Court of Appeals Finds Office Based Surgery Centers Not Entitled to Facility Fees

On March 31, 2016, in the matter of Government Employees Ins Co v Avanguard Medical Group PLLC(— N.E.3d —-, 2016 WL 1247701 (N.Y.), 2016 N.Y. Slip Op. 02473), the Court of Appeals held that, unlike hospitals and ambulatory surgery centers that are regulated under Article 28 and licensed by New York State through the Department of Health, office based surgery centers, which are not licensed by the State, are not entitled to reimbursement of facility fees. Unlike the former, there is no specific fee schedule (adopted by the Superintendent under the No-fault law) that provides for the reimbursement of facility fees to office based surgery centers and, therefore, they are not entitled to reimbursement. This is a significant ruling in that owners of office-based surgery centers are often also the service providers, significantly increasing their fees at the expense of reducing the amount of coverage otherwise available to claimants under their No-fault policies. In that regard, the decision further promotes the cost containment objectives of the No-fault law.