The 120-day rule

Chapa Prods. Corp. v MVAIC, 2019 NY Slip Op 29341 (App. Term 2d Dept. 2019)

It can be called the 150-day rule. In essence the carrier has 150 days from the first verification demand to the date of denial. What i found interesting is that a late denial does not void the defense under a Domotor theory. Rather, a late disclaimer only makes the dismissal without prejudice. I agree with the central holding since it makes sense. New York has a 30-day pay or deny/die rule. So, you cannot argue with this new rule of no-fault law.

I am grateful that the Court appears not to be accepting a nondescript affidavit that certain items were mailed: “However, we agree with the Civil Court’s determination that the documentation plaintiff provided in response to defendant’s verification requests is “not in compliance with the request” (see New Way Med. Supply Corp. v State Farm Mut. Auto Ins. Co., 56 Misc 3d 132[A], 2017 NY Slip Op 50925[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017])”.

As you know, the famous non descrip affidavit has caused many carrier motions to be denied. I disagreed with those holdings.

The Court went on and held as follows:

“Historically, an insurer has not been required to pay or deny claims upon receipt of a “partial response” to a verification request (see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2002] [“(a)n insurer is not obligated to pay or deny a claim until it has received verification of all relevant information requested”]; see also Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co.,24 AD3d 492, 493 [2005]; Compas Med., P.C. v Travelers Ins. Co., 53 Misc 3d 136[A], 2016 NY Slip Op 51441[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). The current version of 11 NYCRR 65-3.8 (b) (3) also does not obligate an insurer to pay or deny a claim prior to its receipt of all requested verification—it merely provides that an insurer “may” issue a denial. Previously, when a request for verification had not been fully complied with prior to the commencement of a no-fault action, the action was dismissed as premature (see Proscan Imaging, P.C. v Travelers Indem. Co., 28 Misc 3d 127[A], 2010 NY Slip Op 51176[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Vista Surgical Supplies, Inc. v General Assur. Co., 12 Misc 3d 129[A], 2006 NY Slip Op 51034[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2006]), and we see no reason to deviate from that rule now.”

“In light of the foregoing, we hold that a denial of claim form issued following the expiration of the 150-day period after the issuance of the initial request for verification is a nullity with respect to that defense. Therefore, we find that the untimely denials issued in this case offer no basis to dismiss the complaint with prejudice. Rather, upon searching the record, we conclude that the action should be dismissed as premature, i.e., without prejudice, which is the same position the parties would have been in before 11 NYCRR 65-3.8 (b) (3) was amended to permit a denial on the ground that verification was not provided.”

Additional Verification

New Horizon Surgical Ctr., LLC v Travelers Ins. Co., 2019 NY Slip Op 51690(U)(App. Term 2d Dept. 2019)

“Contrary to plaintiff’s contention, defendant was not required to pay or deny plaintiff’s claims upon receipt of a “partial response” to defendant’s verification requests (see 11 NYCRR [*2]65-3.8 [a] [1]; [b] [3]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004] [“A claim need not be paid or denied until all demanded verification is provided”]).”

Two thoughts here. First, how do we justify the Rybak general compliance affidavit? Second, how do arbitrators still hold in the general sense that an objection letter or “communication” must be responded in order to continue the toll. The Court is clear – provide it or lose.

I can see two exceptions to the second point. First, a response that says we do not have it is a complete response. Second, a response that objects because the sought after verification is palpable improper. I must assume this case fits under exception two. Maybe the Court found the demand reasonable? The problem is like the definition of medical necessity, the appeals courts have not given us guidance of where the reasonableness line (if it even exists) is drawn.

The additional verification paradigm (again)

Right Aid Med. Supply Corp. v State Farm Mut. Auto. Ins. Co., 2019 NY Slip Op 51409(U)(App. Term 2d Dept. 2015)

“At a nonjury trial held on February 26, 2016, the Civil Court noted that the only issue to be determined was whether plaintiff had provided the requested verification, stated that the burden was on plaintiff, and directed plaintiff to call its first witness. Plaintiff did not call any witnesses, arguing that the burden was on defendant to first establish that it had not received the requested verification. With no testimony having been presented, the Civil Court found for defendant on the ground that plaintiff had failed to demonstrate that it had provided the requested verification. Plaintiff appeals from a judgment entered March 21, 2016, dismissing the complaint.”

This is at most the follow-up to the Travelers case of last week.

The first citing of 65-3.5(p) – somewhat ominous

Lida’s Med. Supply, Inc. v Hereford Ins. Co., 2019 NY Slip Op 51356(U)(App. Term 2d Dept. 2019)

65-3.5(p): “With respect to a verification request and notice, an insurer’s non-substantive technical or immaterial defect or omission, as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply with the request or notice. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.”

“However, since defendant failed to establish that its follow-up IME scheduling letter was timely (see 11 NYCRR 65-3.6 [b]), its cross motion for summary judgment dismissing the complaint was properly denied. Defendant’s contention regarding the applicability of 11 NYCRR 65-3.5 (p) is improperly raised for the first time on appeal (see Joe v Upper Room Ministries, Inc., 88 AD3d 963 [2011]; Gulf Ins. Co. v Kanen, 13 AD3d 579 [2004]), and we decline to consider it.”

The problem with this argument is that (p) on its face subverts 3.5(d), 3.5(b) and 3.6(b). It also conflicts with 5106(b) as to the 30-day pay or deny rule. In terms of an IME, 3.5(d) would have to control and 3.6(b) would be on point as to the follow-up. I could see 3.5(p) construed or “harmonized” to allow a late follow-up verification, but not a terribly late follow-up verification. It is an interesting paradigm on its face.

In the old days, we would ask Chris Maloney or Larry Fuchsberg for their opinion on the interplay between 3.5(p), 3.5(b), 3.6(b) and 3.5(d). But the opinion letter days ended before most attorneys in no-fault obtained their law licenses. I would love to know what DFS has to say. It will be up to the Court on a proper record to interpret 3.5(p). That worries me.

An outstanding verification trial

Island Life Chiropractic, P.C. v Travelers Ins. Co., 2019 NY Slip Op 51273(U)(App. Term 2d Dept. 2019)

This area of law has contributed much body to the procedural world of 3212(g) and CPLR 3123. We now have another matter that is shaping this issue.

(1) “Where a no-fault insurer is relying on the defense that an action is premature because verification is outstanding, it is the defendant insurer’s prima facie burden at trial to demonstrate (1) that verification requests were timely mailed and (2) that the defendant did not receive the requested verification (see 11 NYCRR 65-3.8 [a]; Right Aid Med. Supply Corp. v State Farm Mut. Auto. Ins. Co., 58 Misc 3d 140[A], 2017 NY Slip Op 51857[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]). As there was a finding for all purposes in this action that defendant had timely mailed verification requests to plaintiff, defendant did not have to prove this element of its defense at trial. In contrast, there was no finding that defendant had not received the requested verification. If the motion court had also found, for all purposes in the action, that defendant had not received the requested verification, meaning that that fact could no longer be disputed or rebutted, then, rather than denying defendant’s motion for summary judgment and making CPLR 3212 (g) findings, the appropriate course of action in this case would have been to grant summary judgment to defendant (see EMC Health Prods., Inc. v Geico Ins. Co., 43 Misc 3d 139[A], 2014 NY Slip Op 50786[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).

(2) Instead, the motion court simply found that plaintiff had raised a triable issue of fact as to that question, the only impact of which was that a trial, limited to the issue of “whether the requested verification remains outstanding,” would take place (see Vitality Chiropractic, P.C. v New York Cent. Mut. Fire Ins. Co., 17 Misc 3d 34 [App Term, 2d Dept, 2d & 11th Jud Dists 2007]). “

The net effect is for a new trial where Defendant bears the burden of showing lack of receipt of verification. The better question – and one you should opine on – is can this be satisfied through subpoenaing Plaintiff’s deponent in the summary judgment motion and having him/her prove the exact verification was mailed? And assuming this a party witness, the penalty for refusal to obey a subpoena should be striking the pleadings.

The denial can wait

Parisien v Citiwide Auto Leasing, 2019 NY Slip Op 51050(U)(App. Term 2d Dept. 2019)

The IME no-show disclaimer that is delayed for the verification. Many try to take the view that you cannot wait for verification since it will not change how the claim is handled. It is a very good argument and, in a world without preclusion, I think it wins the day.

“Although plaintiff’s assignor failed to appear for the second scheduled EUO more than 45 days before the subject claims were denied, defendant was not precluded from interposing its defense based upon the assignor’s failure to appear for the EUOs, because defendant’s time to pay or deny the claims did not begin to run until it received the requested written verification (see Alev Med. Supply, Inc. v New York Cent. Mut. Fire Ins. Co., 38 Misc 3d 143[A], 2013 NY Slip Op 50258[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]). Thus, defendant established its prima facie entitlement to summary judgment, and plaintiff failed to raise a triable issue of fact in opposition. “


Orthoplus Prods., Inc. v Global Liberty Ins. Co. of N.Y., 2019 NY Slip Op 51003(U)(App. Term 2d Dept. 2019)

” Even accepting plaintiff’s assertion that it submitted certain verification documents to defendant, the record establishes that plaintiff did not fully respond to defendant’s requests for additional verification, which were properly mailed to plaintiff’s attorney as authorized by counsel’s prior correspondence to defendant “

This is the common scenario where the provider is asked for 5 things, mailed one (provided the item) and says they complied. While this is insufficient to raise an issue of fact, the Appellate Term (Second Department) routinely holds that an affidavit (without more) asserting to comply with all verification is enough to raise an issue of fact. I cannot grasp this dichotomy.


New Horizon Surgical Ctr., L.L.C. v Travelers Ins., 2019 NY Slip Op 50281(U)(App. Term 2d Dept. 2019)

“In opposition to the motion, plaintiff submitted an affidavit which stated that all of the verification requested by defendant was provided to defendant and that a copy of the verification provided was annexed. Among the documents annexed was a medical report in which the treating provider stated that plaintiff’s assignor had signed a “separate, comprehensive Informed Consent Form which has been made a portion of the patient’s chart.” Defendant’s verification request included a request for a signed informed consent form executed by plaintiff’s assignor. However, no such document was annexed to plaintiff’s papers as having been provided to defendant. Thus, plaintiff failed to raise an issue of fact as to whether it had provided all of the requested verification.”

When an affidavit with no exhibits stating that Plaintiff complied with the verification, a triable issue of fact is raised. Here, the Plaintiff presented supporting documentation but failed to annex one item. The affidavit stated all verification was sent to Defendant. The result is that the complaint is dismissed.

Now, I agree with the result in this case. How do you reconcile this matter with the consistent denial of summary judgment motions when nothing is submitted with the affidavit?

Verifications were mailed

Lenox Hill Radiology & MIA, P.C. v Global Liberty Ins. Co. of N.Y., 2018 NY Slip Op 51810(U)(App. Term 2d Dept. 2018)

The relevance here is that my friend Rookie took the District Court published cased and convinced some Civil Court judges that we could not prove mailing.  It made me feel like the partner who could not prove the no show.  Anyway, that case was reversed and so Rookie will take the case out of his Room 809 oral argument tool bag I am assuming.

“Contrary to the determination of the District Court, defendant established the timely mailing of the initial and follow-up verification requests (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). As defendant also sufficiently established that it had not received the requested verification, and plaintiff did not show that the verification had been provided to defendant prior to the commencement of the action, the 30-day period within which defendant was required to pay or deny the claims did not begin to run”

120-day rule rebutted

Solution Bridge, Inc. v State Farm Mut. Auto. Ins. Co., 2018 NY Slip Op 51648(U)(App. Term 2d Dept. 2018)

“Contrary to plaintiff’s contentions, defendant’s proof was sufficient to demonstrate prima facie that it had timely mailed initial and follow-up verification requests (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]); that it had not received the requested verification; and that it had timely denied the claim on that ground. However, as plaintiff further argues, the affidavit submitted by plaintiff in opposition to defendant’s motion was sufficient to give rise to a presumption that the requested verification had been mailed to, and received by, defendant (see id.). In light of the foregoing, there is a triable issue of fact as to whether plaintiff provided the requested verification.”

Has anyone sought to ask the Second Department to review these cases?  i am hard-pressed to imagine that an affidavit without documentary support is sufficient to raise an issue of fact.  Or, are we all sheep?