First sighting of 120-day rule

Understanding the 120-Day Rule in No-Fault Insurance Claims

New York’s no-fault insurance system includes specific timeframes that both providers and insurers must follow when processing claims. One critical aspect involves the 120-day rule for additional verification requests, which allows insurers to deny claims when healthcare providers fail to submit requested documentation within 120 days.

The TAM Med. Supply Corp. case represents the first judicial examination of an important but previously unexplored question: what constitutes a “timely” 120-day denial? While the regulation (11 NYCRR 65-3.5) establishes the 120-day timeframe for provider responses, it doesn’t explicitly address when insurers must issue their denials based on this rule.

This case highlights the ongoing complexity in New York no-fault insurance law, where seemingly straightforward regulations can reveal gaps that require judicial interpretation.

Jason Tenenbaum’s Analysis:

TAM Med. Supply Corp. v Tri State Consumers Ins. Co., 2017 NY Slip Op 51247(U)(App. Term 2d Dept. 2017)

“In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint on the ground that defendant had timely and properly denied the claim at issue based upon plaintiff’s failure to provide requested verification within 120 days of the initial verification request (see 11 NYCRR 65-3.5 ). ”

The case was followed the usual rubric where the Court found a non-specific affidavit sufficient to raise an issue of fact. What is more interesting, however, is the Court held that the a 120-day denial had to be timely issued. This begs the question: When is a 120-day denial “timely” denied? Good question.

Legal Significance

The TAM Medical Supply decision represents the first reported case explicitly holding that 120-day denials must be “timely” issued, introducing temporal requirements beyond those expressly stated in 11 NYCRR 65-3.5. This regulatory provision allows insurers to deny claims when providers fail to submit requested verification within 120 days of the initial verification request. However, the regulation addresses only the provider’s deadline—it says nothing about when insurers must act once that 120-day period expires.

By requiring that 120-day denials be “timely,” the court implicitly recognized a gap in the regulatory framework. Unlike the 30-day payment requirement or the 15-business-day verification request window, no explicit deadline governs when insurers must issue denials based on verification non-receipt beyond 120 days. This silence creates interpretive challenges: Should insurers act within days? Weeks? Months? The regulation provides no guidance.

The court’s holding suggests several possible interpretive approaches. First, courts might apply the general 30-day claim adjudication requirement by analogy, requiring denials within 30 days of the 120-day period expiring. Second, courts could adopt a reasonableness standard, evaluating timeliness based on the specific circumstances of each case. Third, courts might impose a strict requirement that denials be issued immediately upon expiration of the 120-day period. Without further appellate clarification, uncertainty persists.

Jason Tenenbaum’s observation about the “non-specific affidavit” raising an issue of fact is equally significant. This suggests that providers can defeat 120-day denial summary judgment motions through relatively minimal opposition—merely disputing the timing or propriety of the denial may suffice to create factual questions requiring trial resolution.

Practical Implications

For insurance companies, this decision mandates immediate action once the 120-day verification window closes. Insurers should not delay issuing denials based on verification non-receipt, as extended delays may render the denials untimely. Best practices include: (1) calendaring the 120-day deadline from each verification request; (2) monitoring whether providers respond before expiration; and (3) preparing and issuing denials immediately upon the deadline passing without compliance.

Insurance companies should also document the timeline supporting their 120-day denials. Claim files should clearly establish: when the initial verification request was sent; when 120 days expired; when the denial was issued; and why any gap between expiration and denial was reasonable. This documentation will prove critical if timeliness is challenged.

For healthcare providers, the decision creates a valuable defense tool. When challenging 120-day denials, providers should examine the timeline between the 120-day expiration and denial issuance. Significant delays may support arguments that the denial was untimely and therefore invalid. Providers can argue that if the 30-day payment period and 15-business-day verification window require strict compliance, similar temporal limitations should apply to 120-day denials.

Providers should also recognize that the court found a “non-specific affidavit” sufficient to create factual issues. This suggests that detailed, technical opposition may not be necessary—general challenges to timing or compliance may suffice to defeat summary judgment and force trials where providers can present more extensive defenses.

The case also highlights broader strategic considerations. Insurance companies relying on 120-day denials should consider requesting verification through multiple methods (medical records requests, IMEs, EUOs) within the initial 15-business-day window, rather than waiting to see if providers respond to initial requests. This comprehensive approach provides multiple bases for denial while avoiding questions about whether subsequent verification requests were untimely.

Key Takeaway

This case establishes that 120-day denials must be “timely” issued by insurers, but leaves the critical question unanswered: what constitutes timely? This gap in the regulation creates potential procedural challenges for both insurers and providers in verification non-receipt disputes.

Legal Update (February 2026): Since this 2017 analysis of 11 NYCRR 65-3.5 and the 120-day rule for additional verification requests, New York’s no-fault regulations have undergone multiple amendments and procedural updates. The regulatory framework governing timing requirements for insurer denials and provider documentation submissions may have been modified through subsequent regulatory changes or judicial decisions. Practitioners should verify current provisions of 11 NYCRR 65-3 and review recent case law interpreting timing requirements for no-fault claim denials.

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