Standing & Assignment of Benefits

Standing is a party's right to bring the claim. Benefits are paid to the injured person or, upon assignment, to the provider (11 NYCRR 65-3.11(a)), so a provider suing relies on a properly executed assignment on the NF-3, NF-4, NF-5 or NF-AOB form (11 NYCRR 65-3.11(b)). The Court of Appeals held that an insurer that does not timely request verification of the assignment is precluded from contesting its validity, and that a form marked "signature on file" sufficed where the insurer never acted (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007)). The insurer may ask in writing for the original (11 NYCRR 65-3.11(c)).

A provider's right to sue rests on the assignment, so a missing or defective assignment is a standing defense. The regulation requires a properly executed assignment on the NF-3, NF-4 or NF-5 form, or on the prescribed NF-AOB form or an equivalent with no change to the assignment language (11 NYCRR 65-3.11(b)(2)); an authorization to pay benefits alone transfers nothing (11 NYCRR 65-3.11(b)(1)). The insurer must act on any doubt through timely verification or be precluded from contesting the assignment (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007)). Once services are rendered the patient cannot unilaterally revoke the assignment (11 NYCRR 65-3.11(d)).

No. The Second Department has held that lack of standing is not a defect in subject matter jurisdiction; it is a defense waived if not raised in the answer or a pre-answer motion to dismiss, and it rejected an objection first raised in opposition to summary judgment (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239 (2d Dept 2007)). In no-fault, add the verification rule: an insurer that neither pleads the defense nor timely requests verification of the assignment is precluded from contesting it (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007)). Check the answer and the verification file before responding.