Advanced Neurological Care, P.C. v State Farm Mut. Auto. Ins. Co. (2012 NY Slip Op 52203(U))

District Court of Nassau County, First District

CV-012361-12

Fred J. Hirsh, J.

Defendant State Farm Mutual Automobile Ins. Co., (“State Farm”)moves for summary judgment dismissing this action. Plaintiff Advanced Neurological Care, P.C. (“Advanced”) opposes the motion and cross-moves for summary judgment.

BACKGROUND

This motion raises issues regarding what is an appropriate and sufficient affidavit to establish mailing of verification requests.

Advanced commenced this action seeking to recover first party no-fault benefits for MRI’s it performed on Daisha Sylvester on January 17, 2012 and other treatment provided on January 24, 2012.

Advanced mailed the claims for the services proved on both dates to State Farm at a post office box in Ballston Spa, New York. State Farm acknowledges receipt of the claim relating to the testing provided by Advanced on January 24, 2012 at its Ballston Spa office on February 6, 2012. State Farm acknowledges receipt of the claim for the services provided on January 17, 2012 at its Ballston Spa office on February 9, 2012.

Precisely what happened to the claim after it was received by State Farm in Ballston Spa is not clear.

Laura Brooks (“Brooks”), a State Farm Claims Representative sent a verification request to Advanced dated February 24, 2012 seeking a letter of medical necessity for the MRI. This verification request relates to the MRIs performed on Sylvester by Advanced on January 24, 2012. The letter does not indicate which State Farm office at which it was prepared and mailed. The return address on the letter is “State Farm Claims, P.O. Box 106107, Atlanta, Georgia 30348-6107.”

Brooks sent a follow-up verification request dated March 1, 2012 again seeking a letter of medical necessity for the MRIs. This request has the aforementioned Atlanta, Georgia return address.

State Farm sent a second verification request to Advanced dated March 1, 2012 over the signature of Jessalie Smith (“Smith”), Claim Processor advising Advanced the processing of the claim was being delayed because State Farm had not yet received an [*2]Application for No-Fault Benefits from Sylvester and requesting Advanced provide State Farm with handwritten/typed office notes. This verification request relates to the treatment provided to Sylvester by Advanced on January 17, 2012. The record does not reflect which State Farm office in which Jessalie Smith works. The return address on this letter is “State Farm Claims, P. O. Box 106017, Atlanta, Georgia 30348-6107”.

Smith sent a “Second Request” to Advanced dated April 9, 2012 again requesting Advanced’s handwritten/typed office notes and advising Advanced the it had not yet received an Application for No-Fault Benefits from the Sylvester. This letter also reflects the Atlanta, Georgia address.

The affidavit made in support of the motion attesting to the practices and procedures of State Farm regarding the preparation and mailing of the verification requests is made by Monique Rivas (“Rivas”). Rivas avers she is employed by State Farm as a No-Fault Claims Representative. Rivas states this claim has been assigned to State Farm’s Lakeville, New York office.^[FN1] Rivas affidavit does not state which State Farm office she worked at when the claim was received or the verification requests were prepared or mailed. Rivas affidavit does not state which State Farm office prepared and mailed the verification requests.

Rivas states the February 24, 2012 verification request would have been mailed on that day. Rivas avers since State Farm did not receive a response to its February 24, 2012 letter, Brooks issued a second request for this information six (6) days later by Brooks, March 1, 2012 letter.^[FN2]

Rivas avers that Smith’s March 1, 2012 verification request would have been mailed that date. Rivas avers since Advanced did not respond to Smith’s March 1, 2012 verification request, Smith issued her follow up letter of April 9, 2012. Rivas avers the April 9, 2012 letter would have been mailed that day.

Rivas does not indicate in which State Farm office Brooks or Smith work or the basis of her familiarity with the practices and procedures of that office for preparing, addressing and mailing verification requests. In fact, Rivas affidavit does not truly discuss State Farms procedures for preparing, addressing and/or mailing verification requests. Rivas affidavit primarily address State Farm’s practices and procedures used to prepare, address and mail denials.

State Farm supplements the Rivas affidavit with an affidavit of George Perry, a Claims Support Supervisor in State Farm’s Ballston Spa office. His affidavit also [*3]primarily addresses State Farm’s procedures for preparing, addressing and mailing Denials of Claims, the NF-10. His affidavit states the same procedures used to prepare, issue, address and mail an NF-10 is used for all other correspondence issued by State Farm in connection with no-fault claims including verification requests almost as an afterthought,

Perry’s affidavit does not state in which State Farm office Brooks and/or Smith work, where the verification requests they issued prepared, addressed and/or mailed and if the procedures in that office are the same as those described by Perry for documents prepared, addressed and/or mailed from State Farm’s Ballston Spa office.

Advanced cross-moves for summary judgment on the grounds State Farm did not pay or deny the claim within 30 days of submission. Advanced submits affidavits from Enrique Escala attesting to the mailing of the claim for $1758.38 on February 1, 2012. In addition to submitting the No-Fault Claim Form, Advanced also sent a copy of the MRI reports for the MRIs of the left shoulder and cervical spine and the required assignment.

Advanced submits an affidavit from Kerin Hausknecht, M.D. establishing the claims forms and other documents submitted in connection with the claim are records and documents prepared in the regular course of Advanced’s business. Dr. Hausknecht asserts the claims were neither paid nor denied. Payments of the claims is now overdue.

In opposition to defendant’s motion for summary judgment, plaintiff submits an affidavit from Maureen Cronin. Her affidavit states Advanced’s claim was submitted to State Farm by Israel, Israel & Purdy, LLP, plaintiff’s attorney. The claim is accompanied by a letter advising State Farm any requests for verification including requests for medical records should be should be forwarded to Israel, Israel & Purdy, LLP who will make arrangements for providing the requested verification. Cronin’s affidavit describes her office practices and procedures for processing and responding to verification requests received in connection with no-fault claims. She states a review of the office file establishes Israel, Israel & Purdy, LLP never received the verification requests alleged to have been mailed by State Farm.

State Farm did not pay or deny the Advanced claims. State Farm moves for summary judgment on the grounds the claims are premature because its time to pay or deny the claims has not yet begun to run because Advanced has not responded to the verification requests.

Advanced moves for summary judgment on the grounds it timely submitted the claim and the claim was not paid or denied within 30 days of submission.

DISCUSSION

An insurer has 15 business days form receipt of a claim to request additional verification of a claim. 11 NYCRR 65-3.5(b). If the material or documentation sought by way of verification is not provided to the insurer within 30 calendar days of the original request, “…the insurer, shall, within 10 calendar days, follow up with the party from whom verification was requested.” 11 NYCRR 65-3.6(b).

An insurer’s time to pay or deny a claim it tolled or extended until it receives all timely and properly requested verification. Hospital for Joint Disease v. New York Central Mutual Fire Ins. Co., 44 AD3d 903 (2nd Dept. 2007); and 11 NYCRR 65-3.5(c); [*4]and 11 NYCRR 65-3.8(a)(1). An insurer does not have to pay or deny a claim until it receives all timely requested verification. St. Barnabas Hosp. v. American Transit Ins. Co., 57 AD3d 517 (2nd Dept. 2008); Mount Sinai Hosp. v. Chubb Group of Insurance Companies, 43 AD3d 899 (2nd Dept. 2007); and New York & Presbyterian Hosp. v. Progressive Cas. Ins. Co., 5 AD3d 569 (2nd Dept. 2004): and 11 NYCRR 65-3.5(c).

Even though State Farm did not comply with the provisions relating to follow-up verification in regard to the verification requests prepared by Laura Brooks, Advanced failure to respond to the original verification request would ordinarily result in the court dismissing the action as premature. St. Vincent’s Medical Care, P.C. v. Country Wide Insurance Co., 80 AD3d 599 (2nd Dept. 2011); and Infinity Health Products, Ltd. v Eveready Ins. Co., 67 AD3d 862 (2nd Dept. 2009).

In order to obtain summary judgment, the insurer must establish timely mailing of a properly addressed verification request. Timely mailing can be established by submitting an affidavit or affidavits from the claims representatives and insurance company employees who actually prepared and mailed the verification request. South Nassau Orthopedic Surgery and Sports Medicine, P.C. v. Auto One Ins. Co., 32 Misc 3d 129(A) (App.Term 2nd, 11th & 13th Jud. Dists.); Friendly Physicians, P.C. v. Geico Ins. Co., 29 Misc 3d 128(A) (App.Term 2nd, 11th & 13th Jud. Dists. 2010); and Points of Health Acupuncture, P.C. v. Geico Ins. Co., 25 Misc 3d 140(A) (App.Term 2nd , 11th & 13th Jud. Dists. 2009). In this case, State Farm has not submitted an affidavit from either Laura Brooks or Jessalie Smith attesting to the preparation of the verification requests or affidavits from anyone attesting to the actual mailing of those requests.

Timely mailing can also be established by an affidavit from an employee with knowledge of the party’s standard office practices and procedures designed to ensure the items were properly addressed and timely mailed. St. Vincent’s Hosp. of Richmond v. Government Empls. Ins. Co., 50 AD3d 1123, 1124 (2nd Dept. 2008).

While the Appellate Term has frequently and repeatedly cited St. Vincent’s, there is little in the Appellate Term’s decisions indicating precisely who can or should be making the affidavit and what information must be contained in the affidavit establishing the verification request has been timely prepared. properly addressed and timely mailed. In almost all instances, the decisions of the Appellate Term on the issue of mailing simply state the affidavit attesting to the insurer’s practices and procedures was sufficient to demonstrate the verification request or denial was properly addressed and timely mailed. See, e.g. Khodadadi v. Clarendon Ins. Co., 37 Misc 3d 130(A) (App.Term 9th & 10th Jud. Dists. 2012); Brownsville Advanced Medical, P.C. v. Kemper Independence Ins. Co., 36 Misc 3d 146(A) (App.Term 9th & 10th Jud. Dists. 2012); All County, LLC v. Unitrin Advantage Ins. Co., 31 Misc 3d 134(A) (App.Term 9th & 10th Jud Dists. 2011); Crescent Radiology, PLLC v. American Transit Ins. Co., 31 Misc 3d 134(A) (App. Term 9th & 10th Jud. Dists. 2011); Elmont Open MRI & Diagnostic Radiology, P.C. v. Travelers Indemnity Co., 30 Misc 3d 126(A), (App. Term 9th & 10th Jud. Dists. 2010).

If the person making the affidavit attesting to the timely mailing of the verification request is not the person who actually prepared, addressed and mailed the verification request, that person attesting to the insurer’s mailing practices and procedures must establish a familiarity with the practices and procedures used in the office in which the [*5]verification notice was generated, the standard office practices and procedures used for mailing the notice from the office at which it was generated including how the mail was picked up during the work day, when the mail would be delivered to or picked up by the Postal Service and what steps would be taken if the letter was returned as undeliverable. Lenox Hill Radiology, P.C. v. Tri-State Consumer Insurance Co., 31 Misc 3d 13 (App.Term 1st Dept. 2010); See also, Orthotech Express Corp. v. MVAIC, 37 Misc 3d 128(A) (App.Term 1st Dept. 2012).

In this case, neither the Rivas nor Perry affidavits establish at which State Farm office the verification requests were generate or mailed. Neither Rivas nor Perry aver to having personal knowledge regarding the preparation, addressing or mailing of these verification requests. Rivas and Perry work in different offices State Farm offices several hundred miles apart. Neither of their affidavits explain why the verification requests have an Atlanta, Georgia return address. Neither appear to work for State Farm in the office that prepared the verification notices or are personally familiar with the practices and procedures in place in the office at which these notices were mailed for ensuring the notices were properly addressed and properly mailed. In the absence of proof establish a familiarity with the practices and procedures employed by the office generating and mailing the verification request, summary judgment the affidavits are insufficient to establish “…designed to ensure that items were properly addressed and mailed (citations omitted)”. St. Vincent’s Hosp. of Richmond v. Government Empls. Insurance Co., supra at 1124; and Orthotech Express Corp. v. MVAIC, supra.

If a claimant fails to respond to the original verification request within 30 calendar days after the original request, the insurer must send out a follow up request within10 calendar days. 11 NYCRR 65-3.6(b). The follow up request must advise the claimant and the claimant’s attorney of the reasons why payment of the claim is being delayed by identifying the in writing the missing verification. Id. State Farm knew the Advanced was represented by an attorney. Brooks follow up letter does not indicate is was sent to Advanced’s attorney.

Smith’s follow up letter indicates a copy was mailed to Israel, Israel & Purdy.

The Cronin affidavit submitted by Advanced raises questions of fact regarding the mailing of this follow up verification request. Cronin’s affidavit establishes her offices practices and procedures for receiving, processing and responding to verification requests. She further states that based upon her review of the office records, her office never received Smith’s follow up verification request.

Mere denial of receipt of a verification request is insufficient to overcome the presumption of mailing. Darlington Medical Diagnostics, P.C. v. Praetorian Ins. Co., 32 Misc 3d 142(A) (App.Term 1st Dept. 2011); and Pomona Medical Diagnostics, P.C. v. Travelers Ins. Co., 31 Misc 3d 127(A) (App.Term 2nd, 11th & 13th Jud. Dists. 2011). However, if an insurer can establish through an affidavit of any employee attesting to the insurer’s practices and procedures for processing and timely mailing verification requests or denials, a provider should be able to establish non-receipt of a verification request by providing an affidavit detailing the providers practices and procedures for receiving, acknowledging receipt and responding to verification requests. See, St. Vincent’s Hosp. of Richmond v. Government Empls. Ins. Co., supra.

Brooks was advised by the letter transmitting the claim verification requests [*6]should be sent to Israel, Israel & Purdy. Despite being so advised, Brooks and State Farm did not send the original verification request to Israel, Israel & Purdy. Brooks March 1, 2012 follow-up verification request is not addressed to or copied to Israel, Israel & Purdy. Therefore, questions of fact exist as to whether the verification requests were properly addressed.

Smith also was or should have known verification requests were to be mailed to Israel, Israel & Purdy in addition to the provider. Despite this, the original verification request was sent only to Advanced. While Smith’s follow-up verification request was mailed to the provider and copied to Israel, Israel & Purdy, Cronin’s affidavit detailing Israel, Israel & Purdy’s practices and procedures for receiving, logging-in and responding to verification requests raises questions of fact regarding whether the follow-up verification request was properly addressed and timely mailed to the parties required by the regulations. See, 11 NYCRR 65-3.6(b).

The court also notes State Farm offers no explanation for why the claim was being handled by two different claims representatives in the same office or why the first verification request did not advise Advanced Sylvester had not filed an application for no-fault benefits while the later verification request does.

Since questions of fact exist regarding whether the verification requests and follow-up verification requests were properly addressed and timely mailed, defendant’s motion for summary judgment is denied.

Plaintiff has established a prima facie entitlement to judgment as a matter of law. The affidavits submitted by plaintiff coupled with State Farms acknowledgment of the receipt of claims within 45 days of the date the service were provided are sufficient to establish timely submissions of the claim. A.B. Medical Services PLLC v. Utica Mut. Ins. Co., 10 Misc 3d 50 (App.Term 2nd & 11th Jud. Dists. 2005); and 11 NYCRR 65-1.1. The Hausknecht affidavit establishes the documents submitted in support of the claim were business records of Advanced. Art of Healing Medicine, P.C. v. Travelers Home & Mar. Ins. Co., 55 AD3d 644 (2nd Dept. 2008); Bath Medical Supply, Inc. v. Utica Mutual Ins. Co., 23 Misc 3d 141(A) (App. Term, 2nd, 11th and 13th Jud. Dists. 2009); and Bajaj v. General Assurance Co., 18 Misc 3d 25 (App.Term 2nd & 11th Jud. Dists. 2007). The claims were not paid or denied within 30 days of receipt. 11 NYCRR 65-3.8(a).

Since questions of fact exist regarding whether State Farm timely mailed, properly addressed verification requests and follow-up verification requests, the court cannot grant plaintiff’s cross-motion for summary judgment, As discussed above, if the court were to ultimately find the verification requests were properly addressed and timely mailed, the action would be dismissed as premature.

For the foregoing reasons, defendant’s motion and plaintiff’s cross-motion are denied.

SO ORDERED:

Hon. Fred J. Hirsh

District Court Judge [*7]

Dated: November 26, 2012

cc:Israel, Israel & Purdy, LLP

Robert T. Lau & Associates

Footnotes

Footnote 1:Lakeville, New York is located in Livingston County. The court may take judicial notice of location of communities. Prince, Richardson On Evidence 11th Ed. §2-204(a) (Farrell 1995). Even though Lakeville, New York is located in Livingston County, Rivas affidavit is notarized by a notary qualified Nassau County.

Footnote 2:February 24, 2012 was a Friday. If the letter was mailed on Friday, it is unlikely the letter was received by Advanced until the next business day, Monday February 27th. Even if Advanced had received and mailed out a response, it is unlikely the response would have been received and processed by State Farm by the time it sent out the follow-up, second request on March 1, 2012.