The Rogak Report: 30 Nov 2005 ** No Fault - 30 Day Rule **
- NO-FAULT INSURER LOSES LAWSUIT: INVESTIGATION IS NO BASIS FOR DELAY
Nyack Hospital a/a/o Stacey Gersten v. Encompass Insurance Company
(Index No. 10244/04) (2d Dept 2005)
Plaintiff Nyack Hospital appealed from a denial of its summary
judgment Motion in this suit for no-fault benefits. The Appellate
Division reversed and granted summary judgment to the hospital.
Nyack Hospital "made a prima facie showing of entitlement to judgment
as a matter of law on its claim for statutory interest and an
attorney's fee, by submitting evidentiary proof that the prescribed
statutory billing forms were mailed and received, and that payment of
no-fault benefits was overdue when made," held the Second Department.
Encompass Insurance Company "waived any defense based on the lack of
a valid assignment by the claimant to the hospital, by failing to
timely object to the completeness of the forms or seek verification
of the assignment."
"Moreover, the two letters from the insurance company to the
hospital... stating that the claimant's hospital records had been
received but that payment was delayed pending completion of the
insurance company's investigation, did not toll the 30-day statutory
period for paying or denying the claim."
"We reject the insurance company's argument that it was entitled to
delay payment while awaiting a no-fault application to be submitted,
as 11 NYCRR 65.15(d)(6) specifically states that in lieu of a
prescribed application for motor vehicle no-fault benefits submitted
by an applicant and a verification of hospital treatment (NYS Form NF-
4), an insurer shall accept a completed hospital facility form (NYS
Form NF-5) . . . submitted by a provider of health services with
respect to the claim of such provider."
"Therefore, since the hospital established that the insurance
company's payment of the no-fault billing was overdue, and the
insurance company did not raise a triable issue of fact, the hospital
was entitled to summary judgment on its claim for statutory interest
and an attorney's fee. Accordingly, we remit the matter to the
Supreme Court, Nassau County, to calculate the amount due the
Comment: This decision raises three important points which often
ensnare no-fault insurers: (1) objections to the assignment must be
addressed in a timely verification letter; (2) an investigation does
not toll the 30-day period for paying or denying a medical bill; and
(3) form NF-5 is a substitute for a no-fault application.