Court of Appeals
Jun 13, 2006
2006 NY Slip Op 04749
Provider prevailed
The SUM insurer's delay in disclaiming for unreturned proof-of-claim forms was unreasonable under Insurance Law § 3420 (d). The Court of Appeals reversed and dismissed the petition to stay arbitration. The policy's proof-of-claim requirement was a coverage condition or exclusion, requiring disclaimer as soon as reasonably possible after the insurer learned the ground. Its September request for immediate return made that ground apparent well before its June petition, notwithstanding the absence of a fixed return deadline or any eventual submission. The court noted that setting a deadline would resolve the timing problem and that suspected fraud could still be contested in arbitration. Two judges dissented, reasoning that without a fixed deadline the disclaimer period should not begin before belated submission.
Appellate Division, Second Department
Jun 13, 2006
2006 NY Slip Op 04815
Split result
An insurer liable for overdue no-fault benefits must pay 2% monthly interest from 30 days after claim presentation until payment. The Appellate Division, Second Department, modified the order to grant the providers summary judgment on the second cause of action and correct the fourth cause's interest award, while affirming dismissal of the third cause. On the second cause, the providers proved billing, receipt, and nonpayment; a denial dated within 30 days did not establish timely transmission. On the third, the insurer proved a medical-verification request within 30 days and nonreceipt of verification, without a triable opposition issue. Applying Insurance Law § 5106 (a) and 11 NYCRR 65-3.5, the court remitted for interest calculations on the second and fourth causes and entry of judgment.
Appellate Division, Third Department
Jun 8, 2006
2006 NY Slip Op 04486
Provider prevailed
The providers proved claim mailing, and the insurer waived assignment objections by failing to seek verification within 10 days. The Appellate Division, Third Department, affirmed summary judgment on the third, tenth, eleventh, thirteenth, and part of the seventh causes, and denial of sanctions and severance. Signed, stamped mailing certificates and an officer's affidavit established receipt, unrebutted by the insurer. Under 11 NYCRR 65-3.5 (a) and former 65.15 (d), untimely verification waived objections to unauthenticated assignment signatures. The insurer failed to show discovery might raise a triable issue. The asserted fraud defense was precluded under Insurance Law § 5106 (a), following the same-day companion, Valley Psychological v Liberty Mut. Ins. Co. Frivolous conduct under 22 NYCRR 130-1.1 (c) was unproved; CPLR 603 severance was discretionary.
Appellate Division, Third Department
Jun 8, 2006
2006 NY Slip Op 04480
Provider prevailed
An insurer's untimely denial precludes a fraud defense based on a psychologist's alleged failure to supervise treatment. The Appellate Division, Third Department, reversed the order affirming dismissal after trial and remitted to City Court, Albany, to determine the provider's judgment. The insurer denied two claims more than 30 days after receipt, then alleged fraudulent billing because the principal psychologist had not actively and personally supervised employees as required by workers' compensation schedules. Under Insurance Law § 5106 (a) and 11 NYCRR former 65.15 (g), the defense required timely denial because it resembled excessive or unnecessary treatment, rather than strict lack of coverage. The resulting misapplication of substantive law failed the substantial-justice standard under UCCA 1807.
Appellate Term, Second Department
Jun 30, 2006
2006 NY Slip Op 26276
Insurer prevailed
The provider failed to prove claim submission because its affidavit lacked mailing proof and its purported stipulation was unsigned by the insurer. A corporate officer stated that proof of mailing was annexed, rather than specifically stating that the officer mailed the claims, but no such proof was attached. The insurer did not admit receipt. A later submission purporting to stipulate that insurer letters established receipt was unenforceable under CPLR 2104 because the insurer had not signed it. The Appellate Term, Second Department, affirmed denial of the provider's summary judgment motion for failure to establish its prima facie entitlement under Insurance Law § 5106 (a).
Appellate Term, Second Department
Jun 30, 2006
2006 NY Slip Op 51327(U)
Insurer prevailed
A provider's untimely discovery objection forecloses review of the demands except for privileged or palpably improper requests. The insurer denied the assigned no-fault claim in part because the injuries were not caused by the accident. It sought dismissal for failure to answer discovery and appear for an examination before trial, or alternatively an order compelling compliance. The provider had not challenged the discovery notice within the prescribed time. Applying the exception for privileged material under CPLR 3101 and palpably improper requests, the Appellate Term, Second Department, affirmed the order compelling discovery responses and an examination before trial, thereby sustaining the insurer's requested alternative relief.
Appellate Term, First Department
Jun 29, 2006
2006 NY Slip Op 51227(U)
Insurer prevailed
The provider failed to establish mailing of its verification response and was not entitled to summary judgment. An insurer need not pay or deny a claim until it receives all relevant requested verification under 11 NYCRR 65.15 (g) (1) (i) and (g) (2) (iii). Although the provider asserted that it responded, its representative's affidavit neither described actual mailing nor the provider's office mailing practices and procedures. The submission therefore created no presumption that the insurer received the verification. The Appellate Term, First Department, reversed the order granting the provider summary judgment, denied the motion, and remanded for further proceedings.
Appellate Term, Second Department
Jun 29, 2006
2006 NY Slip Op 51278(U)
Insurer prevailed
The provider failed to establish claim submission because it proved neither actual mailing nor a reliable office mailing practice. Counsel lacked personal knowledge, and the corporate officer referred generally to mailing proof in a file without specifically identifying the claims or demonstrating mailing. A denial form attached on reply did not identify any claim at issue and could not establish receipt. The Appellate Term, Second Department, modified the order, insofar as reviewed, to deny summary judgment on the merits and strike leave to renew after discovery. It dismissed the provider's appeal from the discovery ruling under CPLR 5511 because that ruling was entered on default when the provider submitted no written opposition.
Appellate Term, Second Department
Jun 28, 2006
2006 NY Slip Op 51271(U)
Insurer prevailed
The provider failed to prove earlier claim mailing, so the insurer's medical-necessity denial was timely and raised a triable issue. The provider asserted an initial submission followed by resubmission, but its owner's affidavit established neither actual mailing of the initial claim nor a reliable office mailing practice. The insurer acknowledged receipt of the resubmitted claim and proved denial 27 days later, based on a peer review attached to the denial form. Because the provider failed to establish untimeliness, the medical-necessity defense was not precluded. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the provider's cross motion for summary judgment.
Appellate Term, Second Department
Jun 28, 2006
2006 NY Slip Op 51275(U)
Provider prevailed
The insurer's investigator affidavit failed to establish a founded belief that the claimed injuries did not arise from an insured incident. The insurer sought summary judgment alleging a fraudulent accident, while the provider cross-moved for payment of assigned benefits. Although the late denials did not preclude a collision-fraud coverage defense, the affidavit failed to raise a triable coverage issue under Central Gen. Hosp. v Chubb Group of Ins. Cos. Assignment objections were waived because the insurer neither timely challenged the forms' completeness nor sought verification. The Appellate Term, Second Department, reversed, denied the insurer's motion, granted the provider's cross motion, and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a).
Appellate Term, Second Department
Jun 23, 2006
2006 NY Slip Op 51202(U)
Insurer prevailed
The insurer established timely mailing of verification requests, tolling the 30-day period and making its denials timely. Its claims examiner described the practice of mailing each request to the address on the bill on the day generated, confirmed compliance for the requests at issue, and asserted personal knowledge and responsibility for enforcing that practice. After receiving verification, the insurer paid part of the bills and denied the balance on fee-schedule grounds. The Appellate Term, Second Department, reversed provider summary judgment and denied the motion because the requests tolled the payment-or-denial period under Insurance Law § 5106 and 11 NYCRR 65.15 (g) (3), now 11 NYCRR 65-3.8 (c).
Appellate Term, Second Department
Jun 22, 2006
2006 NY Slip Op 51347(U)
Insurer prevailed
The insurer's low-impact study and supporting affidavit raised a triable issue whether the claimed injuries arose from the accident. The providers established claim submission and overdue payment under Insurance Law § 5106 (a). In opposition, the insurer submitted an accident analysis report with an affidavit from the consultant who prepared it. An admissible low-impact study could support a denial, and these submissions demonstrated a founded belief that the injuries did not arise from an insured incident under Central Gen. Hosp. v Chubb Group of Ins. Cos. The Appellate Term, Second Department, reversed the providers' judgment, vacated the summary judgment order, denied their motion, and remanded. A separate concurrence agreed only with the result.
Appellate Term, Second Department
Jun 22, 2006
2006 NY Slip Op 51191(U)
Insurer prevailed
A billing provider cannot recover assigned no-fault benefits for services rendered by an independent contractor rather than its employees. The provider sought summary judgment for health care services furnished to its assignor, but its claim form identified the treating professional as an independent contractor. Under 11 NYCRR 65-3.11 (a), the billing provider was not the provider of those services and therefore was not entitled to direct payment of assigned benefits. The Appellate Term, Second Department, reversed the order granting the provider's motion, denied that motion and, upon searching the record, awarded the insurer summary judgment dismissing the complaint.
Appellate Term, Second Department
Jun 22, 2006
2006 NY Slip Op 51195(U)
Insurer prevailed
The insurer's motion to vacate the default judgment was granted based on a reasonable excuse and a meritorious defense. The Appellate Term, Second Department, affirmed, finding no basis in the record to disturb the lower court's determination that the insurer made both showings in the provider's assigned no-fault benefits action.
Appellate Term, Second Department
Jun 15, 2006
2006 NY Slip Op 51189(U)
Split result
The insurer's denials dated more than 30 days after final verification precluded its medical necessity defense. The provider sought payment for medical supplies. The insurer's denial forms cured the provider's deficient proof of claim submission, but the prescription omitted the TENS accessory kit, defeating prima facie entitlement for that item. Under Insurance Law § 5106 (a) and 11 NYCRR 65-3.8 (c), the late denials precluded the defense. The Appellate Term, Second Department, modified the order, denied the insurer's cross motion and granted the provider partial summary judgment for the remaining supplies. It remanded for statutory interest, attorney's fees and further proceedings on the kit claim; a separate concurrence agreed only with the result and disputed propositions in cited cases.
Appellate Term, Second Department
Jun 8, 2006
2006 NY Slip Op 51185(U)
Provider prevailed
A medical necessity denial must state the factual basis and medical rationale with sufficient particularity, even when timely issued. The provider sought summary judgment for assigned no-fault benefits for medical services, and the insurer relied on a timely denial based on a peer review. The review's conclusions lacked a sufficient factual foundation and medical rationale to warrant rejection of the claims. The insurer therefore failed to raise a triable issue of fact supporting its medical necessity defense. The Appellate Term, Second Department, reversed the order denying the provider's motion, granted summary judgment and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a) and the implementing regulations.
Appellate Term, Second Department
Jun 8, 2006
2006 NY Slip Op 51186(U)
Provider prevailed
The insurer failed to establish timely denials based on IME nonappearance because it did not prove mailing of verification requests. The provider had established entitlement to summary judgment for assigned no-fault benefits, but the District Court denied its motion on finding factual issues. The claims representative's affidavit showed neither personal knowledge of actual mailing nor facts supporting a mailing presumption. The insurer therefore failed to demonstrate tolling through timely verification and follow-up requests, and its untimely denial precluded the defenses raised. The Appellate Term, Second Department, reversed, granted the provider summary judgment and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a) and the implementing regulations.
Appellate Term, Second Department
Jun 7, 2006
2006 NY Slip Op 26251
Insurer prevailed
The provider's summary judgment motion was premature because discovery could establish fraudulent incorporation and reimbursement ineligibility. The provider proved claim submission, while the insurer's unsworn IME report was inadmissible and its general denial incomplete. Nevertheless, the eligibility defense under Mallela and 11 NYCRR 65-3.16 (a) (12) survived preclusion. Discovery into corporate ownership, control and licensing was material under CPLR 3101 and could supply facts essential to opposition under CPLR 3212 (f). The Appellate Term, Second Department, reversed, denied the provider's motion, and granted the insurer's unopposed cross motion only to compel those responses within 30 days of the resulting order or another reasonable period stipulated in writing; a separate concurrence agreed only with the result.
Appellate Term, Second Department
Jun 5, 2006
2006 NY Slip Op 51051(U)
Insurer prevailed
The insurer's low-impact study raised a factual issue whether the claimed injuries arose from the insured accident. The provider established prima facie entitlement to summary judgment for medical supplies under Insurance Law § 5106 (a). The insurer's accident-analysis report and the preparer's affidavit supported a founded belief that the injuries did not arise from an insured incident under Central Gen. Hosp. v Chubb Group of Ins. Cos. The insurer also raised a factual issue concerning excessive billing. The Appellate Term, Second Department, affirmed denial of the provider's motion and the direction to produce a deposition witness with personal knowledge of billing and distribution procedures; a separate concurrence agreed only with the result and disputed propositions in cited cases.
Appellate Term, Second Department
Jun 2, 2006
2006 NY Slip Op 51047(U)
Split result
An explanation of benefits form cannot substitute for the prescribed no-fault denial form under 11 NYCRR 65-3.8 (c) (1). The insurer's acknowledgment of receiving both equipment claims cured the provider's deficient proof of mailing. For one claim, a timely denial accompanied by a peer review stating a factual basis and medical rationale raised a triable medical necessity issue. For the other, the record lacked the required denial form, precluding the insurer's defenses. The Appellate Term, Second Department, modified the order to grant the provider partial summary judgment on the claim addressed by the explanation of benefits, remanded for interest and attorney's fees under Insurance Law § 5106 (a), and left the peer-reviewed claim for further proceedings.
Appellate Term, Second Department
Jun 2, 2006
2006 NY Slip Op 51048(U)
Provider prevailed
The insurer waived defenses concerning assignment forms by failing to object timely to their completeness or seek verification. The Appellate Term, Second Department, affirmed a judgment for the provider after a nonjury trial. The trial court had rejected the insurer's medical-necessity defense, but the appeal challenged admission of the assignment forms and argued that their exclusion would defeat the provider's prima facie case. The appellate court explained that claim submission showing the fact and amount of loss, together with overdue payment, established the provider's prima facie entitlement under Insurance Law § 5106 (a). Because the insurer did not timely object or request verification under 11 NYCRR 65-3.5, its assignment-based defenses were waived.
Trial court, Second Department
Jun 28, 2006
2006 NY Slip Op 51281(U)
Split result
A provider cannot recover assigned no-fault benefits for an impersonator who is not an eligible injured person. The Civil Court, Kings County, granted the insurer summary judgment dismissing the fourth cause of action because evidence established impersonation and the provider raised no factual issue. Investigator affidavits supported a founded belief that injuries underlying the other claims did not arise from covered accidents, despite untimely denials. Those claims presented triable coverage issues; dismissal was denied and the provider's cross motion was denied. The court compelled acceptance of the insurer's late answer under CPLR 3012 (d), finding a reasonable excuse, meritorious defense, and no prejudice. Under CPLR 603, it severed the remaining claims into separate groups because they involved different accidents and a single trial could cause confusion.
Trial court, Second Department
Jun 28, 2006
2006 NY Slip Op 51222(U)
Provider prevailed
The insurer failed to establish either a policy exclusion for felony-related injuries or facts bringing the assignor within that exclusion. The hospital proved claim submission and overdue payment. Although the insurer raised a factual issue over timely denial, it did not show that its policy incorporated the optional exclusion permitted by Insurance Law § 5103 (b) (3). An eyewitness established only that the assignor was running, and the police report was inadmissible. Even an allegation that the assignor fled store security did not establish a felony or flight from lawful apprehension by a law enforcement officer. The Supreme Court, Nassau County, granted the hospital summary judgment with statutory interest and attorney's fees and denied the insurer's cross motion.
Trial court, Fourth Department
Jun 27, 2006
2006 NY Slip Op 51242(U)
Split result
The insurer's untimely denial precluded medical-necessity and fee-schedule defenses, but an unlicensed billing entity remained ineligible. The City Court, Buffalo, granted the treating physician summary judgment and granted the insurer summary judgment against the facility entity, which proved no claim submission, and the billing entity, whose lack of licensing was established through official website records under 11 NYCRR 65-3.16 (a) (12). Assignment objections were waived. The insurer proved neither timely denial nor verification tolling, and its peer review also lacked adequate rationale. Although fee limits under Insurance Law § 5108 (a) could not reduce recovery, charges exceeding the schedule without unique circumstances barred attorney's fees under 11 NYCRR 65-4.6 (i). The physician recovered unpaid benefits with statutory interest; possible cure of the entity's licensing defect remained unaddressed.
Trial court, Second Department
Jun 22, 2006
2006 NY Slip Op 26246
Provider prevailed
A verification follow-up sent only 28 days after the initial request does not preserve the insurer's time to pay or deny a claim. On stipulated facts, the insurer timely requested additional verification of three claims, repeated the request after 28 days, received no response, and denied solely for failure to provide verification. Strictly construing 11 NYCRR 65-3.6 (b), the Civil Court, Richmond County, required follow-up during the 10-day period after 30 days had elapsed. Noncompliance extinguished the initial toll from inception, making the denials issued more than 30 days after receipt untimely. The insurer was precluded from asserting its verification defense, and the provider obtained judgment with interest and attorney's fees under Insurance Law § 5106 (a).
Trial court, Second Department
Jun 21, 2006
2006 NY Slip Op 26240
Provider prevailed
Physical therapists may use medicine-section CPT codes for services not specifically listed in the physical medicine section. After a trial on stipulated facts in three consolidated no-fault actions, the Civil Court, Kings County, awarded judgment to the provider for the disputed charges. Under 12 NYCRR 329.1, the entire medical fee schedule applies to physical therapists; its sections organize services rather than restrict which practitioners may use them. The insurer also failed to support its defense that range-of-motion and muscle testing were included in evaluation and management services. That defense presented a factual question requiring competent medical evidence, which counsel's briefs did not supply, and the insurer identified no applicable fee-schedule rule supporting it.
Trial court, Second Department
Jun 20, 2006
2006 NY Slip Op 51136(U)
Insurer prevailed
A provider that accepts and retains an insurer's late answer waives its right to obtain a default judgment. The Civil Court, Kings County, granted the insurer's motion to reargue and vacated the default judgment under CPLR 2221. The insurer supplied no competent evidence of the attorney's alleged deadline miscalculation, and its affidavits lacked sufficient mailing detail to establish timely denials or verification requests. Those deficiencies ordinarily defeated the required showing of a reasonable excuse and meritorious defense. However, the provider had accepted and retained the answer and offered no admissible evidence of when it received it. Because the default judgment was erroneously entered, the insurer did not need to establish either prong, and the provider was directed to accept the answer.
Trial court, Second Department
Jun 13, 2006
2006 NY Slip Op 51116(U)
Split result
The insurer's evidence raised a factual issue of fraudulent incorporation despite denials issued 53 days after the provider's EUO. Under 11 NYCRR 65-3.8 (a) (1), verification was received when the EUO occurred; the late denials precluded medical necessity and concurrent-care defenses. The owner's certified, unsigned testimony concerning management-company involvement was admissible and raised an eligibility issue under Business Corporation Law § 1507, 11 NYCRR 65-3.16 (a) (12) and Mallela, but did not establish fraudulent incorporation as a matter of law. The District Court, Nassau County, denied both summary judgment motions and enforced the discovery stipulation by precluding insurer evidence only concerning demanded information neither previously supplied nor already in the provider's possession.
Trial court, Second Department
Jun 9, 2006
2006 NY Slip Op 26227
Insurer prevailed
An insurer may call a disclosed substitute peer expert whose testimony stays within the original peer review's facts and opinions. After trial, the Civil Court, Richmond County, denied the provider's motion to preclude and directed judgment for the insurer dismissing the complaint. The original peer reviewer was unavailable, and the substitute testified only to the facts and opinions supporting the preserved medical-necessity defense. The court held that 11 NYCRR 65-3.8 (b) (4) did not restrict trial testimony to the reviewer whose report accompanied the denials. Disclosure identifying the substitute and incorporating those reports satisfied CPLR 3101 (d) (1) (i), without demonstrated prejudice or surprise. The substitute's credited, unrebutted testimony established that the electrodiagnostic testing was medically unnecessary.
Trial court, Second Department
Jun 7, 2006
2006 NY Slip Op 51090(U)
Split result
A treating provider's prescription makes a medical necessity defense unavailable against the radiologist who performs the prescribed test. The radiology provider challenged insurers' denials of prescribed MRI claims. Although Insurance Law § 5102 (a) (1) and 11 NYCRR 65-1.1 require necessary expenses, the court found that a prescription establishes necessity for the radiologist, who does not assess necessity or make a pre-test diagnosis. No statute or regulation requires preapproval or investigation of each prescription. The Supreme Court, Nassau County, denied the insurers' summary judgment motion and granted the provider's cross motion on that issue. It denied class certification under CPLR 901 and 902 without prejudice to renewal because discovery and factual support were needed.
