A no fault claim representative’s affidavit may cure inaccuracies in the NF-10 form

We kind of saw it in a previous post involving a Mercury case where a claim representative’s sworn affidavit could explain typographical errors in a resulting NF-10. Some wondered why the Appellate Term never expounded on this point. Now, they have.

Bath Med. Supply, Inc. v Country Wide Ins. Co.
2009 NY Slip Op 51145(U)(App. Term 2 Dept. 2009)

The highlights are as follows:

“Plaintiff contends that defendant’s opposing papers did not establish that the claim determination period was tolled because, while the affidavit of defendant’s no-fault litigation supervisor sets forth the dates on which the verification requests were mailed, the denial of claim forms set forth incorrect dates as to when final verification was requested. However, the unsworn denial of claim forms do not purport to state the dates on which defendant first requested verification, whereas, in the sworn affidavit, defendant’s no-fault litigation supervisor states the dates on which verification was first requested, the dates on which the verification was received and the dates on which the denial of claim forms were mailed. To the extent the unsworn denial of claim forms suggest that defendant may have sent a further request for verification after receiving the verification it initially sought, they do not contradict the sworn statement by defendant’s no-fault litigation supervisor or otherwise nullify defendant’s position that the claim determination period was tolled.”

My observation is that the days of challenging denials for typographical errors have ended. We saw this starting with AB v. Liberty and extending through Al Correa v. State Farm, as well as other cases decided subsequent to Al Correa.

I suppose the best questions to ask are as follows. First, how much of an NF-10 needs to be filled out in order to preserve the defense(s) on it? Second, how many mistakes are allowed to be present on the NF-10, so as to preserve the defenses on the denial? We shall await the answer to these questions.

Ortho Med Supply – more than meets the eye

The recent trend in Appellate Term jurisprudence involving cases with (u) or Misc (a) cites is to take the approach that the Appellate Division, Second Department takes in terms of reasoning a case. The Court will cite to other precedent which, on their facts, should guide the reader as to what the law is in the matter sub judice. The other trend is for the courts to deem certain challenges “unpreserved” or unpreserved, yet without merit if preserved.

Ortho-Med Surgical Supply, Inc. v Mercury Cas. Co.
2009 NY Slip Op 50731(U)(App. Term 2d Dept. 2009)

If you read the facts of this case, you would think this is another “medical necessity” summary judgment motion that another carrier interposed. Yet, if you read the record on appeal, you would see something different.

This case involved a denial that on its face was dated one month previous to its generation date. Therefore, the denial was dated prior to the receipt date of the bill. The carrier, in their motion for summary judgment, presented an affidavit from someone with personal knowledge that this was a scrivener’s error and based upon a review of the computer records and the paper file, the denial was generated one month following the date set forth on the denial. The affidavit then went on to state that it was mailed in the manner consistent with properly dated denials. Thus, it was mailed on the date it should have been dated or the next business date, in accordance with the carrier’s standard mailing procedures.

Plaintiff opposed the motion and cross-moved, arguing that the denial was fatally defective. The carrier prevailed on its motion and the plaintiff appealed.

On appeal, the plaintiff then went on to argue, besides its preserved argument, that the denial could not be considered a business record since it had the wrong date on it. If a denial is not deemed a business record, it may not be considered by the Court. Hospital v. Elrac and Montifiore v. Liberty stand for those propositions of law.

The carrier argued that a proper foundation was laid and any defects in the “business record” would go to the weight – not the admissibility – of the business record.

Following consideration of all the proofs, the Appellate Term affirmed the grant of summary judgment to the carrier.

Now if only the entire procedural history of this whole case were set forth in the opinion, it might be worth something more than a (u) cite.

But what I can say is that if a defect is not numerous and you spell it out in a decent affidavit, the Appellate Term will give you a pass.

Escaping the four corners of the denial

At this point in our PIP jurisprudence, it has been taken for granted that a defense of medical necessity extends to the four corners of the peer review or the medical examination which recommends cessation of treatment.

The foundation for the principle appears in 11 NYCRR Sec. 65-3.8(a)(4), which states the following: “If the specific reason for a denial of a no-fault claim, or any element thereof, is a medical examination or peer review report requested by the insurer, the insurer shall release a copy of that report to the applicant for benefits, the applicant’s attorney, or the applicant’s treating physician, upon the written request of any of these parties.”

In construing this regulation, the Appellate Division observed in A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co. 39 A.D.3d 779 (2d Dept. 2007): “The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request. Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form, it would have so provided

Thus, it is has been assumed that the the peer or IME is an extension of the denial. This was the methodology behind the Appellate Term, Second Department’s holding in A.B. Medical Services, PLLC v. Liberty Mut. Ins. Co. 10 Misc.3d 128(A)(App. Term 2d Dept. 2005), prior to it being reversed by the Appellate Division, Second Department. See, 39 AD3d 779. In fact, all the Appellate Division really said was that the peer report or IME report does not have to be annexed to the denial.

Therefore, recent Appellate Term, First Department cases are quite questionable. In Mollins v Allstate Ins. Co. 20 Misc 3d 141(A)(App. Term 1st Dept. 2008), the Appellate Term, stated the following: “In opposition, defendant failed to raise a triable issue since it did not submit the IME report upon which its denials were based or any other evidentiary proof to support its defense of lack of medical necessity (see Vista Surgical Supplies, Inc. Travelers Ins. Co., 50 AD3d 778 [2008]; Response Med. Equip. v General Assur. Co., 13 Misc 3d 129[A], 2006 NY Slip Op 51765[U] [2006]).

And the Appellate Term case, Response Med. Equipment said the following: “With respect to the $650 claim for assignor Edwin Milanes, defendant failed to support its defense of lack of medical necessity with the peer review upon which the denial was based, or any other competent proof in admissible form.”

It therefore appears arguable that an insurance carrier may escape the four corners of the denial, as amplied by the peer review and denial. It should be interesting to see how the Appellate Term, First Department and the other courts rule when the “Cerucci” four corner rule collides with the “other competent proof in admissible form” rule.