AN INTERESTING MASTER ARB DECISION

I received this email from Jason Tenenbaum of Picciano & Scahill, P.C.:

Here is an interesting master arb decision. It fits within the growing case law, in this discrete area, where an arbitrators’ bringing up of issues sua sponte, without giving the other side time to respond, warrants article 75 relief in the form of vacatur of the lower arb decision. I think your followers would get something out of this

The decision that was attached is in PDF form and for some reason I can’t convert it into word, so I’m going to type the most relevant portions:

Mineola Open MRI/Bonds (applicant) v. State Farm Insurance Company (respondent)

Part I.
The respondent requests that the award below be modified under CPLR Section 7511(c) and seeks to have its appeal heard ab initio

Part II. Modification of the Award Below Pursuant to CPLR 7509 and 7511(c)
Counsel for the applicant submitted to this Master Arbitrator an affidavit to the effect that its Notice of Appeal and a copy of the lower award were served by Certified Mail, together with copies of the Post Office attesting to this service.

On the basis of this evidence, the award of this Master Arbitrator dated 8/25/07 is revoked and this Master Arbitrator will decide the issues of this appeal, ab initio, in this award.

Part III (I edited out some unecessary background info, names, and citations)
[T]he lower arbitrator relied upon the case of Nir. v. Allstate. The NFA then concluded that the peer review was insufficient since it was not supported by evidence of generally accepted medical/professional practice. [The] NFA relied upon the failure of the insurer’s peer review to be consistent with generally accepted medical/professional practice.

At this point of the proceeding below, the NFA was acting in conformity with the applicable law relating to weighing the merits of a peer review. The problem arose here when counsel for hte insurer pointed out to the NFA that the peer reviewer noted an article in the Journal of the American Academy of Orthopedic Surgeons which related to the issue of medical necessity in this case. The NFA failed to mention this reference to the article and refused to allow counsel to submit a copy of that article to the NFA as a post hearing submission.

It would appear from the evidence, in this case, that there exists excluded evidence sufficient to overturn the award below only on the issue of medical necessity. This can be accomplished by allowing the respondent to sustain its burden of proof on that issue alone by submitting into evidence the article in the Journal of the American Academy of Orthopedic Surgeons. Again, justice and fairness requires this reversal only on the narrow issue of medical necessity and only by allowing the submission of the contested article by the insurer, if so inclined. This restriction does not apply to the claimant who, if so inclined, may then submit whatever additional evidence relates to the issue of medical necessity at the further hearing.

The case is reversed and remanded to a different arbitrator only for the purpose of dealing with the issue of medical necessity only on the basis of the disputed article and on no other evidence except if the claimant seeks to rebut this evidence by whatever evidence he feels is necessary on the issue of medical necessity.

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