Thursday, December 16, 2010

How do you spell "Pyrrhic victory"?

A new post. It's only been like a year and a half. Anyway, there's a new Appellate Division case you should read.

Matter of Carothers v GEICO Indem. Co., __ A.D. 3d, __, 2010 NY Slip Op 09256 (2d Dep't, 2010).

So Carothers did not get their bills into evidence because the sole witness at trial worked for a third-party billing company, and said billing company did not create the bills. Instead, the medical office would create the bills, the billing company would access them online, print them out, and mail them. The Appellate Division now affirms the holding of the Appellate Term that this is insufficient to establish the admissibility of the bills.

This is probably the correct outcome.


The Appellate Division now holds (and this ain't dicta, this is essential to the holding) that "although a proper foundation can be established by a recipient of records who does not have personal knowledge of the maker's business practices and procedures, there must still be a showing that the recipient either incorporated the records into its own records or relied upon the records in its day-to-day operations." (Emphasis mine.)

Thus, where a third-party biller witness lacks personal knowledge of the medical provider's procedures, the biller can still get the bills into evidence so long as:
1) the information received from the medical office was incorporated in the billing company's records, OR
2) the information received from the medical office is used in the billing company's day-to-day operations.

In the standard scenario of a third-party biller witness (or affiant, for that matter) who creates the bills based on information received from the medical office, the biller should now be able to get the bills into evidence even if the biller has no personal knowledge of the medical office's procedures, so long as at least one of the elements of Carothers is satisfied.

This just so happens to overrule every Appellate Term decision that held that a third-party biller cannot get the bills into evidence solely on the basis that the biller lacks personal knowledge of the procedures of the medical office. See, e.g.,, Raz Acupuncture, P.C. v Travelers Prop. Cas. Ins. Co., 26 Misc 3d 132(A) (App. Term, 2d Dep't, 2010).

Merry Christmas.

Thursday, July 30, 2009

Coverage Counsel

I'm not sure how it's possible, but apparently I never, before now, had a link in my blogroll to Roy A. Mura, Esq.'s wonderful blog Coverage Counsel. Mr. Mura's posts deal with no-fault issues, as well as a much wider range of insurance law matters.

Thursday, July 23, 2009

Provider EUOs

David M. Gottlieb, Esq. has previously covered this issue at No-Fault Paradise, but it seems to me that it's worth some additional attention.

On June 24, 2009, the NYS Insurance Department issued an opinion letter entitled "Examinations Under Oath of Assignees". The short question/answer summary is as follows:

May an insurer, when requesting verification in the form of an examination under oath of an assignee of no-fault personal injury protection (“PIP”) benefits, require a corporate assignee to designate a specific person to be examined?

No. Neither the Insurance Law nor the regulations promulgated thereunder permit an insurer to require that a corporate assignee of no-fault benefits designate a specific person of the insurer’s choice to submit to an examination under oath.

As the Insurance Department noted, "nowhere does the regulation address whether an assignee that is a corporate entity or partnership must submit a person for examination that is specifically identified by an insurer in its examination under oath notice." The Department therefore reasoned that there is, in fact, no allowance for the insurer to request the production of a specific person at an EUO. However, the Department opined that, if the provider does produce someone for the EUO, and that person is unable to provide the information sought, "the insurer may request additional examinations of the assignee until a person is submitted for examination by the assignee who can provide the items necessary to verify the claim." (Internal quotation marks omitted).

In his post, Mr. Gottlieb asked what is presumably the most important and immediate question for practitioners: "Would EUO requests, where they demanded that a specific person appear for the EUO, be defective as a matter of law?"

I'm not sure that there's an easy answer here, but it seems to me that if an insurer requests that a specific person (presumably, a professional shareholder) appear at an EUO, and only requests the appearance of that person, the request is invalid. It would seem that it would be invalid, ab initio, for an insurer to request something that it is simply not entitled to. To the extent that a provider could choose to produce a different person in response to such a request, the provider would be under no duty to do so given the specific nature of the request. As such, non-attendance (by anyone from the provider) at such a requested EUO should not constitute a failure to provide verification or to otherwise cooperate, as the insurer had no authority to make such a request in the first place.

It therefore appears to me that requesting that a provider produce a specific person at an EUO is no more valid than an insurer requesting an EUO at all under the Old Regulations (which contained no specific provision whatsoever allowing for EUOs as a form of verification). See King's Med. Supply v. Progressive Ins., 3 Misc.3d 126(A) (App. Term, 2d Dep't, 2004), holding that "[s]ince there was no provision authorizing such a procedure, defendant's request that plaintiff submit to an EUO did not toll the 30-day period within which it was required to pay or deny the claim."

Tuesday, July 21, 2009

An Addition to the Blogroll

I've been meaning to add it in for a while, but now that I finally got around to updating the layout of the blog (which shouldn't look much different to the reader, hopefully), I've added a link to No Fault Law - A Defense Attorney's Perspective. It's worth taking a look at.

Thursday, July 16, 2009

The Death of the Assignment of Benefits?

In 2007, the Court of Appeals reaffirmed the longstanding Appellate Division case law "that a carrier's failure to seek verification or object to the adequacy of claim forms pursuant to 11 NYCRR 65-3.5 precludes it from interposing any defenses based on such deficiencies." Hospital for Joint Diseases v. Travelers Property Cas. Ins. Co., 9 N.Y.3d 312, 318 (2007). The Appellate Division had long held that this rule precluded defenses related to, inter alia, the assignment of benefits form. The Court of Appeals therefore held "that the failure by Travelers to seek verification of the assignment in a timely manner prevents the carrier from litigating the issue now." Id. at 319.

Left open was the question of whether proof of the assignment is a part of a no-fault plaintiff's prima facie case. Travelers contended before the Court of Appeals that proof of the assignment was, indeed, a necessary component of a plaintiff's proof. The Court avoided the issue by holding that, "[e]ven assuming that this is true, we conclude that an assignment form stating that the patient's signature is 'on file' satisfies that burden where the carrier does not timely take action to verify the existence of a valid assignment." Id. at 320.

The Appellate Term, 2d Dep't, has since taken the Hospital for Joint Diseases decision and run with it. In Westchester Neurodiagnostic, P.C. v. Allstate Ins. Co., decided last month, the App. Term held that "proof of the assignment of benefits form is not an element of plaintiff's prima facie case." ___ Misc.3d ___, 2009 NY Slip Op 51385(U) (App. Term, 2d Dep't, 2009). I believe this is the first time an appellate court has explicitly announced this rule.

This month, in Davydov v. Progressive Ins. Co., the Appellate Term dealt with the situation of an assignment form existing, but not actually naming the proper parties. ___ Misc.3d ___, 2009 NY Slip Op 29299 (App. Term, 2d Dep't, 2009). In that case, the assignee was misidentified as "Dr. Albert Davydov, DDS, P.C. rather than Dr. Albert Davydov, DDS." Id. Nevertheless, citing to Hospital for Joint Diseases, and over a dissent by Justice Golia, the Appellate Term held that even this issue was waived.

I wouldn't be surprised if the carriers in Westchester Neurodiagnostic and Davydov try taking their arguments to the Appellate Division, but these decisions represent the current state of the law on assignments. It would thus appear now that, without having made verification requests, no assignment-related defense will hold any water. Indeed, in such situations, the assignment form should not even be subject to production through the discovery process, as discovery demands related to precluded defenses are palpably improper. See Midborough Acupuncture, P.C. v. State Farm Ins. Co., 21 Misc.3d 10, 12 (App. Term, 2d Dep't, 2008).

On the other hand, I have no question in my mind that many trial court judges will continue to consider the assignment a necessary part of a plaintiff's burden. Some judges still continue to hold that an assignor's signature on the assignment form must be authenticated in order for a plaintiff to make out its prima facie case, even though the Appellate Term has held otherwise for years. See A.B. Medical Services PLLC v. Prudential Property & Cas. Ins. Co., 7 Misc.3d 14 (App. Term, 2d Dep't, 2005). That being said, any judge reading this would necessarily be too well-informed to make such an error.

And, of course, many defense attorneys who know better still continue to make such frivolous arguments while feigning ignorance of the last decade of no-fault jurisprudence. I've had defense attorneys tell me, with a straight face, that Hospital for Joint Diseases doesn't preclude them from questioning the validity of the language of the assignment form for the first time at trial.

If anyone believes that, in the absence of relevant verification requests, any assignment-related defenses still survive, please feel free to share.

Thursday, June 25, 2009

State Farm v. Langan

In State Farm Mut. Auto. Ins. Co. v. Langan, 55 A.D.3d 281 (2d Dep't, 2008), the Appellate Division, 2d Department, held that, regarding no-fault benefits, a loss is "accidental" where the incident is "unexpected, unusual and unforeseen" from the point of view of the injured person. Generally speaking, this struck a blow against insurers who seek to disclaim coverage where only one person intentionally caused the loss. Thus, for example, where insurers previously sought to disclaim no-fault coverage for an occupant of a vehicle that was intentionally struck (but where said occupant played no role in the scheme), Langan provides that such a disclaimer would be invalid. The disclaimer would only be appropriate where the insurer can demonstrate that the injured person in question was a party to the intentional conduct.

It thus bears noting that, on June 11, 2009, the Court of Appeals dismissed State Farm's further appeal in that matter. See State Farm Mut. Auto. Ins. Co. v. John Robert Langan,etc., 2009 NYSlipOp 74754 (Ct. of App., 2009), which dismissed the appeal sua sponte on the basis that the App. Div.'s order "does not finally determine the action within the meaning of the Constitution." As a result, the App. Div.'s holding will apparently remain settled law (at least in the 2d Dep't) for the foreseeable future.

Practitioners citing to Langan in briefs may consider noting in the citation that the appeal was dismissed (e.g., State Farm Mut. Auto. Ins. Co. v. Langan, 55 A.D.3d 281 (2d Dep't, 2008), app. dismissed, 2009 NYSlipOp 74754 (Ct. of App., 2009)).

Friday, April 03, 2009

EUO No-Show by Patient Subject to Preclusion

I'll have a post regarding the unsurprising result in LMK later, but there's a new decision from the Appellate Division, Second Department that requires some attention.

The decision in Westchester Med. Ctr. v. Lincoln Gen. Ins. Co., 2009 NY Slip Op 02589 (App. Div., 2d Dep't, 2009) has just been posted.

The decision has a few holdings. The ostensible main holding is that letters "advising the plaintiff that the processing of its claim was being held pending an investigation of the loss, which included verifying the claimant's involvement in the motor vehicle accident and conducting examinations under oath of any individuals with personal knowledge of the facts" are not valid verification requests. Id. This holding is nothing groundbreaking.

The much more interesting holding comes later: "Where, as here, the defendant's denial of liability also was based upon an alleged breach of a policy condition, to wit, the failure of the plaintiff's assignor to appear at an examination under oath, such an alleged breach does not serve to vitiate the medical provider's right to recover no fault benefits or to toll the 30-day statutory period. Rather, such denial was subject to the preclusion remedy." Id. (internal citations omitted).

So, in short, EUO no-shows by patients require timely denials. Presumably this holding also applies to other policy conditions, such as attendance at IMEs. If so, this would extinguish any hope raised by the last sentence of Fogel that such a no-show is a coverage defense because "an insurer may deny a claim retroactively to the date of loss for a claimant's failure to attend IMEs." Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 A.D.3d 720 (2d Dep't, 2006). Clearly, now, such defenses are not based upon a lack of coverage, and must be denied within 30 days. Presumably, timely and valid requests for EUOs and IMEs still toll the 30 days, but the eventual denial must be timely, as well. So, whatever a "retroactive" denial mentioned in Fogel is, it's still something that must be timely.

Tuesday, March 03, 2009

MVAIC & Qualified Persons

Judge Noach Dear's decision in Kipor Medicine P.C. v. MVAIC, 2009 NY Slip Op 29085 (Civ. Ct., Kings Cty., 2009) was published today on the Slip Opinion site. This was published as a Decision of Interest in the New York Law Journal last week and will be published in the official Miscellaneous Reports.

As noted in the version published in the Law Journal, I handled this trial of counsel to the Law Offices of Bruce Newborough for Plaintiff.

In the case, MVAIC alleged that it had never received proof of the assignor's residency in New York and that, therefore, the assignor was not a "qualified person" under Insurance Law § 5202(b). As noted by the Court, however, the definition of "qualified person" is not limited to New York residents. Moreover, the fact that MVAIC had not received proof of residency was not sufficient proof that the assignor did not meet the definition of a "qualified person." MVAIC likewise submitted no other proof to demonstrate that the assignor was not qualified.

Wednesday, February 18, 2009

Timeliness of EUO Requests

This morning brings us the Appellate Term, 2d Department's decision in Great Wall Acupuncture, P.C. v. New York Central Mutual Insurance Company, 2009 NYSlipOp 50224(U) (App. Term, 2d Dep't, 2009).

In a summary judgment motion, "defendant asserted that it timely denied plaintiff's claims based on plaintiff's owner's failure to appear for scheduled examinations under oath (EUOs)." Id. However, the Appellate Term found that "defendant failed to timely request the EUO after receiving plaintiff's bills." Id. As a result, they held that "defendant is precluded from, inter alia, relying upon plaintiff's failure to appear at an EUO as a defense to this action." Id.

The App. Term has thus established a sharp contrast between EUO requests and IMEs. As the App. Div. held in Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 A.D.3d 720 (2d Dep't, 2006), "an insurer may deny a claim retroactively to the date of loss for a claimant's failure to attend IMEs when, and as often as, the insurer may reasonably require." (Internal quotation marks omitted). Such retroactive denial is not available for EUOs that are not requested under the verification time frames, and a failure to attend untimely-requested EUOs is apparently not a coverage issue.

Thursday, February 12, 2009

LMK Update

The newly-shaven David M. Gottlieb, Esq. has a great post over at No-Fault Paradise about the oral arguments before in the Court of Appeals in LMK Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 46 A.D.3d 1290 (3d Dep't, 2007)

Based on David's post, both State Farm/Rivkin Radler and the Insurance Dep't. appear to be in The Twilight Zone. When it comes to interest, the argument is that providers should file suit immediately once a claim is denied and/or overdue. When it comes to attorney's fees, however, providers should apparently wait until all treatment is finished to consolidate all bills into a single suit to avoid exhausting the attorney's fees.

And, really, let's be honest: the concept of "exhaustion" of attorney's fees is just made up. They invented it out of nowhere for this litigation. Just look at the provisions concerning attorney's fees in the Regs:

11 NYCRR § 65-4.6(b)(1) provides that, in a specific scenario, "[i]f the resolved claim was initially denied, the attorney’s fee shall be $80." § 65-4.6(b)(2) provides "[i]f the resolved claim was overdue but not denied, the attorney’s fee shall not exceed..." The word "claim" in these provisions only makes sense if a claim is an individual bill. Otherwise, each "claim" could have a mixture of bills that were denied and not denied, and these provisions would write themselves out of existence.

Moreover, § 65-4.6(e) provides that "[f]or all other disputes subject to arbitration, subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850." Thus, at a minimum, each time a court or arbitrator resolves a matter and grants payment to the provider, there is a maximum of $850. There is no "coverage limit" of $850 in attorneys per patient, per provider. This appears nowhere in the Insurance Law, the Mandatory PIP Endorsement, or anywhere else in the Regs.

It is disappointing, but not surprising, that a carrier would attempt to fabricate a new category of coverage limit where none actually exists.