120-day rule rebutted

Court Challenges Traditional Evidence Standards in No-Fault Verification Disputes

In New York’s no-fault insurance system, the verification process plays a crucial role in claim processing. Insurance companies routinely request additional verification from healthcare providers, and failure to respond within specified timeframes can result in claim denials under the 120-day rule. However, disputes frequently arise over whether verification requests were actually received by providers, creating complex evidentiary battles in court.

A recent Appellate Term decision highlights an interesting development in how courts evaluate evidence in these verification non-receipt cases. The ruling suggests that a simple affidavit, without supporting documentation, may be sufficient to create a disputed question of fact - a position that raises important questions about evidence standards in no-fault litigation.

Case Background

In Solution Bridge, Inc. v State Farm Mut. Auto. Ins. Co., the insurance carrier moved for summary judgment, asserting that it had timely mailed verification requests to the healthcare provider, never received the requested verification, and properly denied the claim based on non-receipt. The carrier submitted affidavits and business records to establish its standard mailing procedures.

The plaintiff provider opposed the motion by submitting an affidavit from an employee stating that the provider had, in fact, mailed the requested verification to the insurance company. Notably, the provider did not submit any documentary evidence supporting this assertion—no certified mail receipts, no proof of mailing, no copies of the verification materials allegedly sent. The affidavit stood alone as the sole basis for creating a factual dispute.

Jason Tenenbaum’s Analysis:

Solution Bridge, Inc. v State Farm Mut. Auto. Ins. Co., 2018 NY Slip Op 51648(U)(App. Term 2d Dept. 2018)

“Contrary to plaintiff’s contentions, defendant’s proof was sufficient to demonstrate prima facie that it had timely mailed initial and follow-up verification requests (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 ); that it had not received the requested verification; and that it had timely denied the claim on that ground. However, as plaintiff further argues, the affidavit submitted by plaintiff in opposition to defendant’s motion was sufficient to give rise to a presumption that the requested verification had been mailed to, and received by, defendant (see id.). In light of the foregoing, there is a triable issue of fact as to whether plaintiff provided the requested verification.”

Has anyone sought to ask the Second Department to review these cases? i am hard-pressed to imagine that an affidavit without documentary support is sufficient to raise an issue of fact. Or, are we all sheep?

Legal Significance

This decision reflects a troubling departure from traditional summary judgment principles that require competent evidence, not mere assertions, to defeat a motion for summary judgment. The case relies on St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co. for the proposition that an affidavit alone can create a presumption of mailing and receipt. However, this approach raises serious questions about evidentiary standards.

Under CPLR § 4518(a), properly executed business records create a presumption of regularity. When an insurance company submits detailed affidavits describing office procedures for receiving and logging verification materials, coupled with records showing no such materials were received, they establish a formidable prima facie case. Allowing a conclusory affidavit—unsupported by any documentary evidence—to rebut such proof effectively eviscerates the summary judgment process.

The decision also implicates the mailbox rule and the competing presumptions that arise in mailing disputes. Courts have long recognized that proof of mailing creates a presumption of receipt, but that presumption must be based on actual evidence of mailing (such as a postal receipt or certified mail documentation), not merely a sworn statement that something was mailed. By accepting the bare affidavit as sufficient, the court may have created an unintended incentive for parties to manufacture factual disputes through self-serving testimony.

Jason Tenenbaum’s provocative question—“Has anyone sought to ask the Second Department to review these cases?”—highlights the need for appellate clarification. The divergence between what should constitute admissible evidence and what this decision accepts creates uncertainty for practitioners and potentially undermines the efficiency of the no-fault system.

Practical Implications

For insurance carriers, this decision complicates the summary judgment process in verification non-receipt cases. Even when carriers establish comprehensive proof of their mailing procedures, non-receipt of verification, and timely denial, a simple affidavit from the provider claiming they sent the verification may be sufficient to create a triable issue of fact. Carriers should consider whether to pursue further appellate review or legislative clarification of evidentiary standards in these cases.

For healthcare providers, the decision offers a potential pathway to defeat summary judgment motions without extensive documentation. However, providers should recognize that this approach may not withstand scrutiny at trial, where the absence of corroborating documentary evidence could prove fatal to their case.

The broader implication is that courts may be applying different evidentiary standards to insurers and providers. If insurers must prove their procedures through detailed business records and testimony, fairness suggests that providers should be held to similar standards when asserting they complied with verification requests. The current framework may create an asymmetry that undermines the integrity of the litigation process.

Key Takeaway

This decision demonstrates how courts may accept minimal evidence to create factual disputes in verification cases, potentially undermining the efficiency of summary judgment motions. The ruling suggests that a healthcare provider’s sworn statement alone can counter an insurance company’s documentation, raising questions about how courts determine when verification was actually received.

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