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The Rogak Report: 30 Nov 2005 ** No Fault - 30 Day Rule **

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  • Lawrence Rogak
    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
    Message 1 of 1 , Nov 29, 2005
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      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
      hospital."

      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.

      Larry Rogak
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