When a delay letter is not good enough

Hillside OpenMRI, P.C. v Allstate Ins. Co., 2014 NY Slip Op 51143(U)(App. Term 2d Dept. 2014)

With respect to the second cause of action, seeking to recover upon a claim for $878.66, and the third cause of action, seeking attorney’s fees with respect thereto, defendant’s claim representative stated that defendant had received plaintiff’s claim for the sum of $878.66 on July 8, 2010 and that it had denied the claim on October 4, 2010. She also stated that defendant had [*2]sent delay letters, dated July 30, 2010 and September 9, 2010 to plaintiff after the receipt of the claim. The letters informed plaintiff that payment of the claim would be delayed pending an EUO of the injured party. However, an insurer’s delay letters, which request no verification, are insufficient to toll the 30-day statutory time period within which a claim must be paid or denied (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]). Since defendant did not establish that it had otherwise tolled its time to pay or deny the claims, defendant failed to demonstrate that the claim underlying these causes of action had been timely denied. Thus, the branches of defendant’s motion seeking dismissal of the second and third causes of action were properly denied.”

The question that is present is this: What does a delay letter have to say to preserve an EUO no-show defense?  Does the date of the EUO have to be set forth on the delay letters to the provider?  It is a bit disconcerting because this is not the all purpose “we are delaying your bill, check in with us one day.”  It told the provider why the bill was on hold.  “prejudice” is “surprise.”  No surprise here.  The provider knew what the good hands people were doing.  A senseless decision.

3 Responses to “When a delay letter is not good enough”

  • ALAN Klaus:

    General delay letters r not ok. Carriers have plenty of time to setup dates b4 they send the delay letter to the provider. Further, every bill is now delayed for some bs reason and that is what the courts should be looking at. If you forgot, carriers are not supposed 2b adversarial 65-3.2. What a joke.

  • Wang Chung:

    Wwwell Carriers not apposed to owwn insurance departwent and Cworts. But that Capitalism.

    You want it. You gwot it.

    Oh yeah … this is ahhh wang Chung.

  • Nathan S:

    Delay letters are the most misunderstood element of the No-Fault claim process. This case is NOT about a defect in the delay letters, or insufficient information. The Courts and Regulation have told us that a delay letter only need to advise the provider what verification the carrier is seeking and from whom. Just read 11 NYCRR 65-3.6(b). There’s no requirement to give more detail than that.

    The delay letters in this case are inadequate because they weren’t accompanied by the EUO letters to the EIP in the motion. And so you could not show that the time to pay or deny the claim was tolled for the period BEFORE the EUO of the provider was requested. That’s why claims that were received after the EIP EUO, but before the provider EUO, were timely tolled before the denial, but not the claims before the EIP EUO. Those earlier claims were found untimely 30 days after receipt because the insurer did not show an EUO letter was sent to their assignor. Put BOTH the EUO letters anddelay letters and you have a proper toll. Omit the EUO letters and you can’t prove verification was requested.

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