Priority of Payment & Policy Exhaustion

Priority of payment is the rule for paying claims when they aggregate to more than the $50,000 basic economic loss limit. Payments are made in the order in which each service was rendered or each expense was incurred, provided the claims were made before the $50,000 was exhausted; if the insurer pays out the limit before receiving claims for earlier services, it is not liable for those late claims; claims received at the same time are paid in the order of rendition of services (11 NYCRR 65-3.15). Insurers may keep paying verified claims while verification of another is pending (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 (2007)).

Yes. A provider whose claim was submitted before exhaustion, for services rendered earlier than services the insurer paid, can assert that 11 NYCRR 65-3.15 required payment of its claim first. In Nyack Hospital, once the hospital's verification arrived and verified claims exceeded $50,000, the insurer was required to pay the hospital ahead of unpaid claims for later services, and the Court of Appeals remitted for that computation (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 (2007)). The proof is documentary: dates of service and receipt, verification correspondence, and the insurer's payment log. The dispute goes to arbitration or court (Insurance Law § 5106(b)).

The insurer must apply 11 NYCRR 65-3.15: among claims made before exhaustion, pay in the order in which each service was rendered or expense was incurred; among claims received at the same time, pay in order of rendition of services; and do not pay a claim for earlier services that arrives after the $50,000 is gone. While one claim awaits verification, the insurer may pay other verified claims, but when the verification arrives it must pay the earlier-rendered services ahead of later ones within the remaining limit (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 (2007)). Bill within 45 days (11 NYCRR 65-1.1) and answer verification promptly.