Were the services billed for?

Distinguishing Delay Letters from Verification Requests in No-Fault Litigation

Insurance carriers processing no-fault claims frequently need additional information or documentation before making payment or denial decisions. When carriers seek this information, they must carefully distinguish between legitimate verification requests—which toll the 30-day claim determination period—and generic delay letters that merely acknowledge receipt without requesting specific information. This distinction determines whether subsequent denials are timely or whether carriers have forfeited their right to disclaim coverage due to untimely claim determinations.

The regulatory framework governing verification requests requires specificity. Carriers must identify what information they need and, in many cases, from whom they need it. Generic letters stating that files are “under review” or that carriers are “investigating” claims typically fail to constitute proper verification requests because they don’t specify what verification is sought. This specificity requirement serves important purposes: it enables providers and assignors to understand exactly what the carrier needs, facilitates prompt responses, and prevents carriers from indefinitely delaying claim decisions through vague requests that toll the 30-day period without advancing claim resolution.

The case examined here addresses multiple critical issues in no-fault litigation: the distinction between delay letters and verification requests, proof requirements for establishing that EUO scheduling letters were timely mailed, and the admissibility of certified EUO transcripts as evidence that billed services were not actually rendered.

The Legal Framework: Verification Requests and Claim Determination Tolling

Under New York no-fault regulations, insurance carriers have 30 calendar days from receipt of proper claim forms to either pay or deny claims. This tight deadline ensures healthcare providers receive prompt payment decisions, enabling them to maintain cash flow while treating accident victims. However, carriers may toll this 30-day period by mailing timely verification requests seeking additional information necessary to process claims.

For verification requests to effectively toll the claim determination period, they must satisfy specific regulatory requirements. The requests must be timely mailed within prescribed timeframes, must specify exactly what information or documentation is requested, and should indicate why that information is necessary for claim processing. Generic acknowledgment letters that fail to request specific verification don’t toll the 30-day period, leaving carriers obligated to pay or deny within the original deadline.

EUO scheduling letters constitute a specific type of verification request. When carriers schedule assignors or providers for EUOs, they must comply with notice requirements including adequate advance notice of examination dates and times. If properly issued and proven mailed, EUO scheduling letters toll the claim determination period from the date of mailing until either the EUO occurs or the assignor/provider fails to appear. This tolling recognizes that carriers cannot be expected to make final claim determinations while awaiting examination testimony.

Jason Tenenbaum’s Analysis of Three Critical Issues

(1) “Defendant alleges that it received the claims underlying the first and eighth causes of action on April 5, 2010 and that it denied those claims on May 13, 2010, which was more than 30 days later. While defendant demonstrated that it had mailed what it denominated as “verification/delay request(s)” on April 5, 2010 and May 7, 2010, those letters were insufficient to constitute verification requests”

The delay letter verses additional verification request. The request must state “who” and “what”. Not sure about “why” and the jury is out on “when”.

(2) However, defendant did submit a letter dated April 19, 2010 which scheduled plaintiff’s assignor for an examination under oath (EUO), as well as proof that plaintiff’s assignor had appeared for the scheduled EUO. While defendant did not submit proof that the EUO scheduling letter had been timely mailed, we find that defendant’s submissions are sufficient to raise a triable issue of fact as to whether the time to pay or deny the claims underlying the first and eighth causes had been tolled, and therefore whether the denials were timely.”

This seems like a wishy wash way out of resolving a legal issue.

(3) “However, the branches of defendant’s cross motion seeking summary judgment dismissing the second through seventh causes of action, on the ground that the services billed for had not been rendered, were properly denied, albeit for a different reason than that advanced by the Civil Court. Contrary to the Civil Court’s finding, the certified EUO transcript relied upon by defendant was admissible”

This would be “the New York rule”. It brings back memories.

Legal Significance: Verification Letter Specificity Requirements

The court’s rejection of the defendant’s “verification/delay request(s)” as insufficient demonstrates strict judicial scrutiny of verification letter content. Carriers cannot satisfy regulatory requirements through form letters generically requesting verification without specifying particular information needed. The court’s indication that requests must state “who” and “what” establishes important guidance: carriers must identify the specific party from whom information is sought and must describe with particularity the exact information or documentation requested.

This specificity requirement prevents carrier abuse of verification procedures. Without it, carriers could mail generic “verification requested” letters for every claim, automatically tolling 30-day periods while conducting leisurely investigations. By requiring specific identification of needed information, regulations ensure that verification requests serve their intended purpose—obtaining particular information necessary for claim adjudication—rather than functioning as blanket tolling devices.

The court’s uncertainty about whether verification requests must state “why” information is needed reflects ongoing debate about explanation requirements. Some decisions suggest carriers must articulate bases for verification requests, while others indicate that specificity about what is requested suffices without explanation of why it’s necessary. This unsettled question leaves room for future litigation and potential regulatory clarification.

The EUO Mailing Proof Issue: Triable Fact Standard

The court’s handling of the EUO scheduling letter presents an interesting procedural approach. Despite the carrier’s failure to prove that the EUO scheduling letter was timely mailed, the court found that evidence of the EUO letter’s existence and the assignor’s appearance at the EUO created a triable issue of fact about tolling. This represents a relatively generous standard for carriers seeking to avoid summary judgment on timeliness grounds.

The court’s reasoning appears to be that if the assignor appeared for the EUO, the scheduling letter must have been received, creating an inference of mailing even without direct proof. However, this approach blurs distinctions between proof of mailing and proof of receipt, potentially undermining regulatory requirements that carriers prove timely mailing of verification requests. The decision may reflect judicial reluctance to grant summary judgment on technical mailing proof issues when functional notice was clearly achieved, as evidenced by the assignor’s appearance.

For carriers, this decision provides some relief from strict mailing proof requirements when circumstantial evidence demonstrates that verification requests reached intended recipients. However, carriers should not view this as license to abandon proof of mailing efforts. Best practices dictate maintaining contemporaneous mailing documentation for all verification requests, preserving the ability to definitively prove timely mailing if challenged.

Admissibility of Certified EUO Transcripts: The New York Rule

The court’s ruling that certified EUO transcripts are admissible evidence invokes what practitioners know as “the New York rule”—a principle that certified transcripts of sworn testimony are admissible in summary judgment proceedings even if the person who provided the testimony is not available for cross-examination. This rule creates powerful evidence for carriers seeking to establish that billed services were not actually rendered.

When carriers conduct EUOs and obtain admissions from assignors that certain services claimed by providers were never performed, those admissions—captured in certified transcripts—constitute competent evidence supporting summary judgment on grounds that services weren’t rendered. This gives carriers an important tool for combating fraudulent billing: if EUO testimony contradicts billing records, carriers can invoke the certified transcript to defeat providers’ prima facie cases or establish affirmative defenses.

However, the court’s denial of summary judgment despite finding the transcript admissible suggests that admissibility alone doesn’t guarantee summary judgment success. Carriers must still establish their entitlement to judgment as a matter of law, which may require more than simply submitting a transcript. Questions about transcript interpretation, credibility assessments, or factual disputes about what services were actually rendered can preclude summary judgment even when the underlying evidence is admissible.

Practical Implications: Verification Letter Drafting and Documentation

For insurance carriers, this decision underscores the importance of specificity in verification letters. Generic form letters acknowledging claims or indicating that files are under review will not toll claim determination periods. Instead, carriers must draft verification requests that clearly identify:

1. The specific documents or information being requested
2. The party from whom the verification is sought (assignor, provider, medical records department, etc.)
3. Any relevant deadlines for response
4. Clear indication that the request is a formal verification request tolling the claim determination period

Carriers should also maintain meticulous proof of mailing for all verification requests, including EUO scheduling letters. While this decision suggests that circumstantial evidence may sometimes suffice to create triable fact issues, relying on such inferences is risky. Direct proof of timely mailing through affidavits from mailing personnel and mailing logs provides much stronger foundations for timeliness defenses.

For healthcare providers, the decision highlights the importance of challenging verification letter sufficiency when carriers attempt to rely on generic delay letters as tolling the 30-day period. Providers should carefully review all carrier correspondence, identifying letters that fail to specify what verification is requested or from whom. When denials are issued more than 30 days after claim receipt, providers should scrutinize whether any intervening verification requests satisfied regulatory specificity requirements.

The admissibility of certified EUO transcripts also counsels providers to prepare carefully when their assignors appear for examinations. Providers may want to prepare assignors in advance, ensuring they understand what services were provided and can accurately testify about their medical treatment. When EUO testimony contradicts billing records, providers should be prepared to explain those contradictions, potentially through supplemental affidavits or expert testimony addressing why assignor recollection might be incomplete or inaccurate.

Related Articles

• Understanding EUO Requirements in New York No-Fault Insurance Cases
• New York EUO Requirements: When Examination Under Oath Demands Are Untimely
• Validity of EUO, Appellate Term, 2d Dept: Take two
• Understanding EUO Denial: When Insurance Companies Can Substantiate Coverage Denials
• New York No-Fault Insurance Law