No-Fault Decisions, March 2005

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50452(U) Insurer prevailed

Amaze Med. Supply Inc. v Travelers Prop. Cas. Corp.

An insurer need not seek further verification when a peer review finds no substantiation of equipment's medical necessity in documents obtained for review. The provider established a prima facie claim for medical supplies, but the insurer timely denied payment based on a peer review. The report showed that pertinent physician reports and other documentation had been requested and provided. The reviewer concluded that those materials did not substantiate the prescribed equipment's necessity in addition to treatment already provided. Applying 11 NYCRR 65.15 (d) and (e), the Appellate Term, Second Department, found no further verification obligation and a triable issue of medical necessity. It affirmed denial of the provider's summary judgment motion.

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50432(U) Insurer prevailed

A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co.

The providers failed to establish prima facie entitlement to partial summary judgment because they omitted the necessary claim forms. In this action for assigned no-fault benefits, a prima facie showing required proof that the providers submitted claims stating the fact and amount of the loss and that payment was overdue under Insurance Law § 5106 (a). Without the claim forms in their motion papers, the providers did not make that showing. The Appellate Term, Second Department, affirmed the denial of partial summary judgment without prejudice to renewal upon proper papers.

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50450(U) Split result

King's Med. Supply Inc. v Kemper Auto & Home Ins. Co.

The insurer's failure to follow up a missed post-claim IME invalidated its denial based on nonappearance. After the assignor missed the first IME, the insurer denied one claim without sending the required second request within 10 days under 11 NYCRR 65.15 (e) (2). It thereby abandoned verification, and its denial did not avoid preclusion. For a separate claim that was neither paid nor denied, proof of mailing two verification requests raised a triable issue concerning timely mailing. The Appellate Term, Second Department, modified the order, insofar as appealed from, to grant the provider partial summary judgment on the IME-denied claim and otherwise affirmed. It remanded for interest and attorney's fees under Insurance Law § 5106 (a) and further proceedings on the remaining claim.

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50429(U) Provider prevailed

Careplus Med. Supply Inc. v General Assur. Co.

The insurer failed to prove mailing of preclaim IME notices to the assignors and was precluded from asserting nonattendance on one late-denied claim. The provider established submission of medical-supply claims and overdue payment. Under 11 NYCRR 65-3.8 (c), an untimely denial precluded the IME defense for one claim. For the timely denied claims, scheduling supervisors' affidavits neither established actual mailing through personal knowledge nor described sufficiently detailed office mailing procedures. Receipts showing mailing to certain assignors' attorneys did not establish mailing to the assignors themselves. The Appellate Term, Second Department, reversed, granted the provider summary judgment on all claims, and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a).

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50435(U) Provider prevailed

Ocean Diagnostic Imaging P.C. v General Assur. Co.

The insurer failed to prove mailing of IME notices, and vendor affidavits first submitted with its appellate brief were outside the record. The provider sought no-fault benefits for services to five assignors, and the insurer timely denied each claim for IME nonattendance. Counsel's affirmation and a team leader's affidavit did not establish personal knowledge of actual mailing or describe office procedures ensuring proper addressing and mailing. Vendor affidavits potentially supplying that proof were not submitted below and could not be considered on appeal. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment, and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a).

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50451(U) Provider prevailed

King's Med. Supply Inc. v Allstate Ins. Co.

The insurer's failure to send a timely follow-up verification request ended the toll and precluded its verification defense. The provider established submission of claims and overdue payment under Insurance Law § 5106 (a). One claim was not paid or denied within 30 days, precluding the insurer's defenses. For the remaining claims, the insurer requested initial narrative reports but failed to follow up timely under 11 NYCRR 65.15 (d) (2). Its denials for missing verification were premature because it had not exhausted the verification procedures. The lapsed toll also precluded defenses first raised in opposition to summary judgment. The Appellate Term, Second Department, reversed, granted the provider's summary judgment motion, and remanded for statutory interest and attorney's fees.

Appellate Term, Second Department Mar 31, 2005 2005 NY Slip Op 50453(U) Provider prevailed

A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co.

An unsworn peer review report did not raise a triable issue against the acupuncture provider's prima facie showing. The provider established that it submitted claims stating the fact and amount of the loss and that payment was overdue under Insurance Law § 5106 (a). The insurer's opposing peer review report was inadmissible because it was unsworn. The Appellate Term, Second Department, reversed the order, insofar as appealed from by the acupuncture provider, granted its summary judgment motion, and remanded for statutory interest and attorney's fees. The other providers' appeals were dismissed because they raised no issue; the parties' remaining contentions were not reached.

Appellate Term, Second Department Mar 22, 2005 2005 NY Slip Op 25112 Split result

SZ Med., P.C. v Lancer Ins. Co.

An insurer's priority-of-payment dispute with another insurer must be arbitrated and is no defense to a provider's no-fault action. The Appellate Term, Second Department, affirmed denial of both sides' summary judgment motions. The rental vehicle's insurer, first notified of the claims, remained responsible under 11 NYCRR 65-3.12 (b), despite asserting that the renter's personal insurer was primary. Insurance Law § 5105 (b) and 11 NYCRR 65-4.11 (a) (6) required interinsurer arbitration, leaving the court without jurisdiction to decide priority; the court expressly declined to adjudicate that issue. The providers also failed to establish their prima facie case because the billing manager's affidavit referred to a singular unidentified plaintiff despite three distinct providers, leaving unclear whose billing practices it supported.

Appellate Term, Second Department Mar 2, 2005 2005 NY Slip Op 50254(U) Provider prevailed

Contemp. Med. Diag. & Treatment, P.C. v Government Employees Ins. Co.

The insurer's conclusory office-practice affidavit failed to prove timely mailing of verification requests. The provider established claim submission and overdue payment under Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3). Although additional verification may be requested by letter rather than on a prescribed form, the claims examiner's statement that documents were mailed when generated did not establish actual mailing or procedures ensuring proper addressing and mailing. The affidavit also failed to identify responsibility for compliance or knowledge that procedures were followed. The 30-day period was therefore not tolled. The Appellate Term, Second Department, affirmed the judgment awarding the provider summary judgment, statutory interest, and attorney's fees on a ground different from the Civil Court's.

Appellate Term, Second Department Mar 2, 2005 2005 NY Slip Op 50256(U) Provider prevailed

Fair Price Med. Supply Corp. v General Assur. Co.

The insurer's conclusory proof of IME requests and nonappearance failed to raise a triable issue against the provider's claim. The provider established submission of its medical-supply claim, the fact and amount of loss, and overdue payment under Insurance Law § 5106 (a). The insurer's allegations that requests had been sent and the assignor failed to attend came from someone without personal knowledge. The insurer also failed to describe standard office procedures ensuring proper addressing and mailing. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment, and remanded for statutory interest and attorney's fees.

Appellate Term, Second Department Mar 2, 2005 2005 NY Slip Op 50255(U) Split result

A.B. Med. Servs. PLLC v Country-Wide Ins. Co.

An investigation-delay letter identifying no verification sought or source does not toll the 30-day claim determination period. The providers established entitlement on 55 of 58 claims under Insurance Law § 5106 (a). The insurer's delay letters did not toll the period under 11 NYCRR 65-3.8 (c); fraud allegations were unpleaded and unsupported, and medical-necessity denials lacked factual and medical support. For three claims, one per provider, the providers failed to allege receipt dates or demonstrate compliance with verification and follow-up requests. The Appellate Term, Second Department, modified the order, insofar as appealed from, to grant partial summary judgment on 55 claims and otherwise affirmed, remanding for statutory interest and attorney's fees on those claims and further proceedings on the remaining three.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 50238(U) Insurer prevailed

Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp.

MVAIC's motion to sever claims arising from three separate accidents was granted because few common issues were likely. The provider sued as assignee of three injured persons, asserting six causes of action. MVAIC sought three separate actions under CPLR 603. Applying Radiology Resource Network, PC v Fireman's Fund Ins. Co., the Appellate Term, Second Department, reversed and granted severance. The particular facts of each claim were unlikely to present common questions even if the policies were identical, and MVAIC's answer disputed the necessity and reasonableness of the services and the sufficiency of the submitted no-fault forms.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 51111(U) Insurer prevailed

A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co.

A billing provider cannot recover assigned no-fault benefits for services performed by an independent contractor rather than by it or its employees. The claim forms identified a separately licensed physician as the treating provider and independent contractor. Under former 11 NYCRR 65.15 (j) (1), now 11 NYCRR 65-3.11 (a), direct payment requires an assignment from the applicant to the provider of services, and the regulations do not authorize provider-to-provider assignments. The Appellate Term, Second Department, modified the order, insofar as appealed from by the medical provider, by searching the record and awarding the insurer summary judgment dismissing that provider's complaint; as modified, the order was affirmed. The chiropractic provider's appeal was dismissed after its claims were withdrawn and no issue remained.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 25336 Insurer prevailed

Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co.

The insurer's investigator affidavit raised a triable coverage issue based on a founded belief that the collision furthered insurance fraud. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the provider's summary judgment motion. Although the provider established its prima facie case and an untimely denial, the fraud-based coverage defense remained available. The assignor's EUO nonappearance furnished no defense: the claim was submitted two days before 11 NYCRR 65-1.1 (d) took effect, and the prior endorsement under 11 NYCRR 65.12 (e) authorized no EUO, so the requests did not toll the 30-day period. Even for later claims, an insurer had to prove issuance of the revised endorsement before relying on EUO noncompliance; the governing claim rules depended on the endorsement in effect.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 50241(U) Insurer prevailed

Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp.

MVAIC's motion to sever the provider's four remaining no-fault causes of action into two actions under CPLR 603 was granted on appeal. The decision described claims arising from nine separate accidents and stated that six causes of action had been discontinued by stipulation. The Appellate Term, Second Department, reversed for the reasons stated in the companion appeal decided the same day, No. 2004-1019 Q C.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 50240(U) Insurer prevailed

Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp.

MVAIC's motion to sever the provider's eight remaining no-fault causes of action into four actions under CPLR 603 was granted on appeal. Two causes of action had been discontinued by stipulation in the provider's action involving five assignors and five separate accidents. The Appellate Term, Second Department, reversed for the reasons stated in the companion appeal decided the same day, No. 2004-1019 Q C.

Appellate Term, Second Department Mar 1, 2005 2005 NY Slip Op 50239(U) Insurer prevailed

Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp.

MVAIC's motion to sever the provider's no-fault causes of action under CPLR 603 was granted on appeal. The provider asserted ten causes of action as assignee of five injured persons whose claims arose from five separate accidents. The Appellate Term, Second Department, reversed for the reasons stated in the companion appeal decided the same day, No. 2004-1019 Q C.

Trial court, Second Department Mar 31, 2005 2005 NY Slip Op 50581(U) Provider prevailed

T.S. Med. P.C. v Country Wide Ins. Co.

A provider need not prove medical necessity as part of its prima facie claim; the insurer bears the burden of proving its absence. The arbitrator denied benefits despite finding one denial late and subsequent denials improperly based on a nurse's audit, and the master arbitrator affirmed. The Civil Court, Kings County, granted the provider's CPLR article 75 petition and vacated the master arbitration award. Although the provider's choice of arbitration warranted narrow review, the award lacked a rational basis because it placed the medical-necessity burden on the provider. Under 11 NYCRR 65.17 (a) (4), the master arbitrator could overturn an award incorrect as a matter of law.

Trial court, First Department Mar 31, 2005 2005 NY Slip Op 50925(U)

National Union Fire Ins. (AIG) v Farmers New Century Ins. Co., Inc.

Insurance Law § 5105 does not compel arbitration of a no-fault insurer's reimbursement claim against a workers' compensation carrier. The no-fault insurer sought repayment of benefits paid while the compensation carrier contested whether the injuries were work-related. Following American Mut. Ins. Co. v Merchants Ins. Group, the Supreme Court, New York County, found this controversy outside the statute's mandatory arbitration provisions. There was also no evidence that either vehicle satisfied the statutory weight or for-hire condition for loss transfer. The parties had not agreed to arbitrate. The court granted the compensation carrier's petition to permanently stay arbitration and denied the no-fault insurer's dismissal cross motion, expressly leaving entitlement to reimbursement undecided.

Trial court, Second Department Mar 29, 2005 2005 NY Slip Op 50416(U) Insurer prevailed

Doshi Diagnostic Imaging Servs. v Progressive Ins. Co.

The provider's unsigned assignment left verification outstanding, so its action for no-fault benefits was premature. The insurer requested an assignment signed by the provider, but the replacement NF-AOB form contained only a handwritten statement purporting to act on another person's behalf, without a signature or identification of the person acting. Applying 11 NYCRR 65-3.11 (b) (2), the District Court, Nassau County, found that the form was not properly executed. The provider therefore had not complied with the verification request under 11 NYCRR 65.15 (g) (1), and the time to pay or deny had not begun. The court granted the insurer's summary judgment motion, denied the provider's cross motion, and dismissed the complaint.

Trial court, Second Department Mar 24, 2005 2005 NY Slip Op 25113 Insurer prevailed

Dilon Med. Supply Corp. v Travelers Ins. Co.

A medical supplier must respond to a proper request for a letter of medical necessity even if it lacks clinical expertise. The Civil Court, Kings County, entered judgment for the insurer and dismissed the complaint as premature after a trial on stipulated facts. The supplier ignored timely verification and follow-up requests, contending that the insurer should have contacted the treating provider. Under 11 NYCRR 65-3.5 (b) and (c), additional verification could be requested from the assignee, which stood in the assignor's shoes and owed cooperation under 11 NYCRR 65-1.1 (d). Because verification remained outstanding, the payment-or-denial period had not begun under 11 NYCRR 65-3.8 (a) (1). The court expressly left undecided what minimum response would have sufficed.

Trial court, Second Department Mar 23, 2005 2005 NY Slip Op 50513(U) Provider prevailed

JSI Expert Serv. v Liberty Mut. Ins. Co.

⚠ Not followed by V.S. Med. Servs., P.C. v Allstate Ins. Co. (2006 NY Slip Op 26000)

An insurer's fraud defense, including a staged-accident defense, requires clear and convincing evidence at trial. The Civil Court, Kings County, entered judgment for the provider on both claims, with statutory attorney fees and interest. It excluded unsigned EUO transcripts as hearsay, finding CPLR 3116 inapplicable to prelitigation EUOs, and barred an adverse inference from nonappearance because trial subpoenas were improperly served. Reversing an earlier evidentiary ruling, it struck the investigator's account of the assignors' EUO statements because those declarations were inadmissible against the assignee. Even if credited, the minor inconsistencies and treatment choices did not clearly and convincingly establish fraud, and the investigator did not connect the training and experience described to the conclusions drawn.

Trial court, Second Department Mar 23, 2005 2005 NY Slip Op 50368(U) Insurer prevailed

Advanced Med. Care, PLLC v Travelers Prop. Cas.

A provider that elects arbitration cannot litigate the same no-fault claim after an arbitrator dismisses it without prejudice for an invalid assignment. The provider submitted its claim to arbitration, received a denial without prejudice based on an invalid assignment, and then brought a plenary action rather than resubmitting the claim. The Civil Court, Kings County, granted the insurer summary judgment. Applying Roggio v Nationwide Mut. Ins. Co. and Rockaway Boulevard Medical P.C. v Progressive Insurance, the court rejected the argument that dismissal restored a fresh choice of forum. Election of arbitration bound the provider as to that claim and subsequent no-fault claims arising from the same accident, regardless of the arbitration's result.

Trial court, Second Department Mar 22, 2005 2005 NY Slip Op 50354(U) Insurer prevailed

First Choice Acupuncture, P.C. v Progressive Ins. Co.

The provider's action was premature because it commenced suit before responding to the insurer's verification requests. The District Court, Nassau County, reconsidered its prior denial of the insurer's summary judgment motion on an application under CPLR 2221. The prior order had directed the provider to answer verification demands within 30 days. After serving responses on the insurer's attorney, the provider sought summary judgment based on an allegedly untimely denial. Following Psych & Massage Therapy Association v Progressive Cas. Ins. Co., the court found that outstanding verification extended the time to pay or deny under 11 NYCRR 65.15 (h). It vacated its prior order, granted the insurer summary judgment, dismissed the action, and denied the provider's cross motion.

Trial court, Second Department Mar 21, 2005 2005 NY Slip Op 25110 Provider prevailed

Sunnyside Plus, Inc. v Allstate Ins. Co.

The insurer's peer reviewer was precluded from opining on medical necessity because the underlying reports lacked an evidentiary foundation. The Civil Court, Queens County, entered judgment for the provider after a bench trial, with interest and attorney's fees under 11 NYCRR 65.15 and 65.17. Medical necessity under Insurance Law § 5102 (a) (1) was the sole contested issue. The reviewer neither examined the assignor nor viewed the MRI, and the treating physician's and radiologist's reports were not in evidence. Following Hambsch v New York City Tr. Auth., the court found no proof of the reports' reliability to support the professional-reliability exception. The insurer also failed to offer the MRI film under CPLR 4532-a and failed to prove its defense by a fair preponderance.

Trial court, Second Department Mar 21, 2005 2005 NY Slip Op 50348(U) Provider prevailed

Westchester Med. Ctr. v Progressive Cas. Ins. Co.

The insurer failed to prove mailing of verification requests and waived its assignment and medical-necessity objections. The hospital established that the insurer received its billing forms and neither paid nor denied the claim within 30 days, satisfying Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g). The insurer's affidavit stated only that its office mailed a verification request, without personal knowledge, mailing details, or office procedures. It therefore did not establish a toll. Although the assignment lacked the assignor's signature and required revocation language, those defects were waived by failure to object timely; medical necessity was likewise not raised in a timely denial. The District Court, Nassau County, granted the hospital summary judgment with statutory interest and attorney's fees.

Trial court, Second Department Mar 15, 2005 2005 NY Slip Op 25096 Split result

Socrates Psychological Servs., P.C. v Progressive Cas. Ins. Co.

No-fault depositions are limited to timely, specific NF-10 defenses, apart from background questions and staged accident or coverage exceptions. Applying CPLR article 31, the Civil Court, Queens County, granted the insurer's motion only to the extent of directing discovery, including depositions of the provider's managerial employee and treating psychologist. It denied sanctions because the insurer had not supplied disclosure required before depositions. The provider's summary judgment cross motion was denied because it submitted an incomplete NF-10, lacked proof of mailing its claim, and failed to explain the relevant dates. Both sides were directed to exchange disclosure and produce witnesses; the court noted that whether claims for services never rendered escape waiver remained unresolved by the Court of Appeals.

Trial court, Second Department Mar 10, 2005 2005 NY Slip Op 25091 Insurer prevailed

Vista Surgical Supplies, Inc. v Utica Mut. Ins. Co.

The provider's boilerplate affidavit failed to establish entitlement to summary judgment because it supplied no case-specific facts. The Civil Court, Kings County, denied the provider's motion to recover no-fault benefits for medical supplies. Under CPLR 3212 (b), the supporting affidavit had to set forth material facts based on personal knowledge. The officer's affidavit identified no service dates, supplies, mailing dates, or outstanding amount, and described an assignment from an unspecified assignor. Instead, it adopted the attorney's affirmation, which lacked probative value because the attorney had no personal knowledge. Adopting that affirmation did not cure the affidavit's deficiencies or establish the provider's prima facie case.

Trial court, Second Department Mar 9, 2005 2005 NY Slip Op 25089 Insurer prevailed

A.B. Med. Servs., PLLC v State Farm Mut. Auto. Ins. Co.

⚠ Not followed by JSI Expert Serv. v Liberty Mut. Ins. Co. (2005 NY Slip Op 50513(U))

A provider retains the burden of proving coverage after an insurer produces admissible evidence of a founded belief that a collision was staged. The Civil Court, Kings County, awarded judgment to the insurer after trial and dismissed all claims in the consolidated action. Applying Central Gen. Hosp. v Chubb Group of Ins. Cos., it found the admissible circumstantial evidence sufficient, including short coverage periods surrounding two collisions, older vehicles, and relationships linking participants. Certain EUO transcripts and insurance-claim histories lacked an admissible foundation and were excluded. The providers offered no rebuttal evidence, and their unexplained failure to call assignors supported a permissive adverse inference. The court concluded that the providers failed to prove coverage.

Trial court, Second Department Mar 7, 2005 2005 NY Slip Op 50926(U) Provider prevailed

Matter of Government Empls. Ins. Co. v Batista

The insurer was denied a stay of UM arbitration after waiting 10 months from notice of the UM claim to request discovery. On reargument, the insurer contended that the claimants' initial notice concerned only no-fault benefits and that a letter reserved its discovery rights. The notice, however, marked reasons concerning uninsured coverage, and the insurer's response expressly addressed the validity of a UM claim. That response stated that discovery might be required after coverage was confirmed, but no discovery was requested until after the arbitration demand. The Supreme Court, Queens County, granted reargument and adhered to its determination denying a permanent or temporary stay pending discovery.

Trial court, Second Department Mar 4, 2005 2005 NY Slip Op 50283(U) Provider prevailed

Brooklyn Hgts. Med. v State-Wide Ins. Co.

The insurer failed to vacate the provider's judgment because the proposed settlement was unsigned, unpaid, and had lapsed. After the provider obtained summary judgment, counsel negotiated a lower settlement conditioned on payment within 30 days. Neither side signed the stipulation, and the insurer neither paid nor returned signed documents during an additional seven-day extension. The Civil Court, Kings County, applied CPLR 2104 and found the provider unbound by the proposed settlement; the detrimental-reliance exception did not apply. It denied the insurer's motion to vacate the judgment and enforce the settlement. Finding no bad faith by either party, it also denied both sides' requests for sanctions and the provider's request for costs.

Trial court, Second Department Mar 3, 2005 2005 NY Slip Op 50267(U) Provider prevailed

Vital Points Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co.

The insurer's low-impact study failed to raise a triable issue that the assignor's injuries arose outside an insured incident. The study affidavit did not identify supporting evidence, explain the testing or reliability of its conclusions, or connect the results to the alleged injuries. The insurer's employee also failed to explain the basis for suspecting a noncovered incident or distinguish staged-accident fraud from provider fraud precluded by untimely denials. The IME nonappearance denials were independently ineffective because the insurer failed to provide the required second opportunity under 11 NYCRR 65-3.5 (c) and 65-3.6 (b). The Civil Court, Kings County, granted the provider summary judgment with statutory interest and attorney's fees and denied the insurer's deposition motion as moot.