Court: Provider doesn't have to hand over records

The ruling in Selective Insurance Company v Hudson East Pain Management, Docket No. A-0433-09T1, makes clear that health care providers can sometimes say no when insurers demand records.

In the case at hand, the court said, the insurer did not even allege a violation of New Jersey's physician self-referral law, known as "the Codey Law" for its sponsor, state Senator Richard J. Codey, but still demanded extensive documents intended to show violations of the law.

"In fact, Selective's complaint does not even allege a violation of the Codey Law, but merely a suspicion of unlawful self-referrals and kickbacks among defendants," the ruling states. "Moreover, Selective has pled no specific facts in support of this possibility, which its sprawling discovery demand is designed to substantiate. Consequently, its complaint makes no claim for substantive remedial relief, such as termination of PIP payments to defendants, enjoining arbitration, or recovery of compensatory damages, but rather only seeks to compel discovery beyond which it would be entitled through the arbitral process."

The ruling goes on to say that "We find this approach not only subverts the established legislative mechanism for obtaining information from health care providers providing medical treatment to insureds, ibid., but also improperly circumvents clearly defined statutory remedies for claimed medical provider misconduct.

"In conclusion, we find that the cooperation clause in Selective's insurance policy does not bind defendant assignees and therefore cannot be the basis for the broad discovery demand at issue here. Rather, plaintiff's entitlement to discovery from defendants is limited by N.J.S.A. 39:6A-13(g), which provides the exclusive mechanism for obtaining information from medical providers in the arbitral process. Outside that process, in an action filed pursuant to the IFPA for substantive remedial relief from claimed violations thereof, plaintiff would be bound by, and subject to, the ordinary rules of discovery governing civil actions in the Law Division, with their usual limitations as to relevance and protections against oppression and harassment. Selective's declaratory judgment action in this instance simply does not qualify as such. Having otherwise offered no sound basis in law in support of its discovery demand, we conclude plaintiff is not entitled to the materials sought."