Dugo v Allstate Ins. Co., 2010 NY Slip Op 50102(U)(Civ. Ct. Richmond Co. 2010)
Lately, various defense counsel have been challenging the precepts behind the Domotor case, which holds that a disclaimer of future benefits excuses compliance with all conditions precedent to coverage, including the timely submission of claims to the insurance carrier. Since Domotor is an Appellate Division, Second Department opinion that has not been overturned, it would seem incongruous to believe that an insurance carrier can successfully rely on the 45-day non submission defense in this scenario. Indeed, every published lower court case has found that a global denial excuses compliance with all conditions precedent to coverage including, among other things, the responsibility to timely submit a claim.
This case is interesting because, as seen below, the Civil Court held that the failure to timely submit a claim following a global denial is excused, but the plaintiff may not rely on the supposed presumption of medical necessity that attaches to a statutory claim form. Therefore, plaintiff must make a prima facie showing that the contested service was medically appropriate in the first instance. As seen below:
“Plaintiff contends that once defendant issues a general denial which predates any services provided by plaintiff, it is no longer under an obligation to submit claims within 45 days of the date of service. Defendant contends that its general denial does not obviate plaintiff’s obligation, under the No – Fault Law, to submit a claim within 45 days.
Defendant’s attempt to distinguish the current factual situation from the governing case of Mtr. Of State Ins Co. V. Domotor, 266 AD3d 219 (2d Dept. 1999) is unavailing….
Allstate’s “ability to resolve the claims at issue if warranted” is not prejudiced. Plaintiff had the option of continuing to submit claims, despite Allstate’s general denial, and chose not to. Since plaintiff has failed to file its claim, no presumption of medical necessity attaches to the services rendered by plaintiff.The burden therefore has not shifted to defendant to demonstrate the lack of medical necessity. See, , e.g. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U, 17 Misc 3d 1135A( Dist. Ct., Nassau Co. 12/3/2007);A.B. Medical Services, PLLC v. NY Central Mutual Fire Ins. Co., 2005 NY Slip. Op. 50662(U), 7 Misc 3d 1018(A) (Civil Ct. Kings. Co. 2005); Citywide Social Work & Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings [*3]Co. 2004). At trial, plaintiff must establish the medical necessity of the services rendered and negate the general denial issued by Allstate that pursuant to an IME, no further medical services were warranted.”
It is an interesting theory that Judge Levine has posited in relation to forcing a provider to make a prima facie showing that the disputed services were medically appropriate in this factual situation. As we all know, medical necessity is not part of a provider’s or injured person’s prima facie case. This is a defense that only becomes relevant following the submission of a timely denied overdue statutory claim form, or in this case, proof that a global denial was issued, received and that the services were rendered after the issuance of said global denial.
Similarly, the causal relation between the loss and the injury is also a defense and is not part of a provider’s prima facie case. In essence, what independent significance does the claim form really have? It would appear that in the paradigm the courts have created, the only thing the claim form does is tell us how much is in dispute and, in effect, shifts the burden of production to the insurance carrier.
Thus, is there really a presumption of medical necessity that attaches to a claim form, or is the notion of medical necessity (similar to causation) presumed in the more global sense? See, Kingsbrook Jewish Medical Center v. Allstate Ins. Co. 61 A.D.3d 13 (2d Dept. 2009); Bronx Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 17 Misc.3d 97 (App. Term 1st Dept. 2007). I think it is the latter.
For the record, I think that the medical necessity of a service and the causal relation between the loss and the service should be a burden that falls on the provider. It is like that in every other state. Why should we be different? But as this fits within the settled law in this State, it would appear that the insurance carrier in the Domotor scenario would have to prove the lack of medical necessity of a service in the first instance, similar to any other insurance carrier.
