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The Rogak Report: 03 Apr 2006 ** No Fault - Denials - Proof of Mailing **

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  • Lawrence Rogak
    COURT FIND INSURER S PROOF OF MAILING NO-FAULT DENIAL TO BE INSUFFICIENT Harbor Medical & Diagnostic PC a/a/o Sandra Dorsett v. Allstate Ins. Co., NYLJ 4/03/06
    Message 1 of 1 , Apr 3, 2006
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      COURT FIND INSURER'S PROOF OF MAILING NO-FAULT DENIAL TO BE
      INSUFFICIENT

      Harbor Medical & Diagnostic PC a/a/o Sandra Dorsett v. Allstate Ins.
      Co., NYLJ 4/03/06 (Civil Court, Queens County) (LANE, j)

      Plaintiff commenced this no-fault benefit suit for medical services
      rendered to assignors Sandra Dorsett and Sharon Little. Thereafter,
      plaintiff moved for summary judgment on its claims in the amount of
      $3,177.54, on the ground that defendant failed to pay or to deny its
      claims within the statutory 30-day period as required by Insurance
      Law section 5106 (a).

      Plaintiff proved that it submitted a timely and proper notice of
      claim pursuant to the No-Fault statute for medical treatment
      rendered, which defendant acknowledged receiving, denying and not
      paying. The burden then shifted to defendant to show the existence of
      a triable issue of fact.

      Defendant maintained that it issued timely denials to plaintiff's
      claim and in its opposition papers asserts the defense of lack of
      medical necessity. "It is well settled that for an insurer's denial
      of claim form to be deemed timely, the insurer must prove that it
      generated the denial of claim within thirty (30) days of receipt of
      plaintiff's proof of claim and that it also mailed the denial to the
      claimant within the same time period," stated the Court.

      "Defendant submits denial of claims form that indicate that the bill
      was being denied due to a lack of medical necessity. The denials for
      the bills are timely on their face. In support of its motion
      defendant submits copies of the denials and purported proof of
      mailing of its denials. Specifically, defendant proffers the
      affidavit of Ms. Joan Rolfe, a claims representative employed by the
      defendant, and the affidavit of Matt Olmstead, an employee of
      defendant who is employed as a Senior Operations Staff Analyst at
      Southwest Output Processing Center."

      "The two affidavits submitted by defendant do not establish mailing
      because neither Ms. Rolfe nor Mr. Olmstead state in their affidavits
      that they had personal knowledge that the denial of claim was
      actually sent to plaintiff; nor does either affidavit create a
      presumption of mailing because neither sufficiently describes the
      standard operating procedures defendant uses to ensure that its
      denials and requests for verification are mailed. Although the
      affidavits provide information on the preparation and mailing of the
      denial of claims, they do not include sufficient factual information
      describing how defendant's regular office practices and procedures
      for mailing denials are geared as to ensure the likelihood that [the
      denial of claim] is always properly addressed and mailed."

      "Specifically, defendant failed to state sufficiently, or describe
      with particularity the regular office practices and procedures
      defendant uses to ensure that denials are properly and timely mailed,
      including, but not limited to the following: (1) whether the NF-10's
      generated by computer by the claims representative are compared with
      the NF-10's that come into the Southwest Output Processing Center's
      job queue; (2) the specific date that the denial was actually mailed
      to plaintiff; (3) whether the envelope contained the NF-10's and that
      the envelope was correctly addressed; (4) whether any computer
      printout or record was generated and reviewed which listed the
      claimants who were allegedly mailed NF-10's on the date or dates that
      defendant alleges it mailed the NF-10's; and (5) whether it was the
      duty of the claims representative or Senior Operations Staff Analyst
      to ensure compliance with said office practices and procedures or
      whether the claims representative or Senior Operations Staff Analyst
      had actual knowledge that said practices and procedures were complied
      with."

      "The court finds the assertions of Ms. Rolfe and Mr. Olmstead
      conclusory and such assertions fail to specify either that it was the
      duty of either one of them to ensure compliance with said office
      procedures or that either one had actual knowledge that said
      procedures were complied with. As defendant's papers in opposition to
      plaintiff's motion for summary judgment do not contain an affidavit
      of someone with personal knowledge that its denial was actually
      mailed, or describe the standard office practices or procedures used
      to ensure that such denials were properly addressed and mailed,
      defendant failed to establish by competent evidence that it timely
      mailed its denials, and therefore, defendant is precluded from
      offering all of its defenses in the instant matter."

      "Accordingly, plaintiff's motion for summary judgment is granted.
      Judgment shall be awarded in favor of plaintiff in the amount of
      $3,177.54, together with statutory interest and attorneys fees."

      Comment: When thousands of similar documents are mailed in the
      regular course of a company's business, it is quite a high hurdle to
      establish by "personal knowledge" that any particular document was
      mailed other than to provide a reasonable basis to conclude that it
      was sent in the regular course of business based on evidence in the
      claims file.

      What insurers might want to consider doing -- and the technology
      exists to do it -- is to bar code and scan every denial and have a
      scanner record when the denial is placed into an envelope, stamped,
      and placed in the mail chute. That way a printout could be produced
      showing that a given denial was generated and placed into a U.S mail
      depository. Nobody does this yet for no-fault denials, but it is
      worth considering.

      Larry Rogak
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