27 decisions · 2 Appellate Division · 15 Appellate Term · 10 trial courts
Issues this month: Timeliness and preclusion 9 Provider's prima facie case 6 Discovery and procedure 5 Staged accidents, lack of coverage 5 Medical necessity 4 EUO no-show 4
The insurer's motion for default vacatur and a late answer was granted based on a reasonable excuse and a meritorious defense. The Appellate Division, Second Department, affirmed, stating only that the insurer made the showing required by CPLR 5015 (a) (1) to vacate the providers' judgment entered upon its failure to appear or answer.
An internally inconsistent compulsory loss-transfer award may be vacated for failure to make a final and definite determination. The Appellate Division, Third Department, affirmed vacatur of the original award on the petitioning insurer's CPLR article 75 application and denied its motion to dismiss the reimbursement-seeking insurer's appeal as moot. Later amended awards did not moot review because reinstating the original award would affect liability allocations. Under Insurance Law § 5105 and CPLR 7511 (b) (1) (iii), compulsory arbitration required evidentiary support and a rational, definite award. The court found the original fault allocation internally inconsistent and the traffic-citation attribution incorrect. The reimbursement-seeking insurer had also characterized the first amended award as ambiguous and indefinite.
A billing provider cannot receive assigned no-fault benefits for services performed by an independent contractor rather than itself or its employees. The Appellate Term, First Department, affirmed summary judgment dismissing the provider's complaint in favor of the insurer. Under 11 NYCRR 65-3.11 (a), direct payment upon assignment is available to providers of health care services. The unrefuted evidence established that an independent physician, rather than the billing provider or its employees, performed the services. The court therefore concluded that the billing entity was not a provider authorized to bill for those services under the no-fault law.
An insurer may assert the insured's fraudulent policy procurement against a provider assignee despite the 30-day preclusion rule. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the providers' motion for partial summary judgment. The insurer's submissions raised factual issues concerning fraudulent procurement of the policy. Although Vehicle and Traffic Law § 313 bars retroactive cancellation, a provider assignee acquires no greater rights than the insured and is not an injured innocent third party protected from that defense. The insurer's medical-necessity defenses failed because of missing or insufficient denials, inadequate peer-review reasoning and failure to seek available records through verification. A separate concurrence agreed only with the result.
The providers obtained partial summary judgment because denials were untimely or defenses lacked evidentiary support. The Appellate Term, Second Department, modified the order to grant the medical-services provider judgment on all claims for two assignors and untimely denied claims for a third, and the chiropractic provider judgment, remanding for interest and fees. Under Insurance Law § 5106 (a), unsupported EUO requests did not toll the determination period; conclusory fraudulent-incorporation allegations raised no triable issue under Mallela. Summary judgment remained denied on the third assignor's other claims because conceded IME nonattendance left issues concerning the requests, excuses and medical necessity. The acupuncture provider's appeal was dismissed because its claims were absent from the motion. A partial dissent found verification responses unproved and the payment period untriggered.
⚠ Overruled by Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co. (2007 NY Slip Op 27234)
A timely medical-necessity denial must state a sufficiently particular factual basis and medical rationale to avoid preclusion. The Appellate Term, Second Department, modified the order to award the provider partial summary judgment only on the two established claims, remanding for statutory interest, attorney's fees and further proceedings on the remaining claim. The provider failed to establish prima facie entitlement to that additional claim. Although 11 NYCRR 65-3.8 (b) (4) did not require attaching peer reviews to the denials, the insurer's vague denials precluded its medical-necessity defense. The unsworn reviews submitted in opposition were inadmissible and could not cure deficient denials even if admissible. A dissent would have reversed and denied the provider's motion entirely.
The claimants failed to establish submission of their claims through mailing proof or the insurer's discrepant denial forms. The Appellate Term, Second Department, reversed the order granting their summary judgment motion and denied the motion. Under Insurance Law § 5106 (a), a prima facie showing required proof of claim submission and overdue payment. The provider principal's affidavit described neither standard office mailing procedures nor personal knowledge of mailing; bare assertions of submission and mailing dates were insufficient. Although denial forms acknowledging receipt can establish submission, unexplained discrepancies between those forms and the claim forms prevented that showing here. A separate concurrence agreed with the result but disputed propositions in cited authorities.
The provider's action was premature because the provider and assignor failed to respond to timely EUO verification requests. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the provider's summary judgment motion and, upon searching the record, granted the insurer's cross motion dismissing the complaint. Under 11 NYCRR 65-3.8 (b) (3), the insurer's time to pay or deny had not begun because requested verification remained outstanding. CPLR 3212 (b) permitted judgment for the insurer on the issue presented by the motion even without a cross appeal. A separate concurrence agreed with the result but disputed propositions in authorities cited by the majority.
An insurer's bill-of-particulars demand is improper when it seeks evidentiary material rather than amplification of the pleadings. The Appellate Term, Second Department, modified the order to deny that portion of the insurer's motion, with leave to serve an amended demand, while affirming compelled discovery and denial of the provider's summary judgment cross motion. The provider established its prima facie case under Insurance Law § 5106 (a); its NF-3's reference to an attached assignment obviated separate proof of assignment mailing under 11 NYCRR 65-3.11 (b) (2), and assignment objections were waived. The timely denial and affirmed peer review raised a medical-necessity issue. Discovery was warranted under CPLR 3101 and 3103 because the provider failed to show irrelevance, privilege or confidentiality.
The vehicle owner and driver failed to establish that the insurer's subrogation action was barred by the statute of limitations. The Appellate Term, Second Department, affirmed denial of their CPLR 3211 (a) (5) motion. The insurer sought recovery of basic economic loss payments and invoked the two-year toll under Insurance Law § 5104 (b). A lien for those payments reaches economic damages, not pain-and-suffering awards. The complaint and index number from the insureds' prior action did not establish recovery attributable to basic economic loss or an available lien that would defeat the toll. The ruling permitted the defendants to renew the limitations defense upon sufficient documentary proof.
An insurer's untimely denial precludes a defense that the provider failed to submit its bill within the applicable 180-day period. The Appellate Term, Second Department, reversed the order, insofar as appealed from, and granted the provider summary judgment. The insurer's claims representative acknowledged receipt and denial dates more than 30 days apart, precluding the late-billing defense under former 11 NYCRR 65.11 (m) (3). The matter was remanded for interest and attorney's fees under Insurance Law § 5106. A separate concurrence agreed with the result but questioned inconsistent denial forms and observed that one denial might have been timely because the thirtieth day fell on a Sunday.
The insurer failed to establish an EUO-authorizing endorsement or admissible support for its fraud defense. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the providers summary judgment and remanded for interest and attorney's fees under Insurance Law § 5106 (a). Although 11 NYCRR 65-1.1 (d) permits reasonably required EUOs, the insurer did not show that the policy contained the requisite endorsement. Its nonwaivable fraud defense rested on an attorney's affirmation without personal knowledge, an unsworn adverse driver's letter without an excuse for its inadmissible form, and conclusory claims-representative allegations. A dissent disputed the endorsement-proof requirement and found the driver's statement sufficient to defeat summary judgment.
The insurer failed to establish an EUO-authorizing endorsement or submit admissible evidence of a staged-accident defense. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment and remanded for statutory interest and attorney fees under Insurance Law § 5106 (a). Without proof of the endorsement, the EUO requests did not toll the 30-day determination period under 11 NYCRR 65-3.8 (c), making the denial untimely. The staged-accident defense survived preclusion, but the investigative materials were inadmissible, counsel's allegations were hearsay, and the claims representative's affirmation alone raised no triable issue. One justice dissented, disputing the need to produce the policy when the revised regulations authorized EUOs.
The insurer's misaddressed EUO demand did not toll its denial deadline, and EUO transcripts failed to support its coverage defense. The Appellate Term, Second Department, affirmed summary judgment for the provider. Assuming the insurer could require an EUO, sending the demand to the assignor's attorney did not cure failure to send it to the assignor's proper address or toll the 30-day period under 11 NYCRR 65-3.8 (c). Although the defense that injuries did not arise from a covered accident survived untimely denials, the transcripts did not establish a founded belief under Central Gen. Hosp. v Chubb Group of Ins. Cos. A dissent found conflicts between the testimony sufficient to defeat summary judgment.
A peer review citing insufficient information cannot support denial without proof that the insurer sought that information through verification. The Appellate Term, Second Department, reversed the order, granted the provider summary judgment and remanded for interest and attorney's fees under Insurance Law § 5106 (a). Claim submission established medical necessity initially; no physician's affidavit was required. The insurer's timely denial relied on a reviewer who lacked sufficient information, without proof of verification requests under 11 NYCRR 65-3.5 (b) and 11 NYCRR 65-3.6 (b). That deficient rationale precluded the medical-necessity defense. The court distinguished a review of requested and supplied records finding no substantiation of necessity, which may raise a factual issue without further verification.
The provider was obligated to comply with an unappealed discovery order and could not persist in objections after its time to object expired. The Appellate Term, Second Department, affirmed an order directing an amended response to the defendants' notice to produce under CPLR 3126 and denying the provider's cross motion for a protective order. After an initial order compelled discovery, the provider failed to respond as directed and received additional time. Its eventual response nevertheless objected to two demands. Following Kihl v Pfeffer, the court found that the provider's willful failure to satisfy court-ordered discovery obligations had required two additional motions and warranted enforcement of the discovery orders.
The provider failed to show two claims were overdue, and a founded belief of noncovered injuries raised a coverage issue on the third. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the provider's summary judgment motion on all three medical-supply claims. The defendants acknowledged receipt of two claims without specifying receipt dates, leaving the provider's prima facie proof deficient. Delay letters and a denial form established receipt of the third claim, but investigation letters did not toll the 30-day determination period. Although an untimely denial precluded other defenses to that claim, evidence of an alleged fraudulent scheme in the accident's occurrence raised a triable coverage issue that survived preclusion.
The provider's challenge to the master arbitration award failed because the arbitrators' fraud-based rejection of the claim had a rational basis. The Civil Court, New York County, dismissed the petition under CPLR 7511, rendering its decision on the insurer's default at oral argument. The arbitrators relied on the provider's dissolution, its principal's failure to obey a subpoena, the possible connection between dissolution and a criminal plea, and uncontradicted allegations concerning its management relationship. The court found the award neither arbitrary nor legally incorrect under Mallela and the lower-court authorities. It expressly declined to resolve whether 11 NYCRR 65-3.16 (a) (12) applied retroactively to unpaid claims for services rendered in 2000, limiting review to the rationality and legality of the award.
The insurer's low-impact study and out-of-state affidavit were inadmissible and failed to support its lack-of-causation defense. The Civil Court, Kings County, granted the provider summary judgment with statutory interest and attorney fees. The provider established claim submission and overdue payment under Insurance Law § 5106 (a). The untimely denials precluded a medical-necessity defense, but not the contention that the injuries did not arise from a covered accident. The consultant's Maryland affidavit lacked the certificate of conformity required by CPLR 2309 (c). The attached accident-analysis report was unsworn, incorporated hearsay and referenced an unattached recorded statement. Neither submission provided competent evidence establishing a basis for the insurer's belief that coverage was lacking.
A provider seeking summary judgment on overdue claims must address whether those claims were timely and validly denied. The Civil Court, Kings County, denied the provider's motion because its affidavit established nonpayment but said nothing about denials. Reading 11 NYCRR 65-3.8 (a) (1) together with 11 NYCRR 65-3.8 (c), the court required proof that the claims were neither paid nor properly denied within 30 days. Under CPLR 3212 (b), the provider also had to identify each claim covered by the motion and its basis for judgment. The court did not reach the insurer's opposition or decide the distinction between stating and showing the absence of a defense.
The provider obtained a 14-day sealing order for limited redactions, but its requested disclosure injunction exceeded the court's powers. In an action for assigned no-fault benefits, the provider sought to seal business and tax records and prevent the insurer and its counsel from sharing discovery material. The District Court, Suffolk County, found good cause under 22 NYCRR 216.1 (a) only for potential identity theft and patient information; many documents were already public. The court temporarily sealed the file to permit submission of a proposed version redacting identification numbers and patient information for later public inspection. It denied the injunction because no basis within the limited equitable authority conferred by Uniform District Court Act § 209 (b) was articulated.
A licensed acupuncturist's fee is the local prevailing fee, subject to insurer review for consistency with scheduled similar procedures. The Civil Court, Kings County, awarded the provider the unpaid balance after trial. Applying Insurance Law § 5108 and 11 NYCRR 68.5 (b), the court placed the burden of proving the prevailing fee on the provider and inconsistent charges on the insurer. The parties stipulated to a $100 prevailing fee per session. The insurer automatically applied the physician schedule without showing similar services or proper review. Education Law § 8216 (3) supported distinguishing licensed acupuncturists from certified physicians. The court left constitutional and other review-clause questions unresolved and awarded statutory interest and attorney's fees while declining excess fees under 11 NYCRR 65-4.6.
Four unrelated assigned claims remained joined because they shared a provider, insurer, uniform contract and no-fault questions. The Supreme Court, Nassau County, denied the insurer's severance motion. CPLR 601 permits one plaintiff to join unrelated claims against one defendant, while CPLR 603 makes severance discretionary for convenience or avoidance of prejudice. Following Hempstead General Hospital v Liberty Mutual Ins. Co., the court found common questions under Insurance Law § 5106 (a) supported joinder under CPLR 1002 (a). The insurer offered only counsel's conclusory assertions of fraud and medical-necessity defenses. Four claims would neither unduly burden the insurer nor likely confuse the factfinder; decisions severing other groups of claims did not mandate severance.
The insurer failed to prove timely mailing of its denials and was precluded from asserting its medical-necessity defense. The Civil Court, Queens County, granted the provider summary judgment with statutory interest and attorney's fees under Insurance Law § 5106 (a). Although the denials were timely on their face, neither affidavit established personal knowledge of actual mailing or office procedures ensuring proper addressing and mailing. The submissions lacked particulars linking generated denials to the processing center, confirming envelope contents and addresses, and establishing responsibility for or knowledge of compliance with mailing procedures. The provider had established claim submission through the insurer's acknowledgment, and the insurer failed to raise a triable issue.
The insurer's post-assignment EUO transcripts were excluded at trial as hearsay against the provider assignee. The Civil Court, Queens County, precluded the insurer from introducing the two nonpolicyholder assignors' testimony, taken after the assignments and commencement of the action. Under Paige v Cagwin, their declarations were inadmissible against the provider. The assignors were nonparties, not real parties in interest, and the provider did not sue in a representative capacity. The court distinguished using hearsay to oppose summary judgment or for impeachment. Alternatively, the later EUO provisions in 11 NYCRR 65-1.1 (d) did not govern these claims, and the insurer's postcommencement EUOs improperly bypassed deposition protections, including CPLR 3106 (b).
A provider that elects no-fault arbitration cannot litigate the same claims even if arbitration never reaches their merits. Applying Insurance Law § 5106 (b), the Civil Court, Kings County, awarded the insurer summary judgment under CPLR 3212 (b) dismissing the medical, acupuncture and chiropractic claims withdrawn from arbitration with prejudice. A physical-therapy claim was separately dismissed as barred by the prior arbitral award. The court granted summary judgment, with statutory interest and attorney's fees, to the chiropractic and transportation providers whose claims had not been arbitrated. The insurer failed to establish timely mailing of initial IME requests or timely follow-up requests, precluding its IME-nonappearance defense; the missing follow-up also defeated that defense on the one timely denied claim.
Nonparty provider-assignees are not bound by a judgment against assignors when their assignments preceded the action. The Civil Court, Kings County, denied the insurer's CPLR 3211 (a) (5) motion to dismiss the providers' no-fault actions on collateral-estoppel grounds. The insurer had obtained a default declaration against the assignors that the collision was intentional and no UM, SUM or PIP benefits were owed; the providers were not parties. Under Gramatan Home Investors Corp. v Lopez, the earlier assignments prevented privity with the assignors for purposes of the later judgment. The court also found that the default involved no actual litigation on the merits and therefore supplied no identity of issues supporting collateral estoppel.
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