The Rogak Report: 02 November 2004 ** No Fault - Medical Supplies **
- IF NO-FAULT DENIAL IS LATE, INSURER CANNOT OPPOSE SUMMMARY JUDGMENT
BY RAISING ISSUE OF COST OF MEDICAL SUPPLIES OR THEIR NECESSITY
King's Medical Supply Inc. v. Country-Wide Insurance Company, NYLJ
11/02/04 (Civil Court, Kings County) (O'Shea, j.)
This no-fault lawsuit arose out of an automobile accident on June 24,
2002, in which Robert Nieves, plaintiff's assignor, was injured.
Plaintiff, a medical equipment supplier, allegedly provided Mr.
Nieves with medical supplies for which it submitted a claim for $705
to Country Wide. The insurer denied plaintiff's claim on the ground
that the supplies were not medically necessary. Plaintiff moved for
summary judgment, arguing that defendant's denial was untimely and
without any evidentiary support. Defendant, in opposition, asserted
that plaintiff had no prima facie case, no evidence as to the
documented cost of the supplies provided.
In support of its motion for summary judgment, plaintiff submitted a
copy of its NF-3 proof of claim form, accompanied by an affidavit of
its billing manager attesting on personal knowledge to the issuance
of the claim, and a copy of defendant's denial form (NF-10),
indicating defendant received the claim on August 28, 2002, and
denied it on November 21, 2002. In this case, the NF-10, "which is
admissible as an admission by defendant, is sufficient to establish
plaintiff's prima facie entitlement to summary judgment, i.e. that
the claim was transmitted, that defendant received it, and that
defendant failed to pay or deny the claim within 30 days of receipt,"
held the Court. "Nothing more is required."
Country-Wide "fails to overcome plaintiff's prima facie case for
several reasons," held the Court. "First, the denial is untimely,
and, therefore, defendant is precluded from asserting any defense
other than fraud or lack of coverage. Second, the stated reason for
the denial in defendant's NF-10 is that 'an extended delay between
the motor vehicle accident and the beginning of treatment suggest not
medically necessary and raises issue of casuality.' It is by now
firmly established that the burden is on the insurer to prove that
the medical services or supplies in question were medically
unnecessary. In addition, a denial premised on lack of medical
necessity must be supported by evidence such as an independent
medical examination, peer review, or examination under oath, setting
forth a sufficiently detailed factual basis and medical rational for
the claim's rejection. Defendant's conclusory, unsupported statement
in its denial form is wholly inadequate to defeat plaintiff's motion
for summary judgment."
Finally, Country Wide's defense to the summary judgment motion --
that plaintiff did not document the cost of the supplies provided as
part of its claim -- "is without merit." Under the regulations, no-
fault benefits available for medical supplies are limited to 150% of
their documented cost. "However, in this court's view, 'documented
cost' is not an element of plaintiff's prima facie case. As is the
case with issues of medical necessity, any questions about the amount
claimed for medical supplies can and should be asked through a
request for verification and, if possible, resolved at the claim
stage, not by a court on a motion for summary judgment or at trial.
Defendant had the opportunity to ask plaintiff to document the costs
of the supplies when it received the claim. Because defendant failed
to do so within the time permitted by the regulations, defendant is
precluded from raising it now as a defense to plaintiff's summary
Plaintiff's motion was granted in all respects.