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No-Fault
Assignment For Diagnostic Services
and Medical Necessity
by Gregory J. Naclerio
In
West Tremont Medical Diagnostics, P.C. v. GEICO (Richmond Civ. Court,
March 24, 2005), the Court held that payment of First Party benefits to a
plaintiff diagnostic center by a No-Fault carrier was appropriate despite
the carrier’s affirmative defense of lack of medical necessity. At issue was
whether a diagnostic center that merely performs diagnostic tests and that
does not perform a physical examination on the patient-assignor be denied
First Party benefits by the insurer who asserts an affirmative defense of
lack of medical necessity. The Court found that the diagnostic center was
entitled to reimbursement of several diagnostic tests performed at the
request of the treating physician, plus statutory interest and attorney’s
fees.
In this case, the patient presented to the treating physician following a
motor vehicle accident in which she sustained injuries. After an initial
evaluation, the patient was referred for several diagnostic tests to the
plaintiff’s diagnostic center. The patient had assigned her rights to
No-Fault payments to the diagnostic center, which subsequently forwarded a
bill to insurer GEICO. GEICO timely denied payment and the plaintiff
instituted this case seeking payment of First Party benefits pursuant to the
No-Fault Insurance Law. GEICO raised the affirmative defense of lack of
medical necessity of the tests performed by the diagnostic center.
The Court stated that it is the healthcare provider’s decision, after
consultation with and examination of the patient, that a particular service
or treatment is “medically necessary.” Such treatments and services are
“consistent with the patient’s condition, circumstances and best interest of
the patient in regard to the type of treatment or services rendered.”
Additionally, “…to find treatment or services are not medically necessary it
must be reasonably shown by medical evidence, inconsideration of the
patient’s condition, circumstances and best interests of the patient that
the treatment or services would be ineffective or that the insurer’s
preferred health care treatment or lack of treatment would lead to equally
good outcome.” The Court noted that the diagnostic center was not in the
position, “in the ordinary and usual course of medical procedure, to consult
with the patient about the patient’s complaints and symptomology and does
not perform a physical examination upon the patient. The diagnostic center
is there to perform tests solely. Patients go there on a referral basis from
their treating, examining doctor.” The Court went further to say that “if
there was a nexus between the diagnostic center and the examining physician
which would impute knowledge to the diagnostic center as if it were a
treating physician, a different result would have been achieved.” The
carrier would still have the burden to prove this in its prima facie case on
its affirmative defense of lack of medical necessity in a situation such as
this case.
This case can be used by diagnostic imaging offices as
precedent to attack a carrier's refusal to pay radiology claims based upon
"lack of medical necessity." If you have any further
questions, please contact me for assistance.
___________________
Gregory J. Naclerio is a partner and chair of the Health Law
Regulatory Department at Ruskin Moscou Faltischek. He is also co-chair
of the White Collar Crime & Investigations Group and a member of the
Corporate Governance Practice Group. He can be reached at 516-663-6633 or
gnaclerio@rmfpc.com.