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Understanding Verification Request Compliance in No-Fault Claims

In New York’s no-fault insurance system, healthcare providers must navigate complex verification requirements when submitting claims. Insurance companies routinely request additional documentation to verify claims, and providers’ responses can make or break their ability to recover payment. A recent Appellate Term decision highlights a crucial but often overlooked aspect of this process: the ability to provide reasonable justification for non-compliance with verification requests. If you’re dealing with a no-fault insurance defense matter, an experienced attorney can help protect your rights.

Under 11 NYCRR 65-3.8, when an insurer seeks additional verification of a claim, the healthcare provider must either supply the requested materials or provide a reasonable justification for failing to do so. This regulatory provision recognizes that not all verification requests are proper, and some requested documents may not exist or may not be in the provider’s possession. The timing of this justification, however, is critical—it must be provided during the administrative claims process, not for the first time in litigation.

The case demonstrates how providers can potentially avoid claim denials even when they cannot fully comply with every verification request, provided they can articulate proper justification during the claims processing stage. This principle balances insurers’ legitimate need to verify claims against the reality that providers may have valid reasons for being unable to produce certain documents.

Case Background

In Burke Physical Therapy, P.C. v State Farm Mut. Auto. Ins. Co., the plaintiff healthcare provider sued to recover payment for no-fault benefits allegedly owed by the defendant insurer. State Farm had issued verification requests seeking additional documentation to support the submitted claims. The provider’s response indicated that verification had been mailed “to the extent such response was proper and in possession”—a vague statement that failed to specify which documents were sent, which were unavailable, and why.

State Farm’s claims specialist submitted evidence demonstrating that the insurer had not received the requested verification materials. The provider’s owner, in opposition, merely reiterated the conclusory assertion that documents were mailed “to the extent” they were proper and in the provider’s possession. This imprecise response became the focal point of the appellate court’s analysis.

Jason Tenenbaum’s Analysis:

Burke Physical Therapy, P.C. v State Farm Mut. Auto. Ins. Co., 2022 NY Slip Op 50623(U)(App. Term 2d Dept. 2022)

“While defendant’s claims specialist stated that defendant had not received any of the documents that defendant’s verification requests sought to obtain, plaintiff’s owner merely stated that he had mailed the requested verification “to the extent such response was proper and in possession.” Thus, [*2]plaintiff failed to demonstrate that it had provided the requested verification or had set forth a reasonable justification for the failure to comply with defendant’s verification requests (see 11 NYCRR 65-3.8 ). Consequently, we find no basis to disturb the order”

That underline passage is important. If performed during the claims processing stage and the basis is properly articulated, the App. Term may go along with it,“

Legal Significance of the Justification Requirement

The court’s emphasis on “reasonable justification” reflects an important principle in no-fault insurance law: insurers’ verification rights are not absolute. Healthcare providers need not produce documents that are irrelevant, not in their possession, protected by privilege, or otherwise improper to disclose. However, providers must affirmatively communicate these limitations during the claims process, with specificity.

This requirement serves multiple policy objectives. First, it promotes efficient claim resolution by requiring parties to identify and resolve verification disputes early. Second, it prevents gamesmanship where providers could strategically withhold responses and then manufacture justifications during litigation. Third, it gives insurers fair notice of any claimed limitations on document production, allowing them to assess whether their information requests should be modified or whether the claim should be denied.

The regulatory framework under 11 NYCRR 65-3.8 contemplates a dialogue between insurers and providers regarding verification requests. When providers cannot fully comply, they must explain why—and that explanation must be contemporaneous with the claims process itself. Generic or conclusory statements like “to the extent proper” fail this standard because they provide no meaningful information to the insurer.

Practical Implications for Healthcare Providers

This decision carries significant implications for healthcare providers navigating verification disputes. Providers should implement clear protocols for responding to verification requests. When a requested document cannot be provided, the response should specifically identify which document is unavailable and explain why—whether it’s not in the provider’s possession, doesn’t exist, is protected by privacy laws, or falls outside the scope of proper verification.

Equally important, providers must document these communications. Maintaining copies of verification responses with detailed explanations creates a record that can support the provider’s position if litigation ensues. Vague responses that attempt to preserve all arguments for later litigation are ineffective under the standard established in Burke Physical Therapy.

Conversely, insurers should carefully scrutinize verification responses for specificity. When providers offer only conclusory assertions about providing “some” documents or responding “to the extent proper,” insurers may have grounds to deny claims based on incomplete verification—provided the original verification request was reasonable and properly served.

Key Takeaway

Healthcare providers don’t always need to provide every document requested in insurance verification demands. However, they must either comply fully or provide reasonable justification for non-compliance during the initial claims process, not after litigation begins. Vague responses about mailing documents “to the extent proper” won’t suffice.

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• New York No-Fault Insurance Law
• No-Fault verification requirements and partial compliance standards
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• Critical timing rules for summary judgment motions under CPLR 3212(a)
• Reasonable excuse standards despite jurisdictional challenges