By now all of us are aware of the changes to Insurance Department Regulation 68 and the way these changes will affect our quest to ensure that our clients receive their full measure of benefits due them under the No-Fault Law. We are all likewise familiar with the arbitration process currently administered by the American Arbitration Association (A.A.A.) under the aegis of the Insurance Department, as well as the procedures in place for review of Arbitration decisions by Master Arbitrators.
What most of us do not know is that there is currently a procedure in place for the annual review of the performance of the Arbitrators, as well as to report and recommend upon new applicants for Arbitrator positions. It is this procedure that we might begin to use more effectively to champion our clients' causes.
The Arbitrator Review Process
Pursuant to Insurance Department Regulations [11 NYCRR 65-4.6(a)(1)], there is a New York No Fault Arbitrator Screening Committee which meets several times a year to interview current Arbitrators and report its recommendations to the Superintendent concerning whether or not the Arbitrators should have their annual contracts renewed for another one-year term. In addition, due to the significant backlog of cases, the Department has recently authorized the hiring of new Arbitrators, and each of those applicants was screened by this Committee as well.
Legally, ALL arbitrators serve at the pleasure of the Superintendent of Insurance who, under the terms of the present Contract of Employment, can terminate them upon five (5) days written notice for virtually any reason. The Committee's role officially is to report to the Superintendent with a recommendation concerning the hiring, firing or retention of the arbitrators, leaving her/him free thereafter to act at pleasure. In practice, however, throughout the terms of several successive Superintendents this writer is unaware of ANY instance where a Superintendent ultimately refused to follow the advice of the Department's own regulatorily-created Committee concerning hiring, retention or dismissal.
The Committee itself has six ex-officio members, though by regulation only four vote. NYSTLA has one of the voting seats, as does the New York State Bar Association. The other two voting members are chosen from the insurance industry. Both the Insurance Department and the A.A.A. each have one non-voting member, and additional people from each are present at each meeting with non-voting status. Currently yours truly serves as NYSTLA's representative, having taken over in 2000 from our BoardMember Emeritus DAVID EPSTEIN, who worked tirelessly since the creation of the Screening Committee well over a decade ago. The present insurance industry reps are from Progressive Insurance and M.V.A.I.C.
Each year each Arbitrator comes up for review a month or two in advance of the expiration of their Contract. Each Committee-member receives a packet of information containing statistics, charts of dispositions and samples of the Arbitrator's decisions chosen at random. This review usually includes a personal interview with the Committee which plays a pivotal role in the relationship between the Arbitrator and the Department.
Arbitrators are asked about the decisions they have made in the samplings provided to the Committee. Methodology as well as policy are explored - how the decision was reached as well as how the particular Arbitrator deals with "problem areas" of the law. This is where the members of the committee have the opportunity to sensitize each Arbitrator to issues and problems of particular interest to them and their constituency. In addition, feedback, comments and letters of commendation or complaint are addressed at that time, and each is asked about what recurring issues they are seeing and what problems they are having.
These reviews, coupled with Semi-Annual Meetings attended by all Arbitrators at which the Department prepares an agenda of presentations and group discussions, provide for a rather powerful opportunity to capture the attentions and imaginations of those who are deciding our clients' cases.
Quite rightly, the Insurance Department has no difficulty raising issues of concern to it with particular Arbitrators, even to the point of whether their individual applications of the law comport with prior decisions and Department policy. This is done not in the manner of an appeal where an existing result is affected but rather proscriptively so as to try to achieve uniformity amongst the cadre in matters yet to come.
Problems Seeking Recourse
The insurance industry representatives as well are not hesitant to raise issues of concern to the insurers whom they represent. And, because of the nature of their industry, they are often the repository of statistics and information that we plaintiffs' lawyers are at a loss to match or refute. They are representatives of a highly sophisticated, computerized, multi-faceted multi-billion dollar industry, while we are comparatively small, balkanized, and in competition with each other. They gather and share information and statistics as a matter of course - we rarely do. As a result, if some insurer has a problem with an Arbitrator, the chances are greater that letters of complaint will come to the fore and be dealt with, whereas any one attorney's letter will be more likely lost in the shuffle.
Indeed, with the recent hirings that have swelled the ranks of sitting Arbitrators from 38 to 100 it will be harder than before to maintain meaningful oversight. The last two Semi-Annual Meetings have been dispensed with, ostensibly due to the lack of a conveniently located meeting room that could accommodate everyone. Rather than meeting twice a year for presentations that all Arbitrators - and Committee members - can participate in, the Department and A.A.A. now conduct several meetings a year with smaller groups - 6 to 10 at a time - where issues are discussed and ideas shared, but Committee members are absent. Whatever other benefits this affords, it has the unfortunate side-effect of taking us out of the loop concerning how the Arbitrators are inculcated.
Filing a Compelling Complaint
There ARE a few things we can do to try and make up for these imbalances.
- First, while we do not have at our disposal an information bank similar to those maintained within the insurance industry, we can share far more than we do with the organizations that represent us. If you have an experience with an Arbitrator that is noteworthy, for good or ill, write about it. Send a letter to the Insurance Department, the A.A.A., or to me or to my attention at NYSTLA: better yet, send a copy to all three. [Please keep in mind, sour grapes are never persuasive. For your comments to be taken seriously they should be brief, cogent, and relate to the performance of the subject Arbitrator in some particular other than the result!]
- Second, for those of us who are likewise members of the New York State Bar Association, make them aware of your thoughts as well, with specific reference to this Committee. With two of the four voting members on this Committee attorneys' associations can be effective as a united front against industry abuses, as the industry is against claim abuses.
- Third, be prepared. The unfortunate fact is that No-Fault Arbitration is the unwanted stepchild of the personal injury practice. Both sides tend to send their less experienced counsel to arbitrations, and to treat these claims/defenses as less worthy than the plenary actions for pain and suffering that accompany them. The result is that the Arbitrators are receiving presentations that often lack the necessary attention, sometimes years removed from the underlying treatment events (due to the advisability of postponing arbitration until after the end of the suit for collateral estoppel reasons). The Arbitrators therefore see cases in which neither side is particularly well-prepared. Though insurance counsel may be no better it is the claimant who has the burden of proof and who is most seriously harmed by an equality of indifference. On a larger scale, this contributes to a climate where it is easier for arbitrators to think somewhat less of claimants' cases as a whole, giving a vague but palpable added advantage to the defense in many instances.
- Fourth, be aware. As in all areas of law and commerce, there are "hot-button" issues. Know what they are and how to handle them, for these are the issues that will intrigue the Arbitrator. Right now, with New York battling New Jersey for the nation's highest auto insurance rates, anything that looks like taking an unfair advantage is immediately suspect. Of course, fraudulent No-Fault claims are always a target and should NEVER be asserted or paid. However, the Arbitrators are encouraged to look for legitimate loopholes in the system that are being exploited by health care providers. Cases are now being bunched or bundled together so that one Arbitrator can hear all of the cases that arise from the same accident if an issue is raised about the similarity of treatment. Though this is an obvious attempt to strike at the "mills" that process all claimants to the maximum regardless of their injuries, it tends to overlook the fact that passengers in the same vehicle during the same accident all were subject to the same impact and can tend to have the same or similar injuries which have the same or similar protocols for treatment. Currently the "hot" issues are: reasonableness and necessity of treatment; improper use of diagnostic testing modalities; multiple visitation (with a zealous skepticism as to whether the patient ever attended the treatment sessions at all); failure to show up for a medical exam called for by the carrier; employee wage verification; and whether or not the mere dispute of one bill in a claim otherwise uncontested by the carrier requires the claimant to make out a full prima facie entitlement to all No-Fault benefits or whether only that one bill remains in issue. For those who represent the claimant's providers the main issues are: standing and the validity of the underlying assignment (it must be a true assignment without any reservation of rights to a lien); whether or not the provider is so constituted under the Public Health Law and General Business Law so as to qualify as a legitimate provider of services in the first place (if not, the carriers do not have to pay); and bills submitted for aids and appliances (which are NOT specifically included in the Comp rates for payment, but for which a provider can charge a multiple of the market rate). By knowing the pivotal issues that appear in a case and by preparing the case adequately in light of those issues, counsel can counter or even remove some of the most troublesome ones from the minds of the Arbitrators. Of course, all Arbitrators are not created equal - some are better, fairer, more compassionate, more experienced, more savvy, than others. But they all are constrained to follow the law and the regulations. The better your case tracks what the law and regulations require, the less chance an Arbitrator has to refuse your client relief. In plain language, too many lawyers make it too easy for too many Arbitrators to deny or devalue their claims.
- Fifth, choose your forum. The Insurance Law gives claimants the right to proceed to Court in a plenary action for No-Fault benefits as an alternative to arbitration. Conventional wisdom is that arbitration is better. Unconventional wisdom demonstrates that it is not always. What with the multi-year backlog in getting to the Arbitration Hearing, the recent rise in fees to cover the AAA's new conciliation step along the way, the existence of a P.I. action in many cases that can be consolidated and thereby allow collateral estoppel problems to be effectively dealt with, and the different standards customarily employed by Courts and arbitrators concerning such entry level issues as the 30-day rule and the need to establish a prima facie case (hint - to date courts have been more lenient to claimants), perhaps the best way to go in any one particular case is to Court.
An across-the-board improvement in the way claimants' cases are handled together with increased feedback on Arbitrator performance from the claimant's perspective are the tools by which the corps of No-Fault Arbitrators can be held accountable to the claimants' bar for the decisions they hand down. To date, these tools have been underutilized and a chance to reform the current Arbitration system is needlessly languishing thereby.