CAMBRIDGE MEDICAL v. PROGRESSIVE CASUALTY INS CO (2010)

During oral argument, the parties stipulated that the only issue before the court was whether 11 NYCRR 65-3.6(b) requires the insurer to notify the injured party when it sends the follow-up verification request to the plaintiff provider. This court has already determined and reiterates herein that the injured party need not be notified. See, Cambridge Medical, P.C. v. Nationwide Property and Casualty Ins. Co., index No. 4561/08 (Civil Court, Richmond Co. 2/22/2010).

Pursuant to Insurance Law § 5106(a) and 11 NYCRR 65-3.5, an insurer is required to either pay or deny a claim for no fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim or it will be precluded from offering any defenses at trial. Mt Sinai Hosp. v. Chubb Group of Ins. Cos., 43 AD3d 889, 889-90 (2d Dept.2007). See, Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 278, (1997). An insurer may toll the 30 day period by properly requesting additional verification within 15 days from the receipt of the no fault insurance claim forms (“NF-3” or “claim form”). Psych. & Massage Therapy Assoc., PLLC v. Progressive Casualty Ins. Co., 5 Misc.3d 723 (Civil Ct, Queens Co., 2004) (11 NYCRR 65-3.5(b)). If the “requested verification has not been supplied to the insurer 30 calendar days after the original receipt, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested., either by a telephone call or by mail. At the same time the insurer shall inform the applicant and such person's attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” 11 NYCRR Section 65-3.6(b). See, Pine Hollow Medical v. Global Liberty Ins. Co., 25 Misc.3d 244 (Civil Ct., Richmond Co.2009).

If the insurer does not receive the verification request after its follow-up request is sent, its time to pay or deny the claim is tolled pending submission of the requested information. “A claim need not be paid or denied until all demanded verification is provided.” New York & Presbyt. Hosp. v. Progressive Cas. Ins. Co ., 5 AD3d 568, 570 (2d Dept.2004); Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins., 262 A.D.2d 553, 553-54 (2d Dept 1999). The insurer must pay or deny the claim within 30 days after it receives verification of all relevant information it requested pursuant to its original request for additional information. 11 NYCRR 65-3.5(c), 65-3.8(a)(1); Westchester County Med. Ctr., supra .

The clear language of 11 NYCRR 65-3.5(b) does not even mention the term “applicant” within the context of its requirement that the insurer follow up with the party from whom the verification was requested. Rather, the term “applicant” is only utilized within the context of the further obligation of the insurer to inform the applicant and such person's attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.

Plaintiff interprets the term “applicant” of 11 NYCRR 65-3.6(b) to mean that the insurer must inform the assignor and the assignor's attorney of the reasons why the claim is delayed at the same time the defendant requests a follow-up verification from the provider, since the defendant failed to notify the assignor and the assignor's attorney, hence negating its motion for summary judgment. The defendant counters that upon the assignment of no fault benefits, the medical provider steps into the shoes of its assignor and assumes all of his rights and obligations, thereby becoming the applicant within the meaning of 11 NYCRR 65-3.6(b). Moreover, defendant argues that the plaintiff attorney's letter directing the defendant to send all correspondence, including payment and verification requests to the attorney's office or to “face unnecessary litigation,” placed the defendant on notice that the provider's law firm was acting as the agent for the bills at issue.

In East Acupuncture v. Allstate Ins. Co., 61 AD3d 202 (2d Dept.2009), the Second Department recognized that the no fault regulations do not specifically define the term “applicant,” which generically refers to both the provider/assignee and injured persons in various no-fault sections. In Doshi Diagnostic Imaging Services v. State Farm Ins. Co., 16 Misc.3d 42 (App. Term., 9th & 10th Jud. Dists.2007), the Appellate Term interpreted the term “applicant” as used in 11 NYCRR 65-3.5(b), to apply to an MRI facility which was the medical services provider/assignee. Accordingly, the plain meaning of 11 NYCRR 65-3.5(b) refers to any entity, whether an injured person or a provider/assignee, who submits a claim or applies to an insurance company for no fault benefits. Id. citing Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (1998).

Furthermore, the objective behind the aforementioned law is the efficient and speedy processing of the no-fault claims. It therefore begs all reason to require an insurer to seek verification from a party who has divested his interest in no fault benefits by assigning his rights to their provider. MIA Acupuncture, P.C. v. Mercury Ins. Co., 26 Misc.3d 39 (App. Term., 2nd, 11th & 13th Jud. Dists.2009)(assignment of no fault benefits divests eligible injured persons of their interest in no fault benefits and makes them non parties to actions commenced by their assignees). The letter mailed by the plaintiff's attorney to the defendant, directing that all correspondence including payment and verification requests, be mailed to the plaintiff's attorney clearly placed the defendant on notice that the provider's law firm was acting as the agent for receipt of all correspondence concerning the bills at issue. See Lenox Hill Radiology v. Global Liberty Ins., 20 Misc.3d 434 (Civ.Ct., New York Co.2008).

The court therefore deems the provider to be the applicant in the instant matter. Since the plaintiff did not provide the verification sought by the defendant, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run and the instant case is premature. Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 A.D.2d 553 (2d Dept.1999).

Accordingly, the defendant's motion is granted.

The foregoing constitutes the decision and order of this court.

KATHERINE A. LEVINE, J.