No Fault Defender – A Defense Attorney's Perspective on New York No-Fault Law

Archive for the ‘Additional Verification’ Category

Eagle Surgical Supply, Inc. v Travelers Indem. Co., 2010 NY Slip Op 51456(U)(App. Term 2d Dept. 2010)

“[d]efendant failed to establish that plaintiff did not provide the requested verification. Defendant’s litigation examiner did not even allege that the requested verification was outstanding, and defendant’s attorney failed to demonstrate that she had personal knowledge to support her assertion of defendant’s non-receipt of such documents (see Warrington v Ryder Truck Rental, Inc., 35 AD3d 455, 456 [2006]; Feratovic v Lun Wah, Inc., 284 AD2d 368, 368 [2001]; V.S. Med. Servs., P.C. v New York Cent. Mut. Ins., 20 Misc 3d 134[A], 2008 NY Slip Op 51473[U] [App Term, 2d & 11th Jud Dists 2008]). Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is denied.”

By the way: you saw this before- A.B. Medical Services, PLLC v. Country-Wide Ins. Co.,  23 Misc.3d 140(A)(App. Term 2d Dept. 2009):

Since the affidavit of defendant’s no-fault litigation supervisor lacks specificity to support the assertion that defendant did not receive the verification it requested, it was insufficient to establish that the verification was still outstanding and, thus, defendant’s time to pay or deny the claims was not tolled.

Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 2010 NY Slip Op 50987(U)(App. Term 2d Dept. 2010)

This case really should be in the misc.3d reporter and Habif, the last case we discussed, should have the aforesaid (U) cite.  The predominant issue that is presented in this case involves peer hearsay.  But, there is a subtle jab at how certain Kings County judges adjudicate the mailing issue; a mention of 3212(g) and a way to possibly invoke it; and the duty to communicate when an additional verification request is received.  Now on to the discussion of this case.

1. Peer hearsay – exception to the hearsay rule

The case starts off with the observation that the plaintiff assignor’s medical records are fair game under the standard argument that a medical provider is estopped from challenging medical records that reference or discuss the assignor.  This rule follows the long line of cases, which holds that the plaintiff’s medical records constitute admissions when used by the defendant.  The court was correct in invoking this rule, and should have stopped here in its analysis.

2. Peer hearsay – it is non hearsay

“Moreover, we note that, while defendant’s peer review doctor may have considered medical records received from other providers who had rendered treatment to the assignor, defendant was not seeking to use such records to establish the truth of the facts set forth therein. Defendant was not attempting to prove that Rafailova was injured as documented in her medical records, or that she was treated as set forth in those records. Instead, defendant’s peer review doctor simply opined that, assuming the facts set forth in Rafailova’s records were true, the treatment allegedly provided was not medically necessary. Therefore, as defendant was not using the underlying medical records for their truth, such records were not being used for a hearsay purpose (see e.g. Dawson v Raimon Realty Corp., 303 AD2d 708 [2003]; Splawn v Lextaj Corp., 197 AD2d 479 [1993]). This is distinguishable from a situation in which a medical expert relies upon medical records to establish the fact of an injury (see e.g. Hambsch v New York City Tr. Auth., 63 NY2d 723 [1984]; Wagman v Bradshaw, 292 AD2d 84 [2002]). Consequently, plaintiff’s argument that defendant failed to establish the reliability of the underlying medical records in support of its claim that the treatment provided was not medically necessary is irrelevant.”

I am not sure that I agree with theabove reasoning.  If a patient’s medical chart shows normal Range of Motion and symmetrical Deep Tendon Reflexes, then of course I as a competent defense attorney am going to use these findings for their truth, to show that certain diagnostic testing was medically unreasonable.  This also runs counter to the Ninth and Tenth Districts’ determination in Progressive Medical Inc. v. Allstate.  Finally, it runs counter to the Second, Eleventh and Thirteenth Districts’ determination in Pan Chiro, P.C. v. Mercury Ins. Co.

But, the real problem with this case is the application it has to personal injury and medical malpractice litigation.  I will let your imagination craft the creative lawyering this case presents.

3. Mailing

The rule in Civil Kings with certain judges is that the affidavit must be specific as to the dates an item is mailed.  It is insufficient, according to these judges, to present an affidavit that discusses the general mailing procedure, which will allow a reader to infer that an annexed denial was mailed on the date of the denial or the next business date.  The fact that certain plaintiff’s prevailed using this argument forever baffled my mind, and was always a key determination as to whether or not I appealed an adverse decision.  Here is an example of case from Kings County where I reversed a judge who said my affidavit was not specific enough: Quality Psychological Services, P.C. v. Mercury Ins. Group, 27 Misc.3d 129(A)(App. Term 2d Dept. 2010).  Here is an example from Queens County where I reversed a judge who said my affidavit was not specific enough : Innovative Chiropractic, P.C. v. Mercury Ins. Co., 25 Misc.3d 137(A)(App. Term 2d Dept. 2010).

Here is the language from Urban:

“The Civil Court denied the motion due to the lack of specificity in the affidavit of defendant’s mail clerk regarding mailing of the denial & requests for additional verification.  The instant appeal by defendant ensued. Contrary to the determination of the Civil Court, the affidavits of defendant’s no-fault claims examiner and mail clerk were sufficient to establish that defendant had timely mailed the additional verification requests and NF-10 denial of claim forms in that they described, in detail, based on the affiants’ personal knowledge, defendant’s standard office practice and procedure designed to ensure that said documents were mailed”

4. Communicate or be estopped

A reoccurring theme in the case law has involved the insurance carrier sending a verification request  to a provider who the insurance carrier knows, or should know, does not have the requested information.  A similar theme involves the sending of verification requests to a provider when they have an attorney submitting their bills.

The Court, in following recent precedent, held that the provider must communicate that it does not have the information in order to stop the tolling of the time to pay or deny the claim.  The Urban court said the following: “While plaintiff argues that the requests should have been sent to the referring physician, inaction was, in this case, not a proper response (see Westchester Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [1999]). Plaintiff should have informed defendant that the requests should be sent elsewhere.”

5. The door opens up to the invocation of 3212(f)

“Furthermore, plaintiff did not demonstrate that it needed the records from the other providers in order to raise a triable issue of fact as to whether the services at issue were medically necessary when they were rendered (see CPLR 3212 [f]; GZ Med. & Diagnostic, P.C. v Mercury Ins. Co., 26 Misc 3d 146[A], 2010 NY Slip Op 50491[U] [App Term, 2d, 11th & 13th Jud Dists 2010]), and that it had served discovery demands during the ample opportunity that it had to commence discovery proceedings to obtain such records before the instant summary judgment motion was brought (see Meath v Mishrick, 68 NY2d 992 [1986]).

It looks like the Defendant failed to annex the medical records that its peer review doctor relied upon in its motion for summary judgment.  Interestingly, the court held that if Plaintiff was diligent in seeking discovery, it would have been able to invoke 3212(f).  This is very interesting and it also makes sense.

All that in one case.

Canarsie Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 50950(U)(Civ. Ct. Kings Co 2010)

“In support of its second contention, Plaintiff argues that despite the fact that the accident occurred in Kings County and the Plaintiff resides in Kings County, Defendant scheduled the EUOs to be held at the offices of its counsel located in Westchester County. As such, Plaintiff claims that the EUO notices were defective and unreasonable because it failed to provide that Plaintiff would be paid for her time and travel expenses.

Here, it is undisputed that Plaintiff did not respond to the Verification Request. Plaintiff asserts that it was not required to respond due to the fact that Defendant’s request was defective and unreasonable. The Court disagrees. There is no provision of the No Fault Regulations which allow a claimant or insurance company to ignore a Verification Request or response. In fact, there is ample case law which provides that neither party may ignore communications from the other without risking its chance to prevail in the matter (see, Media Neurology, P.C. v. Countrywide Ins. Co., 21 Misc 3d 1101(A); and Westchester County Medical Center v. NY Central Mutual Fire Ins. Co., 262 AD2d 553). Even when a claimant believes it need not comply with a verification request, the claimant still has a duty to communicate with the insurer regarding the request (see, Dilon Medical Supply Corp. v. Travelers Insurance Co., 7 Misc 3d 927). It is well established that the purpose of the No Fault statute is to ensure prompt resolution of claims by accident victims. The parties’ obligations are centered on good faith and common sense. Any questions concerning a communication should be addressed by further communication, not inaction.(see, Dilon Medical Supply Corp. v. Travelers Insurance Co, supra).

If a Plaintiff deems a Verification Request to be defective and or unreasonable, it is incumbent on that Plaintiff to convey that information to the Defendant and to state the reasons thereof, thereby giving the Defendant the opportunity to respond accordingly. The Defendant should not be put in a position to second guess the reason or reasons why the Plaintiff has failed to respond to the request. In this case, the Plaintiff could have informed the Defendant that given the fact that the Plaintiff resided in Brooklyn, the scheduled location for the EUO was inconvenient, or in the alternative, Plaintiff could have requested reimbursement for time and travel expenses, thereby preserving its defenses concerning the EUO notices (see, Presbyterian v Maryland, 90 NY2d 274). By failing to respond to Defendant’s Verification Request, Plaintiff undermined the purpose of the No Fault Statute, which is to ensure the prompt resolution of claims.

The Court finds that by failing to respond to Defendant’s Verification Request, Plaintiff waived its defense and is therefore estopped from asserting that the EUO notices were defective and unreasonable. Defendant should not be penalized for Plaintiff’s inaction. Accordingly, the Court [*3]need not address Plaintiff’s arguments concerning the sufficiency of Defendant’s EUO requests (see Allstate Social Work and Psychological Svcs. v. Utica Mutual Insurance Co., 22 Misc 3d 723).”

The bolded passages tell the story about this case.  While the better practice is to hold EUO’s in the county where the deponent resides or where the treatment is occurring, the court correctly found that a venue defect must be met with a prompt objection or forever be waived.

This should be analogized to CPLR 3122(a), where the courts have interpreted the statute to mean that absent a timely objection to the deposition notice, most objections, save those that allege the deposition is palpably improper, are waived.

Ambrister v Integon Natl. Ins. Co., 2010 NY Slip Op 50489(U)(App. Term 2d Dept. 2010)

“Defendant’s claims examiner explained that when a provider fails to comply with a verification request, defendant’s regular course of business is to stamp the original request with the words “second notice” and insert the date of the second notice. The verification request annexed as an exhibit was dated December 24, 2007 and bore a stamp of the words “second notice” and the date, January 28, 2008. Therefore, without reaching the question of whether defendant was even required in the first instance to annex its verification requests to its cross motion papers, we reject plaintiff’s argument that defendant failed to annex a copy of its initial verification request. Accordingly, the judgment is affirmed.”

1. Do you think it is proper for an insurance carrier to move for summary judgment without annexing the bills, which correspond to the denials?

2. Is it proper for an insurance carrier to move for summary judgment without annexing the denials?

3. Is it proper for a provider to move for summary judgment, without annexing the bills to its motion?

4. Is it proper for a provider to meet its prima facie case through an insurance carriers denials, which are first disclosed in answering papers, thereby obviating the rule that the failure to make a prima facie case precludes resort to the opposing papers?

5. Is it proper for an insurance carrier to move for summary judgment on a medical necessity defense, and not to include the medical records the peer reviewer relies on to come to his conclusion that a service is not medically appropriate?

First Aid Occupational Therapy, PLLC v Country-Wide Ins. Co., 2010 NY Slip Op 50149(U)(App. Term 2d Dept. 2010)

Unbundling.  I love this word.  I discussed this issue in a previous post.  Click here for that post.  The only difference between the previous case and this case is that the penalty for failing to proffer an expert affidavit (assuming you can find an expert who would support the unbundling theory in this case) is succumbing to a plaintiff’s summary judgment motion.  The relevant portions of the case are as follows:

“While defendant denied the claims underlying plaintiff’s first and fifth causes of action on the ground that plaintiff sought to recover in excess of the fee schedule by ” unbundling’ the service[s] into . . . separate bill[s]” even though such services “are considered part of the initial medical evaluation,” defendant did not submit an affidavit from someone with sufficient expertise to establish that ground as a matter of law or even to demonstrate the existence of a triable issue of fact with respect to the billing for such services (see Zuckerman v City of New York, 49 NY2d 557 [1980]; Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2009]). As a result, defendant “failed to raise a triable issue of fact in admissible evidentiary form sufficient to warrant denial of summary judgment in favor of [plaintiff] on the [first and fifth] cause[s] of action” (Kingsbrook Jewish Med. Ctr., 61 AD3d at 23).”

Finally, the case involved a premature additional verification request where plaintiff was granted summary judgment.  This was reversed.

“It is undisputed that defendant timely mailed its initial requests for verification and that plaintiff failed to provide the information requested. Plaintiff also did not provide the information requested in defendant’s follow-up verification requests, which were mailed on the 30th day after the initial verification requests but prior to the expiration of the full 30-day period within which plaintiff was supposed to respond to defendant’s initial requests for verification. As the foregoing facts are nearly identical to those in Infinity Health Prods., Ltd. v Eveready Ins. Co. (67 AD3d 862 [2009]), “the 30-day period within which the defendant was required to pay or deny the claim did not commence to run . . . [and] plaintiff’s action is premature” (id. at 865).”

A follow-up verification that is one day premature.  No problem.

Velen Med. Supply, Inc. v Country-Wide Ins. Co., 2009 NY Slip Op 52630(U)(App. Term 2d Dept. 2009):

“It is undisputed that defendant timely mailed its initial request for verification and that plaintiff failed to provide the information requested. Plaintiff also did not provide the information requested in defendant’s follow-up verification request, which was mailed on the 29th day after the initial verification request, but prior to the expiration of the full 30-day period within which plaintiff was supposed to respond to defendant’s initial request for verification. As the foregoing facts are nearly identical to those in Infinity Health Prods., Ltd. v Eveready Ins. Co. (___ AD3d ___, 2009 NY Slip Op 08585 [2d Dept 2009]), “the 30-day period within which the defendant was required to pay or deny the claim did not commence to run . . . [and] plaintiff’s action is premature” (id. at *2 [citations omitted]). In view of the foregoing, we reach no other [*2]issue.”

When an order of a lower court is reversed, wouldn’t it be nice to have the appellate court tells us if the reversal is on the law, the facts or the interest of justice?  The Appellate Divisions all do this.  The Court of Appeals does not, but since that is a pure law court (with the exception of direct appeals from capital murder cases where the death penalty is imposed), there is no need for that court to make that statement.

Yet, the Appellate Terms do not tell us whether their order are on the law, the facts or in the interest of justice.  Thus, we are left to wonder whether the Court was saying that the order of the Civil Court should have been reversed on the law or for some other basis.  Without this statement, a Civil Court is free to deny a Defendant’s motion for summary judgment and possibly grant Plaintiff’s summary judgment motion based upon a premature follow-up verification request when the court is convinced that the interests of justice would not be served by dismissing the complaint.

Crazy.

Today, the Appellate Division, in Infinity Health Prods., Ltd. v Eveready Ins. Co. 2009 NY Slip Op 08585 (2d Dept. 2009) quite surprisingly held that a premature follow-up additional verification request was sufficient to toll the 30-day period to pay or deny a bill.

In this case, the follow-up additional verification request was four days premature, i.e., sent on day 27.  The Civil Court, as affirmed by the Appellate Term, granted Plaintiff summary judgment.  In dissent, Justice Golia (21 Misc.3d 1 [App. Term 2d Dept. 2009]) held that Defendant, as a matter of law, should have been granted summary judgment.  He held, in pertinent part, the following:

“The majority simply states that “[c]ontrary to defendant’s contention, the case of New York & Presbyt. Hosp. v American Tr. Ins. Co. (287 AD2d 699 [2001]) does not 5 permit defendant to disregard the regulation governing the timing of a follow-up request for verification.” The majority makes this finding even though the cited Appellate Division case deals with a verification request that was dated October 5, 1999 and a follow-up request that was sent and dated November 1, 1999. Certainly, the first day of November is less than 30 days from the fifth day of October.”  Id.

The Appellate Division agreed with the result Justice Golia reached, and even cited the above case in coming to its holding.  But, there is a glaring subtlety that should cause people like me who live for “bright line rules” to cringe.

First, one needs to observe what the first (and only) decretal paragraph of the Appellate Division’s order states:

“ORDERED that the order dated July 10, 2008, is reversed, on the facts and in the exercise of discretion, with costs, the order of the Civil Court of the City of New York, Kings County, is reversed, the plaintiff’s motion for summary judgment on the complaint is denied, and the defendant’s cross motion for summary judgment dismissing the complaint is granted.”

The motion of Eveready was not granted on the law.  In fact, the Appellate Division’s discussion of this case solidifies that statement, as observed herein:

“Although the defendant in this case did not strictly comply with the time limitation set forth in the rule regarding the submission of a second verification request, under the circumstances of this case, the plaintiff is estopped from claiming that the defendant is precluded from asserting any defense to the claim. It would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent.”

As you can see, precepts of “equity” and the Appellate Division’s observation that the disposition of this case was guided “under the [peculiar factual] circumstances of this case” should make every reader of this article scratch their collective heads. I think this case may be a double edged sword, because if equity concerns are viable, then all the practices of the providers and the carriers are opened to a new level of scrutiny.  What was a rule laden system that was guided by the letter of the regulations and offered predictable outcomes, has now become a paradigm that has lost a certain level of foreseeability.  What we gain on one hand, we lose with the other.

For more analysis on this case, see NFP.  Roy Murra at Coverage Counsel has an interesting perspective on this case, which you should read.

While not earth shattering, the matter of Richmond Hospital a/a/o Claudio v. State Farm (Sup. Ct. Nassau Co. Index # 22143/08 [Lally, J. 2009]) that I prevailed on is proof that the courts are heeding the Court of Appeals decision in holding that an Assignment of Benefits form bearing the legend “signature on file” may be challenged through timely and proper additional verification requests.  There are two things to observe in this decision.  First, the Court found that “signature on file” satisfied the “claimant’s notice burden where the carrier does not take timely action to verify the existence of an assignment of benefits.”  Second, the Court found Plaintiff’s argument that the Claimant was unable to sign the Assignment of Benefits because he was too severely injured to be without merit.

But here is what intrigues me I suppose.   What would happen if the AOB failed to state signature on file or contain any other indicia that it was signed?  We all know that it would not matter, since standing is not part of a medical provider’s prima facie case.  Yet, Justice Lally intimates otherwise.

Finally, as I have said numerous times – if the law were being written on a clean slate, I would tend to agree with the approach the majority of no-fault jurisdictions (everyone except for New York) take and  require a medical provider to prima facie prove: (a) Standing; (b) Performance of a medically necessary service; (c) Causal relation between the service and the loss; (d) Proper billing of the service; and (e) The bill being overdue when the action was commenced.  But, we are not writing on a clean slate.  We must therefore work within the framework that has been built in the last 15 years, lest we want to live in the late Mr. Rogers’ “Land of Make Believe.”

The issue involving whether a premature follow-up additional verification request may be deemed valid is now before the Appellate Division, Second Department. The case of “Infinity Health Products v. Eveready Insurance Company”, is slated for oral arguments on September 11, 2009.

http://www.courts.state.ny.us/courts/ad2/calendar/09calendars/September/Publication_Calendar_20090911_P1.pdf

I found this story a week before it was brought to life by a fellow blogger, but since the fellow blogger published it first, he gets deserved credit. the name of the case is: Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc.3d 1 (App. Term. 2d Dept. 2008).

This was the case involving a premature follow-up additional verification and the preclusion sanction due to this occurring. It is interesting to see the Second Dept taking up this issue. The dissenter at the Appellate Term observed other Appellate Division cases that found the sanction of preclusion unwarranted in this factual scenario. This is probably what lead the App. Div to grant leave as to this issue. As I have learned recently through personal experience in two recent matters, the App. Div. does not like to grant leave to no fault matters and does not like motions to reargue when a non-articulated argument, if properly preserved, would reverse their opinion and order.

That is the only case of interest on the horizon that i have seen lately…