Appellate Division, Second Department
May 30, 2006
2006 NY Slip Op 04260
Insurer prevailed
The insurer obtained default vacatur under CPLR 317 by showing untimely actual notice of the summons and meritorious defenses. The Appellate Division, Second Department, affirmed the order, insofar as appealed from, vacating the providers' default judgment and extending the insurer's time to answer. Service had been made on the Deputy Secretary of Insurance under Insurance Law § 1212. Although the motion invoked CPLR 5015 (a) (1), it could also be treated under CPLR 317. That provision did not require a reasonable excuse where service was other than personal delivery or delivery to a CPLR 318 agent. The insurer met the notice and merits requirements, with 11 NYCRR 65-3.8 cited concerning its defenses.
Appellate Division, Second Department
May 16, 2006
2006 NY Slip Op 03879
An insurer seeking equitable subrogation for additional PIP benefits is bound by an adverse verdict on its insured's extended economic loss. The Appellate Division, Second Department, affirmed summary judgment dismissing the insurer's subrogation complaint. Insurance Law §§ 5102 (a), (b) and 5103 (a) did not prohibit recovery of extended-economic-loss benefits paid under an additional personal injury protection endorsement. Nevertheless, the insured had unsuccessfully sought those damages from the defendants in a prior action ending in a defense jury verdict. Under Allstate Ins. Co. v Stein, equitable subrogation conferred only the insured's rights, without enlargement or diminution. The prior verdict therefore precluded the insurer's claim to recoup those payments.
Appellate Division, Second Department
May 2, 2006
2006 NY Slip Op 03558
Insurer prevailed
The providers failed to establish mailing and receipt of the hospital bill asserted in their second cause of action. The Appellate Division, Second Department, affirmed denial of summary judgment on that cause. The billing representative's affidavit neither stated actual mailing of the particular claim nor described an office practice ensuring proper addressing and mailing, so no receipt presumption arose. A certified mail receipt and postal tracking printout also failed to establish receipt because no evidence linked that claim to the receipt number and no signed return receipt card was produced. Without prima facie proof of billing-form mailing and receipt and overdue benefits, the motion failed regardless of the sufficiency of the insurer's opposition.
Appellate Term, Second Department
May 30, 2006
2006 NY Slip Op 51043(U)
Insurer prevailed
Fraudulent licensing under 11 NYCRR 65-3.16 (a) (12) is a nonwaivable defense outside the 30-day preclusion rule. The provider established prima facie entitlement to assigned no-fault benefits because the insurer's denial forms cured deficient proof of claim submission. The insurer's submissions, including its special investigator's report, raised a factual issue concerning fraudulent incorporation. Under Mallela, fraudulently incorporated medical corporations are ineligible for reimbursement. The Appellate Term, Second Department, reversed the judgment for the provider, vacated the underlying order and denied the provider's summary judgment motion. It dismissed the direct appeal from the order because judgment had been entered, while reviewing the order's issues on the judgment appeal under CPLR 5501 (a) (1).
Appellate Term, Second Department
May 30, 2006
2006 NY Slip Op 51044(U)
Insurer prevailed
The provider's W-2 forms did not establish employment when services were rendered by professionals listed as independent contractors. The claim forms identified the treating professionals as independent contractors, for whose services the billing provider could not recover direct payment of assigned no-fault benefits. W-2 forms submitted with the cross motion did not conclusively show that the professionals were employees on the service dates. The Appellate Term, Second Department, affirmed the denial of the provider's cross motion for partial summary judgment. It dismissed the appeal from the portion conditionally striking the complaint for failure to answer discovery demands because the insurer's motion was unopposed and granted on default, from which no appeal lay.
Appellate Term, Second Department
May 25, 2006
2006 NY Slip Op 51344(U)
Provider prevailed
An insurer's fraud defense based on excessive billing or lack of medical necessity is subject to the 30-day denial preclusion rule. The insurer's acknowledgment of receipt cured deficient mailing proof, establishing the provider's prima facie case. It waived assignment objections by failing to object or seek verification timely. Letters announcing an investigation of the accident and patient eligibility did not toll the payment-or-denial period under 11 NYCRR 65-3.5 and 65-3.8 (a) (1). The alleged scheme involving the provider and equipment wholesalers concerned billing or necessity, rather than staged-accident coverage, and was precluded. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted the provider summary judgment, and remanded for interest and attorney's fees under Insurance Law § 5106 (a).
Appellate Term, Second Department
May 25, 2006
2006 NY Slip Op 51345(U)
The insurer's investigator affidavit raised a coverage issue concerning an alleged fraud scheme, but neither side was entitled to summary judgment. The provider established its prima facie case under Insurance Law § 5106 (a). The insurer failed to pay or deny within 30 days under 11 NYCRR 65-3.8 (c) or establish tolling, but its late denial did not preclude the defense that the collision furthered insurance fraud. Its investigator's affidavit demonstrated a founded belief that the injuries did not arise from an insured incident, leaving a factual coverage issue. The Appellate Term, Second Department, modified the order to deny the insurer's cross motion and otherwise affirmed, leaving the provider's motion denied.
Appellate Term, Second Department
May 24, 2006
2006 NY Slip Op 51118(U)
Insurer prevailed
The provider failed to establish claim submission because its mailing receipts and the insurer's verification letters were not linked to the claims. The provider moved for summary judgment on assigned no-fault benefits. Its corporate officer did not claim personal knowledge of mailing, and the attorney's affirmation was unsubstantiated hearsay without probative value. Neither the certified mail receipts and return receipt cards nor the verification requests established mailing or receipt of the claims at issue. Without competent proof of submission, the provider failed to establish prima facie entitlement under Insurance Law § 5106 (a). The Appellate Term, Second Department, affirmed the order denying the provider's motion.
Appellate Term, Second Department
May 24, 2006
2006 NY Slip Op 51338(U)
Provider prevailed
The insurer's vague medical-necessity denials did not establish entitlement to partial summary judgment. The insurer limited its appeal to claims denied for lack of medical necessity and relied on affirmed peer review reports. Even assuming timely mailing, the denial forms merely referred to IMEs, without indicating that the IME reports were attached or separately sent within the 30-day claim-determination period. A medical-necessity denial must state its factual basis and medical rationale with sufficient particularity. Because the insurer might be precluded from asserting that defense, the Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the insurer's cross motion. The provider's denied motion was outside the appeal.
Appellate Term, Second Department
May 24, 2006
2006 NY Slip Op 51336(U)
Insurer prevailed
An affirmed peer review report may raise a medical-necessity issue even when it refers to unaffirmed reports of treating doctors. The provider sought summary judgment for medical supplies furnished to its assignor and argued on appeal that the insurer's peer review was inadmissible because it relied on such reports. Applying Kearse v New York City Tr. Auth., the Appellate Term, Second Department, concluded that an affirmed medical report referring to unaffirmed medical material was admissible in opposition to summary judgment. The insurer's report raised a triable issue of medical necessity, and the court affirmed denial of the provider's motion.
Appellate Term, Second Department
May 24, 2006
2006 NY Slip Op 51337(U)
Provider prevailed
The provider established its prima facie entitlement to summary judgment, and the insurer submitted no opposition. The provider proved submission of a claim stating the fact and amount of the loss and overdue payment under Insurance Law § 5106 (a), shifting the burden to the insurer to raise a triable issue. The Appellate Term, Second Department, reversed the denial of the provider's motion, granted summary judgment, and remanded for statutory interest and attorney's fees.
Appellate Term, First Department
May 22, 2006
2006 NY Slip Op 50963(U)
Provider prevailed
The insurer's conclusory peer review failed to establish lack of medical necessity, while credited neurological testimony supported the provider. The Appellate Term, First Department, affirmed a judgment for the provider after a nonjury trial on claims for diagnostic tests. The peer review lacked a detailed basis and medical rationale for denying benefits and was insufficient to meet the insurer's evidentiary burden. The court expressly left open whether a peer review report alone could establish a prima facie showing of lack of medical necessity. In any event, the provider's fully credited neurological expert testimony satisfied its burden of persuasion and supported the finding that the tests were medically necessary.
Appellate Term, Second Department
May 19, 2006
2006 NY Slip Op 51034(U)
Insurer prevailed
The provider's action was premature because timely verification requests remained unanswered when the action began. The Appellate Term, Second Department, reversed the order, denied the provider's summary judgment motion, and granted the insurer's cross motion dismissing the complaint. The provider established its prima facie case under Insurance Law § 5106 (a) without authenticating the assignment. The insurer, however, mailed additional verification requests within 15 business days of receiving the claims and timely follow-up requests under 11 NYCRR 65-3.5 (b) and 65-3.6 (a). The provider did not controvert the assertion that it had not responded before commencing suit. Under 11 NYCRR 65-3.8 (a), the insurer's time to pay or deny had not elapsed.
Appellate Term, Second Department
May 19, 2006
2006 NY Slip Op 51033(U)
Provider prevailed
The insurer's EUO evidence did not establish a founded belief that the claimed injuries arose from a noncovered event. The providers established prima facie entitlement to summary judgment for assigned no-fault benefits. Although the coverage defense was not precluded under Central Gen. Hosp. v Chubb Group of Ins. Cos., the attorney's affirmation and inconsistencies in accident participants' testimony failed to raise a triable coverage issue. The Appellate Term, Second Department, reversed, granted the providers summary judgment and remanded for interest and attorney's fees under Insurance Law § 5106 (a). A dissent found the inconsistencies and prior claims sufficient and would also have accepted an unsworn IME report as raising a medical necessity issue on the chiropractic claim.
Appellate Term, Second Department
May 19, 2006
2006 NY Slip Op 51036(U)
Provider prevailed
The insurer failed to establish tolling because it did not prove mailing of its follow-up verification request. The insurer timely requested the treating person's name and license; the provider's attorney replied that the information was attached. Claiming nonreceipt, the insurer alleged a follow-up request. Its litigation specialist's affidavit showed neither personal mailing nor a sufficiently detailed office mailing procedure. The insurer therefore failed to pay or deny within the period prescribed by 11 NYCRR 65-3.8 (c), despite its initial request under 11 NYCRR 65-3.6 (b). The Appellate Term, Second Department, affirmed summary judgment for the provider and denial of the insurer's cross motion; a separate concurrence agreed only with the result and expressed reservations about propositions in cited cases.
Appellate Term, Second Department
May 17, 2006
2006 NY Slip Op 26194
Provider prevailed
An insurer waives the 45-day submission defense by omitting notice that reasonable justification can excuse a late claim. The Appellate Term, Second Department, reversed and granted the providers summary judgment on all claims, remanding for statutory interest and attorney's fees under Insurance Law § 5106 (a). Under 11 NYCRR 65-1.1 and 11 NYCRR 65-3.3 (e), deficient advisements defeated late-submission defenses; receipt on day 45 established another claim's timeliness. One claim lacked a proven denial. Medical-necessity denials were conclusory, and an unsworn nurse's review lacked probative value and sufficient medical rationale. Unauthenticated assignment signatures were not defects, and any assignment defense was waived. A separate concurrence agreed only with the result.
Appellate Term, Second Department
May 17, 2006
2006 NY Slip Op 50909(U)
Insurer prevailed
The insurer established the assignor's failure to attend a pre-claim IME, defeating the provider's summary judgment motion. The provider established prima facie entitlement to payment for medical supplies under Insurance Law § 5106 (a). In opposition, the insurer demonstrated timely mailing of its denial under 11 NYCRR 65-3.8 (c) and of the letters requesting the IME. The record also established the assignor's nonappearance. Following Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., the Appellate Term, Second Department, affirmed denial of the provider's motion; a separate concurrence agreed only with the result and expressed reservations about propositions in cited cases.
Appellate Term, Second Department
May 17, 2006
2006 NY Slip Op 50910(U)
Insurer prevailed
The insurer's proof of mailing IME notices and the assignor's nonappearance raised a triable issue defeating the provider's cross motion. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the provider summary judgment. The provider established claim submission and overdue payment under Insurance Law § 5106 (a). In opposition, a supervisor described a standard office practice designed to ensure proper addressing and mailing of IME notices and stated that the assignor missed all scheduled IMEs. The insurer denied the claims for nonattendance, and the provider offered neither a valid excuse nor proof that the requests were unreasonable. A separate concurrence agreed with the result but disputed legal propositions in cited cases.
Appellate Term, Second Department
May 17, 2006
2006 NY Slip Op 50908(U)
Provider prevailed
The insurer failed to show tolling by EUO requests because it did not establish an EUO endorsement in the applicable policy. The provider's corporate-officer affidavit and signed postal ledgers established claim submission. One claim's denial was outside the 30-day period under 11 NYCRR 65-3.8 (c); the record contained no NF-10 denial for the other. The insurer did not show that the policy contained the endorsement authorizing EUOs under 11 NYCRR 65-1.1 (d), so its requests did not toll the determination period. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, awarding the provider partial summary judgment on those two claims. The lower court's denial of summary judgment on two other claims was outside the insurer's appeal.
Appellate Term, Second Department
May 17, 2006
2006 NY Slip Op 50913(U)
Insurer prevailed
The provider's claims from 11 separate accidents were properly severed because the defenses raised few common issues of law or fact. The provider sued as assignee of 11 alleged eligible injured persons. The insurer's answer disputed accident fraud and the necessity and reasonableness of the services. Those defenses supported separate actions even if the insurance policies were identical. The Civil Court granted severance and denied the provider's summary judgment cross motion, which had been filed in violation of a stay. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, finding severance a proper exercise of discretion and the cross motion properly denied.
Appellate Term, First Department
May 11, 2006
2006 NY Slip Op 50841(U)
Provider prevailed
Under the former no-fault regulations, proof of claim is due within 180 days of services or written notice to the insurer, whichever is later. The Appellate Term, First Department, modified the order to deny the insurer's summary judgment motion and grant the provider's cross motion on the fee-schedule claims. Under 11 NYCRR 65.12 (e) and 65.15 (b) (4), an NF-2 application could satisfy written notice. Although one claim was submitted more than 180 days after services, the NF-2 receipt date remained disputed; a perforated date did not establish receipt. That claim required further proceedings. The provider obtained summary judgment on the remaining claims because the insurer offered no competent proof that they exceeded the fee schedules.
Trial court, Second Department
May 31, 2006
2006 NY Slip Op 51003(U)
The insurer's evidence raised a triable issue of fraudulent incorporation but did not establish its entitlement to summary judgment. The District Court, Nassau County, denied the provider's motion and the insurer's cross motion for summary judgment. The provider established its prima facie case, and investigation delay letters did not toll the 30-day period under Insurance Law § 5106 (a). Untimely denials precluded medical-necessity, concurrent-care and claim-form defenses. An untimely denial did not preclude the fraudulent-incorporation defense; Mallela and 11 NYCRR 65-3.16 (a) (12) barred reimbursement to fraudulently incorporated providers. The provider owner's certified, unsigned testimony concerning the management company's operations and the owner's limited knowledge of billing and services raised factual questions about provider eligibility, defeating the provider's motion without proving the insurer's defense.
Trial court, Second Department
May 30, 2006
2006 NY Slip Op 52565(U)
Provider prevailed
The insurer failed at trial to substantiate its fee-schedule and medical-necessity defenses to physical therapy claims. The parties stipulated to the provider's prima facie case and timely denials. Applying Insurance Law § 5108 and 11 NYCRR 68.6 (a), the Civil Court, Kings County, accepted the provider's comparable-procedure calculations for range-of-motion and manual muscle testing at physical therapist rates; the insurer offered no contrary proof. The assertion that testing exceeded expected usage was a medical-necessity defense unsupported by an IME, peer review, or factually sufficient documentation, and the insurer offered no expert testimony or documents at trial. The court directed judgment for the provider with statutory interest and reasonable attorney fees.
Trial court, Second Department
May 30, 2006
2006 NY Slip Op 50999(U)
Split result
The provider failed to establish overdue benefits despite the insurer's failure to comply with a discovery stipulation. The insurer opposed summary judgment with an affirmed peer review and a claims representative's affidavit establishing mailing procedures for its timely denial. The affidavit sufficiently described practices ensuring proper addressing and mailing, and the provider annexed the peer review to its own moving papers. The District Court, Nassau County, found the provider had not established prima facie entitlement to summary judgment under CPLR 3212. It enforced the stipulation by precluding insurer evidence concerning demanded information neither previously provided nor already in the provider's possession. Existing documents permitted trial to proceed on the medical necessity defense without the precluded evidence.
Trial court, Second Department
May 23, 2006
2006 NY Slip Op 50977(U)
Provider prevailed
The providers' late notice was excused because incorrect insurer information made timely filing impossible despite diligent efforts. After a nonjury trial, the Civil Court, Queens County, found diligence in presenting the claim to the carrier listed on the police report, then MVAIC, and finally the correct insurer. Former 11 NYCRR 65.11 (m) (2) permitted late filing upon written proof of impossibility caused by circumstances beyond the claimant's control. The court also applied equitable estoppel under New York City Civil Court Act §§ 213 and 905 because the claimant relied on information supplied by the insured, and the insurer had earlier notice and showed no prejudice. It granted judgment for the providers on both causes of action, with statutory interest and attorney's fees.
Trial court, Second Department
May 16, 2006
2006 NY Slip Op 50892(U)
Insurer prevailed
The insurer proved that the prescribed medical supplies were not medically necessary through expert testimony and supporting medical literature. The Civil Court, Kings County, dismissed the provider's complaint after trial, at which the parties stipulated to the provider's prima facie case and timely denials. The insurer had to show that the supplies were inconsistent with generally accepted medical practices. Its peer reviewer explained that certain supports impeded mobility and other equipment duplicated therapies the assignor received. The provider called no witness, and its treating chiropractor's report did not adequately explain why the supplies were necessary or refute the insurer's evidence.
Trial court, Second Department
May 11, 2006
2006 NY Slip Op 50853(U)
Provider prevailed
An insurer must support a staged-collision defense at trial with admissible evidence under a preponderance standard. The Civil Court, Kings County, awarded judgment to the provider after the parties stipulated to its prima facie case. Under 11 NYCRR 65-3.8 (e) (2), the insurer did not have to prove common-law fraud, but a founded belief alone did not satisfy its trial burden. Its investigator's database information lacked a foundation and was inadmissible hearsay. The insurer also offered no admissible proof of noncooperation, and the insured vehicle's absence when police arrived did not establish an intentional collision. Because the insurer failed to rebut the presumption of coverage, the burden of persuasion never shifted to the provider.
Trial court, Second Department
May 9, 2006
2006 NY Slip Op 50825(U)
Insurer prevailed
The provider's failure to comply with a discovery stipulation precluded the evidence needed to establish its prima facie case. The District Court, Nassau County, granted the insurer's unopposed motion for summary judgment under CPLR 3212 and dismissed the action. The provider had agreed to respond to discovery demands within 60 days or be precluded from offering evidence at trial. Although an assignment was attached to the complaint, the provider did not supply the demanded invoices, medical-necessity letters or medical chart. Following Tepper v Tannenbaum, the court enforced the reasonable stipulation and found that the resulting preclusion prevented the provider from proving its claim.
Trial court, Second Department
May 9, 2006
2006 NY Slip Op 50836(U)
Provider prevailed
MVAIC's 30-day period to pay or deny a no-fault claim begins upon receipt of proof of claim, before the injured claimant is qualified. The District Court, Suffolk County, denied MVAIC's motion for summary judgment dismissing the provider's action based on its assignor's failure to establish qualification. The assignor timely filed the notice of intention required by Insurance Law § 5208 (a) (1). Under Insurance Law § 5221 (b) (3) and 11 NYCRR 65.15 (g) (3), MVAIC remained subject to the claim-processing deadlines. Because MVAIC neither paid nor denied the claim within 30 days nor requested additional verification within 10 days, it failed to establish entitlement to dismissal.
Trial court, Second Department
May 3, 2006
2006 NY Slip Op 50794(U)
Split result
⚠ Not followed by Elmont Open MRI & Diagnostic Radiology, P.C. v Country-Wide Ins. Co. (2007 NY Slip Op 27072)
A provider that sues more than 30 days after receiving a timely denial recovers interest from commencement of suit. The District Court, Nassau County, granted the provider summary judgment but limited interest to the commencement date. The insurer failed to submit admissible medical-necessity evidence or establish mailing of the IME notice supporting its nonappearance defense. The provider commenced suit more than four years after timely denials. Rejecting East Acupuncture, the court applied 11 NYCRR 65-3.9 (c) to assignees because they acquire no greater rights than assignors and exempting them would undermine prompt resolution under Insurance Law § 5106 (a). The court awarded interest at two percent monthly under 11 NYCRR 65-3.9 (a) and attorney fees under 11 NYCRR 65-4.6.
