D & R Med. Supply v American Tr. Ins. Co., 2011 NY Slip Op 51727(U)(App. Term 2d Dept. 2011)
I think this case shows the perils a law firm or plaintiff encounters when they attempt to challenge the veracity and necessity of verification. This is a huge case.
“The record establishes that plaintiff’s responses to defendant’s verification requests failed to provide the information which defendant had requested, in that plaintiff merely stated that the supplies at issue had been provided pursuant to a doctor’s prescription and did not advise defendant of the name of the doctor who had issued the prescription or where the doctor was located so that defendant could try to obtain the requested information from the prescribing doctor (see Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Misc 3d 140[A], 2010 NY Slip Op 50987[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Consequently, defendant’s cross motion for summary judgment dismissing the complaint as premature should have been granted, as defendant’s time to pay or deny the claim had not begun to run (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [a]; Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903 [2007]; Central Suffolk Hosp. v New York Cent. Mut. Ins. Co., 24 AD3d 492 [2005]; Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]). In light of the foregoing, we reach no other issue.”
Interesting dissent but it missed the point.
5 Responses
The issue for this type of verification cases for me is that, 99% of the time, the insurer actually has the records in its files when the other treating provider sent in its claims for payment.
If the insurer requests records that were already in its possession, the request is unreasonable.
In such is the case Slick the insurer’s conduct is illegal … but not according to the Superintendent or the Courts: “They have a right to try to hold onto their money” sayeth one Judge to me in Sup. NY.
The parallel is that those people that commit fraud should have a right to commit fraud.
This is a bogus decision. The insurance company had the records showing who prescribed the DME.
You should be able to prove through discovery that the requested documents are in the possession of the carrier. But the Courts would say they have a right to ask for them again.
What about demands for personal and private information.
It doesn’t matter whether the insurer might have the records from some other source, DME providers have an affirmative duty to provide the prescription and letter of medical necessity as a basic part of their initial submission of the bill. Failure to pony up the docs means they haven’t submitted complete request for benefits.
Besides, thanks to Fair Price they can already get away with committing out and out fraud. Now you guys want to argue that they don’t have to follow even the most basic requirements of claims submission?
Nice to have sanity posting on here.
To be clear, I am not focused on DME and recognize that it is somewhat unique based on the nature of the business. I dont disagree that carriers should have a copy of the scrip before they pay although a “letter of medical necessity” is not a mandatory requirement. However, I would expect that the prescribing provider would document need in his medical records in some fashion. That said, the most basic form of claims submission is an NF-3 or equivalent claim form. Anything else is extra.
With that said, I agree that a carrier should have the option to review the scrip and any medical records that document the need for the scrip. However, once the insurer has the records, it has no need to ask for them again from another source.
It seems like Spud and JT are advocating that insurers are entitled to use unnecessary verification requests to punish providers instead of using EUO’s, IME’s and other methods that would discover any fraud. Maybe I am missing something?
That said, no carrier has the right to ask for the same documents it already possesses.