Triable issue of fact: 45-day rule

Irina Acupuncture, P.C. v Auto One Ins. Co., 2018 NY Slip Op 50781(U)(App. Term 2d Dept. 2018)

“Proof that documents are mailed in accordance with a standard mailing practice and procedure gives rise to a rebuttable presumption that the documents have been received (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Contrary to the Civil Court’s finding, by demonstrating that it had received the claim forms at issue long after plaintiff claims to have mailed them, defendant raised a triable issue of fact as to whether plaintiff’s practices and procedures resulted in the timely mailing of the claim forms to defendant (see Healing Health Prods., Inc. v New York Cent. Mut. Fire Ins. Co., 44 Misc 3d 59 [App Term, 2d, Dept, 2d, 11th & 13th Jud Dists 2014]). Thus, plaintiff is not entitled to summary judgment on the second through fourth causes of action”

45-day rule appeal was meritless

Masigla v ELRAC, Inc., 2017 NY Slip Op 51712(U)(App. Term 2d Dept. 2017)

“With regard to the claims that were denied based upon plaintiff’s failure to submit them to defendant within the time frame required by 11 NYCRR 65—2.4 (c), contrary to plaintiff’s argument on appeal, its own papers demonstrate that the claims were submitted more than 45 days after the dates on which the services had been rendered.”

This was funny.

Late notice defense sustained

Sunrise Acupuncture PC v ELRAC, Inc., 2016 NY Slip Op 50905(U)(App. Term 1st Dept. 2016)

(1) “Defendant made a prima facie showing of entitlement to summary judgment dismissing plaintiff’s no-fault claims, by establishing that it timely denied the subject claims on the ground that plaintiff submitted the claims more than one year after the services were rendered, a period well beyond that called for in the applicable regulation (see 11 NYCRR 65-2.4(c); see St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733 [2010]; see also Matter of Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405 [2014]).”

Submission was more than 45 after service rendered.

(2) Insofar as plaintiff’s submissions showed that the claims were mistakenly submitted to MVAIC, thus justifying plaintiff’s initial delay in submitting the claims to defendant (see 11 NYCRR 65—3.5[l]), plaintiff failed to submit any competent proof establishing the dates the claims were denied by MVAIC or when it was apprised that defendant was the proper carrier (see Bronx Expert Radiology, P.C. v Great N. Ins. Co., 24 Misc 3d 134[A], 2009 NY Slip Op 51474[U][App Term, 1st Dept. 2009])

No evidence from when MVAIC denied and when submitted to ELRAC.

(3) “Plaintiff’s remaining contention that defendant failed to give due consideration to its excuse, is unavailing, since plaintiff’s own submissions show that defendant considered the excuse proffered by plaintiff and rejected it.”

Due consideration defense unavailing since Plaintiff showed the billing was considered and rejected in resubmission.

Failed to avail itself of the opportunity afforded to it on the NF-10

Healthway Med. Care, P.C. v Country Wide Ins. Co., 2015 NY Slip Op 51654(U)(App. Term 2d Dept. 2015)

“As defendant established its prima facie entitlement to judgment as a matter of law, the burden shifted to plaintiff. Despite being informed by the denial of claim forms that it had the opportunity to “submit[] written proof providing clear and reasonable justification for the failure” to timely advise defendant of the accident (11 NYCRR 65-1.1; 65-2.4), plaintiff did not present any evidence that it had availed itself of the opportunity or that it had given timely notice.”

The Court again stressed that if you wish to seek refuge within the regulation’s safety valve, communication with the carrier is key.

45-day rule in action (or inaction)

SMB Med. P.C. v Chubb Indem. Ins. Co., 2015 NY Slip Op 50719(U)(App. Term 1st Dept. 2015)

“Defendant failed to establish its entitlement to summary judgment dismissing the complaint based upon plaintiff’s alleged untimely submission of the claims beyond the applicable 45-day time limit (see 11 NYCRR 65-1.1[d]). The affidavit of defendant’s claims adjuster failed to describe defendant’s “regular practices and procedures in retrieving, opening, and indexing its mail and in maintaining its files on existing claims”

The First Department (unlike Second Department precedent) requires some type of discussion in the affidavit to allow the affiant to reach the conclusion that the billing was untimely submitted.   Just saying the billing was received on some day is insufficient.

The conclusory statement of non receipt will not non-suit a 45-day case

Easy Care Acupuncture PC v MVAIC, 2014 NY Slip Op 51645(U)(App. Term 1st Dept. 2014)

“The action, seeking recovery of assigned first-party no-fault benefits, is not ripe for summary dismissal. The vague and conclusory assertion by defendant MVAIC’s claim representative that defendant “was not aware of plaintiff’s bills” prior to the commencement of the action was insufficient, on this record, to make a prima facie showing that plaintiff’s claims were untimely submitted beyond the applicable 45-day time limit (see 11 NYCRR 65-1.1[d]; cf. NY Arthroscopy & Sports Medicine PLLC v Motor Veh. Acc. Indem. Corp., 15 Misc 3d 89 [2007]). Conspicuously absent from the claim’s representative’s moving affidavit was any indication that she or a colleague searched the assignor’s file — said to be under the affiant’s “custody and control” — to ascertain whether plaintiff’s bills and claims had been logged in by defendant as received.”

Like any other defense that germinates from a “non-receipt” of a item, the Courts have uniformly held that some type of search was made prior coming to the conclusion that an item was not received.  The search does not need to be exhaustive (a prior case from the second department dispelled this notion), but the search must be somewhat detailed.  Here, all that was presented was a boilerplate I did not receive the billing.  That is not enough to win in this Court.

The reason proffered by plaintiff was insufficient

Leica Supply, Inc. v American Tr. Ins. Co., 2013 NY Slip Op 50711(U)(App. Term 2d Dept. 2013)

“plaintiff had submitted its claims to defendant more than 45 days after the date the services had been rendered to plaintiff’s assignor (see Insurance Department Regulations [11 NYCRR] § 65-1.1). Defendant’s denial of claim form adequately advised plaintiff of the basis for the denial, and it further advised plaintiff that the late submission of the claim would be excused if plaintiff provided a reasonable justification for the lateness (see Insurance Department Regulations [11 NYCRR] § 65-3.3 [e]). We find that the reason proffered by plaintiff was insufficient.”

Since this is my case, here is the insufficiently proffered reason.

The bill here is for services on 2/14/08-3/7/08.  Plaintiff provided proof that it mailed the bill to MVAIC on 3/24/08.  This was through a letter with a mailing ledger and an affidavit from the billing manager.  What was the reason the bill was sent to MVAIC? ” [A]TIC was not known or indicated on the documents to be the insurer. “Only MVAIC advised that ATIC was, indeed, the insurer.  Copes are attached.  We never heard again from the examiner”  The bill was then mailed to Defendant on 6/25/08 with explanation of tardiness.

Appellate Term found this to be an insufficient excuse.  Interesting.

Late written notice not excused

Norman Y. Schoenberg, M.D., P.C. v N.Y.C. Tr. Auth.,  2013 NY Slip Op 50421(U)(App. Term 2d Dept. 2013)

“Defendant annexed to its motion papers a letter from plaintiff’s attorney, who stated that, initially, the claim had been inadvertently submitted to a different carrier, but he failed to proffer any explanation as to why that had happened. Under the circumstances, defendant’s moving papers properly established its prima facie entitlement to summary judgment, and, therefore, its unopposed motion should have been granted”

And then had the circumstances been explained, it is a toss up as to whether claim would have been saved.  There is a lot of case law on the “what happened” issue.

Summary judgment granted under the new interpretation of prima facie

New York Diagnostic Med. Care, P.C. v Geico Cas. Ins. Co., 2012 NY Slip Op 50681(U)(App. Term 2d Dept. 2012)

“The affidavit by plaintiff’s billing manager was sufficient to establish that the claim forms annexed to the motion papers were admissible pursuant to CPLR 4518 (see Art of Healing Medicine, P.C., 55 AD3d 644 [2008]; Fortune Med., P.C. v Travelers Home & Mar. Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]), that the claim forms had been mailed to defendant within 45 days of the date services were rendered (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]), and that the basis for defendant’s denials, i.e., that “written proof of claim was provided more than 45 days after the date these services were rendered” was “without merit as a matter of law.” Contrary to defendant’s contention, it is not the date of defendant’s receipt of a claim form which determines whether the submission of a claim form is untimely, but rather the date of plaintiff’s submission of the claim form (see Insurance Department Regulations [11 NYCRR] § 65 – 1.1 [“the eligible injured person or that person’s assignee . . . shall submit written [*2]proof of claim to the Company . . . in no event later than 45 days after the date services are rendered”]; see also SZ Med. P.C. v Country-Wide Ins. Co.,12 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2006]; Ops Gen Counsel NY Ins Dept No. 04-02-12 [Feb. 2004]).”

The Court of Appeals discusses a condition precedent

New York & Presbyt. Hosp. v Country Wide Ins. Co., 2011 NY Slip Op 07149 (2011).

This case has a lot of value for many reasons.  Like so many cases from the appellate courts, the value comes from what some have denominated as dicta or other powerful statements that surround the central holding.

The question presented was relatively straightforward.  The answer really made the reader wonder whether the Court of Appeals agrees with the Unitrin holding.  Clearly, there was no reason to even get within 100 feet of this issue; yet, the Court of Appeals came really close to reaching it.  Pretty scary.

Query: could a hospital satisfy the 30-day prompt notification rule through submitting a timely proof of claim within 45-days of the date of service?  The argument from the hospital was that since the NF-5 is the functional equivalent of an NF-2 and an NF-3, the submission of it within 45-days should satisfy both regulations.  Otherwise, the argument follows, why would the NF-5 substitute for both of those forms?  Public policy would on some level support the hospitals’ argument because the NF-5 was created just for hospitals, and the “fraud prevention” goal of the 2002 amendments to Part 65 of the regulations are not directed to hospitals.  Rather, as the Court of Appeals discussed in Serio, this purpose of the regulations is directed towards the Brooklyn medical mills.  (I editorialized a bit there)

The Court of Appeals held that a submission of the NF-5 which is after the 30-day time period (to submit proof of loss) but prior to the 45-day time period (to submit a bill), where there was no prior proof of loss would be violative of the condition precedent to coverage under the policy.

To quote from the case:

“By ruling that the notice of accident condition was satisfied based on the plain language of 11 NYCRR 65-3.3 (d), the Appellate Division disregarded the separate and distinct nature and purpose of these requirements. Even more troubling, such a construction effectively reads the 30-day written notice of accident requirement out of the no-fault regulations. But nothing in 11 NYCRR 65-3.3 (d) explicitly dispenses with the 30-day notice of accident requirement. Rather, 11 NYCRR 65-3.3 (d) merely provides that a NF-5 form may constitute the written notice required under the notice of accident provision.

In other words, these regulations (read alone or in tandem) cannot be interpreted to mean that a hospital/assignee’s timely submission of a proof of claim for health services within 45 days of discharge of the injured person excuses the insured/assignor’s failure to give the threshold notice of accident within 30 days of the accident, or that health care service providers are exempt from the written 30-day notice of accident requirement. Neither 11 NYCRR 65-1.1 nor 11 NYCRR 65-3.3 (d) contains such language. That is, while 11 NYCRR 65-3.3 (d) allows a completed hospital facility form to satisfy the written notice of accident requirement, the regulation does not provide (or suggest) that a “proof of claim” in that form filed within 45 days of treatment satisfies the 30-day notice of accident requirement where, as here, the form was submitted to Country Wide after the 30-day period has expired.”

For the first time, the Court of Appeals discussed the reasonable excuse issue.  This was discussed after holding that the Hospital’s arguments “where the insurer is not readily identifiable” lacked merit.  In this regard, the Court of Appeals cited 65-3.5(l): “Indeed, the regulations specifically direct carriers to consider whether the injured person was a pedestrian or an occupant of a vehicle who may have difficulty identifying the proper carrier in assessing untimely notices of accident”

I suspect this overturns the sweeping holding of the Appellate Term, First Department in Bronx Expert Radiology, P.C. v NYC Tr. Auth., 32 Misc 3d 140(A)(App. Term 1st Dept. 2011), as it construes the due consideration portion of 65-3.5(l), since the Court of Appeals appear to have relegated this to more of a regulatory market conduct issue.

My favorite part of this opinion, and the dicta that I discussed above is right here:

“Finally, as an assignee of all the rights, privileges and remedies to which Benitez was entitled under the No-Fault law, Presbyterian stood in the shoes of Benitez and acquired no greater rights than he had (see Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121, 126 [1975] [Chief Judge Breitel wrote, “[i]t is elementary ancient law that an assignee never stands in any better position than his assignor.”]). Here, because no written notice of accident was given, there was a failure to fully comply with the terms of the no-fault policy, which is a condition precedent to insurer liability.”

“As a result, the assignment effectively became worthless (i.e., Benitez assigned nothing to Presbyterian) — you cannot assign your right to benefits if your right to those benefits has not been triggered, or if you had no right to those benefits in the first place.

So it follows that maybe there is a reason why the Court of Appeals did not grant leave in the Unitrin matter.

Call this a win for the carriers – the nature and extent seems pretty significant.  That would make it two significant victories for the defense bar in one year.