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Policy exhaustionFebruary 12, 2020

Matter of Ameriprise Ins. Co. v Kensington Radiology Group, P.C., 2020 NY Slip Op 00500 (1st Dept. 2020)

“Respondent contends that its claims were complete before the policy issued by petitioner was exhausted. This argument is unavailing. The Court of Appeals has interpreted the word “claims” in 11 NYCRR 65-3.15 to mean “verified claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]), i.e., claims as to which the healthcare provider has submitted additional information requested by the insurer (see id. at 297-298, 300-301). Petitioner requested verification in the form of an examination under oath (EUO). Since respondent never appeared for an EUO, its claims were never verified. The defense that an award exceeds an arbitrator’s power is so important that a party may introduce evidence for the first time when the other party tries to confirm the award (see Brijmohan, 92 NY2d at 822-823).

Respondent may also raise on appeal the purely legal argument that Appellate Term lacked the power to remand to Civil Court for a framed issue hearing (see generally Branham v Loews Orpheum Cinemas, Inc., 31 AD3d 319, 323 n 2 [1st Dept 2006], affd 8 NY3d 931 [2007]). On the merits, however, this argument is unavailing (see Allstate Prop. & Cas. Ins. Co. v Northeast Anesthesia & Pain Mgt., 2016 NY Slip Op 50828[U], 51 Misc 3d 149[A] [Appellate Term, 1st Dept, 2016]; Allstate Ins. Co. v DeMoura, 2011 NY Slip Op 50430[U], 30 Misc 3d [*2]145[A] [Appellate Term, 1st Dept, 2011]).”

So in this case, the question on remand will be whether the EUO’s were properly scheduled. The failure here will mean the claims were complete prior to the EUO defaults when there may have been money remaining on the policy. The basis here is that the EIP attender his EUO but the provider defaulted. Measuring the provider EUO against the bill, it was more than 15-business days from its receipt. Measuring the provider EUO letter from the EIP EUO, it was more than 15-days from this date. So the framed issue will be interesting when it all shakes out.

But the important holding here is that this Court is not advocating the proposition that exhaustion is unconditional. The Court is applying 3.15, which would mean, in essence, that this Court may follow the Appellate Term Alleviation line of cases.

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