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The Rogak Report: 29 May 2008 (Part III) ** No Fault - Verification Requests **

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  • insurancelawyer
    Message 1 of 1 , May 29 2:35 PM


      Lenox Hill Radiology & MIA P.C. a/a/o Sokol Nila v. Global Liberty Ins.
      2008 NY Slip Op 28197
      Decided on May 21, 2008
      Civil Court Of The City Of New York, New York County
      Bluth, J.
      Edited by Lawrence N. Rogak

      Plaintiff brought this no-fault suit for three MRI studies it allegedly conducted for its assignor, Nila Sokol. Two were allegedly performed on June 7, 2007 for which plaintiff billed defendant $879.72 and $912, and a third on June 12, 2007 for $878.67.   Defendant moved for summary judgment.

      Plaintiff's attorneys submitted each bill to defendant with a form cover letter on the attorney's letterhead. In that letter, the attorneys introduce themselves and state no less than three times that defendant was to deal with the attorneys from then on ("Accordingly, please forward all future correspondence to our attention...Please make this payment payable to the above-referenced provider, C/O this office...All correspondence including payment, EOB's, verification requests, etc. must be mailed directly to this office. Failure to do so may result in unnecessary litigation.").  "The clear import of this repetitive direction to be followed under threat of 'unnecessary litigation' is that plaintiff's attorneys are its agents for all purposes related to the bill, and defendant must deal directly with plaintiff's attorneys," held the Court.  "In addition, the end of the letter contains the representation that any enclosed bills, forms, doctor's reports, notes and narratives were prepared solely by the above-referenced provider.  Clearly, then, the plaintiff did not submit any documents from the referring physician; there was no MRI referral form or prescription submitted with any of the bills."

      "The defendant's claims examiner, Cinnamon Houston, states that defendant received the first bill (for $879.72) on June 26, 2007 and timely sent a verification request on July 10, 2007. That request was sent directly to the plaintiff's attorneys and requested two items: a letter of medical necessity from the referring physician and a claim form with a valid provider's signature. There can be no dispute that plaintiff's attorneys received this request because they responded thereto by letter dated July 17, 2007. Their response, even though titled 'Verification Compliance', completely ignored the bona fide request. Instead, it said, in essence, 'whatever we gave you was good enough and this provider is not giving you anything else. If you need something from someone else, go ask them. Now pay the bill.'   In addition, the attorneys state: 'Any further requests to this provider are deemed unnecessary and in violation of 11 NYCRR 65-3.2 (c).'  This section states an insurer should 'not demand verification of facts unless there are good reasons to do so.' Nevertheless, Ms. Houston sent a follow-up request to plaintiff's attorneys on August 13, 2007."

      "Defendant received the second bill (for $912) with the same form cover letter on June 27, 2007, and it sent a request for verification, seeking the same information as sought for the other MRI taken the same date, to plaintiff's attorneys on July 10, 2007. There can be no dispute that plaintiff's attorneys received this request, because they responded thereto by letter dated July 17, 2007. Their response was the same form letter referred to above, and Ms. Houston sent a follow-up request on August 10, 2007."

      "When defendant received the third bill, Ms. Houston timely sent a verification request. This time, plaintiff's attorneys did not send a response and Ms. Houston sent a follow-up request on August 10, 2007."

      "The Court finds Ms. Houston's affidavit explaining preparation of the verification requests and the mailing procedures with respect to all of the verification requests (the initial three and the follow-up requests) sufficient to prove timely and proper mailings. Ms. Houston stated that she personally prepared each mailing, put each in the envelope, checked that it was properly addressed, and put it in her outgoing mail bin. She also stated that the regular office practice is that the mail person comes by at approximately 3:45 each afternoon, collects and stamps the mail, and then delivers it to the post office that day."

      "Although plaintiff's opposition correctly notes that Ms. Houston did not swear that it was her duty to ensure compliance with defendant's mailing procedures and that she did not herself drop it in the mailbox, it is enough that the defendant submitted admissible evidence in the form of an affidavit of an employee with knowledge of the defendant's standard office practices or procedures designed to ensure that items were properly addressed and mailed.   St. Vincent's Hosp. of Richmond v Government Employees Ins. Co., —- NYS2d ——, 2008 WL 1902681 (2d Dept), 2008 NY Slip Op 04072, citing New York & Presbyterian Hosp. v Allstate Ins. Co., 29 AD3d 547, 814 NYS2d 687 (2d Dept 2006); Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374, 736 NYS2d 443 (2d Dept 2001); Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 726 (2d Dept 2001); and Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 847 NYS2d 322 (App Term, 2d Dept 2007). Ms. Houston's detailed affidavit fulfills this requirement."

      "The verification requests were sent to the plaintiff's law firm. A letter properly mailed is presumed to have been received.   Although an associate of that law firm submitted an affirmation in opposition to this motion, no attempt to rebut the presumption was made; conspicuously absent from that affirmation is a simple denial of receipt of the requests for verification. In opposing a motion for summary judgment, the non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion.   It is no excuse that the opponent could have submitted such evidence but did not because the opponent believed that the movant's papers were insufficient.   The affirmant in opposition was in the position to, but did not, even attempt to rebut the presumption that plaintiff's law firm received the requests for verification shortly after Ms. Houston stated that they were mailed. Therefore, there is no question of fact as to proper mailing of the verification requests."

      "Having determined that defendant proved its timely and proper mailing of the requests for verification, the Court turns to the other bases for plaintiff's opposition. Plaintiff claims that defendant failed to present a 'good reason' why further verification was necessary; this Court disagrees. This Court does not believe that it is unreasonable to ask for a letter of medical necessity before a carrier pays more than $2500 for three MRIs conducted during the course of one week, approximately six weeks after an alleged accident. Defendant is not required to provide a blank checkbook to plaintiff. Rather, defendant is entitled to find out whether and why each MRI was prescribed; in other words, the carrier is entitled to inquire as to the medical necessity before it pays the bills."

      "Plaintiff also claims defendant violated 11 NYCRR 65-3.6 (b), which provides:

      b) Verification requests. At a minimum, if any requested verification has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, 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."

      "Plaintiff argues that because defendant did not send the follow-up verification requests both to it and to its attorneys, the requests are defective. This argument lacks merit."

      "Because the attorney's cover letter clearly put defendant on notice that the law firm was the agent for the medical provider for all purposes with respect to the bill submitted, sending the verification request to the attorneys was the same as sending the request to the principal....  Accordingly, defendant's notice to the law firm-agent was notice to the principal-provider as a matter of law. Under the circumstances presented here, there was no need for the insurer to send another copy to the principal."

      "In addition, in interpreting 11 NYCRR 65-3.6 (b), courts have found that the additional notification to the applicant and its attorney is required when the verification is requested from a third party, not when, as here, the verification is requested from the applicant. 'Where verification is sought from a party other than the applicant, the applicant is entitled to be timely informed of the nature of the verification sought and from whom it is requested when, after an initial verification request remains unsatisfied, a follow-up request is necessary.' Doshi Diagnostic Imaging Services v State Farm Ins. Co., 16 Misc 3d 42, 43, 842 NYS2d 153, 154 (App Term, 2d Dept 2007). This Court notes that this very plaintiff advanced the same arguments that the second verification request was defective because the insurer did not send an additional notification to the attorney's client/principal, in Lenox Hill Radiology and Mia, P.C. (Dejesus) v Progressive Casualty Insurance, Civ Ct, NY County, Index. No. 31019/07 (2008); there, albeit after trial, Judge Jeffrey Oing also found the argument to be without merit."

      "Because plaintiff failed to respond to defendant's valid and proper verification requests, the 30-day period within which defendant had to either pay or deny the claim did not begin to run. Therefore, plaintiff's claims for No-Fault benefits are not overdue, this action is premature and must be dismissed. See Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534-35, 779 NYS2d 534 (2d Dept 2004); St. Vincent's Hosp. of Richmond v Am. Transit Ins. Co., 299 AD2d 338, 340, 750 NYS2d 98 (2d Dept 2002)."

      "For the forgoing reasons, defendant's motion for summary judgment is granted and plaintiff's complaint is hereby dismissed."

      Comment: Note that the court held, in addition to the ruling that verification requests need only be sent to the claimant's attorney, that the 30-day rule is tolled by a demand for a letter of medical necessity, until it is received.

      Larry Rogak

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