New York Central Mutual has got tied up in Sound Shore (again?)

Mount Sinai Hosp. v New York Cent. Mut. Fire Ins. Co., 2014 NY Slip Op 05779 (2d Dept. 2014)

(1) “In March 2011, Ana Rodriguez, who was insured under a policy of automobile insurance issued by the defendant, New York Central Mutual Fire Insurance Company (hereinafter New York Central), allegedly was injured in an automobile accident. In November 2011, she received treatment at a hospital facility of the plaintiff, Mount Sinai Hospital (hereinafter Mount Sinai). In early December 2011, a few days after Mount Sinai rendered this treatment, it sought payment for it. Mount Sinai’s third-party biller, The Outsource Group (hereinafter Outsource), sent a Form UB-04 and a letter requesting payment to New York Central. Twenty days after New York Central received the request, it requested verification of Mount Sinai’s claim. Approximately one week after New York Central sent the verification request, it received from Outsource more than 100 pages of documents, including records of Rodriguez’s treatment at Mount Sinai and various forms Rodriguez had completed there. New York Central did not request further verification. On January 27, 2012, less than 30 days after it received these records, New York Central issued a denial of the claim on a Form NF-10. The Form NF-10 was, in all substantial respects, complete.”

(2) “Two months later, on March 26, 2012, Mount Sinai, which was now represented by a different third-party biller, issued another request for payment of its bill for the treatment it had rendered to Rodriguez. This time, Mount Sinai’s third-party biller issued the request on a Form NF-5. New York Central ignored this request for payment, and, in May 2012, Mount Sinai, as assignee of Rodriguez, commenced this action seeking payment. Mount Sinai eventually moved for summary judgment on the complaint, and New York Central cross-moved for summary judgment dismissing [*2]the complaint. The Supreme Court denied Mount Sinai’s motion and granted New York Central’s cross motion. Mount Sinai appeals. We reverse.”

(3) “Here, in reliance on Sound Shore, Mount Sinai contends that its billing through Outsource in December 2011 on a Form UB-04 did not commence the 30-day period in which New York Central was required to pay, deny, or request verification of Mount Sinai’s claim. Instead, Mount Sinai contends, the 30-day period commenced in March 2012, when Mount Sinai submitted a billing request on a Form NF-5. In effect, Mount Sinai contends, New York Central’s denial of claim in January 2012 did not deny anything; there was no claim submitted in December to deny.”

My opinion is that this is far fetched.  Everyone knows no-fault is a game of form over substance.  Some call it the game of gotcha.  Recall Justice McKeon’s concurrence in Lenox Hill v. Tristate?  I am baffled how  a re-bill triggered a new 30-day pay or deny period, when the App. Div. has previously said this was not the case.  So, through magic of form NF-5, a new 30-day pay or deny period materialized?

In St. Vincent v. Countrywide 7 years ago, this Court stated that a follow-up verification was issued on day 30 (not 31-40) was sufficient to preserve the tolling because, in essence, the carrier should not be penalized for proactive claims handling.  The Court reversed the Appellate Term on the fact, the law and in the interest of justice.  Now 7 years later, this Court through Sound Shore and now Mount Sinai has given the Henig gang a free pass on logic for “strict compliance” with how this Court perceives the regulations should be interpreted.

This case  cries for a trip to Albany.  The only catch, of course, is why was the original bill denied?  Assuming the Court of Appeals said this is  an injustice and allows the original UB-04 “under the peculiar facts of this case” to act as the NF-5, what is the substantive defense to this hospital bill?

Finally, I would be remiss if I did not express the first thing on my mind when I read this case was, but why the heck did NYCM not address the second submission.  That is baffling.


One Response to “New York Central Mutual has got tied up in Sound Shore (again?)”

  • kurtlundgren:

    I would usually be applauding a decision like this …. but I have to agree with your analysis Jason … and there must be something more to the underlying claim process that is not mentioned in the decision. Where a carrier had to accept an NF-3, or NF-5, or the substantial equivalent – I am having trouble reconciling the Decision.

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