NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES FOURTH AMENDMENT TO 11 NYCRR 65-3 (INSURANCE REGULATION 68-C) CLAIMS FOR PERSONAL INJURY PROTECTION BENEFITS
I, Benjamin M. Lawsky, Superintendent of Financial Services of the State of New York, pursuant to the authority granted by Sections 202 and 302 of the Financial Services Law, Sections 301, 2601, 5221 and Article 51 of the Insurance Law, and Section 2407 of the Vehicle and Traffic Law, do hereby promulgate the following
Fourth Amendment to Subpart 65-3 of Title 11 of the Official Co pilation of Codes, Rules and Regulations of the State of New York (Insurance Regulation 68-C), to take effect on April 1, 2013, to read as follows:
(NEW MATTER IS UNDERSCORED; MATTER IN BRACKETS IS DELETED)
New subdivisions (o) and (p) are added to section 65-3.5 to read as follows:
(o) An applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply. The insurer shall advise the applicant in the verification request that the insurer may deny the claim if the applicant does not provide within 120 calendar
days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply. This subdivision shall not apply to a prescribed form (NF-Form) as set forth in Appendix 13 of this Title, medical examination request, or examination under oath request. This subdivision shall apply, with respect to claims for medical services, to
any treatment or service rendered on or after April 1, 2013 and with respect to claims for lost earnings and reasonable and necessary expenses, to any accident occurring on or after April 1, 2013.
(p) With respect to a verification request and notice, an insurer’s non-substantive technical or immaterial defect or omission, as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply with the request or notice. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.
Paragraph (3) of section 65-3.8(b) is amended to read as follows:
(3) Except as provided in subdivision (e) of this section, an insurer shall not issue a denial of claim form (NYS form N-F 10) prior to its receipt of verification of all of the relevant information requested pursuant to [section] sections 65-3.5 and 65-3.6 of this Subpart (e.g., medical reports, wage verification, etc.). However, an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart. This subdivision shall not apply to a prescribed form (NFForm) as set forth in Appendix 13 of this Title, medical examination request, or examination under oath request.
This paragraph shall apply, with respect to claims for medical services, to any treatment or service rendered on or after April 1, 2013, and with respect to claims for lost earnings and reasonable and necessary expenses, to any accident occurring on or after April 1, 2013.
Subdivisions (g) through (j) of section 65-3.8 are relettered subdivisions (i) through (l) and new subdivisions (g) and (h) are added to read as follows:
(g)(1) Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:
(i) when the claimed medical services were not provided to an injured party; or
(ii) for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.
(2) This subdivision shall apply to medical services rendered on or after April 1, 2013.
(h) With respect to a denial of claim (NYS Form N-F 10), an insurer’s non-substantive technical or immaterial defect or omission shall not affect the validity of a denial of claim. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.
What do they mean to you? Well, claims people are enamored with new “(o)” which allows reserves to be closed after the provider does nothing for more than 120 days following receipt of a verification demand. I consider gratuitoulsy objecting also be the equivalent of doing nothing. There will be arbitration and litigation involving the following:
” …under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.” Once the blanks are filled in, more informed decisions can be made as to what the 120-day rule really means.
Next, what about the repeal of Fair Price? Pretty simple.
I like the repeal of Mercury v. Encare. The First Department really angered the Department and common sense applied. Insurance Law 5108 is not precludable, or shall we say, proof of claim shall not be established if this statute is violated.
Regarding the issue involving the defective denials… The best way to read and understand this rule is to put it in the context of what it is ameliorating. I would look at every defective denial case that the Appellate courts (mostly Second Department Appellate Division) have held that the denial is defective and hold this provision of he regulation against the holdings. The smart practitioner will get his or her way if they use this provision of the regulation from that vantage point.
6 Responses
Geez the insurance industry really poured in some heavy money to Andrew Cuomo.
But riddle me this. Can an insurance regulation undo the decision of the Court of Appeals when the Court is interpreting the Insurance Law — not a mere reg.
It seems like another end run around the legislature to me.
Isnt the Department of Financial Services supposed to regulate insurance companies too … investigate insurance companies too … create regulations to curtail carrier abuses … guess they missed that memo.
Subdivision (g) is going to generate quite a bit of litigation. Does it mean the insurer no longer has to pay at the correct fee schedule amount and issue a denial for the rest? Sure sounds like it.
This amendment will create a ton of litigation. What is an immaterial defect? KL is so right. All for the carriers. The immense abuse by carriers is so pervasive it’s incredible and they never pay for it. The one thing I agree with is the 120 day rule. Insurance lobby did great for their clients. SMH
does the new (g) mean carriers do not have to issue denials bc they have not received proof of the claim?
Does a denial with BOX 18 checked but the charges are proper under the fee schedule render the the denial invalid?
will it be bad faith to check box 18 even when the charges are proper under the fee schedule?
will Benson know the answer to these questions?
5106b allows the Superintendant of Insurance to make regs. The leg. under 5106a and the Sup of Ins under 5105b failed to address the issue of out of state providers and fees. All you have is Reg 68.6. So how can this new Reg. say the bill is not deemed supplied without the corect fee when the is no fee schedule out of state providers?