Late notice defense sustained

New York’s no-fault insurance regulations impose strict timing requirements on medical providers seeking reimbursement for services rendered. Under 11 NYCRR 65-3.5, providers must submit claims within forty-five days after rendering services or lose their right to payment. This regulatory deadline serves multiple purposes: it allows insurers to promptly investigate claims while evidence remains fresh, prevents stale claims that are difficult to verify, and promotes efficient administration of the no-fault system. Courts have consistently enforced this deadline as mandatory, requiring providers who miss it to demonstrate valid excuses for their delay.

The late notice defense represents one of the most effective tools available to no-fault insurers defending against provider claims. When insurers timely deny claims based on untimely submission, they shift the burden to providers to establish both the fact of timely submission and any excuse justifying delay. Mere assertions of mailing or good faith error prove insufficient. Providers must submit competent evidence establishing when claims were submitted, why delays occurred, and whether the circumstances triggering delay fall within recognized regulatory exceptions. Failure to meet this evidentiary burden results in dismissal of provider claims regardless of the underlying validity of the medical services.

Case Background

Sunrise Acupuncture PC v ELRAC, Inc., 2016 NY Slip Op 50905(U)(App. Term 1st Dept. 2016)

In this no-fault action, plaintiff Sunrise Acupuncture provided medical services to an accident victim and sought reimbursement from defendant ELRAC, Inc. However, plaintiff submitted its claims more than forty-five days after rendering the services, triggering ELRAC’s timely denial based on late notice. Plaintiff attempted to excuse the delay by arguing that it had mistakenly submitted the claims to MVAIC (Motor Vehicle Accident Indemnification Corporation) rather than to ELRAC, which was the proper carrier.

Plaintiff’s excuse possessed facial plausibility under 11 NYCRR 65-3.5, which recognizes submission to the wrong carrier as a valid justification for delay. However, plaintiff’s evidentiary showing proved fatally deficient. While plaintiff submitted evidence that the claims were initially misdirected to MVAIC, plaintiff failed to establish when MVAIC denied those claims or when plaintiff learned that ELRAC was the proper carrier. Without this critical chronology, the court could not determine whether plaintiff’s subsequent submission to ELRAC occurred within a reasonable timeframe after discovering the error. Plaintiff moved for summary judgment, and ELRAC cross-moved, leading to competing motions before the trial court.

Court’s Analysis

Sunrise Acupuncture PC v ELRAC, Inc., 2016 NY Slip Op 50905(U)(App. Term 1st Dept. 2016)

(1) “Defendant made a prima facie showing of entitlement to summary judgment dismissing plaintiff’s no-fault claims, by establishing that it timely denied the subject claims on the ground that plaintiff submitted the claims more than one year after the services were rendered, a period well beyond that called for in the applicable regulation (see 11 NYCRR 65-2.4(c); see St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733 ; see also Matter of Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405 ).”

Submission was more than 45 after service rendered.

(2) Insofar as plaintiff’s submissions showed that the claims were mistakenly submitted to MVAIC, thus justifying plaintiff’s initial delay in submitting the claims to defendant (see 11 NYCRR 65—3.5), plaintiff failed to submit any competent proof establishing the dates the claims were denied by MVAIC or when it was apprised that defendant was the proper carrier (see Bronx Expert Radiology, P.C. v Great N. Ins. Co., 24 Misc 3d 134, 2009 NY Slip Op 51474)

No evidence from when MVAIC denied and when submitted to ELRAC.

(3) “Plaintiff’s remaining contention that defendant failed to give due consideration to its excuse, is unavailing, since plaintiff’s own submissions show that defendant considered the excuse proffered by plaintiff and rejected it.”

Due consideration defense unavailing since Plaintiff showed the billing was considered and rejected in resubmission.

Legal Significance

The Appellate Term’s decision in Sunrise Acupuncture clarifies the evidentiary requirements providers must satisfy when invoking the wrong-carrier exception to the forty-five day rule. While submission to the wrong insurer qualifies as a recognized excuse under 11 NYCRR 65-3.5, providers bear the burden of establishing the complete chronology of their error and correction. Simply proving that initial misdirection occurred proves insufficient without demonstrating when the provider discovered the mistake and how quickly it corrected the error.

The decision also addresses the separate “lack of due consideration” defense that providers occasionally assert. Some providers argue that insurers must explicitly state that they considered the provider’s excuse for late submission before denying claims. The court rejected this argument, holding that when a provider’s own submissions establish that the insurer considered and rejected the proffered excuse, the provider cannot subsequently claim lack of due consideration. This ruling prevents providers from creating procedural obstacles through purely technical arguments unsupported by the facts.

Practical Implications

For medical providers, Sunrise Acupuncture emphasizes the importance of maintaining detailed records when claims are submitted to wrong carriers. Providers must document not only the initial submission but also when denials from wrong carriers arrive, when they discover the correct carrier, and when they resubmit to the proper entity. Without this documentation, providers cannot satisfy their evidentiary burden when insurers assert late notice defenses. Providers should implement systems to track claim submissions and promptly investigate any denials indicating wrong carrier issues.

Defense counsel representing no-fault insurers should carefully review claim submission chronologies to identify late notice defenses. When providers submit claims beyond forty-five days and assert wrong-carrier excuses, insurers should demand complete documentation of the claimed misdirection including denial dates from the alleged wrong carrier and submission dates to the correct carrier. Absent such documentation, insurers can successfully move for summary judgment dismissing provider claims based on late notice, regardless of whether the underlying services were properly rendered.

Key Takeaway

Medical providers asserting wrong-carrier exceptions to the forty-five day submission requirement must establish the complete timeline of their error and correction through competent evidence. Proving initial misdirection alone proves insufficient without demonstrating when the provider discovered the mistake and how promptly it resubmitted to the correct carrier. Insurers defending against untimely claims should demand detailed chronological proof of any asserted excuse, and providers must maintain comprehensive records documenting every step of their submission process to preserve their right to payment.

Related Articles

• MVAIC submission timing issues and the 45-day rule
• Understanding what happens after the 45-day deadline
• Provider requirements for explaining untimely bill submissions
• Insufficient justification for late submissions under the 45-day rule
• Triable issues of fact in 45-day rule cases