Non responded to verification fatal to plaintiff’s case

In New York’s no-fault insurance system, healthcare providers must comply with stringent verification requirements when seeking reimbursement from insurance carriers. These verification requests can include medical records, billing documentation, and other supporting materials that insurers use to evaluate claims. The failure to provide complete responses can have serious consequences for a provider’s ability to recover payment.

A recent Appellate Term decision highlights just how critical it is for healthcare providers to fully comply with these verification demands. The case demonstrates that even when some verification materials are provided, partial compliance may not be sufficient to move forward with litigation.

Case Background: City Care Acupuncture v Allstate

City Care Acupuncture filed suit against Allstate seeking payment for acupuncture services provided to an automobile accident victim. During the pre-litigation phase, Allstate sent verification requests to the provider seeking additional documentation to evaluate the claims. These requests likely included items such as office treatment notes, billing records, proof of the claimant’s attendance at treatment sessions, and other materials insurers routinely request under 11 NYCRR 65-3.5(c).

The provider responded to Allstate’s verification requests, but the response was incomplete. Rather than providing all requested materials or objecting to specific requests on legitimate grounds, City Care’s response explicitly stated it would not provide certain requested items. The provider then moved forward with litigation, filing a motion for summary judgment seeking payment of the outstanding claims.

Allstate cross-moved for summary judgment, arguing that the provider’s failure to comply with verification requests rendered the entire action premature. The Civil Court granted Allstate’s cross-motion, dismissing the claims without prejudice. City Care appealed to the Appellate Term, arguing that it had provided sufficient verification and that any outstanding items were either unavailable or unnecessary. The appeal thus presented the question of whether partial verification compliance satisfies a provider’s obligations under no-fault law.

Jason Tenenbaum’s Analysis:

City Care Acupuncture, P.C. v Allstate Prop. & Cas. Ins. Co., 2017 NY Slip Op 51839(U)(App. Term 2d Dept. 2017)

“In support of plaintiffs’ motion for summary judgment and in opposition to defendant’s cross motion, plaintiffs submitted affirmations from plaintiffs’ counsel and annexed purported verification responses which expressly stated that plaintiffs were not providing responses to some of defendant’s verification requests. As a result, contrary to plaintiffs’ contention, the record demonstrates that defendant had not received all of the requested verification and, thus, that the action is premature”

This is interesting because we are left to reason that certain verification was objected to and certain verification was provided. The Court held that the failure to provide the requested verification (or to indicate where the verification could be obtained) renders the action premature. This Court has often stated that the failure to fully comply with verification renders the matter premature.

Legal Significance: The Verification Requirement as Condition Precedent

The Appellate Term’s decision in City Care Acupuncture reinforces a fundamental principle in New York no-fault law: verification compliance is a condition precedent to litigation, not merely a procedural formality. Under 11 NYCRR 65-3.5(c), insurance carriers may request verification materials to determine whether claimed services were actually rendered, medically necessary, and properly billed. Providers must respond to these requests before bringing suit to recover benefits.

This regulatory framework serves important policy objectives. It allows insurers to evaluate claims without incurring litigation costs, promotes settlement of legitimate claims, and prevents premature lawsuits when material facts remain undisclosed. Courts have consistently held that providers who fail to supply requested verification cannot maintain actions for benefits, as the insurer has not had adequate opportunity to assess the claim’s validity.

The “partial compliance is insufficient” rule established in cases like City Care prevents providers from selectively responding to verification requests. Providers cannot simply provide easy-to-obtain documents while withholding materials that might reveal problems with their claims. The expressly stated refusal to provide certain verification in City Care made clear that the provider was engaging in selective compliance rather than good-faith cooperation with the evaluation process.

However, providers do have options when facing verification requests. They may object to requests that are overly broad, seek privileged information, or demand materials not reasonably related to claim evaluation. Providers may also indicate that certain requested materials don’t exist or are maintained by third parties, directing the insurer to alternative sources. What providers cannot do is simply refuse to provide requested verification without explanation while proceeding with litigation.

Practical Implications for Providers and Insurers

For healthcare providers, City Care Acupuncture emphasizes the critical importance of establishing comprehensive verification response procedures. When verification requests arrive, providers must evaluate each request carefully and respond completely. If certain materials cannot be provided, the response should explain why and offer alternative means for the insurer to obtain necessary information. Blanket refusals to provide verification categories virtually guarantee dismissal of any subsequent lawsuit.

Providers should also recognize that verification disputes can be resolved through proper objections rather than non-compliance. If an insurer’s verification request seems unreasonable, providers can object while still providing responsive materials for proper requests. Courts distinguish between providers who attempt compliance while raising legitimate concerns and those who simply refuse cooperation.

For insurance carriers, this decision confirms their right to insist on complete verification before paying claims or defending lawsuits. When providers supply partial responses while explicitly refusing to provide other requested materials, carriers can successfully move to dismiss the action as premature. However, insurers must ensure their verification requests are reasonable and properly tailored to claim evaluation. Overly broad or harassing requests may not receive judicial protection if providers can demonstrate the requests serve no legitimate evaluation purpose.

Key Takeaway

Healthcare providers cannot pursue litigation against no-fault insurers if they have only partially responded to verification requests. Even when some materials are provided, explicitly stating that certain verification will not be supplied renders the action premature. Complete compliance with all verification demands is essential before litigation can proceed, as courts consistently hold that partial responses are insufficient to establish a valid claim for summary judgment.

Related Articles

• Partial response to verification insufficient
• The failure to respond to ALL of the requested verification renders lawsuit premature
• No-Fault Verification Requirements, When Partial Compliance Isn’t Enough