The feigned verification response does not slice it – a break from the law as certain arbitrators construe itMarch 13, 2017

St. Barnabas Hosp. v Government Employees Ins. Co., 2017 NY Slip Op 27056 (2d Dept. 2017)

(1) “The Plaintiff’s position that the verification request was improper because it is not required under the insurance regulations or no fault law is without merit. The Defendant, GEICO, referenced Circular Letter No. 4 dated January 12, 2011, issued by the State of New York Insurance Department, in its original request for additional verification. The purpose of the Circular Letter is to advise no-fault insurers and health insurers of the amendment of Insurance Law §5103(b)(2) and to interpret the regulations related thereto.”

(2) “The Court also disagrees with the Plaintiff’s contention that it fully responded to the Defendant’s verification requests by merely stating, “[t]he patient received ‘Necessary Emergency Health Services’ during his admission at the hospital.” The Plaintiff’s response is vague in that it fails to delineate whether some, most or all of the services were in fact “necessary emergency health services”.

(3) Thus, as the Defendant correctly maintains, the Plaintiff’s initial claim for payment was premature and was not complete until the Defendant received additional verification of the claim as requested (See 11 NYCRR 65-3.8(a)(1), (b)(3); Nyack Hosp. v. State Farm Mut. Auto. Ins. Co., 19 AD3d 569 [2d Dept. 2005]).

(4) Where, as here, the insurer presents sufficient evidence that it timely requested additional verification and the hospital fails to provide the information requested, the complaint must be dismissed as premature (St. Vincent’s Hosp. of Richmond v. American Transit Ins. Co.. 299 AD2d 338 [2d Dept. 2002]).

The context of the within matter involves the when the insurance carrier is liable to a hospital for no-fault coverage following a patient’s “stabilization”.  What is noteworthy here is that in response to verifications, the hospital objected and GEICO failed to communicate with the hospital.  Most arbitrator’s apply a 13 year old Civil Court case, stating that an insurance carrier must respond to an objection at its own peril.  All Health Med. Care, P.C. v. Gov’t Employees Ins. Co., 2 Misc. 3d 907, 911, (Civ. Ct. Queens Co. 2004).  This case is contra.  And, it makes sense.  If the provider sends documentation that is unresponsive to the verification, then why does the insurance carrier have to play “ping pong”.  Upon objecting to a verification or providing unresponsive information. the claim is ripe for arbitration or litigation.

In this case, the Court held that objection lacked merit, did not require the insurance carrier to do anything further, and dismissed the claim.  In my mind, that is the right call.

2 Responses

  1. Rookie says:

    Jason, Your commentary is somewhat inacurate. A prOviders Response to the carrier might be sufficient in provider’s mind, but insufficient in the carrier’s or best yet unresponsive. Where do you draw a line? Also, App Div was very cleaR in WestchEster v NYCM that if there is any confusion as to verification request or respOnse some action or
    Communication is required. The party of whom the Verification is sought needs to reSpond if they dont understand the verification or the carrier needs to object to the response if it is not sufficient.

    This case was different. The hospital had to answer a simple question tell us when the patient beCame stabilized. To which the hospital simply Said notHing and Instead of getting paid on atleast a portion of the claim they got paid nothing

    • jtlawadmin says:

      I raise this issue because here is the following fact pattern in arbitration. Carrier delays surgery center bill for MRIs and operative photos. The basis of the delay is on the verification request, i.e., we are requesting information from provider who has information. Delays are ALSO sent to the MRI facility and the surgeon. This avoids the Doshi v. State Farm problem and the Mt. Sinai v. Autoone problem. MRI center and surgeon do not cooperate often. Surgery center sends a letter that says we do not have the information, pay the bill. My favorite is when they send me a Hippa authorization from the surgeon and MRI center. Hippa does not apply to no-fault – read the Appellate Term, Fist Department case of Amaze v. Geico.

      Now, does the carrier have to respond with, hello, we sought verification from the MRI center and surgeon (again this was on the initial and follow-up verification)? I say no. Arbitrator Rosenberger says no and he cites to D & R Medical Supply, Inc. v. American Transit Ins. Co., 2011 NY Slip Op 51727 (App Term 2d Dept. 2011). I often disagree with him but he is correct here.

      Too many arbitrators say you must write back or you lose the toll.

      As you can figure, this issue will undoubtedly be briefed before the Appellate Division in 2018. I really believe that communication has to be substantive and meaningful. God knows, we are well aware the surgery center does not have the information. You are reiterating a truism. Hillary won the popular vote? Trump won the electoral college? These are just facts. If you write it to me, do I need to say, of course you are right? I think that type of response – similar to that of Hospital Receivable systems – is a non-response and the carrier should not be penalized for ignoring non-responsive correspondence.

      I would be lying if I said I think the carrier has a clear cut chance of winning. Most arbitrators are buying the “he who laugh lasts wins” mantra. But on these legal issues, the Courts and AAA part ways quite often. I truly believe AAA has it wrong on this issue. If only Norman Dachs were still around.

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