Verification non-receipt – Partial response insufficient

New York’s no-fault insurance system imposes strict procedural requirements on both insurers and healthcare providers during the claims verification process. Under 11 NYCRR 65-3.8, insurance carriers may request additional verification when legitimate questions arise regarding the necessity, reasonableness, or causation of billed services. Healthcare providers must respond to these verification requests within specified timeframes, and their responses must be complete and substantive. The regulations create a carefully balanced framework intended to prevent fraudulent claims while ensuring legitimate providers receive timely payment.

The verification process represents one of the most contentious areas of no-fault litigation. Insurance carriers frequently assert that providers failed to supply requested verification materials, justifying claim denials. Providers counter that they responded fully to all proper verification requests and that insurers improperly rejected their submissions or demanded unnecessary documentation. Courts must navigate these disputes by determining whether verification requests were appropriate, whether responses were adequate, and whether insurers complied with their obligations to pay or deny claims within regulatory timeframes.

Partial responses to verification requests create particular challenges. Providers sometimes submit some but not all requested materials, either because they lack certain documents or because they contest the appropriateness of specific requests. This raises the critical question: must insurers pay or deny claims upon receiving partial responses, or may they continue holding claims in suspension until receiving complete verification? The regulatory scheme and case law addressing this issue have evolved significantly, creating important implications for both insurers and providers.

Case Background

Compas Med., P.C. v Travelers Ins. Co., 2016 NY Slip Op 51441(U)(App. Term 2d Dept. 2016)

In Compas Medical, P.C. v. Travelers Insurance Company, the insurance carrier requested verification materials from the plaintiff healthcare provider. The provider submitted some of the requested materials but did not provide complete responses to all verification requests. Rather than immediately paying or denying the claims, Travelers maintained the claims in suspension pending receipt of the outstanding verification. The provider then filed suit alleging that Travelers violated the 30-day statutory payment requirement by failing to act on the claims after receiving the partial verification response.

The trial court sided with the plaintiff provider, finding that Travelers should have paid or denied the claims upon receiving any verification response. On appeal, the Appellate Term Second Department examined whether the no-fault regulations require insurers to pay or deny claims when providers submit partial rather than complete verification responses.

Jason Tenenbaum’s Analysis

Compas Med., P.C. v Travelers Ins. Co., 2016 NY Slip Op 51441(U)(App. Term 2d Dept. 2016)

“Contrary to plaintiff’s contention, defendant was not required to pay or deny plaintiff’s claims upon receipt of a “partial response” to defendant’s verification requests (see 11 NYCRR 65-3.8 ; ; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [“A claim need not be paid or denied until all demanded verification is provided”]). To the extent that plaintiff asserts that certain of defendant’s requests were inappropriate, that argument also lacks merit, as plaintiff did not allege, much less demonstrate, that it objected to such requests during claims processing (see Rogy Med., P.C. v Clarendon Natl. Ins. Co., 43 Misc 3d 133, 2014 NY Slip Op 50629, *2 [“inaction is an improper response to a verification request, and therefore plaintiff’s objections regarding the requests will not now be heard”]).”

Consider two examples where this plays out. Example one: Plaintiff says: I do not have these records search somewhere else and the defendant failed to search. This would be a loser to the carrier.

Example two: The carrier sought verification directly from the correct parties and following this Plaintiff says: “I do not have these records search somewhere else and the defendant failed to search.” This would be at best a partial response or a non response since the carrier has done everything it is supposed to do.

I raise these two issues because they play out often. AAA gets example #1 correct. AAA often gets example #2 incorrect.

Legal Significance

The Appellate Term’s decision in Compas Medical clarifies a crucial procedural requirement in no-fault verification disputes. By holding that insurers need not pay or deny claims upon receiving partial verification responses, the court aligned with established precedent from New York & Presbyterian Hospital v. Progressive Casualty Insurance Company. This principle prevents providers from circumventing verification requirements by submitting incomplete responses and then asserting violations of payment timeframes.

The decision’s treatment of the waiver issue carries equal significance. The court held that providers who fail to object to verification requests during claims processing cannot later challenge those requests in litigation. This ruling incentivizes contemporaneous objections and prevents providers from gaming the system by remaining silent during claims processing only to raise challenges after litigation commences. The policy rationale supports efficient claims administration by forcing parties to identify and resolve verification disputes promptly rather than allowing them to fester until litigation.

The Rogy Medical citation reinforces that silence or partial compliance constitutes an inadequate response to verification requests. Providers must affirmatively object if they believe requests are inappropriate rather than simply ignoring them or providing incomplete responses. This standard places the burden on providers to engage substantively with verification requests and clearly communicate any disputes about their propriety.

Practical Implications

For healthcare providers, Compas Medical establishes clear procedural requirements when responding to verification requests. Providers must either submit complete verification materials or raise timely objections to any requests they consider inappropriate. Partial responses without explanation or objection will not trigger the insurer’s obligation to pay or deny claims. Providers who lack requested materials should affirmatively notify the insurer, explain why the materials are unavailable, and potentially suggest alternative sources for the information.

For insurance carriers, the decision confirms the right to maintain claims in suspension until receiving complete verification responses. However, insurers must ensure that their verification requests are appropriate and properly directed. When providers indicate that certain materials are unavailable, insurers should pursue those materials from other sources rather than indefinitely suspending claims. The distinction Jason Tenenbaum draws between the two examples illustrates this principle: insurers cannot request materials from providers who lack them and then refuse to pursue other available sources.

Related Articles

• Understanding Verification Requests in New York No-Fault Insurance Claims
• The 120-day rule
• The Verification Process in No-Fault Insurance: When Technical Requirements Override Common Sense
• Procedural Fairness in No-Fault Insurance Litigation: Is It Fair?
• New York No-Fault Insurance Law

Legal Update (February 2026): The no-fault verification requirements under 11 NYCRR 65-3 have undergone several amendments since 2016, including updates to verification request procedures and response timeframes. Additionally, subsequent appellate decisions may have refined the standards for what constitutes adequate partial responses and appropriate verification objections. Practitioners should verify current regulatory provisions and recent case law developments when advising on verification compliance strategies.