No-Fault Verification Requirements: When Partial Compliance Isn’t Enough

Understanding No-Fault Verification Requirements: When Partial Compliance Isn’t Enough

In New York’s no-fault insurance system, medical providers must comply with insurance company verification requests to receive payment for services. A recent appellate decision clarifies an important principle: when providers only partially comply with verification requests, they must provide reasonable justification for any withheld documents. This ruling has significant implications for both medical providers and accident victims.

The New York Manual Case: A Lesson in Proper Verification

New York Manual, P.T., P.C. v Nationwide Affinity Ins. Co. of Am., 2023 NY Slip Op 50281(U)(App. Term 2d Dept. 2023)

“In opposition, plaintiff’s owner merely stated that he had mailed the requested verification “to the extent such response was proper and in possession.” Thus, contrary to plaintiff’s contentions on appeal, [*2]plaintiff failed to establish a triable issue of fact by demonstrating 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.”

The Legal Significance of This Ruling

Whereas the usual affidavit of mailing will state that all requested verification was mailed, the change now introduces an issue to what was withheld. As for that, an offer of proof as to the reasonableness for not turning over the verification is required.

This decision makes sense.

This ruling establishes a clear standard: partial compliance with verification requests is insufficient unless the provider can demonstrate a reasonable justification for withholding certain documents. This represents a significant shift from previous practice and has important implications for all parties involved in no-fault cases.

What Are No-Fault Verification Requirements?

Under New York’s no-fault insurance system, insurance companies have the right to request verification of medical treatment and bills before paying claims. These verification requirements are designed to prevent fraud and ensure that payments are made for legitimate, necessary medical care.

The Legal Framework

Regulation 11 NYCRR 65-3.8(b)(3) governs verification requirements in no-fault cases. This regulation allows insurance companies to request various documents and information to verify the legitimacy of claims, including:

• Medical records and treatment notes
• Billing documentation and fee schedules
• Patient files and intake forms
• Proof of medical provider credentials and licensing
• Documentation of medical necessity for treatment provided

The Balance Between Verification and Payment

The verification process creates a balance between insurance companies’ need to prevent fraud and medical providers’ need for timely payment. However, this balance can become contentious when providers feel that verification requests are excessive or used to delay payment unfairly.

What This Means For You: Practical Implications

The New York Manual decision has significant practical implications for both medical providers and accident victims receiving no-fault benefits.

For Medical Providers

This ruling makes it clear that providers cannot simply send partial verification and expect courts to accept that approach. If you’re a medical provider dealing with verification requests:

• Complete compliance is expected: You should provide all requested verification documents unless you have a legitimate reason not to.
• Justify any omissions: If you cannot provide certain documents, you must explain why in detail.
• Document your compliance efforts: Maintain detailed records of what verification you’ve provided and when.
• Be specific in your responses: Vague statements about providing verification “to the extent proper” are no longer sufficient.

For Accident Victims

As a patient, verification disputes can affect your access to medical care and create delays in treatment. Understanding these requirements helps you:

• Choose compliant providers: Work with medical providers who understand and properly handle verification requirements.
• Ensure treatment continuity: Verification disputes can lead to treatment delays if providers stop seeing patients due to payment issues.
• Understand potential liability: If verification issues result in unpaid claims, you may become responsible for medical bills.
• Monitor your case: Stay informed about any verification disputes that might affect your treatment or coverage.

Common Verification Requests and Compliance Challenges

Understanding typical verification requests and potential compliance challenges helps both providers and patients navigate the no-fault system more effectively.

Standard Verification Documents

Insurance companies commonly request the following verification documents:

• Treatment records: Detailed notes documenting each treatment session
• Initial examination reports: Comprehensive assessments conducted at the beginning of treatment
• Progress notes: Regular updates on patient improvement and ongoing treatment needs
• Billing records: Detailed invoices showing services provided and charges
• Provider credentials: Documentation of medical licenses and qualifications
• Assignment of benefits: Signed agreements allowing providers to bill insurance directly

Legitimate Reasons for Withholding Documents

While complete compliance is generally expected, there are legitimate reasons why providers might withhold certain documents:

• Patient privacy concerns: Documents containing information unrelated to the accident or claim
• Privilege issues: Communications protected by attorney-client or other privileges
• Third-party restrictions: Documents obtained from other providers with confidentiality restrictions
• Irrelevant information: Records predating the accident or unrelated to the claimed injuries

However, providers must specifically explain these limitations rather than using vague language about providing verification “to the extent proper.”

The Evolution of Verification Standards

The New York Manual decision represents an evolution in how courts view verification compliance in no-fault cases.

Previous Practice

Previously, many providers could submit affidavits stating they had mailed “all requested verification” without being challenged about what specifically was provided. This often led to disputes where insurance companies claimed they never received adequate verification while providers insisted they had complied.

Current Requirements

The new standard requires providers to be much more specific about what they’ve provided and what they’ve withheld. This creates greater accountability but also requires more careful documentation and legal analysis when verification issues arise.

Strategic Considerations for Compliance

Given the New York Manual ruling, both providers and patients should consider strategic approaches to verification compliance.

Best Practices for Medical Providers

• Maintain comprehensive records: Keep detailed documentation of all verification requests and responses
• Respond specifically: Address each verification request item by item
• Explain limitations clearly: If certain documents cannot be provided, explain why in detail
• Seek legal advice early: Consult with no-fault attorneys when verification disputes arise
• Consider protective measures: Use protective orders or other legal tools when sensitive information is involved

For Patients and Their Attorneys

• Monitor provider compliance: Ensure your medical providers are properly responding to verification requests
• Support legitimate privacy concerns: Work with providers to protect sensitive information while ensuring compliance
• Address disputes promptly: Don’t let verification disputes linger and potentially affect ongoing treatment
• Document everything: Keep records of all verification-related communications and issues

Common Disputes and Legal Challenges

Verification requirements frequently lead to disputes between insurance companies and medical providers, creating complex legal battles that can affect patient care.

Timing Issues

Disagreements often arise about how quickly providers must respond to verification requests and what constitutes reasonable time for compliance. Insurance companies may use verification delays to justify claim denials, while providers may struggle with the administrative burden of responding to numerous requests.

Scope of Requests

Insurance companies sometimes make overly broad verification requests that providers believe exceed regulatory requirements. The New York Manual decision may give insurance companies more leverage in these disputes by requiring specific justification for any non-compliance.

Good Faith Disputes

Not all verification disputes involve fraud or bad faith. Sometimes legitimate disagreements arise about what information is necessary or appropriate to verify a claim. The new standard requires more careful legal analysis of these situations.

Protecting Your Rights and Interests

Whether you’re a medical provider or an accident victim, understanding your rights under no-fault verification requirements is essential for protecting your interests.

For Medical Providers

If you’re facing verification disputes:

• Review requests carefully: Analyze whether verification requests are reasonable and within regulatory bounds
• Respond comprehensively: Provide complete responses or detailed explanations for any limitations
• Maintain detailed records: Document all verification requests, responses, and communications
• Seek professional help: Consult with attorneys experienced in no-fault law when disputes arise

For Accident Victims

To protect your access to care and avoid liability for unpaid bills:

• Choose experienced providers: Work with medical providers who understand no-fault compliance requirements
• Stay informed: Monitor any verification disputes that might affect your treatment
• Support legitimate compliance: Cooperate with reasonable verification requests
• Seek legal help: Consult with attorneys if verification disputes threaten your access to care

Frequently Asked Questions

What happens if a medical provider doesn’t comply with verification requests?

If a provider fails to comply with legitimate verification requests, the insurance company can deny payment for services. This may leave the patient responsible for the bills unless the provider can demonstrate that the verification requests were improper or that they had valid reasons for non-compliance.

Can insurance companies make unlimited verification requests?

No, verification requests must be reasonable and related to verifying the legitimacy of the claim. However, the scope of what’s considered reasonable can be quite broad, and providers challenging verification requests bear the burden of proving they’re improper.

What should I do if my medical provider stops treatment due to verification disputes?

If verification disputes are affecting your access to medical care, you should consult with an experienced no-fault attorney immediately. There may be ways to resolve the dispute or find alternative treatment arrangements while protecting your rights.

How long do providers have to respond to verification requests?

The regulations provide specific timeframes for verification responses, typically 30 days. However, the timing can vary depending on the specific circumstances and type of verification requested. Providers should respond as quickly as possible to avoid payment delays.

Can patients help resolve verification disputes?

Yes, patients can sometimes help by providing additional information or documentation that supports their provider’s position. However, it’s important to work with your attorney or provider to ensure that any assistance doesn’t compromise your rights or privacy.

The Importance of Experienced Legal Representation

The New York Manual decision demonstrates the complex legal landscape surrounding no-fault verification requirements. These disputes can significantly impact both medical care access and financial outcomes for all parties involved.

At the Law Office of Jason Tenenbaum, we have extensive experience handling no-fault verification disputes for both medical providers and accident victims. We understand the nuanced requirements established by cases like New York Manual and can help navigate these complex legal waters.

Our Approach to Verification Disputes

Our no-fault insurance attorneys provide comprehensive assistance with:

• Analyzing the reasonableness of verification requests
• Developing compliance strategies that protect legitimate interests
• Challenging improper or excessive verification demands
• Resolving disputes to minimize impact on patient care

We work closely with our personal injury team to ensure that verification issues don’t interfere with our clients’ ability to receive necessary medical treatment and fair compensation.

Don’t Let Verification Disputes Compromise Your Rights

The complexity of no-fault verification requirements means that proper legal guidance is essential. Whether you’re a medical provider struggling with compliance issues or an accident victim whose treatment is affected by verification disputes, we can help you understand your rights and develop effective strategies.

Verification disputes can have serious consequences, including denied claims, unpaid bills, and interrupted medical treatment. Don’t risk your financial interests or access to care by trying to navigate these complex requirements alone.

Call 516-750-0595 for a free consultation to discuss your verification dispute or compliance concerns. We’ll review your situation, explain your rights and obligations, and develop a strategy to protect your interests. We work on a contingency fee basis for personal injury claims, so you don’t pay attorney fees unless we recover compensation for you.