Key Takeaway
New York court ruling shows healthcare providers face uphill battle when using third-party billing services to establish prima facie cases in no-fault insurance claims.
Healthcare providers pursuing no-fault insurance benefits face significant evidentiary challenges when relying on third-party billing services. The foundational requirement of establishing a prima facie case becomes particularly complex when the testimony and documentation don’t originate directly from the provider’s own employees. This case highlights the strict evidentiary standards courts apply when evaluating the admissibility of claim forms and supporting documentation.
The ruling demonstrates how the chain of custody for business records can make or break a provider’s case. When third-party billers are involved in preparing claim forms, providers must navigate additional layers of hearsay exceptions and foundation requirements that often prove insurmountable.
Jason Tenenbaum’s Analysis:
Peace of Mind, Social Work, P.C. v Travelers Prop. Cas., 2013 NY Slip Op 51119(U)(App. Term 2d Dept. 2013)
“At the nonjury trial of this action by a provider to recover assigned first-party no-fault benefits, plaintiff proffered its claim form as proof of the fact and the amount of the loss sustained. Plaintiff’s foundation witness, who was employed not by plaintiff, but by a third party, testified that she had used documents from plaintiff’s file in the preparation of the claim form. Under these circumstances, in order for the claim form to be admissible, pursuant to CPLR 4518 (a), as evidence of the truth of the assertions contained therein, it was necessary for plaintiff to demonstrate that “each participant in the chain producing the record, from the initial declarant to the final entrant, within the course of regular business conduct or the declaration must meet the test of some other hearsay exception”
It seems that once you enter the realm of the third-party biller, it is just a losing proposition in the Second
Key Takeaway
This decision underscores the importance of maintaining direct control over billing processes and documentation. Providers using third-party billing services face substantially higher evidentiary burdens, as they must establish the reliability of every link in the documentation chain. The Second Department’s strict interpretation of CPLR 4518(a) makes establishing prima facie cases particularly challenging when third-party intermediaries are involved.
The ruling serves as a cautionary tale for healthcare providers who may want to reconsider their billing arrangements or ensure they have proper foundational witnesses available. This contrasts with more lenient approaches seen in other jurisdictions, such as how similar evidentiary issues are handled differently across New York’s appellate divisions.
Legal Update (February 2026): Since this 2013 decision, New York’s no-fault regulations have undergone several revisions, including amendments to claims processing procedures and evidentiary standards under Insurance Regulation 68. Additionally, appellate courts have issued subsequent rulings that may have refined the application of CPLR 4518(a) foundation requirements for third-party billing arrangements. Practitioners should verify current regulatory provisions and recent case law when establishing prima facie cases involving external billing services.
