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Pro-Align Chiropractic, P.C. v. Travelers Property Casualty Insurance Co.

District Court of Suffolk County, Third District

December 19, 2017

Pro-Align Chiropractic, P.C., a/a/o FATOUMATA KOUYATE, Plaintiff,
v.
Travelers Property Casualty Insurance Company, Defendant.

          Gabriel & Shapiro, P.C. Steven F. Palumbo Attorney for the Plaintiff.

          Law Office of Aloy O. Ibuzor Attorney for the Defendant.

          HON. JAMES F. MATTHEWS J.D.C.

         Upon the following papers numbered 1 to 23 read on this motion for summary judgment in favor of defendant by Notice of Motion/Order to Show Cause and supporting papers 1, 2, 8; Notice of Cross Motion and supporting papers 9-11, 19; Answering Affidavits and supporting papers 20, 21; Replying Affidavits and supporting papers 22, 23; Filed papers; Other exhibits: 3-7, 12-18, ;(and after hearing counsel in support of and opposed to the motion), it is, ORDERED that motion by defendant seeking an order granting summary judgment for dismissal of the complaint, pursuant to CPLR 3212, is denied; and it is further

         ORDERED that defendant's uncontested request for partial summary judgment concerning the timely and proper mailing of its verification requests, is granted; and it is further

         ORDERED that the cross-motion by plaintiff seeking an order granting summary judgment for the relief demanded in the complaint, is granted.

         Defendant moves by summary judgment for dismissal of plaintiff's complaint which seeks reimbursement of assigned first-party no-fault benefits for medical services provided to plaintiff's assignor from 06/04/15 through 06/16/15 in the aggregate sum of $6, 396.08, as the result of an automobile accident of 03/11/15. The grounds for dismissal are the failure of plaintiff's assignor to fully comply with defendant's written verification requests, thereby rendering the action premature.

         Defendant alternatively seeks partial summary judgment in the event its motion for summary judgment is denied, asserting it has demonstrated a prima facie showing that timely and proper mailing procedures were used to send its verification requests to plaintiff.

         In opposition, plaintiff asserts that defendant has failed to demonstrate any "good reasons" to support its verification requests as required by insurance regulation 11 NYCRR 65-3.2[c]). Plaintiff alleges that defendant has made onerous and burdensome "Mallela" type verification requests which plaintiff brought to defendant's attention in its 3 responding "objection" letters dated 7/28/15, 9/4/15 and 10/23/15. These letters were timely provided to defendant in response to its verification requests, and plaintiff contends defendant ignored the "objection" letters with its responsive letter dated 8/5/15, where it refused to narrow the verification requests to the issues of plaintiff's reimbursement claims and stated it was entitled to all the requested information pursuant to law.

         Plaintiff also cross-moves for summary judgment for the relief demanded in the complaint. Plaintiff asserts that defendant has failed to properly respond to plaintiff's "objection" letters and the 30 calendar days to pay or deny the claim has expired, thereby requiring payment by defendant.

         A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, 68 N.Y.2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]; see also Manhattan Medical v State Farm Mut. Ins. Co., 20 Misc.3d 1144');">20 Misc.3d 1144 [A][Civ. Ct. Richmond Cty. 2008]).

         A summary judgment motion must be supported by an affidavit of a person having knowledge of the facts and the affidavit shall recite all the material facts and show there is no defense to the cause of action or that the cause of action or defense has no merit (see CPLR 3212[b]). A conclusory affidavit or an affidavit by an individual who lacks personal knowledge of the facts does not satisfy the proponent's prima facie burden (see JMD Holding Corp. v Congress Financial Corp., 4 N.Y.3d 373');">4 N.Y.3d 373 [2005]).

No-fault regulations mandate that a written proof of claim for health service expenses rendered on or after April 1, 2013 (see 11 NYCRR 65-3.5[o]; 11 NYCRR 65-3.8[b][3]), are overdue, if not paid or denied by the defendant (or "insurer") within 30 calendar days of receipt (see Insurance Law §5106[a]; 11 NYCRR §65-3.8[a][1]). An insurer may toll the 30 day period by requesting additional verification of the claim within 15 days from its receipt of the claim (see 11 NYCRR 65-3.5[b]; NY & Presbyt. Hosp. v Allstate Ins. Co., 30 A.D.3d 492, 493 [2nd Dept 2006]). If the insurer has not received requested verification from the plaintiff (or "applicant") within 30 calendar days of the initial request, the insurer may send a follow-up verification request by phone or mail within 10 calendar days (see 11 NYCRR §65-3.6[b]). At the same time, the insurer shall inform the applicant and its 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 (see 11 NYCRR §65-3.6[b]).

         An insurer may not issue a denial of claim form (NF-10) prior to its receipt of verification of all relevant information requested by the insurer (see Insurance Law §5106[a];11 NYCRR §65-3.8[b][3]; 11 NYCRR §65-3.5[c]). A verification demand by an insurer will extend the 30 day period until such time as the requested verification is received (see 11 NYCRR §65-38[a][1]; Hosp. For Joint Diseases v Elrac, Inc., 11 A.D.3d 423');">11 A.D.3d 423 [2nd Dept 2004]). Where a requested verification is not provided an insurer is not required to pay or deny the claim (see 11 NYCRR §65-3.8[b][3]; NY & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 A.D.3d 568');">5 A.D.3d 568 [2nd Dept 2004]; St. Vincent's Hospital of Richmond v American Transit Ins. Co., 299 A.D.2d 338');">299 A.D.2d 338 [2nd Dept 2002]).

         However, an insurer may issue a denial of claim for health service expenses rendered on or after April 1, 2013, if more than 120 calendar days have transpired after the initial request for verification, and the applicant has not submitted the verification requested under the applicant's control or possession or written proof providing reasonable justification for the failure to comply, provided the verification request so advised the applicant as required in section 65-3.5(o)(see 11 NYCRR 65-3.8[b][3]).

         A plaintiff applicant has a duty to respond to a proper and timely verification request from a defendant insurer, even where a plaintiff anticipates it will be unable to fully satisfy the insurer's request or the request is unintelligible(see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 A.D.2d 553');">262 A.D.2d 553 [2nd Dept 1999]). Also, any additional verification sought from plaintiff's assignor, can be sought from plaintiff's assignee, as an assignee stands in the shoes of the assignor (see Arena Constr. Co. v Sackaris & Sons, 282 A.D.2d 489 [2nd Dept 2001]).

         A defendant also has a duty to act, by payment or denial of the claim or request for further verification, upon receipt of plaintiff's response to defendant's verification request, so long as plaintiff's documentation is arguably responsive to defendant's verification request (see All Health Med. Care v Government Employees Ins. Co., 2 Misc.3d 907 [NY City Civ Ct. 2004]; 11 NYCRR §65-3.8[a]). Where a defendant remains silent in the face of plaintiff's verification response, this inaction constitutes a waiver of all defenses (Id.).

         Though an insurer is entitled to request and receive information necessary to the processing and verifying of the applicant's claim (see 11 NYCRR §65-3.5[c]), the scope of the requested materials are not unlimited (see generally 11 NYCRR §65-3.6[b]). Insurance regulations require the existence of "good reasons" to demand verification (see 11 NYCRR §65-3.2[c]; Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc.3d 42');">16 Misc.3d 42');">16 Misc.3d 42');">16 Misc.3d 42 [2nd Dept 2007). Also, insurance regulations require an insurer to clearly inform an applicant of the insurer's position concerning any disputed matter (see 11 NYCRR §65-3.2[e]). In addition, the insurance regulations require insurers to follow the basic principle of providing prompt and fair payment (see 11 NYCRR §65-3.2[a]). In this regard, the insurance regulations provide that an insurer is to assist an applicant in the processing of a claim (see 11 NYCRR §65-3.2[b]) and insurers are directed to not treat the applicant as an adversary (see 11 NYCRR §65-3.2[b]).

         Insurance carriers are entitled to withhold reimbursement of no-fault claims "provided by fraudulently incorporated enterprises to which patients have assigned their claims" (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 N.Y.3d 313, 319 [2005]). Consequently, a medical provider which is not wholly owned and controlled by physicians (see BCL §1507[a] and §1508[a]), is ineligible to collect no-fault reimbursements and insurers can examine how a medical practice is owned and controlled to determine whether unlicensed individuals were violating state and local laws (Id. at page 321). However, insurers can not delay payments of no-fault claims to pursue investigations unless they have "good cause" (Id. at page 322; see also 11 NYCRR §65-3.2[c] for "good reason").

         Here, the Court determines that defendant has failed to demonstrate a prima facie entitlement to summary judgment for dismissal, with proof in admissible form sufficient to establish there are no material issues of fact (see Alvarez v Prospect Hospital, 68 N.Y.2d 320, 324 [1986]; Hempstead Gen. Hosp. v New York Cent. Mut. Fire Ins. Co., 232 A.D.2d 454');">232 A.D.2d 454 [2nd Dept 1996]).

         It is uncontested that defendant has demonstrated it timely requested verification of facts on 7/22/15 ("First Request") and on 8/26/15 ("Second Request") from plaintiff, with mailings in accordance with defendant's standard office practices and procedures, as shown by the supporting affidavits of Joyce Mooney and Patricia S. Pierce, which is uncontradicted by plaintiff (see St. Vincent's Hosp. of Richmond v Government Employees Ins. Co., 50 A.D.3d 1123');">50 A.D.3d 1123 [2nd Dept 2008]; Elmont Open MRI & Diagnostic Radiology, P.C., 30 Misc.3d 126[A][App Term, 9th & 10th Jud Dists 2010]. Therefore, defendant's request for partial summary judgment concerning the timely and proper mailing of the verification ...


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