Understanding Account Stated Claims and Medical Billing in New York No-Fault Cases

Understanding Account Stated Claims and Service Verification in New York No-Fault Cases

In the intricate world of New York’s no-fault insurance system, understanding the legal theories that govern billing disputes is essential for both healthcare providers and patients. One area that frequently creates confusion involves “account stated” claims and the critical importance of proving that services were actually rendered. For residents of Long Island and New York City who have been involved in motor vehicle accidents, this legal concept directly impacts how medical bills are processed and paid.

The relationship between account stated claims and no-fault benefit disputes demonstrates how traditional contract law principles apply in modern insurance contexts. Whether you’re a patient receiving treatment in Nassau County, Suffolk County, or anywhere in the five boroughs, understanding these legal standards can help protect your access to necessary medical care.

The Foundation: Account Stated Law in Medical Billing

The Appellate Term, six years ago, analogized an action sounding in no-fault benefits to one for an account stated. An account stated cause of action is satisfied through proof that a bill was mailed, retained and not promptly objected to. While we do not know if there was a prompt objection to the bill, we do know that in opposition to a summary judgment motion in the matter of Good Samaritan Hosp. v Parim 2009 NY Slip Op 52376(U)(App. Term 2d Dept. 2009), “defendant raised a triable issue of fact since he alleged in his verified answer, which may be used in lieu of a sworn statement (CPLR 105 ), that he was billed for a hospital room which plaintiff never provided to him.”

This case is interesting in that it once again stresses that a verified pleading may be used in the place of an affidavit. From a no fault perspective, this case reminds us that that the failure to promptly object to a bill for a service that was never rendered is of no consequence outside the realm of seeking reimbursement of no-fault benefits.

Breaking Down Account Stated Claims

An account stated is a powerful legal concept in New York contract law. Traditionally, it creates a rebuttable presumption that a debt is owed when certain conditions are met. However, as the Good Samaritan Hospital case demonstrates, this presumption has clear limitations when the underlying service was never actually provided.

In the context of medical billing and no-fault insurance, account stated claims typically arise when:

• A healthcare provider sends a bill to a patient or insurer
• The bill is received and retained
• No prompt objection is made to the charges
• The provider later seeks payment based on this “implied acceptance”

However, the Good Samaritan Hospital case clearly establishes that even if these traditional elements are met, the defense of non-performance—proving the service was never rendered—remains viable and effective.

The Critical Importance of Verified Pleadings

One of the most significant takeaways from this case involves the procedural aspects of New York litigation. The court emphasized that “a verified pleading may be used in the place of an affidavit” under CPLR 105(u). This is particularly important for patients and their attorneys when challenging medical bills.

In practical terms, this means that if you’re facing a lawsuit over medical bills for services you believe were never provided, a properly verified answer can be as effective as a sworn affidavit in raising genuine issues of fact that prevent summary judgment.

Implications for New York Accident Victims

For individuals who have been injured in motor vehicle accidents throughout the New York metropolitan area, this ruling provides important protection against erroneous billing practices. Common scenarios where this principle applies include:

Hospital Room Charges: As demonstrated in the Good Samaritan case, patients can challenge charges for rooms they never occupied, even if they didn’t immediately object to the billing.

Phantom Services: Cases where medical providers bill for treatments, tests, or procedures that were never actually performed.

Upgrade Billing: Situations where a patient receives basic services but is billed for premium or upgraded services they never received.

Duration Disputes: Cases involving disagreements about how long a patient actually received certain services or occupied specific facilities.

The No-Fault Insurance Context

New York’s no-fault insurance system adds another layer of complexity to these billing disputes. The system is designed to ensure that accident victims receive prompt medical care without regard to who caused the accident. However, this same system can sometimes be exploited through improper billing practices.

The Good Samaritan Hospital case reminds us that while no-fault insurance generally operates on a “pay first, investigate later” principle, the fundamental requirement that services must actually be rendered remains absolute. Insurance carriers cannot be compelled to pay for services that were never provided, regardless of whether the patient promptly objected to the billing.

Practical Applications in Different Healthcare Settings

This legal principle applies across various healthcare contexts that accident victims might encounter:

Emergency Room Visits: In busy emergency rooms throughout Long Island and New York City, billing errors can occur. Patients may be charged for private rooms when they were treated in general emergency areas.

Hospital Admissions: Complex hospital stays may involve transfers between different types of rooms or units. Accurate billing requires precise tracking of where patients actually stayed and for how long.

Outpatient Procedures: Ambulatory surgery centers and outpatient clinics must ensure their billing accurately reflects the services actually provided to each patient.

Physical Therapy and Rehabilitation: Long-term treatment relationships may involve changes in service levels or durations that must be accurately reflected in billing.

Protecting Your Rights in Medical Billing Disputes

Understanding your rights when facing medical billing disputes is crucial, particularly in the context of no-fault insurance claims. The Good Samaritan Hospital case establishes several key principles that protect patients:

The Burden of Proof

While account stated claims traditionally place the burden on the debtor to prove non-performance, the practical reality is more nuanced. Healthcare providers must still be prepared to demonstrate that they actually provided the services for which they’re billing.

This is particularly important in no-fault cases where insurance carriers are increasingly scrutinizing bills for accuracy and legitimacy. Providers cannot simply rely on the assumption that failure to object equals acceptance when the underlying services were never rendered.

Documentation and Record-Keeping

Both patients and healthcare providers benefit from maintaining detailed records of all services provided. For patients, this means:

• Keeping track of all appointments and services received
• Retaining copies of all bills and insurance communications
• Documenting any disputes or concerns promptly
• Maintaining correspondence with insurance carriers and providers

Frequently Asked Questions

What should I do if I receive a bill for medical services I never received?

Contact the billing department immediately to dispute the charges. Document your dispute in writing and keep records of all communications. If the provider files a lawsuit, ensure your answer is properly verified as this can serve as evidence equivalent to an affidavit.

Can I be held responsible for medical bills just because I didn’t object to them promptly?

While account stated law generally creates a presumption of validity for uncontested bills, you can still defend against charges for services that were never actually provided. The key is having evidence that the services listed on the bill were not rendered.

How does this apply to no-fault insurance claims?

In no-fault cases, insurance carriers are not required to pay for services that were never provided, even if the traditional elements of account stated are met. The fundamental requirement that services be actually rendered cannot be waived through billing practices alone.

What evidence do I need to prove a service was never rendered?

Evidence can include medical records showing you were not present for the alleged service, testimony about your actual experiences, documentation of your location during the time services were allegedly provided, and any other evidence that contradicts the provider’s billing records.

Can a verified answer really substitute for an affidavit in these cases?

Yes, under CPLR 105(u), a verified pleading can be used in lieu of a sworn statement. This means that a properly verified answer alleging that services were never rendered can create a genuine issue of fact that prevents summary judgment against you.

The Intersection of Contract Law and Healthcare

The Good Samaritan Hospital case illustrates how traditional contract law principles interact with modern healthcare billing practices and insurance systems. While account stated claims remain a legitimate collection tool for healthcare providers, they cannot override the fundamental requirement that services be actually provided.

This balance is particularly important in New York’s complex healthcare environment, where patients often receive care from multiple providers and navigate between different insurance systems. Understanding these principles helps ensure that both patients and providers can protect their legitimate interests.

Get Expert Legal Guidance

Medical billing disputes in the context of no-fault insurance can be complex and challenging to navigate alone. The interplay between account stated law, no-fault regulations, and healthcare billing practices requires experienced legal guidance to protect your rights effectively.

Whether you’re facing improper charges for services you never received or dealing with insurance carriers who are improperly denying legitimate claims, understanding your legal rights and options is essential.

The Law Office of Jason Tenenbaum has extensive experience in New York no-fault law and medical billing disputes. We understand how these complex legal principles apply in real-world situations and can help you protect your rights and interests.

Call 516-750-0595 today for a consultation. Don’t let improper billing practices or insurance disputes prevent you from getting the compensation and medical care you deserve after an accident.

Related Articles

• New York No-Fault Insurance Law
• Understanding CPLR 3212(g) summary judgment standards
• No-fault verification requirements and compliance standards
• CPLR 3212(a) timing rules for summary judgment motions
• Regulatory amendments affecting no-fault claims

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Legal Update (February 2026): Since this post’s publication in 2009, New York’s no-fault regulations have undergone significant revisions, including updates to the Insurance Law Article 51 and related procedural requirements for account stated claims in medical billing disputes. The fee schedules, billing procedures, and standards for proving service verification may have been substantially modified through regulatory amendments and case law developments. Practitioners should verify current provisions under the updated no-fault regulations and recent appellate decisions when evaluating account stated claims and medical billing disputes.