The 120-day rule

Understanding New York’s 150-Day Verification Rule in No-Fault Insurance Cases

New York’s no-fault insurance system operates under strict timing requirements that can make or break your personal injury claim. One of the most critical rules affecting both healthcare providers and accident victims is the 150-day verification rule, which fundamentally changed how insurance companies must handle claim denials.

The Landmark Chapa Decision: Establishing the 150-Day Rule

The case of Chapa Prods. Corp. v MVAIC, 2019 NY Slip Op 29341 (App. Term 2d Dept. 2019), established a crucial timeline for insurance companies when handling verification requests. This decision clarified that carriers have 150 days from the first verification demand to the date of denial, creating a definitive framework for no-fault claim processing.

What makes this ruling particularly significant is that it established that a late denial does not void the defense under a Domotor theory. Instead, a late disclaimer only makes the dismissal without prejudice, preserving important rights for both parties.

Why the 150-Day Rule Matters for Personal Injury Victims

For accident victims throughout Nassau County, Suffolk County, and the greater New York area, understanding this rule is crucial because it affects when and how insurance companies must respond to medical providers’ claims. This timing can directly impact your ability to receive necessary medical treatment and compensation.

The Evolution of No-Fault Verification Requirements

New York’s no-fault system has always operated under the principle of “pay or deny within 30 days.” However, the verification process has evolved significantly over time, with the 150-day rule representing the latest refinement in protecting both legitimate claims and preventing fraud.

Historical Context: The 30-Day Pay or Deny Rule

The fundamental principle of New York’s no-fault system requires insurance companies to either pay valid claims or provide specific denials within 30 days. This “pay or deny/die” rule ensures that injured parties receive timely medical treatment and compensation. As the Chapa court noted, “you cannot argue with this new rule of no-fault law.”

Impact of 11 NYCRR 65-3.8(b)(3)

The current regulations under 11 NYCRR 65-3.8(b)(3) provide that insurance companies “may” issue denials when verification requests are not fully satisfied, but they are not obligated to pay or deny claims until receiving complete verification of all requested information.

Understanding Verification Requests in Personal Injury Cases

When you’re injured in a motor vehicle accident, slip and fall incident, or other covered event, medical providers treating you must submit claims to your no-fault insurance carrier. The insurance company may then request additional verification to validate these claims.

Common Types of Verification Requests

Insurance companies typically request verification regarding:

• Medical records and treatment documentation
• Proof of medical necessity for treatments
• Billing documentation and coding verification
• Patient attendance records
• Provider licensing and certification
• Equipment and supply documentation

The Problem of “Partial Responses”

One of the key issues addressed in the Chapa decision involves partial responses to verification requests. The court clarified that insurance companies have not historically been required to pay or deny claims upon receipt of incomplete verification responses.

This principle was established in earlier cases such as St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 (2002), which held that “an insurer is not obligated to pay or deny a claim until it has received verification of all relevant information requested.”

The Significance of Complete Documentation

The Chapa court emphasized the importance of proper documentation, noting approvingly that courts are “not accepting a nondescript affidavit that certain items were mailed.” This represents a crucial protection for healthcare providers and patients alike.

Requirements for Valid Verification Responses

To satisfy verification requests, healthcare providers must ensure:

• Complete documentation of all requested materials
• Specific identification of documents provided
• Detailed affidavits describing verification efforts
• Proper mailing and delivery documentation
• Compliance with all regulatory requirements

As the court noted in referencing New Way Med. Supply Corp. v State Farm Mut. Auto Ins. Co., 56 Misc 3d 132, 2017 NY Slip Op 50925, documentation that is “not in compliance with the request” will not satisfy verification requirements.

Practical Implications for Different Stakeholders

For Healthcare Providers

Medical providers treating accident victims must understand that the 150-day rule provides both opportunities and obligations:

Opportunities:

• Protection against untimely denials
• Clear timelines for insurance company responses
• Preserved rights for claim pursuit

Obligations:

• Complete and timely verification responses
• Detailed documentation of all submissions
• Compliance with specific regulatory requirements

For Personal Injury Victims

Understanding the 150-day rule helps accident victims protect their rights by:

• Ensuring medical providers have adequate time to respond to verification requests
• Understanding why treatment claims may be delayed
• Recognizing when insurance companies exceed their authority
• Preserving options for pursuing denied claims

For Insurance Companies

The rule establishes clear boundaries for insurance company conduct:

• 150-day maximum timeline for verification-based denials
• Prohibition on denials after the deadline
• Requirements for specific, detailed verification requests
• Standards for evaluating verification responses

Legal Consequences of Timing Violations

The Chapa decision established that denials issued after the 150-day period are “a nullity with respect to that defense.” This has significant implications for litigation strategy and case outcomes.

Without Prejudice Dismissals vs. Prejudice Dismissals

When insurance companies exceed the 150-day deadline, the result is a dismissal without prejudice rather than with prejudice. This distinction is crucial because:

Without Prejudice:

• Claims can be refiled
• No permanent bar to recovery
• Preserves future litigation rights
• Returns parties to pre-verification status

With Prejudice:

• Permanent dismissal of claims
• No opportunity to refile
• Complete bar to recovery
• Final resolution in favor of insurance company

Strategic Considerations for Personal Injury Attorneys

Understanding the 150-day rule is essential for attorneys handling personal injury cases, particularly those involving significant medical treatment and no-fault benefits.

Timeline Management

Attorneys must carefully track verification timelines to ensure:

• Proper documentation of verification request dates
• Monitoring of insurance company response times
• Identification of deadline violations
• Preservation of client rights throughout the process

Working with Medical Providers

Successful personal injury representation requires coordinating with healthcare providers to:

• Ensure complete verification responses
• Document all communications with insurance companies
• Preserve evidence of compliance efforts
• Maintain detailed records for potential litigation

The Broader Impact on New York No-Fault Law

The 150-day rule represents part of a broader evolution in New York’s no-fault system, balancing the needs of injured parties for timely medical treatment with insurance companies’ legitimate needs for claim verification.

Preventing Fraudulent Claims

The verification process serves important anti-fraud purposes by:

• Ensuring treatment was actually provided
• Confirming medical necessity
• Validating billing accuracy
• Preventing duplicate payments

Protecting Legitimate Claims

The 150-day rule protects legitimate claims by:

• Preventing indefinite delays in claim resolution
• Requiring specific timelines for insurance responses
• Preserving access to necessary medical treatment
• Maintaining the integrity of the no-fault system

Common Challenges and Pitfalls

For Healthcare Providers

Common challenges include:

• Understanding exactly what verification is required
• Maintaining proper documentation of submissions
• Dealing with unclear or overly broad verification requests
• Managing multiple verification requests for the same claim

For Insurance Companies

Insurance companies must navigate:

• Strict adherence to 150-day timelines
• Specific requirements for verification requests
• Proper evaluation of partial responses
• Documentation requirements for denial decisions

Frequently Asked Questions

What happens if an insurance company denies a claim after 150 days from the initial verification request?

According to the Chapa decision, such denials are considered “a nullity” and provide no basis for dismissing a no-fault claim with prejudice. The case would be dismissed without prejudice, allowing the provider to refile the claim.

Does the 150-day rule apply to all types of no-fault denials?

The 150-day rule specifically applies to denials based on insufficient verification responses. Other types of denials (such as those based on medical necessity or coverage exclusions) may have different timing requirements.

Can healthcare providers sue immediately if verification is requested, or must they wait for a denial?

Generally, providers must wait for either payment or denial before filing suit. Filing before completing the verification process typically results in dismissal as premature, without prejudice.

What constitutes a complete response to a verification request?

A complete response must address all items specifically requested by the insurance company and provide detailed documentation. General or “nondescript” affidavits stating that materials were mailed are insufficient.

How does the 150-day rule interact with New York’s 30-day pay or deny requirement?

The 30-day rule still applies for claims where no verification is requested. When verification is requested, the insurance company has 150 days from the initial request to issue a denial based on inadequate verification.

Protecting Your Rights Under New York’s No-Fault System

The 150-day verification rule represents an important protection for both accident victims and healthcare providers in New York’s no-fault system. Understanding these timing requirements can help ensure you receive the medical treatment and compensation you deserve after an accident.

Whether you’re dealing with delayed no-fault benefits, disputed medical claims, or complex verification requests, experienced legal representation can help navigate the system’s requirements and protect your rights. The technical nature of no-fault law requires attorneys who understand both the regulatory framework and the practical realities of claim processing.

Call 516-750-0595 for a free consultation with experienced New York personal injury attorneys who understand the complexities of no-fault insurance law and can help ensure you receive the benefits you’re entitled to under the law.

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Legal Update (February 2026): Since this post’s publication in late 2019, New York’s no-fault insurance regulations under 11 NYCRR 65-3 may have been subject to amendments or clarifications, particularly regarding verification procedures and timing requirements under section 65-3.8. Additionally, subsequent appellate decisions may have further refined the application of the 150-day rule established in Chapa or modified procedural requirements for claim denials and verification requests. Practitioners should verify current regulatory provisions and recent case law developments when advising clients on no-fault verification timelines.

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