary judgment motion by an insurer asserting lack of medical necessity for a health service, the health service provider must submit expert medical opinion evidence which specifically refers to and either discusses or rebuts the insurer's expert medical opinion evidence?
The term "hearing arbitrator" is used herein instead of "arbitrator" to avoid confusion with the term "master arbitrator."
Background
This is a special proceeding pursuant to CPLR Article 75 commenced by American Transit Insurance Company (ATIC) seeking an order and judgment vacating a No-Fault Insurance master arbitration award of Victor D'Ammora, Esq. (dated August 24, 2022), which affirmed the arbitration award of Lester Hill, Esq. (dated May 14, 2022) granting Respondent Right Choice Supply, Inc.'s (Right Choice) claim for No-Fault insurance compensation for health service expenses. Arbitrator Hill awarded the $4,737.90 sought by Respondent Right Choice for providing supplies to its assignor (Assignor), who claimed to have been injured in a motor vehicle accident on January 30, 2020.
The notice of petition seeks vacatur of "the arbitration award issued by Arbitrator Lester Hill, Esq. and/or Master Arbitrator Vic D'Ammora, Esq." (NYSCEF Doc No. 2, notice of petition, ¶ 34), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. The No-Fault Regulations provide that "court review pursuant to an article 75 proceeding" is from the "decision of a master arbitrator" (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (Matter of Staten Island Hospital v. USAA, 103 A.D.2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator's award is imperfect, a master arbitration award affirming it would likewise be imperfect and subject to vacatur.
Health service providers obtain standing to pursue No-Fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted an "assignor."
The arbitration was organized by the American Arbitration Association (AAA), which has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 [b], which provides:
Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer's liability to pay first party ["No-Fault insurance"] benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.
The arbitration was assigned Case No. 17-21-1226-7577 by the AAA. At oral argument before this Court on January 25, 2022, Petitioner ATIC appeared and argued that the above-referenced arbitration awards should be vacated. Respondent Right Choice has neither submitted opposition nor appeared in this special proceeding.
Paragraph 28 of the petition describes the AAA Case No. as 99-21-1226-7577, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA Case No. 17-21-1226-7577.
The record evidence submitted in this Article 75 proceeding reveals that Arbitrator Hill conducted a hearing on May 13, 2022, at which Walter Pisary, Esq., appeared for Right Choice and Helen Cohen, Esq., appeared for ATIC. At issue were four bills from Right Choice submitted to ATIC for payment pursuant to the No-Fault insurance system set forth in Insurance Law Article 51 and the Department of Financial Services' No-Fault Regulations set forth at 11 NYCRR part 65. Pertinent details of the four bills are as follows: date of service May 21, 2020, $548.08, provision of cane and hinged knee brace; dates of service May 25, 2020-June 21, 2020, $1,839.78, rental of knee CPM (continuous passive motion device) and provision of synthetic sheepskin pad; dates of service May 25, 2020-June 14, 2020, $1,365.00, rental of Game Ready compression unit; and dates of service May 25, 2020-June 7, 2020, $985.04, rental of DVT device (deep vein thrombosis prevention device).
Only one Form NF-10 denial of claim was included in the record denying payment of the $548.08 bill for the cane and hinged knee brace on the grounds of lack of causation and fees not being in accordance with fees schedule. Apparently, with respect to the other three bills, ATIC relied on a defense that additional verification it had sought was never provided.
Arbitrator Lester Hill's Award
In that part of Arbitrator Hill's award containing his findings, conclusions, and basis, he wrote: "The basis of the respondent's timely denial based upon a lack of medical necessity is the peer report by Dr. Matthew Skolnick." This was followed by citations to case law concerning a prima facie showing of entitlement to No-Fault benefits: the prescribed statutory billing forms had been mailed and received and the payment of No-Fault benefits were overdue. He found that Respondent's submission of its "NF-10 denial of claim form established that the insurer received the claim referenced therein as having been submitted by the provider and that the insure[r] did not pay the claim." (NYSCEF Doc No. 3, arbitration award, at numbered p 2)
The peer review of Dr. Skolnick, referenced in the Form NF-10 denial of claim and attached to it, opined lack of medical necessity in addition to lack of causation from the accident of record (NYSCEF Doc No. 6, ATIC's arbitration submission, at 4, 29).
There then ensued a discussion of law concerning denials of claim and a defense of lack of medical necessity. Arbitrator Hill discussed the medical evidence before him. Noteworthy was the fact that Assignor underwent left knee surgery on May 21, 2020. As a result, the latter was provided with supplies, as noted above. "The claim for the knee brace was denied based upon the peer report by Dr. Slotnick.[ ] With respect to the claim for the continuous passive motion device [and synthetic sheepskin pad], [Game Ready] compression unit, and DVT device, the respondent asserts that the claims are not verified." (Id.)
The reference to Dr. Slotnick is obviously a typographical error; the arbitrator meant Dr. Skolnick.
Arbitrator Hill noted that in a prior arbitration award of his in AAA Case No. 17-21-1190-2706 ATIC had relied on the same peer review from Dr. Skolnick which was submitted in the arbitration at issue. In this other case, Arbitrator Hill found the left knee surgery to be medically necessary.
Continuing with his analysis, Arbitrator Hill mentioned that Dr. Skolnick had relied in part on a review of intraoperative photos by Dr. Howard Levin. Arbitrator Hill discussed competing medical evidence, including a report by Dr. Anjani Sinha, which was submitted in support of medical necessity. (Id. at numbered pp 3-4)
Arbitrator Hill found as follows regarding the bill for the cane and hinged knee brace:
Although Arbitrator Hill did not mention the cane in his award, he did award compensation for it, as per Part A in the conclusion of his award: he awarded $548.08 for the bill for date of service May 21, 2020, which bill was for the cane and the knee brace. It is clear that his findings concerning the knee brace applied likewise to the cane (NYSCEF Doc No. 3, arbitration award, at numbered p 5).
I find that the respondent has not demonstrated by sufficient factual basis and medical rationale that the knee brace prescribed to the EIP post surgery was medically unnecessary. With respect to the surgery itself I find that the best source of information is the surgeon, who noted in his postsurgical diagnosis of tears of the medial and lateral menisci. This is particularly the case with this EIP where the EIP presented a positive McMurray's sign, the test for meniscal injury and an MRI that noted a tear of the medial meniscus. Putting these facts together it would appear that the most reasonable conclusion is that the EIP did suffer from a meniscal injury from the motor vehicle accident as there was no history nor any medical records to indicate that the EIP had a prior history of injury to the left knee. The peer report provides no factual basis to conclude that the surgery was not causally related to the motor vehicle accident other than the conclusion in the report of Dr. Levin that there were no meniscal tears. Therefore, based upon the evidence submitted, I find that the applicant has demonstrated that the surgery was medically necessary and causally related to the motor vehicle accident. I find that the respondent has not demonstrated that the knee brace following the surgery was medically unnecessary.(Id. at numbered p 4)
As for the other three bills, Arbitrator Hill found as follows:
With respect to the claims for the continuous passive motion device, compression unit, and DVT device, the respondent, upon receipt of the claims requested verification, specifically, a letter of medical necessity and the pertinent medical records and stated that the claim was delayed pending the examination under oath of the EIP.
On October 21, 2020, the applicant provided the documentary verification, specifically, a letter of medical necessity and the pertinent medical reports. The applicant further inquired [as to] the status of the examination under oath of the EIP.
There is no evidence submitted by either party that an examination under oath of the EIP was scheduled or attempted to be scheduled.
Without evidence that there was an examination under oath [which] was timely scheduled, the respondent's position that the claims are not verified is without merit.(Id.)
Right Choice's arbitration claim was granted in its entirety by Arbitrator Hill, who awarded $4,737.90 in medical expenses plus interest and an attorney's fee (id. at numbered pp 5-6).
Master Arbitrator Victor D'Ammora's Award
Master Arbitrator D'Ammora set forth the issues in dispute as follows:
The issues before the lower arbitrator were whether the Respondent properly denied the claim for various devices and durable medical equipment based upon (1) the lack of medical necessity and/or causation; and (2) unverified claims. The lower arbitrator allowed the claim. The Respondent seeks to overturn the award of the lower arbitrator.
The issue before me is whether Arbitrator Hill's decision to allow the claim was arbitrary, capricious or incorrect as a matter of law.(NYSCEF Doc No. 4, master arbitration award, at numbered p 1)
Master Arbitrator D'Ammora set forth case law to the effect that the standard of his review was limited to whether the hearing ("lower") arbitrator's review was supported by evidence or another reasonable basis or was arbitrary or capricious, irrational, and without a plausible basis. He noted that a master arbitrator's review did include whether the hearing arbitrator's award was incorrect as a matter of law, but he was constrained in reviewing the facts adduced by the evidence. (Id. at numbered p 2)
As for the cane and hinged knee brace ($548.08 bill), "Arbitrator Hill conducted a hearing and reviewed all of the evidence including the medical documentation. Arbitrator [Hill] considered the peer review of Dr. Skolnick, the intraoperative photo review of Dr. Levin and the rebuttal of Dr. Sinha. Based upon the medical evidence Arbitrator Hill determined that the devices and equipment were medically necessity and causally related. And as such [he] allowed the claim" (id.).
As for the unprovided verification defense (regarding the other three bills), "Arbitrator Hill further determined that the Respondent had failed to show that an EUO of the EIP was scheduled or attempted to be scheduled. And as such there is no merit to [ ] the position that the claims were not verified." (Id.)
Master Arbitrator D'Ammora stated that Arbitrator Hill's conclusions and findings were within his discretion and based on his interpretation of the evidence. It did not constitute reversible error. "This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill's determination is rational and supported by the record." He concluded, "I cannot conclude on the basis of the record before me that Arbitrator Hill's decision was incorrect as a matter of law or arbitrary and capricious. Therefore, I must affirm the award." (Id.)
ATIC's Petition to Vacate
ATIC's petition to vacate asserted that "The arbitration decision was arbitrary and capricious, irrational and without a plausible basis" (NYSCEF Doc No. 1, petition, ¶ 35), in that "Arbitrator Hill failed to follow well settled law" (id., ¶ 37). The petition went on to argue that Dr. Howard Levin's review of the intraoperative photos concluded that there was no tear resulting from the subject motor vehicle accident; any change was degenerative and not traumatically induced (id., ¶ 39). ATIC's evidence submitted to the hearing arbitrator "clearly satisfied its burden" (id., ¶ 41). Ultimately the medical provider Right Choice in this instance had to prove by a preponderance of the evidence that its services were medically necessary, claimed ATIC; the petition to vacate cited to Dayan v. Allstate Ins. Co. (49 Misc.3d 151 [A], 2015 NY Slip Op 51751[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2015], and Park Slope Medical and Surgical Supply, Inc. v. Travelers Ins. Co. (37 Misc.3d 19, 22 n. [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]) (id., ¶ 42). "In order for an applicant to prove that the services were medically necessary, it must meaningfully refer to, or rebut, the conclusions set forth in the peer review," maintained the petition, which cited to Pan Chiropractic, P.C. v. Mercury Ins. Co. (24 Misc.3d 136 [A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2009]) (id., ¶ 43). Right Choice failed to offer any rebuttal at all, and certainly did not meaningfully refer to Dr. Skolnick's peer review, as was required by Pan Chiropractic, P.C. and the more than 100 published decisions citing to it, insisted ATIC (id., ¶ 45).
To the extent that ATIC's petition argued that the intraoperative photo review by Dr. Howard Levin had to be rebutted by Right Choice, it is rejected. ATIC's denial of the $548.08 bill referred only to the "attached peer review by Dr. Matthew D. Skolnick, M.D." (NYSCEF Doc No. 6, ATIC's arbitration submission, at 4). An insurer must stand or fall upon the defense upon which it based its refusal to pay and cannot create new grounds (Matter of State Farm Ins. Co. v. Domotor, 266 A.D.2d 219, 220-221 [2d Dept 1999]).
ATIC reiterated in several paragraphs of its petition that a health service provider seeking No-Fault medical expense compensation must meaningfully refer to and rebut an insurer's peer reviewer's conclusions (id., ¶¶ 51-54). "This proposition is widely accepted as 'well settled' law in the industry" (id., ¶ 55). "In this case the arbitrator also ruled for Respondent [Right Choice] despite the fact that Respondent failed to offer a rebuttal. In doing so the arbitrator failed to follow well settled law. As such, this Court should vacate the arbitration award for the same reasons the Appellate Term reversed the trial courts in Pan Chiropractic, Eastern Star Acupuncture, Jaga Med. Servs., P.C. and High Quality Medical." (Id., ¶ 58)
The petition concluded by asserting that Arbitrator Hill ignored ATIC's "evidence and/or well settled legal precedent in order to justify a determination in favor of Applicant [Right Choice]" (id., ¶ 62). Therefore, ATIC's rights were prejudiced by the arbitrator's partiality "and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated" (id., ¶ 63). The relief sought was vacatur of the awards of both Arbitrator Hill and Master Arbitrator D'Ammora that they "have no force or effect" (id., ¶ 64).
ATIC has not addressed that part of Arbitrator Hill's findings with respect to the three bills concerning which ATIC asserted that verification was unprovided. As such, I deem ATIC to have abandoned any effort to vacate that part of Master Arbitrator D'Ammora's award which affirmed Arbitrator Hill regarding the bills in the amounts of $1,839.78, $1,365.00, and $985.04. Therefore, the discussion which follows relates to the $548.08 bill for the cane and knee brace dispensed on May 21, 2020 to Assignor whether to vacate Master Arbitrator D'Ammora's award insofar as that bill is concerned.
As noted above, Respondent Right Choice has not appeared in this special proceeding, either with written opposition or oral argument. Nonetheless this petition must be adjudicated in this instance solely on the papers and record submitted by Petitioner ATIC.
No-Fault Insurance Arbitration
In order to determine this petition to vacate an arbitration award, some discussion of the nature of No-Fault insurance arbitration is necessary. When the No-Fault Law was first enacted by the Legislature in Chapter 13 of the Laws of 1973 to take effect February 1, 1974, § 675 of the Insurance Law was added. In subdivision 2 thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first party (No-Fault) benefits. This provision was amended in Chapter 892 of the Laws of 1977, when several changes were made to the 1973 version of the No-Fault Law. The provision regarding arbitration in § 675 was amended to add the following language:
Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit medical expenses and modifying the threshold categories to be able to sue for pain and suffering.
An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator's decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator's award is five thousand dollars or greater, exclusive of interest and attorney's fees, the insurer or the claimant may institute an action in a court of competent jurisdiction to adjudicate the dispute de novo.Nothing in the Governor's Bill Jacket for Chapter 13 of the Laws of 1977 comments on the provision adopting master arbitration review of hearing arbitrators' decisions.
The provisions regarding No-Fault insurance arbitration remained in the recodification of the Insurance Law enacted in Chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in § 5106, and subdivisions (b) and (c) now read as follows:
(b) Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer's liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.
(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator's award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator's award is five thousand dollars or greater, exclusive of interest and attorney's fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.
Insofar as is here relevant, the No-Fault Insurance Regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator's award where it "was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)" (11 NYCRR 65.18 [a] [4]). This regulatory language was carried over into the revised Regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4). A master arbitrator may also vacate or modify a hearing arbitrator's award under certain other grounds too (see 11 NYCRR 65-4.10 (a).
11 NYCRR 65-4.10 (a) provides as follows:
Grounds for review. An award by an arbitrator rendered pursuant to section 5106(b) of the Insurance Law and section 65-4.4 or 65-4.5 of this Subpart may be vacated or modified solely by appeal to a master arbitrator, and only upon one or more of the following grounds:
(1) any ground for vacating or modifying an award enumerated in article 75 of the Civil Practice Law and Rules (an article 75 proceeding), except the ground enumerated in CPLR subparagraph 7511(b)(1)(iv) (failure to follow article 75 procedure);
(2) that the award required the insurer to pay amounts in excess of the policy limitations for any element of first-party benefits; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of an appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;
(3) that the award required the insurer to pay amounts in excess of the policy limitations for any element of additional first-party benefits (when the parties had agreed to arbitrate the dispute under the additional personal injury protection endorsement for an accident which occurred prior to January 1, 1982); provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;
(4) that an award rendered in an arbitration under section 65-4.4 or 65-4.5 of this Subpart, was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground);
(5) that the attorney's fee awarded by an arbitrator below was not rendered in accordance with the limitations prescribed in section 65-4.6 of this Subpart; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart.
Discussion
The provision that a hearing arbitrator may vacate or modify a hearing arbitrator's award due to an error of law is one of several grounds but is the main gravamen of ATIC's petition. ATIC argued that in finding medical necessity for the supplies dispensed by Right Choice on May 21, 2020, Arbitrator Hill failed to follow well-settled law that a health service provider opposing an insurer's prima facie case of lack of medical necessity must submit a rebuttal meaningfully referring to and rebutting the insurer's peer reviewer's conclusions. As such, affirmance by Master Arbitrator D'Ammora was improper and both awards should be vacated pursuant to CPLR § 7511 (b) (1) (iii). ATIC also argued that Arbitrator Hill's award "was arbitrary and capricious, without rational basis and incorrect as a matter of law..." (NYSCEF Doc No. 1, petition, ¶ 61). ATIC argued further, among other things, that the weight of the evidence clearly favored its position that the subject supplies were not medically necessary (id. ¶ 60).
While Arbitrator Hill referred to a "rebuttal" of Dr. Anjani Sinha in his award (NYSCEF Doc No. 3, arbitration award, at numbered page 3), by definition it was not a rebuttal. Dr. Matthew Skolnick's peer review was dated October 10, 2020 (NYSCEF Doc No. 6, ATIC's arbitration submission, at 26), and Dr. Sinha's report was dated March 4, 2020 (id. at 86). Therefore, the latter report could not be deemed a rebuttal meaningfully referring to and rebutting the peer reviewer's conclusions on a later date. Dr. Sinha's report is certainly not labeled a "rebuttal." Applicant did have other supporting evidence in the record, none of which would be considered a formal rebuttal. Based on the record evidence submitted by ATIC in support of its petition, I agree that no rebuttal was submitted to Arbitrator Hill to formally rebut Dr. Skolnick's conclusions. But did Right Choice's failure to submit a formal rebuttal mandate vacatur by Master Arbitrator D'Ammora or by this Court? Did it constitute an error of law pursuant to 11 NYCRR 65-4.10 (a) (4), as claimed by ATIC?
The record evidence did include an operative report dated May 21, 2020 (NYSCEF Doc No. 6, ATIC's arbitration submission, at 76-77), a certificate of medical necessity of Dr. Sinha's dated May 21, 2020 (NYSCEF Doc No. 5, Right Choice's arbitration submission, at 34), and a post-operative note of his dated June 5, 2020 (NYSCEF Doc No. 6, ATIC's arbitration submission, at 89).
One of the difficulties in assessing ATIC's claim is that the No-Fault Regulation enabling a master arbitrator to vacate a hearing arbitrator's award due to an error of law is unclear exactly as to what is meant by "incorrect as a matter of law" (11 NYCRR 65-4.10 [a] [4]). We know that procedural or factual errors are not encompassed: "(procedural or factual errors committed in the arbitration below are not encompassed within this ground)" (id.). However, what does constitute an error of law? Does it mean that the hearing arbitrator failed to comply with a statute or a regulation? Or does this encompass case law also? If it encompasses case law, does that mean any deviation from a conclusion of law of any court warrants vacatur of the hearing arbitrator's award? From a trial court? From just appellate courts? Does a conclusion of law in one case suffice to establish the "law" referred to in 11 NYCRR 65-4.10 (a) (4) or must there be a series of cases formulating "well settled law," the phrase utilized in ¶ 37 of the petition?" Clearly this regulatory provision could benefit from clarification from the New York State Department of Financial Services (successor to the Department of Insurance) in the form of an amendment to 11 NYCRR 65-4.10 (a) (4).
As it turns out, there is no issue of whether the hearing arbitrator incorrectly applied law embodied in a statute or regulation, but if he had it would obviously constitute an error of law. The case law sought to be applied by ATIC in the subject Article 75 petition was embodied in a long series of court decisions of the Appellate Term, so any issue of applying case law from just one decision or from a trial court is academic in this instance.
In fact, since this decision involves interpretation of the Department of Financial Services' No-Fault Regulations, a copy of it will be transmitted by this Court to the Superintendent of Financial Services. This Court encourages other justices who determine Article 75 petitions seeking review of No-Fault arbitration awards to likewise transmit copies of their decisions to said Superintendent and, perhaps, a process for their transmission by New York's court system to the Superintendent could be implemented. For sure, this would assist the Superintendent to fulfill her responsibilities to promulgate procedures governing the No-Fault arbitration system (see Insurance Law § 5106 [b], [c], [d]).
ATIC's claim that the necessity for a rebuttal meaningfully referring to the peer reviewer's conclusions derives from a long line of decisions of the Appellate Term, 2d, 11th & 13th Districts (at one time just the 2d and 11th Districts) over a period of years. One of the earlier decisions in this regard was in A Khodadadi Radiology, P.C. v. NY Central Mutual Fire Ins. Co. (16 Misc.3d 131 [A], 2007 NY Slip Op 51342[U] [App Term, 2d Dept, 2d & 11th Dists 2007]). The decision held that the insurer may rebut the inference of medical necessity through a peer review and, if the peer review is not rebutted, the insurer is entitled to denial of the claim. This was within the context of the defendant insurer's cross-motion for summary judgment against the plaintiff medical provider. Shortly afterwards, Delta Diagnostic Radiology, P.C. v. American Transit Ins. Co. (18 Misc.3d 128 [A], 2007 NY Slip Op 52455[U] [App Term, 2d Dept, 2d & 11th Dists 2007]), cited to A Khodadadi Radiology, P.C. 's requirement that a peer review establishing a prima facie case of lack of medical necessity necessitated a rebuttal from the medical provider in order to avoid summary judgment being granted against it.
This concept of a rebuttal being required from a health service provider to avoid summary judgment where the medical provider's peer review made out a prima facie case of lack of medical necessity was enhanced in Pan Chiropractic, P.C. v. Mercury Ins. Co. (24 Misc.3d 136 [A], 2009 NY Slip Op. 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2009]), the case chiefly relied upon by ATIC. In Pan Chiropractic, P.C., the said Appellate Term established the requirement that on a motion by the insurer for summary judgment against the medical provider, if the peer review sets forth a factual basis and medical rationale for the conclusion of lack of medical necessity, the medical provider must rebut it with an affidavit which "meaningfully refer[s] to, or discuss[es], the determination of defendant's doctor" (id. at *2); without the provider submitting such an affidavit, the insurer is entitled to summary judgment dismissing the complaint.
Since Pan Chiropractic, P.C. was decided on July 9, 2009, by the Appellate Term for the 2d, 11th, and 13th Districts, that court has cited it at least 100 times when reviewing trial court orders on summary judgment motions, according to Westlaw. The Appellate Term for the 9th and 10th Districts has also cited it (e.g., B.Y., M.D., P.C., v. Progressive Casualty Ins. Co., 26 Misc.3d 135 [A], 2010 NY Slip Op 50144[U] [2010]). Therefore, this principle of law exists throughout the Second Department and is binding, at least on all trial courts within it. The requirement of a rebuttal from a health service provider which meaningfully refers to or discusses the determination of the No-Fault insurer's peer review doctor has basically been repeated in practically the same or similar language, per this Court's review of all cases citing to Pan Chiropractic, P.C., although in some instances the Appellate Term merely referred to rebutting the peer review without the words "meaningfully refers to, or discusses" (e.g., BLR Chiropractic, P.C. v. American Transit Ins. Co., 35 Misc.3d 141 [A], 2012 NY Slip Op 50882[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]; Crotona Heights Medical, P.C. v. New York Central Mutual Fire Ins. Co., 34 Misc.3d 155[A], 2012 NY Slip Op 50401[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]). In Neomy Medical, P.C. v. American Transit Ins. Co. (35 Misc.3d 135 [A], 2012 NY Slip Op 50769[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]), the court found that the plaintiff's supervising physician's affidavit "failed to justify with specificity the additional studies" and therefore "did not rebut the conclusions set forth in the peer review report"; the words "meaningfully refers to, or discusses" were not used. The term "meaningfully rebut" was used in New Life Medical, P.C. v. GEICO Ins. Co. (35 Misc.3d 146 [A], 2012 NY Slip Op 51061[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]). In Yklik, Inc. v. Electric Ins. Co. (36 Misc.3d 131 [A], 2012 NY Slip Op 51287[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]), the term used was "failed to meaningfully refer to, let alone rebut," without the word "discuss."
The Pan Chiropractic, P.C. holding regarding the need for a rebuttal which meaningfully referred to, or discussed, the determination of the No-Fault insurer's peer review doctor was extended in connection with IME reports submitted by an insurer to establish lack of medical necessity, in High Quality Medical, P.C. v. Mercury Ins. Co. (29 Misc.3d 132 [A], 2010 NY Slip Op 51900[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2010]) and MIA Acupuncture, P.C. v. Geico Ins. Co. (29 Misc.3d 132 [A], 2010 NY Slip Op 51899[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2010]). Subsequent decisions of that court continued to hold likewise regarding an insurer's IME report.
It is noteworthy that in one case, Pan Chiropractic, P.C. was cited for the principle of law that an insurer made out a prima facie case of entitlement to summary judgment dismissing the complaint on the ground of lack of medical necessity through submission of a sworn peer review. The court held that the burden shifted to the health service provider to raise a triable issue of fact, but it continued by stating that a sworn letter of medical necessity by a health service provider was "sufficient to raise a triable issue of fact as to the medical necessity of the services rendered" (Quality Psychological Services, P.C. v. Mercury Ins. Group, 27 Misc.3d 129 [A], 2010 NY Slip Op 50601[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2010]). This constituted a departure from the case law that a health service provider had to submit a rebuttal which meaningfully referred to or discussed the determination of the No-Fault insurer's peer review doctor. However, in a subsequent case, Gentle Care Acupuncture, P.C. v. Geico Ins. Co. (30 Misc.3d 126 [A], 2010 NY Slip Op 52226[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2010]), the court acknowledged that the health service provider submitted an affidavit of medical necessity for the purpose of rebutting the insurer's IME reports but it rejected it because it did not meaningfully refer to, let alone rebut, the IME reports' conclusions (see also Gentle Care Acupuncture, P.C. v. Geico Ins. Co., 30 Misc.3d 131[A], 2012 NY Slip Op 51290[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]). A "letter of medical necessity" did not "meaningfully refer to, let alone rebut" the insurer's psychologist's conclusions in All Boro Psychological Services, P.C. v. Progressive Northeastern Ins. Co. (38 Misc.3d 142[A], 2013 NY Slip Op 50252[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2013]).
The plaintiff's doctor's affidavit in Neomy Medical, Inc. v. GEICO Ins. Co. (34 Misc.3d 144 [A], 2012 NY Slip Op 50145[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]) sufficiently demonstrated the existence of a question of fact as to medical necessity but the court did not indicate whether it meaningfully referred to or discussed the insurer's peer review (see also Bay Plaza Chiropractic, P.C. v. Praetorian Ins. Co. (38 Misc.3d 126[A], 2012 NY Slip Op 52315[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]).
Not only must a health service provider's affidavit refer to the insurer's IME report, but the rebuttal component must not be conclusory (Flushing Traditional Acupuncture, P.C. v. Geico Ins. Co., 36 Misc.3d 156[A], 2012 NY Slip Op 51772[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2012]); from this one can infer that the rebutting evidence must also discuss the IME report's conclusions.
It is clear that whatever medical evidence is submitted in response to the peer review, it must "rebut" the latter's conclusions and meaningfully refer to it (see Promed Durable Equipment, Inc. v. GEICO Ins. Co., 41 Misc.3d 19 [App Term, 2d Dept, 2d, 11th & 13th Dists 2013]; Jamaica Medical Supply, Inc. v. GEICO General Ins. Co., 39 Misc.3d 141 [A], 2013 NY Slip Op 50760[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2013]; Park Slope Medical and Surgical Supply, Inc. v. Praetorian Ins Co., 39 Misc.3d 141[A], 203 NY Slip Op 50761[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2013]).
This Court's review of the cases citing to Pan Chiropractic, P.C. revealed that in more recent years, the word "discuss" was replaced by "rebut" in the decisions of the Appellate Term, 2d, 11th, and 13th Districts. Either way, the health service provider still must "meaningfully refer" to the peer review or the IME report. As for discussing it, a lower court decision still required it in 2021 (see Heavenly Points Acupuncture v. Integon National Ins. Co., 73 Misc.3d 1201[A], 2021 NY Slip Op 50895[U] *2 [Civ Ct, Queens Co]).
The case law discussed extensively above was from the Appellate Term in the Second Department when reviewing appeals from orders on summary judgment motions. By comparison, the Appellate Term in the First Department has not used the phraseology of "meaningfully referring" and either "discuss" or "rebut" in all of its relevant decisions. In Darlington Medical Diagnostics, P.C. v. Praetorian Ins. Co. (34 Misc.3d 148 [A], 2012 NY Slip Op. 50226[U] [App Term, 1st Dept 2012]), the court held that if a chiropractor's peer review setting forth a factual basis and medical rationale for his conclusion that diagnostic testing lacked medical necessity established a prima facie showing of entitlement to judgment for an insurer, the plaintiff medical provider failed to raise a triable issue of fact where its submitted affidavit by a physician whose field of practice was unspecified contained no indication that its generic conclusions were based upon either a medical examination of the injured person or a review of the injured person's medical records. An operative report of the claimant's principal was insufficient to rebut the peer review where it consisted of conclusory, fill-in-the-blanks findings (see Synergy Medical v. Praetorian Ins. Co., 40 Misc.3d 127[A], 2013 NY Slip Op 51047[U] [App Term, 1st Dept 2013]). A medical affidavit detailing the assignor's complaints of pain and restricted range of motion, and opining that an MRI was necessary to rule out disc herniations, was sufficient to raise a triable issue of fact as to medical necessity (see AP Diagnostic Medical, P.C. v. Chubb Indemnity Ins. Co., 41 Misc.3d 126[A], 2013 NY Slip Op 51647[U] [App Term, 1st Dept 2013]).
Further, where an insurer made a prima facie showing of entitlement to judgment through the submission of an IME report of its examining acupuncturist who set forth a factual basis and medical rationale for the conclusion that the assignor's injuries were resolved and that no further acupuncture treatment was needed, the acupuncture provider failed to raise a triable issue concerning medical necessity where its principal, who while broadly describing his approach to the practice of traditional Chinese medicine, failed to set forth any allegations as to the assignor's claimed injuries or the medical necessity of the acupuncture treatments at issue (see Utica Acupuncture, P.C. v. Interboro Ins. Co., 39 Misc.3d 139[A], 2013 NY Slip Op. 50643[U] [App Term, 1st Dept 2013]).
However, the Appellate Term, First Department, did at one point begin to use phraseology holding that a health service provider had to meaningfully respond to prima facie evidence from the insurer. In Premier Health Choice Chiropractic, P.C. v. Praetorian Ins. Co., 41 Misc.3d 133[A], 2013 NY Slip Op 51802[U], *1 [2013], the court held that a doctor's report "did not meaningfully refer to, let alone rebut, the contrary findings made by defendant's peer reviewer" [emphasis added]. Further, the same court held in Rummel G. Mendoza, D.C., P.C. v. Chubb Indemnity Ins. Co., 47 Misc.3d 156 [A], 2015 NY Slip Op 50900[U] [App Term, 1st Dept 2015], that if the insurer's examining doctor's IME report and follow-up report set forth a factual basis and medical rationale for her conclusion that the assignor's injuries were resolved and that there was no need for further physical therapy treatment, an affidavit of the health service provider's treating physical therapist which failed to meaningfully address the contrary findings made by the defendant's examining doctor, including the normal results of the range of motion testing of the assignor's cervical and lumbar spine, was insufficient to raise a triable issue of fact. The words "meaningfully rebut" were used in Mingmen Acupuncture Services, PC v. Global Liberty Ins. Co. (61 Misc.3d 128 [A], 2018 NY Slip Op 51358[U] [App Term, 1st Dept 2018] and Forest Drugs v. Global Liberty Ins. Co. of New York, 61 Misc.3d 147 [A], 2018 NY Slip Op 51708[U] [App Term, 1st Dept 2018]).
Interestingly, no Appellate Term 1st Department decision has cited to the Appellate Term, Second Department's Pan Chiropractic, P.C. decision.
The foregoing review of Appellate Term decisions was performed to determine what constitutes settled law governing a motion for summary judgment in the context of a health service provider's having to refute a prima facie case of lack of medical necessity established through an insurer's submission of a sufficient peer review or IME report. Therefore, this Court now holds that in such context, well-settled case law holds that the health service provider must submit expert opinion evidence, whether it is a "rebuttal," affidavit, affirmation, or letter of medical necessity, which meaningfully refers to and either discusses or rebuts the conclusions of the insurer's expert witness. Nothing submitted by Right Choice to Arbitrator Hill, according to the record, referred to Dr. Skolnick's peer review. Had the dispute at bar been a motion for summary judgment, ATIC would have prevailed. Dr. Skolnick's peer review made out a prima facie case of lack of medical necessity, and Right Choice did not submit expert medical evidence which referred to it; neither did Right Choice's evidence discuss it or specifically rebut it.
The instant dispute, however, does not concern a motion for summary judgment. It concerns an arbitration. And that triggers an inquiry into whether Arbitrator Hill's determination to accord probative value to Right Choice's evidence lacking a formal rebuttal referencing the peer review was incorrect as a matter of law (11 NYCRR 65-4.10 [a] [4]), and whether in turn, Master Arbitrator D'Ammora's affirmance must be vacated.
Most non-No-Fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen v. Nomberg, 46 N.Y.2d 623, 629-630 [1979]). No-Fault insurance arbitrations are different; an error of law can be the basis for reversal by a master arbitrator. This is because, as discussed above, 11 NYCRR 65-4.10 (a) (4), in the No-Fault Insurance Regulations promulgated by the Superintendent of Financial Services (previously Superintendent of Insurance), lists "incorrect as a matter of law" as a ground for vacating or modifying a hearing arbitrator's award. In that sense, the master arbitrator's review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky v. Allstate Ins. Co., 54 N.Y.2d 207, 211-212 [1981]; Acuhealth Acupuncture, P.C. v. Country-Wide Ins. Co., 176 A.D.3d 800, 802 [2d Dept 2019]).
Determination
With regard to case law, this Court now holds that the phrase "incorrect as a matter of law" in 11 NYCRR 65-4.10 (a) (4) is to be construed to refer to settled or established court decisions on issues which do not relate to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact. "[I]ncorrect as a matter of law" (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues.
In part, this Court's present determination is based on the additional provision in 11 NYCRR 65-4.10 (a) (4) which provides that "procedural or factual errors committed in the arbitration below are not encompassed within this ground." The reference to "factual errors" conveys impliedly that when it comes to assessing evidence for the purpose of fact-finding, an arbitrator has wider latitude and should not be required to comply with settled or established law concerning what specific evidence suffices to refute the opposing party's evidence. This Court also takes into account the general proposition that the admissibility of evidence and the determination of issues of fact are left to the arbitrator's discretion (s ee Wien & Malkin LLP v. Helmsley-Spear, Inc., 6 N.Y.3d 471, 483 [2006] ["Manifest disregard of the facts is not a permissible ground for vacatur of an award...."]; Central Square Teachers Association v. Board of Education of the Central Square Central School District, 52 N.Y.2d 918, 919 [1981] ["The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny."]; Matter of Lipson v. Herman, 189 A.D.3d 440, 441 [1st Dept 2020] ["error of fact... will not result in the vacatur of an arbitrator's award"]; Matter of Bernstein v. On-Line Software International, Inc., 232 A.D.2d 336, 338 [1st Dept 1996] ["It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis."]). In light of this case law with respect to the admissibility of evidence and the determination of issues of fact in arbitration, 11 NYCRR 65-4.10 (a) (4)'s "matter of law" should be limited in its breadth.
That "incorrect as a matter of law" (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues not evidentiary ones is supported by case law. "If, however, the master arbitrator vacates the arbitrator's award based upon an alleged error of a rule of substantive law, the determination of the master arbitrator must be upheld unless it is irrational [citations omitted]" (Golden Earth Chiropractic & Acupuncture, PLLC v. Global Liberty Ins. Co. of New York, 54 Misc.3d 31 [App Term, 2d Dept, 2d, 11th & 13th Dists 2016] [emphasis added]).
In Matter of Global Liberty Ins. Co. v. McMahon (172 A.D.3d 500 [1st Dept 2019]), the court held that it was incorrect as a matter of law for the hearing arbitrator to not consider the American Medical Association's CPT Assistant newsletter, which is incorporated by reference in the New York Workers' Compensation Medical Fee Schedule, in determining whether the No-Fault insurer paid the proper fee to the medical provider. Issues regarding application of fee schedules in No-Fault arbitration clearly are substantive ones. Similarly, an arbitrator's failure to apply well-settled case law regarding fees for a licensed acupuncturist involved a substantive issue, which is a matter of law pursuant to 11 NYCRR 65-4.10 (a) (4) (Allstate Ins. Co. v. Natural Healing Acupuncture, P.C., 39 Misc.3d 1217[A], 2013 NY Slip Op 50645[U] [Civ. Ct. Kings Co. 2013]). Whether an insurer's defense of fraudulent incorporation is precluded by a late denial of claim form involves an issue of law, based on case law (see Matter of Acuhealth Acupuncture, P.C. v. Country-Wide Ins. Co., 149 A.D.3d 828 [2d Dept 2017]); it is obviously a matter of substantive No-Fault insurance law. A hearing arbitrator's assessment of medical necessity in the absence of a denial of claim asserting lack of medical necessity is incorrect as a matter of law (see Matter of Liberty Mutual Ins. Co. v. Spine Americare Medical, P.C., 294 A.D.2d 574 [2d Dept 2002]), and this too would be a substantive issue.
In contrast, an arbitrator's task of determining whether a service is medically necessary entails making a finding of fact not a conclusion of law. A substantive issue is not involved. Case law regarding the analysis of evidence, such as Pan Chiropractic, P.C. v. Mercury Ins. Co. and its progeny, would not be controlling.
Finally, this Court notes that the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully refers to and either discusses or rebuts the conclusions of the insurer's expert witness was rendered in the context of summary judgment motions. A court's assessment of reviewing these motions entails securitizing the evidence to determine whether there is a lack of a material issue of fact. No-Fault arbitrations are not summary judgment motions. They entail making final determinations, akin to a bench trial where the trial court hears the evidence and makes its own findings of fact. Decisions on summary judgment motions concerning evidence as opposed to substantive issues do not repose within the ambit of a "matter of law" (11 NYCRR 65-4.10 [a] [4]).
Having held that in the circumstance of case law, the phrase "incorrect as a matter of law" (id.) applies to issues of substantive law not to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact this Court further holds that when determining an issue of medical necessity, a No-Fault hearing arbitrator is not required to apply the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully refers to and either discusses or rebuts the conclusions of the insurer's expert witness.
This is not to say that a hearing arbitrator is prohibited from applying the well-settled case law which began with Pan Chiropractic, P.C. Since it is not deemed a "matter of law," as the term is used in 11 NYCRR 65-4.10 (a) (4), an arbitrator is free to apply it or not.
Accordingly, in this Article 75 proceeding, Arbitrator Hill's award, which clearly did not apply the well-settled case law Pan Chiropractic, P.C. v. Mercury Ins. Co. and its progeny, was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4). Master Arbitrator D'Ammora's award approved Arbitrator Hill's review of the evidence. Master Arbitrator D'Ammora noted that his review of Arbitrator Hill's award had to consider whether it was incorrect as a matter of law, citing to 11 NYCRR 65-4.10 (a) (4) (NYSCEF Doc No. 4, master arbitration award, at numbered p 2). By affirming Arbitrator Hill's award, Master Arbitrator D'Ammora conveyed that he did not find that it was incorrect as a matter of law.
This Court must next determine whether to sustain Master Arbitrator's D'Ammora's award. The standard for Article 75 court scrutiny of a master arbitrator's review of a hearing arbitrator's award in terms of whether there was an error of law is whether it is so irrational as to require vacatur (see Matter of Smith v. Firemen's Ins. Co., 55 N.Y.2d 224, 232 [1982]; Matter of Acuhealth Acupuncture, PC v. Country-Wide Ins. Co., 170 A.D.3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v. New York City Transit Authority, 167 A.D.3d 314 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v. Country-Wide Ins. Co., 149 A.D.3d 828 [2d Dept 2017]). In the case at bar, Master Arbitrator D'Ammora's review of the legal issue presented by ATIC was not irrational. As this Court found, the Pan Chiropractic, P.C. line of cases need not be followed by No-Fault hearing arbitrators. Hence, in terms of the legal issue, Master Arbitrator D'Ammora's award was actually correct, let alone not irrational.
With respect to the factual issues reviewed by Master Arbitrator D'Ammora basically, the medical necessity for the surgery and the follow-up supplies the proper standard of his review was whether Arbitrator Hill reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, making independent findings of fact (Matter of Petrofsky v. Allstate Ins. Co., 54 N.Y.2d 207 [1981]). Here, with respect to the $548.08 bill, Master Arbitrator D'Ammora noted that the hearing arbitrator considered Dr. Skolnick's peer review, Dr. Levin's intraoperative photo review, and a report of Dr. Sinha. The services at issue were found medically necessary and causally related, and the hearing arbitrator allowed the claim. "Arbitrator Hill's conclusions and findings regarding the lack of medically necessity and the verification defense were in his discretion and interpretation of the evidence. It cannot be regarded as reversible error within this Master Arbitrator's purview. This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill's determination is rational and supported by the record." (NYSCEF Doc No. 4, master arbitration award, at numbered p 2)
Judicial review of a master arbitrator's authority to vacate a hearing arbitrator's award derives from § 675 (presently § 5106) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith v. Firemen's Ins. Co., 55 N.Y.2d 224, 231 [1982]). Master Arbitrator D'Ammora did not exceed his power when he reviewed the factual findings of Arbitrator Hill. He applied the correct standard of review when he wrote, "I cannot conclude on the basis of the record before me that Arbitrator Hill's decision was incorrect as a matter of law or arbitrary and capricious" (NYSCEF Doc No. 4, master arbitration award, at numbered p 2). Indeed, Arbitrator Hill's factual finding that the supplies at issue the cane and knee brace were medically necessary was neither arbitrary nor capricious. As indicated above, he found that the best source of information was the surgeon, who noted in his postoperative report that there were tears of the medial and lateral menisci. The MRI noted a tear of the medial meniscus. With no evidence of prior injury to the knee, the most reasonable conclusion was that Assignor did suffer from a meniscal injury from the motor vehicle accident. The surgery was necessary and so too were the supplies. (NYSCEF Doc No. 3, arbitration award, at numbered p 4) Master Arbitrator D'Ammora was correct when he found that Arbitrator Hill's factual determination was rational and supported by the record (NYSCEF Doc No. 4, master arbitration award, at numbered p 2). This Court finds that Master Arbitrator D'Ammora's review of that factual determination was neither arbitrary and capricious, irrational, or without a plausible basis (see Matter of Petrofsky v. Allstate Ins. Co.).
ATIC's petition in this Article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:
if the court finds that the rights of that party were prejudiced by:
(i) corruption, fraud or misconduct in procuring the award; or
(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or
(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or
(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.(NYSCEF Doc No. 1, petition, ¶ 33)
This Court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that neither arbitrator exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of Article 75.
Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected.
Conclusion
Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that that ATIC's petition is denied and the master arbitration award of Victor D'Ammora Esq., which affirmed the arbitration award of Lester Hill, Esq., is confirmed in its entirety.