Lincoln General citing

Insurance Companies Must Act Quickly on No-Fault Claims or Lose Defense Rights

Under New York’s no-fault insurance regulations, insurance companies face strict deadlines when processing medical claims. When insurers fail to meet these deadlines, they can lose important defense rights - including the ability to deny claims based on a patient’s failure to appear for Independent Medical Examinations (IMEs) or Examinations Under Oath (EUOs).

This principle was reinforced in a recent Appellate Term decision that demonstrates how procedural requirements in New York No-Fault Insurance Law can significantly impact claim outcomes. The case highlights the critical importance of the 30-day claim determination period established under New York regulations.

The regulatory framework governing no-fault insurance claims establishes strict timelines that serve important policy objectives. By requiring insurers to pay or deny claims within 30 days, the regulations ensure that injured parties and healthcare providers receive prompt responses to claims for accident-related medical expenses. When insurers miss this deadline without properly tolling it through verification requests, examinations under oath, or independent medical examinations, they forfeit their right to assert substantive defenses—even defenses that would otherwise be valid.

Case Background

In Compas Medical, P.C. v Praetorian Insurance Co., a medical provider brought suit to recover no-fault benefits for services provided to an injured patient. The insurance carrier, Praetorian, raised multiple defenses, including the patient’s failure to appear for scheduled Independent Medical Examinations and Examinations Under Oath. While these defenses would typically be powerful grounds for claim denial, the court’s analysis turned on a threshold procedural question: did Praetorian deny the claims within the mandatory 30-day period, or properly toll that period as permitted under the regulations?

The record revealed that with respect to the third cause of action, Praetorian failed to issue a timely denial. The insurer also could not demonstrate that it had properly tolled the 30-day claim determination period through appropriate procedural mechanisms. This procedural failure became fatal to Praetorian’s substantive defenses.

Jason Tenenbaum’s Analysis:

Compas Med., P.C. v Praetorian Ins. Co., 2015 NY Slip Op 51667(U)(App. Term 2d Dept. 2015)

“However, with respect to the third cause of action, the record establishes that the claim at issue was not denied within 30 days of its receipt (see 11 NYCRR 65-3.8 ) and defendant did not demonstrate that the 30-day claim determination period (see 11 NYCRR 65-3.8) had been tolled. As a result, since defendant is precluded from asserting, with respect to this claim, its defense that plaintiff’s assignor had failed to appear for the duly scheduled IMEs and EUOs (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 ), plaintiff is entitled to summary judgment upon its third cause of action.”

Legal Significance

The Appellate Term’s decision applying Lincoln General precedent serves as a critical reminder that procedural compliance in no-fault insurance can trump substantive defenses. The court’s citation to Westchester Medical Center v Lincoln General Insurance Co., 60 AD3d 1045, reinforces a well-established principle: when an insurer fails to meet its procedural obligations, it cannot later rely on otherwise valid substantive defenses.

This rule reflects the regulatory scheme’s emphasis on prompt claim resolution. The 30-day period under 11 NYCRR 65-3.8 is not merely a guideline—it is a mandatory requirement that serves the no-fault system’s core purpose of providing swift reimbursement for accident-related medical expenses. By making the 30-day deadline dispositive, courts incentivize insurers to process claims efficiently and deny them promptly if defenses exist.

The tolling provisions in the regulations provide insurers with appropriate tools to extend the 30-day period when additional information is needed. Insurers can request verification materials, schedule examinations under oath, or arrange independent medical examinations, and each of these actions properly tolls the deadline. However, insurers must follow the specific procedures outlined in the regulations. Generic requests or improperly formatted notices will not toll the period, leaving insurers vulnerable to preclusion of their defenses.

Practical Implications

For insurance carriers, this decision emphasizes the need for robust claims processing procedures that ensure timely action on every no-fault claim. Claims handlers must be trained to recognize the 30-day deadline and understand the proper methods for tolling it. Internal systems should flag approaching deadlines and ensure that denials are issued with sufficient time to account for potential mailing delays.

When carriers schedule IMEs or EUOs, they must ensure that the scheduling letters comply with regulatory requirements and are sent within appropriate timeframes. Even if a patient ultimately fails to appear for these examinations—which would normally provide grounds for denial—an untimely denial will be precluded if the carrier missed the initial 30-day window without proper tolling.

For medical providers and their counsel, these rules create strategic opportunities. Careful review of claims processing timelines can reveal procedural defects that preclude an insurer’s defenses, even when the substantive merits favor the carrier. Providers should maintain detailed records of claim submissions and track insurer responses to identify potential timeline violations.

Key Takeaway

This decision reinforces that insurance companies operating under New York’s no-fault system must strictly adhere to regulatory timelines. When an insurer fails to deny a claim within 30 days and cannot prove the deadline was properly tolled, they forfeit their right to raise common defenses like IME no-shows. This creates a powerful tool for medical providers seeking payment for covered services.

Legal Update (February 2026): Since this 2015 post, New York’s no-fault insurance regulations under 11 NYCRR Part 65 have undergone multiple amendments, including potential modifications to claim processing timeframes, IME scheduling requirements, and insurer defense preservation procedures. The regulatory framework governing the 30-day claim determination period referenced in section 65-3.8 may have been revised through subsequent rulemaking. Practitioners should verify current provisions of 11 NYCRR 65-3.8 and related sections to ensure compliance with the most recent regulatory requirements.

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