VITALITY CHIROPRACTIC v. KEMPER INSURANCE CO (2006)

Order modified by providing that plaintiff's motion for summary judgment is granted to the extent of awarding it partial summary judgment in the principal sum of $357.94, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney's fees thereon, and for all further proceedings on plaintiff's remaining claims;  as so modified, affirmed without costs.

 In this action to recover first-party no-fault benefits for health care services rendered to its assignor, plaintiff established its prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a];  Mary Immaculate Hosp. v. Allstate Ins. Co., 5 A.D.3d 742, 774 N.Y.S.2d 564 [2004];  Amaze Med. Supply v. Eagle Ins. Co., 2 Misc.3d 128(A), 2003 N.Y. Slip Op. 51701[U], 2003 WL 23310886 [App. Term, 2d & 11th Jud. Dists.] ).   Defendant's failure to timely object to the completeness of the claim forms or seek verification of the assignments constituted a waiver of any defenses based thereon (see Hospital for Joint Diseases v. Allstate Ins. Co., 21 A.D.3d 348, 800 N.Y.S.2d 190 [2005];  see also New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 A.D.3d 640, 779 N.Y.S.2d 548 [2004];  A.B. Med. Servs. PLLC v. Nationwide Mut. Ins. Co., 6 Misc.3d 70, 792 N.Y.S.2d 289 [App. Term, 2d & 11th Jud. Dists. 2004] ).   Defendant's remaining contentions regarding plaintiff's alleged failure to establish its prima facie entitlement to summary judgment similarly have no merit.   The burden then shifted to defendant to demonstrate a triable issue of fact (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ).

 A review of the record indicates that defendant made verification requests of the assignor seeking chiropractic and orthopedic independent medical examinations (IMEs) by letters dated May 22 and 23, 2002, which was prior to its receipt of plaintiff's $357.94 claim on May 30, 2002.   Consequently, these were pre-claim verification requests and the tolling provisions of the insurance regulations do not apply (see Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc.3d 18, 793 N.Y.S.2d 661 [App. Term, 2d & 11th Jud. Dists. 2004] ).   As a result, defendant's July 11, 2002 denial of said claim was untimely (see e.g. A.B. Medical Services PLLC v. Utica Mut. Ins. Co., 10 Misc.3d 50, 809 N.Y.S.2d 765 [App. Term, 2d & 11th Jud. Dists. 2005] ). Defendant, however, timely denied, on the basis of the assignor's failure to attend the pre-claim IMEs, the $101.07 claim which it received on June 19, 2002 and denied on July 9, 2002, the $67.38 claim which it received on July 1, 2002 and denied on July 9, 2002, and the $67.38 claim which it received on August 5, 2002 and denied on August 30, 2002 (see e.g. A.B. Medical Services PLLC v. American Transit Ins. Co., 8 Misc.3d 139(A), 2005 N.Y. Slip Op. 51316[U], 2005 WL 1981317 [App. Term, 2d & 11th Jud. Dists.] ), and established such failure in admissible form in opposition to plaintiff's motion for summary judgment.   Consequently, the presumption of medical necessity which otherwise attached to these claim forms was rebutted and defendant raised a triable issue of fact as to the medical necessity of the services rendered (see e.g. S & M Supply, Inc. v. Peerless Ins. Co., 6 Misc.3d 127(A), 2004 N.Y. Slip Op. 51683[U], 2004 WL 2979217 [App. Term, 2d & 11th Jud. Dists.] ).

 We are aware that defendant's agent sent a letter to plaintiff dated June 5, 2002, in which it stated that it had “received your [$357.94] bill ․ [and][t]here will be a delay in our consideration of the bills ․ because ․ the claimant involved is currently scheduled for independent medical examinations.” The agent also sent letters to the assignor dated June 11 and 14, 2002, by which it, respectively, reminded the assignor of the chiropractic IME scheduled for June 18, 2002 and the orthopedic IME scheduled for June 24, 2002.   The assignor was apparently unable to attend the orthopedic IME scheduled for June 24, 2002, and contacted defendant's agent.   By letter dated June 18, 2002, defendant's agent acknowledged the assignor's request to reschedule the orthopedic IME due to his work schedule, and rescheduled said IME to July 2, 2002.   By another letter dated June 18, 2002, defendant's agent acknowledged defendant's request to reschedule the chiropractic IME and rescheduled said IME to July 1, 2002.   It is uncontroverted that the assignor did not attend the rescheduled IMEs.

Even were we to deem the letter of June 5, 2002 to be a valid post-claim request for additional verification pursuant to 11 NYCRR 65-3.5(b), said request would not have tolled the time which defendant had to pay or deny the claims since defendant did not make follow-up verification requests pursuant to 11 NYCRR 65-3.6(b) after the assignor failed to attend the July IMEs. We note that although the assignor apparently contacted defendant's agent on July 5, 2002 “to advise that he was unable to attend the [previously scheduled] appointment[s],” he was not allowed to reschedule them again.   Defendant subsequently issued denials, dated July 9, 2002, based on the assignor's failure to attend the July IMEs.

 Furthermore, unlike our dissenting colleague, we do not view the mutually agreed-upon rescheduling of the initial IMEs, from June 18, 2002 to July 1, 2002 and from June 24, 2002 to July 2, 2002, as the equivalent of a failure to supply “any requested verification[ ]” (see 11 NYCRR 65-3.6 [b] ).  We, therefore, do not deem the rescheduled July IMEs as follow-up requests.

 In the court below, plaintiff's opposition to defendant's cross motion to compel depositions was only on procedural grounds.   Therefore, plaintiff's contention that defendant's cross motion should be denied on the merits because it was not entitled thereto was improperly raised for the first time on appeal, and will not be considered by this court (see e.g. First Nationwide Bank, FSB v. Goodman, 272 A.D.2d 433, 707 N.Y.S.2d 669 [2000] ).   Plaintiff's remaining contentions have no merit.

Accordingly, plaintiff is awarded partial summary judgment in the principal sum of $357.94, and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney's fees thereon pursuant to Insurance Law § 5106(a) and the regulations promulgated thereunder, and for all further proceedings on plaintiff's remaining claims.

I concur with the findings of my colleagues to the extent that they find defendant timely denied plaintiff's $67.38, $101.07 and $67.38 claims.   I also agree that defendant's proof as to mailing of the various notices was sufficient.   However, I disagree with and dissent from their finding that defendant's denial of the $357.94 claim, which it received on May 30, 2002 and denied on July 11, 2002, was untimely.

An examination of the record in this case will reveal that this defendant did everything conceivable to meet and exceed the requirements and the spirit of the no-fault regulations.

Defendant, in accordance with the regulations, sent a notice for an independent medical examination (IME) to the eligible injured person on May 22, 2002, directing that he appear for IMEs on June 18, 2002 and June 24, 2002.   This notice was sent prior to plaintiff's filing this claim, which is permissible pursuant to the regulations (see Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc.3d 18, 793 N.Y.S.2d 661 [App. Term, 2d & 11th Jud. Dists. 2004] ).

It is necessary to briefly examine the importance which the majority places on the fact that the initial notice for an IME was sent prior to the claim being filed.   The majority in Fogel created, what I consider, a “forced” and unnecessarily complex interpretation of a very simple regulation.  11 NYCRR 65-1.1 states:

“The eligible injured person shall submit to medical examination ․ when, and as often as, the company may reasonably require ” (emphasis added)

Nevertheless, Fogel created a bright-line distinction between an IME request that was sent before a claim was filed (pre-claim) and one that was requested after the claim was filed (post-claim).   Having invented this dichotomy, the Fogel majority held that if the assignor failed to appear at a pre-claim IME, then such failure established, in itself, an issue of fact as to medical necessity.   It further held that if the assignor failed to appear at a post-claim IME and the defendant had followed the protocols set forth in the regulations, then summary judgment would be granted to the defendant.

In the Fogel case, I dissented and found that the regulations do not establish such a distinction.   In fact it is interesting to note that the Appellate Term of the First Department in the matter of Inwood Hill Med., P.C. v. General Assur. Co., 10 Misc.3d 18, 20, 805 N.Y.S.2d 772 [2005] acknowledged and cited the Fogel decision but found that “․ we decline to follow the majority's holding and find more persuasive the conclusion reached by ․ [the] dissent.”

Notwithstanding my belief that there should not be any distinction between pre-claim and post-claim requests for an IME, I nevertheless find here that defendant has properly and timely met the requirements of the regulations, even as defined by the majority in Fogel.   As is tacitly addressed in the majority's decision, defendant's “delay letter” of June 5, 2002 should serve as a post-claim verification request inasmuch as it contains all the elements required.

Plaintiff's assignor did not appear for those “first” scheduled dates.   Defendant, at assignor's request, rescheduled the IMEs for July 1 and July 2, 2002, and then sent letters reminding the assignor of the mutually agreeable dates of the second appointments for IMEs. The assignor, nevertheless, failed to appear on either July 1st or July 2nd and defendant thereupon sent a timely denial (NF-10).   I note that the assignor contacted defendant immediately prior to the first scheduled IME and requested rescheduling.   There was no such request for a rescheduling of the July appearances;  the assignor simply failed to appear.   It was only after the assignor failed to appear on July 1st and then failed to appear on July 2nd that he contacted the defendant on July 5th to discuss rescheduling.

Consequently, even if one were to discount the June 18th and June 24th IME appointments, it would be absurd to require defendant to serve a second set of notices for IMEs when the original dates were previously rescheduled at the assignor's request and upon which he intentionally failed to appear and failed to notify the defendant that he would be unable to appear.

If one were to follow the reasoning of the majority, then defendant would have been well served to ignore the assignor's request for rescheduling of the June dates.   Thereafter, upon the assignor's failure to appear, the defendant would then send a “follow-up” request setting a date of defendant's choosing and thereby inconvenience the assignor, and upon the assignor's failure to appear, defendant could then “legitimately” issue an NF-10 denial of claim.

In the matter before us, defendant sent its request for an IME on May 22, 2002.   Plaintiff, on May 28, 2002, filed this disputed claim for $357.94.   On June 11, 2002 and on June 14, 2002, both dates well within the 30-day claim period, defendant sent “reminder” letters to the eligible injured person (assignor) which noticed him for examinations on June 18, 2002 and June 24, 2002.   On June 17, 2002, defendant received requests to adjourn both June IME examinations, and rescheduled them to the mutually agreed upon dates of July 1 and 2, 2002.  (See affidavit of Jeffrey Mehl, Executive Director HVMC, Exhibit H paragraph 5 of the defendant's cross motion).

In addition, on June 5, 2002, defendant sent a “delay letter” to plaintiff (assignor) which stated specifically that the claim was being delayed due to a pending demand for an IME of plaintiff's assignor.   Certainly this post-claim “delay letter” must serve as a functional equivalent of an additional verification request pursuant to the regulations inasmuch as it specifically informed the plaintiff of what was required in order to complete the claim filed.   In fact, the majority of the court then sitting in Ocean Diagnostic Imaging P.C. v. Citiwide Auto Leasing Inc., 8 Misc.3d 138(A), 2005 N.Y. Slip Op. 51314[U], 2005 WL 1981323 [App. Term, 2d & 11th Jud. Dists.], held that a verification request will not serve to toll the 30-day period if it merely informs that the claim is delayed but fails to specify the particular information sought.   Since this notice informs the plaintiff, with specificity, of the information sought, it is a functional equivalent and therefore qualifies as an additional verification request which in turn tolls the 30-day period.   To me, that is substance over form.

I note that plaintiff's attorney's affirmation states at page 5 that “there are no notices ․ calling for any verification or cooperation whatsoever.”   He claims that the assignor has no obligation to open any mail from an unknown source and since the notice did not come from the insurance company, it has no significance.   How counsel can speak for the assignor who is not his client and without an affidavit in support of his assertions is beyond me.   Clearly it has no significance and should be discounted.

Despite defendant's well demonstrated willingness to accommodate the assignor, that individual willfully failed to appear either on July 1 or July 2, 2002.   Nor did he request an adjournment prior to July 1, 2002.   The fact that he requested yet another opportunity to appear for these IMEs was clearly a red herring used to give the assignor additional time to build up his no-fault claim and cost the defendant additional funds for “no-show” medical appointments.

There must be an end.   The assignor's failure to appear at either of the two appointments that he scheduled certainly constitutes a reasonable end.

Here, defendant used every reasonable means to assure compliance with the regulations and to give proper notice to plaintiff and its assignor.   Indeed, it was only after the assignor failed to appear on the adjourned dates, the second of which was requested by the assignor himself, that the defendant sent an NF-10 denial of claim.

Clearly, in light of those delay letters and reminder notes sent by the defendant, the NF-10 denial of claim form sent on July 11, 2002 was timely and I would affirm the order of the court below.

PESCE, P.J., and RIOS, J., concur. GOLIA, J., concurs in part and dissents in part in a separate memorandum.