First Stop P.T., P.C. v GEICO Ins. Co. (2025 NY Slip Op 50947(U))

Recitation, as required by CPLR 2219 (a), of the papers considered in the review of this application:

Upon the foregoing cited papers, the decision on Defendant’s Motion for Summary Judgment is as follows:

Plaintiff, FIRST STOP P.T., P.C. (hereafter “Plaintiff” or “First Stop”), as assignee of Sandy Molina (hereafter “Assignor”), commenced this action against the defendant, GEICO INSURANCE COMPANY (hereinafter, “Defendant”), to recover assigned first-party No-Fault insurance benefits for medical treatment provided to the Assignor pursuant to an automobile insurance policy issued by the Defendant.

Currently before the Court is Defendant’s motion seeking (i) an order pursuant to CPLR §3212 to grant summary judgment to the Defendant on the grounds that Plaintiff failed to provide GEICO with response to written demands for verification requested pursuant to the N.YS. Insurance Department regulation. (11 N.Y.C.R.R. §65-3.5).

The Court finds the following facts relevant to the decision in this matter.

The Defendant received a bill on May 23, 2023 for treatment rendered by the Plaintiff to [*2]the Assignor on April 14, 2023 in the amount of $614.00. On June 6, 2023 the Defendant requested the Plaintiff to appear for an “examination under oath (hereafter referred to as “EUO”) to take place on July 18, 2023, which was eventually rescheduled to August 29, 2023.

In the same letter making the EUO request dated June 6, 2023, the Defendant asked the Plaintiff to produce the following documents no later than seven days prior to the EUO:

1. “Sign in sheets, treatment notes, evaluation and reevaluation reports, and referrals from other healthcare providers to the extent not already provided;

2. Documents evidencing ownership of First Stop at the time of treatment for which you seek payment, by one or more licensed professionals, including but not limited to a copy of the certificate of incorporation, receipts for filing, stock certificates and the stock ledger for the professional corporation;

3. A list of the individuals who provide health care services on behalf of First Stop, licensing documentation for those individuals, and documents identifying the relationship between each individual and First Stop (i.e. W2s, 1099s, and/or K-1s);

4. Documents relating to the income and expenses of First Stop, including but not limited to payroll tax returns, corporate tax returns, financial statements, general ledgers, and bank statements for the past 12 months; and

5. Documents, contracts and agreements (including proofs of payments thereunder) relating to the relationship between First Stop and any entity or individual that (i) leases space and/or equipment to or First Stop or (ii) provides management, marketing, consulting, administrative, mailing, billing or collection services to First Stop.” (June 6, 2023 letter from Anuj Kundnani from GEICO to First Stop PT PV, including any typographical errors.)

Both sides agree that the Plaintiff appeared for the EUO on August 29, 2024. Then on September 1, 2023 the Defendant’s attorney sent a follow-up letter to the Plaintiff demanding the following documentation:

1. “Copies of all leases between First Stop and primary leaseholders, as well as proof of payment made thereunder the time period of January 1, 2023 to present regarding the following locations (14 addresses listed)… If there are no written leases, rent amounts at each location and names of doctors or clinics who serves as primary lease holder for First Stop;

2. A complete list of employees and individuals who provide or have provided services on behalf of First Stop, documents identifying the relationship between each individual and First Stop, including all W-2s, W-4s, W-9s, 1099s, K-a forms; and documentation identifying the compensation for these individuals, including quarterly payroll returns;

3. All licenses and certificates for each and every healthcare professional, including physical therapists, and technicians, who provide or have provided services on behalf of First Stop, including, but not limited to: (i) Mohamed Afify; (ii) Waleed Abdelrohman, (iii) “Dennis”;

4. All Billing agreements and paperwork, and proof of payment thereunder relating to billing (copies of the front and back of checks), between First Stop and (i) RMA Billing and Consulting; and (ii) Billing Experts Inc.;

5. All Functional Capacity Evaluation referral forms from treating providers for patients listed in Exhibit ‘A’;

6. All documentation relating to the employment status for patients listed in exhibit ‘A’; and

7. Copies of any materials disseminated by First Stop on behalf of its practice, including Flyers or business cards.”

The Defendant issued a second letter dated September 18, 2023 requesting verification of the same information requested in the September 1, 2023 letter. Then a follow-up letter was issued requesting the same information again on October 24, 2023.

The Plaintiff responded by a letter from their attorney dated December 28, 2023 in which the attorney raised objections to the requests, and then allegedly provided responses to the requests as follows:

1. In response to Defendant’s verification request #1 in the September 1, 2023 letter the Plaintiff responded:

“Please see Exhibit I and Exhibit 2” (The Court notes, Exhibit I attached to the September 1, 2023 letter included with the motion contains only three (3) leases for 160-59 Rockway Blvd., Jamaica, NY 11434; 1251 Ralph Avenue, Brooklyn NY, 11236; and 146 Empire Blvd., Brooklyn NY 11225, which were attached to the motion. Exhibit 2 contains the front and back of checks from First Stop PT PC made payable to different vendors some of which are labeled as “rent.”)

2. In response to Defendant’s verification request #2 in the September 1, 2023 letter the Plaintiff responded:

“Please see Exhibit 3.” (The Court notes, Exhibit 3, attached to the September 1, 2023 letter included with the motion, contains a document labeled “Payroll Register Report.”)

3. In response to Defendant’s verification request #3 in the September 1, 2023 letter the Plaintiff responded: “Please see Exhibit 4.” (The Court notes, Exhibit 4, attached to the September 1, 2023 letter included with the motion, contains documents labeled as licensing and registration certificates from the NYS Department of Education Department, and an attendance certificate from a medical company.)

4. In response to Defendant’s verification request #4 in the September 1, 2023 letter the Plaintiff responded:

“Please see Exhibit 5 and Exhibit 2.” (The Court notes, Exhibit 5, attached to the September 1, 2023 letter included with the motion, contains marketing material and Exhibit 2 is the cancelled checks referred to above.)

5. In response to Defendant’s verification request #5 in the September 1, 2023 letter the Plaintiff responded:

“Overbroad and irrelevant…” (The Court notes that no Exhibits were attached or referred to in response to this verification request.)

6. In response to Defendant’s verification request #6 in the September 1, 2023 letter the Plaintiff responded:

“Objection: Vague, overbroad and irrelevant….” (The Court notes that no Exhibits were attached or referred to in response to this verification request.)

7. In response to Defendant’s verification request #7 in the September 1, 2023 letter the Plaintiff responded:

“Please see Exhibit 6.” (The Court notes that Exhibit 6 was not included in the documents attached to the motion with the December 28, 2023 letter from the Plaintiff’s attorney.)

By a NF-IO Form dated January 25, 2024, the Defendant denied payment of the bill giving the reason for denial as “Payment is denied. You have failed to comply without verification request of 9/18/2023 within 120 days of such request or provide us with written proof providing reasonable justification for your failure to comply with the verification request.”

The Plaintiff instituted this action by a summons and complaint filed June 20, 2024. The Defendant filed an answer with the Court on July 30, 2024. The Defendant filed this motion for summary judgment on September 11, 2024. The Plaintiff filed opposition to the motion on November 11, 2024, and a reply was filed on December 5, 2024. The parties argued the motion on December 19, 2024 along with motions for summary judgment in actions between the same parties in NYC Civil Court Index Numbers CV-734903-24/RI, CV-734948-24/RI, CV-735025-24/RI. The Court reserved decision on all of these motions.

The claim procedure for payments pursuant to a New York automobile insurance policy (hereafter referred to as a “No-Fault” policy) are set forth in detail by the regulations of the NYS Insurance Department in the New York Codes, Rules and Regulations (NYCRR) Title 11, Chapter III, Subchapter B, Part 65, Subpart 65-3 (hereafter referred to as 11 NYCRR §65-3 et. seq.). Section 65-3.5 sets forth the particulars of the claim procedure. Paragraphs (a) and (b) of that section provide:

“(a) Within 10 business days after receipt of the completed application for motor vehicle no-fault benefits (NYS form NF-2) or other substantially equivalent written notice, the insurer shall forward, to the parties required to complete them, those prescribed the verification forms it will require prior to payment of the initial claim.

(b) Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification form. Requests by an insurer for additional verification need not be made on any prescribed or particular form… 11 NYCRR §65-3.5(a-b).

Pursuant to this section, the “initial verification request” made by the insurance carrier is to direct an applicant, who notifies the carrier of a claim, to file the specifics of the claim on the designated form. The Superintendent provides the forms for the claim (NF-2 and NF-3). (11 NYCRR §65-3.5 [a]) The “subsequent” verification request must be made in 15 business days for any additional information required, however, the response to this request does not have to be on any particular form. (11 NYCRR §65-3.5[b]) The regulations require a “follow-up” verification request if there is no response to the subsequent verification request within thirty days. (11 NYCRR §65-3.6[b]) However, the follow-up request does not toll the time to issue the denial. The claim need not be denied until timely verification is provided. (11 NYCRR §65-3.8)

The regulations do not provide for a fourth or “supplemental” verification request after the response to the “subsequent” verification request is received. While the regulations do not preclude such a request, the time to file any denial of claim is not tolled by such a fourth request. If it did, this verification process would be endless, contrary to the public policy of swiftly addressing the payment of the bills. (LMK Psychological Services, PC, v. State Farm Mut. Auto. Ins. Co., 12 NY3d 217 [2009]).

However, the regulations are clear that the insurance carrier is entitled to receive proper proof of claim made in the initial and subsequent verification requests. (11 NYCRR §65-3.8). Likewise, the Court of Appeals is clear that the insurance carrier is entitled to delay or deny payments to an unlicensed or fraudulently licensed health care provider. (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). The Courts have permitted the insurance carrier to delay payments of invoices to investigate such unlicensed or fraudulent behavior within the time constraints provided by the regulations.

In this instance, the “subsequent” verification request was made by the letter of June 6, 2023 which outlined the items the Defendant sought to be produced at, or seven days before, the EUO. The EUO was held on August 29, 2023 and by the letter dated September 1, 2023 the Defendant’s attorney notified the Plaintiff that two of the items requested in the June 6, 2023 letter were not supplied by the responses in the EUO, namely:

(3) A list of the individuals who provide health care services on behalf of First Stop, licensing documentation for those individuals, and documents identifying the relationship between each individual and First Stop (i.e. W-2s, 1099s, and/or K-1s);

(5) Documents, contracts and agreements (including proofs of payments thereunder) relating to the relationship between First Stop and any entity or individual that (i) leases space and/or equipment to or First Stop or (ii) provides management, marketing, consulting, administrative, mailing, billing or collection services to First Stop.”

(1) “Copies of all leases between First Stop and primary leaseholders. . .”

(2) “All licenses and certificates for each and every healthcare professional, including physical therapists, and technicians, who provide or have provided services on behalf of First Stop, . . . . .”

The Plaintiff submitted a response to the verification request by a letter dated December 28, 2023 that included three leases, copies of checks to vendors, and licensing certificates for the medical providers. The Defendant issued a denial of the claim (NF-10) on January 25, 2024 alleging the Defendant failed to comply with the verification request. The Plaintiff contends that it did comply by its response on December 28, 2023.

The issue raised is whether the Plaintiff’s response to the verification request made by its December 28, 2023 letter with attachments satisfied the demand of the “subsequent” verification request issued June 6, 2023.

In this instance, the subsequent verification request was timely made and issued simultaneously with the request for the EUO. The Defendant’s time to pay or deny the claims was tolled by the EUO scheduling letter. 11 NYCRR §65-3.5(b).

However, that toll does not apply to the time to request the verification. In Burke Physical Therapy, P.C. v State Farm Mutual Automobile Ins. Co. 209 N.Y.S.3d 712 [Second Dept, 2nd, 11th & 13th J.D, 2024]) the Court opined that:

” . . . the regulations do not provide that a toll of the time to pay or deny a claim created by timely additional verification request also grants an insurer additional opportunities to make requests for verification that would otherwise be untimely. (Neptune Med. Care, P.C. v. Ameriprise Auto & Home Ins., 48 Misc 3d 139[A], 2015 N.Y Slip op 51220[U]; see O & M Med. P.C. v Travelers Indem. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50476[U], indeed, an original request for additional verification made more than 30 days after receipt of a prescribed verification form i.e., an NF-3 form or NF-4 form, is a nullity as to that claim, regardless of any toll of the time to pay or deny the claim that might be in effect. ” Burke Physical Therapy, P.C. v State Farm Mutual Auto. Ins. Co., 209 N.Y.S.3d 712, at 714-715, [App. Term, Second Dept., 2nd, 11th, 13th J.D. [2024].)

By the letter of September 1, 2024 the Defendant notified the Plaintiff that some of the verification information that was originally requested in the June 6, 2023 letter was still outstanding. That same September 1, 2023 letter also asked for new verification information that was not previously requested in the June 6, 2023 verification request. The new information requested is made more than 15 business days after the receipt of the prescribed initial verification form and therefore is a nullity. (Burke Physical Therapy, P.C v State Farm Mutual Automobile Ins. Co., 209 N.Y.S.3d 712). The Plaintiff is not required to respond to the request for the new information requested in the September 1, 2023 letter, but was still responsible for those items requested in the Defendant’s June 6, 2023 letter that were not provided at the EUO as identified by Defendant’s September 1, 2023 letter.

The Plaintiff’s December 28, 2023 response provided documents allegedly in response to the June verification request. The regulations only require the response provide all the information under the Plaintiff’s “control or possession or written proof providing reasonable justification for the failure to comply.” (11 NYCRR 65-3.5[o]) The issue of whether the Plaintiff’s verification response satisfies the June 6, 2023 demand is a material issue of fact for trial. If it is determined that the December 28, 2023 letter was responsive to the verification request, then the January 24, 2024 denial would be in error. Therefore, a trial is necessary in this matter.

Accordingly, the Court rules the summary judgment motion is DENIED and the matter is referred to trial on the issue of whether the December 28, 2023 response to the June 6, 2023 subsequent verification request satisfied the request.

This is the decision and order of the Court.