27 N.Y.3d 813 (2016)
A health insurer cannot seek reimbursement directly from a no-fault automobile insurer for medical expenses paid to treat injuries sustained in an accident, because it is not a “provider of health care services” as defined in the No-Fault Law and its implementing regulations.
Summary
Aetna Health Plans, a health insurer, paid medical bills for its insured, Luz Herrera, who was injured in a car accident covered by Hanover Insurance Company under its no-fault policy. Aetna sought reimbursement from Hanover, arguing that Hanover was responsible for the bills under the No-Fault Law. The Court of Appeals held that Aetna could not directly seek reimbursement from Hanover because the No-Fault Law and its regulations only allow payments directly to applicants or providers of health care services (upon assignment from the applicant), and Aetna did not qualify as a health care provider. The court reasoned that allowing health insurers to seek direct reimbursement would be inconsistent with the no-fault statutory scheme.
Facts
Luz Herrera was injured in a car accident while insured by Hanover Insurance Company. Herrera also had health insurance through Aetna Health Plans. Medical providers initially submitted bills to Aetna, which paid them. Aetna later sought reimbursement from Hanover for these bills. Hanover did not respond to Aetna or Herrera. Herrera assigned her rights against Hanover to Aetna. Aetna filed suit against Hanover seeking reimbursement for the medical bills paid.
Procedural History
Aetna sued Hanover for reimbursement. The trial court granted Hanover’s motion to dismiss the complaint. The Appellate Division affirmed. The New York Court of Appeals granted Aetna’s motion for leave to appeal.
Issue(s)
1. Whether a health insurer that pays for medical treatment that should have been covered by an insured’s no-fault automobile insurance carrier can maintain a reimbursement claim against the no-fault insurer.
Holding
1. No, because New York’s No-Fault statutory law and regulatory scheme do not contemplate such reimbursement to a health insurer.
Court’s Reasoning
The court relied on the No-Fault Law (Article 51 of the New York Insurance Law) and its implementing regulations, specifically 11 NYCRR 65-3.11(a). This regulation states that an insurer should pay benefits for any loss directly to the applicant or, upon assignment by the applicant, to providers of health care services. The court found that Aetna was not a provider of health care services and therefore could not receive direct payment from Hanover. The court rejected Aetna’s argument that the assignment from Herrera gave it the right to reimbursement because Aetna was not a health care provider. The court also noted that the No-Fault Law was designed for prompt resolution of claims and that allowing Aetna’s claim would be inconsistent with this purpose. The court deferred to the New York State Insurance Department’s opinion that an HMO such as Aetna could not subrogate its recovery, because it did not fit the definition of “insurer” under the no-fault insurance law scheme.
Practical Implications
This decision confirms that health insurers in New York cannot directly sue no-fault insurers for reimbursement of medical expenses paid. Health insurers should ensure that healthcare providers properly bill the correct insurer initially. Health insurers may have contractual remedies against the health care providers to recover funds if the providers were initially paid by the health insurer by mistake. This case underscores the importance of understanding the specific requirements of the No-Fault Law and the distinctions between different types of insurance providers. The ruling reinforces the established regulatory scheme for no-fault insurance and limits the circumstances under which a health insurer can recover payments made on behalf of an insured. Future cases in this area will likely continue to center on the technical requirements and the proper application of the No-Fault Law, with health insurers unable to seek direct reimbursement from automobile insurers.