Key Takeaway
Court remands case for hearing on whether policy limits were exhausted before provider claims arose, highlighting critical priority of payment issues in no-fault insurance disputes.
No-fault insurance disputes often hinge on timing—specifically, when claims were received and paid relative to policy limits. The concept of “priority of payment” determines which medical providers get paid when an insurance policy’s limits are insufficient to cover all claims. This principle becomes particularly important when multiple healthcare providers are competing for payment from the same exhausted policy.
In cases involving policy exhaustion, insurers must demonstrate that funds were depleted by earlier claims before they can deny payment to subsequent providers. However, establishing this timeline requires careful documentation and often leads to contested proceedings when providers challenge an insurer’s payment chronology.
Jason Tenenbaum’s Analysis:
Ameriprise Ins. Co. v Kensington Radiology Group, P.C., 2017 NY Slip Op 51911(U) (App. Term 1st Dept. 2017)
“Here, petitioner-insurer’s submissions in support of its petition to vacate the arbitration award – including an attorney’s affirmation, the policy declaration page showing the $50,000 limit and a payment ledger listing in chronological order the dates the claims by various providers were received and paid – raised triable issues as to whether the $50,000 policy limit had been exhausted by payments of no fault benefits to respondent and other providers before petitioner became obligated to pay the claims at issue here (see Allstate Prop. & Cas. Ins. Co. v Northeast Anesthesia & Pain Mgt., 51 Misc 3d 149, 2016 NY Slip Op 50828 ; Allstate Ins. Co. v DeMoura, 30 Misc 3d 145, 2011 NY Slip Op 50430 1st Dept 2011]). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.”
This looks like pure priority of payment, which does not look good,
Key Takeaway
The court’s decision to remand for a hearing demonstrates that priority of payment disputes require factual determination rather than summary judgment. When insurers present chronological payment records showing policy exhaustion, courts must examine whether the timing truly supports the insurer’s position—a process that can significantly impact provider recovery rights.
