Today, the Appellate Division, in Infinity Health Prods., Ltd. v Eveready Ins. Co. 2009 NY Slip Op 08585 (2d Dept. 2009) quite surprisingly held that a premature follow-up additional verification request was sufficient to toll the 30-day period to pay or deny a bill.
In this case, the follow-up additional verification request was four days premature, i.e., sent on day 27. The Civil Court, as affirmed by the Appellate Term, granted Plaintiff summary judgment. In dissent, Justice Golia (21 Misc.3d 1 [App. Term 2d Dept. 2009]) held that Defendant, as a matter of law, should have been granted summary judgment. He held, in pertinent part, the following:
“The majority simply states that “[c]ontrary to defendant’s contention, the case of New York & Presbyt. Hosp. v American Tr. Ins. Co. (287 AD2d 699 [2001]) does not 5 permit defendant to disregard the regulation governing the timing of a follow-up request for verification.” The majority makes this finding even though the cited Appellate Division case deals with a verification request that was dated October 5, 1999 and a follow-up request that was sent and dated November 1, 1999. Certainly, the first day of November is less than 30 days from the fifth day of October.” Id.
The Appellate Division agreed with the result Justice Golia reached, and even cited the above case in coming to its holding. But, there is a glaring subtlety that should cause people like me who live for “bright line rules” to cringe.
First, one needs to observe what the first (and only) decretal paragraph of the Appellate Division’s order states:
“ORDERED that the order dated July 10, 2008, is reversed, on the facts and in the exercise of discretion, with costs, the order of the Civil Court of the City of New York, Kings County, is reversed, the plaintiff’s motion for summary judgment on the complaint is denied, and the defendant’s cross motion for summary judgment dismissing the complaint is granted.”
The motion of Eveready was not granted on the law. In fact, the Appellate Division’s discussion of this case solidifies that statement, as observed herein:
“Although the defendant in this case did not strictly comply with the time limitation set forth in the rule regarding the submission of a second verification request, under the circumstances of this case, the plaintiff is estopped from claiming that the defendant is precluded from asserting any defense to the claim. It would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent.”
As you can see, precepts of “equity” and the Appellate Division’s observation that the disposition of this case was guided “under the [peculiar factual] circumstances of this case” should make every reader of this article scratch their collective heads. I think this case may be a double edged sword, because if equity concerns are viable, then all the practices of the providers and the carriers are opened to a new level of scrutiny. What was a rule laden system that was guided by the letter of the regulations and offered predictable outcomes, has now become a paradigm that has lost a certain level of foreseeability. What we gain on one hand, we lose with the other.
For more analysis on this case, see NFP. Roy Murra at Coverage Counsel has an interesting perspective on this case, which you should read.
5 Responses
I agree, Jason. The Appellate Division had an opportunity to establish a bright line rule, something akin to: “where the the insurance carrier issues a premature follow-up request for verification, and the medical provider fails to respond to either request, then the medical provider is estopped from asserting that the requests are invalid due to the premature nature of the second request”. Sadly, this decision may only add to the litigation on this issue. Time will tell, I suppose.
Regardless of the court’s hedging language, I do think this decision represents a certain rule, namely, that a provider which ignores an insurer’s additional and follow-up verification requests is estopped from arguing that the insurer is precluded from asserting any defenses to payment by reason of the insurer’s early or premature follow-up verification request. What troubles me is that the court had, but apparently passed on, the opportunity to address the broader question of whether there should be any defense-preclusive consequence of a no-fault insurer’s early or “premature” follow-up verification request. Looks like we’re have to wait for the court’s decision of Progressive’s appeal in Alur Medical for an answer to that question.
But is a no-fault insurer’s follow-up verification request sent sooner than Day 31 actually premature? Why have the courts and parties adopted that label? The 30-day period of 65-3.6(b) is expressed as a conditional phrase starting with “if” and follows three, very important words that no court, including the Second Department, seems to have given any thought or meaning to. The adverbial prepositional phrase “at a minimum” modifies “the insurer shall, within 10 calendar days, follow up”, NOT the past conditional phrase “if any requested verifications has not been supplied to the insurer 30 calendar days after the original request[.]” The past conditional phrase is only that — a condition that “at a minimum”, triggers the 10-day follow-up requirement. What then, is the maximum? Doesn’t the phrase “at a minimum” itself suggest that the insurer may send a follow-up request sooner than Day 31? As I suggested in my post on this decision, I believe the 30-day period of 65-3.6(b) is neither a “time limitation”, as the Second Department seems to think, nor a proscriptive waiting period requiring strict compliance.
Somebody pass the word to Progressive. Or the three words, actually.
Hey Roy,
While I pride myself on my ability to parse sentences, avoid the passive voice and to use indirect and direct objects properly, I cannot help but think that you are reading a bit too much into the grammar of the regulations. I hate to be a strict constructionist – and I agree with the underlying premise of the Appellate Division decision – but I feel as those you are trying to put life into prepositions and adverbs, some of the most dormant parts of speech we have in the language.
And with that in mind, what do you think of the proposed new regulations?
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