WESTCHESTER MEDICAL CENTER v. MERCURY CASUALTY COMPANY

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Supreme Court, Nassau County, New York.

WESTCHESTER MEDICAL CENTER, a/a/o Mitchell Fuchs, Plaintiffs, v. MERCURY CASUALTY COMPANY, Defendant.

Decided: June 27, 2008

Joseph Henig, P.C., Bellmore, for plaintiff. Ficciano & Scahill, P.C., Westbury (Jason Tenenbaum of counsel), for defendant.

The plaintiff, Westchester Medical Center a/a/o Mitchell Fuchs, moves by Notice of Motion for summary judgment against the defendant. The defendant, Mercury Casualty Company, also moves by Notice of Motion for summary judgment against the plaintiff.

The instant motions stem from an action to recover no-fault medical payments under Insurance Law § 5106(a).   The insured was injured in a motor vehicle accident on November 10, 2007.   The defendant insurer received the requisite billing from the plaintiff hospital on January 10, 2008.

Plaintiff states that the defendant has failed to pay the no-fault claim.   Plaintiff alleges that the defendant received the requisite hospital facility form in January 2008 and has failed to make the payment.   The plaintiff further claims that the defendant failed to issue a Denial of Claim form.   The plaintiff maintains that because the defendant failed to pay and has failed to deny the claim within the requisite 30 days, the defendant is precluded from interposing a defense.   The total unpaid hospital bill is currently $42,024.64.

Plaintiff claims that the defendant has failed to submit sufficient proof to defeat the plaintiff's motion.   The plaintiff further claims that the defendant's additional verification request was defective as the information requested was not the within the custody and control of the plaintiff hospital.   The plaintiff claims that the defendant's request failed to toll the thirty day requirement of denial of the claim.

Additionally, defendant claims that it timely delayed payment or denial of the bill pending receipt of additional verification.   The defendant claims that there was some concern as to the proximate cause of the motor vehicle accident, and therefore defendant requested additional information pursuant to Insurance Law § 5103(b)(2).   The defendant maintains that on January 22, 2008 an additional verification request was sent to both plaintiffs requesting receipt of the insured's blood alcohol level and a copy of the police report.   The defendant maintains that the assignor failed to respond to the additional verification request within thirty days, and also failed to respond to a second request.   The defendant claims that it has yet to receive the consent to obtain the blood sample, or an application for benefits.

Upon the foregoing the plaintiff's motion for summary judgment is denied.   Insurance Law § 5106(a) provides:  “within 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part.”  11 NYCRR 65.15[g][3]. This 30-day period may however be extended if within 15 days of receipt of a claim, an insurer demands additional verification of a claim.  11 NYCRR 65.35[b][1];  New York & Presbyterian Hosp. v. Allstate Ins. Co., 31 A.D.3d 512, 818 N.Y.S.2d 583;  New York & Presbyterian Hosp. v. Progressive Cas. Ins. Co., 5 A.D.3d 568, 774 N.Y.S.2d 72;  Hospital for Joint Diseases v. New York Central Mutual Fire Ins. Co., 44 A.D.3d 903, 844 N.Y.S.2d 371 (2nd Dept., 2007).

If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 days of the insured's failure to respond.  11 NYCRR 65.15[e][2]. Mount Sinai Hosp. v. Chubb Group of Ins. Companies, 43 A.D.3d 889, 843 N.Y.S.2d 634 (2nd Dept., 2007).   A claim need not be paid or denied until all demanded verification is provided.  11 NYCRR 65.35[c][1][I]. New York & Presbyt. Hosp. v. Progressive Cas. Ins. Co., 5 A.D.3d 568, 774 N.Y.S.2d 72 (2nd Dept., 2004);  Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 A.D.2d 553, 692 N.Y.S.2d 665 (2nd Dept., 1999);  Mount Sinai Hosp. v. Chubb Group of Ins. Companies, 43 A.D.3d 889, 843 N.Y.S.2d 634 (2nd Dept., 2007).

If an insurer has reason to believe that the applicant was operating a motor vehicle while intoxicated or impaired by the use of a drug, and such intoxication or impairment was a contributing cause of the automobile accident, “the insurer shall be entitled to all available information relating to the applicant's condition at the time of the accident.  11 NYCRR 65.15[g] [7]. Proof of claim shall not be complete until the information which has been requested ․ has been furnished to the insurer by the applicant or the authorized representative.”  11 NYCRR 65.15[g][7];  Westchester Medical Center v. Progressive Cas. Ins. Co., 19 Misc.3d 1113(A), 2008 WL 880211 (N.Y.Sup.2008).   In order to properly and timely request such information, the insurer must forward the prescribed verification forms to the parties required to complete them within 10 business days after receipt of the completed application (11 NYCRR 65.15[d][1] ).   If the insurance company fails to deny a claim within 30 days after receiving it, or fails to extend the time by requesting verification, the insurer will be precluded from asserting the statutory exclusion defense of intoxication.  Presbyterian Hospital v. Maryland Cas. Co., 90 N.Y.2d 274, 660 N.Y.S.2d 536, 683 N.E.2d 1 (Ct. of App., 1997).   Finally, “the insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested”.  11 NYCRR 65.15[d][1].

 Here, the plaintiff hospital made a prima facie showing of entitlement to judgment as a matter of law with respect to insured's claim by establishing that the prescribed statutory billing documents were mailed, defendant's receipt of the requisite no fault billing forms, a certified mail receipt and a signed return receipt card.   The hospital also submitted the affidavit of the hospital employee, Peter Kattis, who is a person with personal knowledge, who states that he mailed the bill to the defendant, via certified mail, in January 2008.  Insurance Law § 5106;  11 NYCRR 65-3.8[a][1];  Westchester Medical Center v. Liberty Mut. Ins. Co., 40 A.D.3d 981, 837 N.Y.S.2d 210 (2nd Dept., 2007);  Mount Sinai Hosp. v. Joan Service Corp., 22 A.D.3d 649, 803 N.Y.S.2d 102 (2nd Dept., 2005).

 The defendant has submitted sufficient evidence to defeat the plaintiff's summary judgment motion.   The defendant submitted evidentiary proof that it timely requested additional information from the insured and the hospital to verify its claim, and that the requested information was never received despite a timely follow-up request.   Mercury requested additional verification from the insured on January 22, 2008, twelve days after receipt of the hospital billing claim.   Moreover, an additional verification request was sent to the hospital on the same day.   In light of the fact that the requested verification was not provided, the 30-day period within which the defendant was obligated to pay or deny the hospital's claim did not begin to run, and the hospital's cause of action was premature.  Hospital for Joint Diseases v. New York Cent. Mut. Fire Ins. Co., 44 A.D.3d 903, 844 N.Y.S.2d 371 (2nd Dept., 2007);  New York & Presbyterian Hospital v. Progressive Casualty Ins. Co., 5 A.D.3d 568, 774 N.Y.S.2d 72 (2nd Dept., 2004).

Here, Mercury Casualty requested its initial verification form requesting a consent to obtain the blood sample, the actual blood sample and an application for benefits, to both the insured and Westchester Medical on January 22, 2008, twelve days after receipt of the application.   Although the verification request was sent 2 days after the statutory prescribed 10 business days, the insurer was not prevented from requiring proof of claim”.  11 NYCRR 65.15[g][6].

When both the insured and Westchester Medical failed to respond, a second request was made on February 22, 2008.   The Court finds that the information was timely requested from the appropriate parties, the insured and the health care provider, along with the third party police department.   In order for the insurer to have properly and timely requested the blood alcohol test results, it had to forward prescribed verification forms to the appropriate parties within 10 days after receipt of the completed application.  11 NYCRR 65.15[d][1];  Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 N.Y.2d 274, 660 N.Y.S.2d 536, 683 N.E.2d 1 (1997).   The Courts finds that Mercury took the appropriate action, and properly sought to extend the time frame by requesting verification.   Therefore Westchester Medical's motion for summary judgement is denied.

 The defendant demonstrated its entitlement to summary judgment by proving that it timely requested additional verification from the plaintiff, regarding the issue of the driver's alleged intoxication at the time of the accident, within the requisite periods, and that such information was never received.   In opposition, Westchester Medical Center failed to demonstrate the existence of a triable issue of fact.   Moreover, pursuant to § 5103(b)(2), and 11 NYCRR § 65-3.8. the defendant was acting within its rights to request the verification.

Regarding Westchester Medical's claim that the additional information requested was not in its custody or control, the Court finds this argument is without merit.  11 NYCRR 65-3.8(g) provides that proof of claim is not complete until the insurer is furnished with “all available information” relating to the insured's condition at the time of the accident.   However, “available information” includes only information within the control of the health care provider or the insured, or information obtainable by those parties through reasonable effort.

Westchester Medical claims that they merely drew the plaintiff's blood and did not actually tests it, however with reasonable efforts Westchester could have provided Mercury with the information requested as the insured's medical information (i.e. blood alcohol level) was available to the treating hospital.   Moreover, the insured could reasonably have provided consent to release the information requested, even if in the custody and control of the police department.   The insurer is entitled to receive all items necessary to verify the claim “directly from the parties from whom such verification is requested.” 65-3.5(c).  Mercury took timely action to attain the requested information from the appropriate party.   Mercury also took action to attain the information requested from the appropriate third party police department.   The Court finds that the plaintiff's failure to provide the information requested rendered the claims incomplete.  Westchester Medical Center v. Progressive Casualty Ins. Co., 46 A.D.3d 675 (2nd Dept., 2007).

Based on the above, the plaintiff's motion for summary judgment is denied and the defendant's motion is granted.

This constitutes the decision and order of the court.

KENNETH A. DAVIS, J.

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