Olympic Chiropractic, P.C. v American Tr. Ins. Co. (2007 NY Slip Op 50011(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal and cross appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered September 27, 2005. The order denied plaintiff’s motion for summary judgment and, in effect, granted defendant’s cross motion to the extent of severing and dismissing three of plaintiff’s five claims (in the sums of $425.44, $101.10 and $404.40).

Cross appeal by defendant dismissed as abandoned.

Order, insofar as reviewed, modified by granting plaintiff’s motion for summary judgment as to its claims for $269.60 and $33.70 and matter remanded to the court
below for a calculation of statutory interest and an assessment of attorney’s fees thereon; as so modified, affirmed without costs.

In this action to recover first-party no-fault benefits for health care services provided plaintiff’s assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Defendant’s admissions of receipt cured the deficiencies, if any, in plaintiff’s proof of mailing (Fair Price Med. Supply Corp. v ELRAC Inc., 12 Misc 3d 119 [App Term, 2d & 11th Jud Dists [2006]; A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). The burden shifted to defendant to demonstrate a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The record supports the determination of the court below that, with respect to the claims [*2]in the sums of $425.44, $101.10, and $404.40, defendant validly (see New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2006]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2005]) sought verification of the assignor’s social security number, a request we find appropriate in that such information must be provided on the statutory NF-2 application for no-fault benefits form, “and made the requisite follow-up requests” (Delta Diagnostic Radiology, P.C. v American Mfrs. Mut. Ins. Co., 12 Misc 3d 145[A], 2006 NY Slip Op 51439[U] [App Term, 2d & 11th Jud Dists]). Plaintiff’s failure to produce the verification requested merited defendant’s refusal to pay the claims, and for that matter, to take any action on the claims, rendering plaintiff’s lawsuit thereon premature (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004] [“A claim need not be paid or denied until all demanded verification is provided . . . [and when a claimant] fails to respond to a verification request . . . any claim for payment . . . is premature”]; see also A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50, 54 [App Term, 2d & 11th Jud Dists 2005]), thereby warranting the claims’ severance from the remainder of the action and their dismissal (Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005]).

However, we find that plaintiff should have been granted summary judgment as to the remaining claims for $269.60 and $33.70. Although defendant issued timely denials on the ground of lack of medical necessity based on a report of an independent medical examination (IME), the denial forms contained no facts satisfying the statutory requirement that the insurer state the reason for the denial “fully and explicitly” on the claim denial form (Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95, 96 [App Term, 9th & 10th Jud Dists 2004]), and to the degree necessary to “promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated” (New York University Hosp. Rusk Inst. v Hartford Acc. & Indem. Co., 32 AD3d 458 [2006] [quotation marks and citation omitted]). A timely denial does not avoid the preclusion sanction “where said denial is factually insufficient, conclusory or vague” (A.B. Med. Servs. PLLC v GEICO Cas. Ins. Co., 12 Misc 3d 30, 31 [App Term, 2d & 11th Jud Dists 2006]; see also Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004]). While an insurer is not required to attach a peer review report to its denial of claim form (see 11 NYCRR 65-3.8 [b] [4]), where the peer review is not attached the form itself must set forth, with the requisite particularity, the factual basis and medical rationale for the denial (e.g. A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]), or at the very least, the insurer must supply claimant with a peer review report within the same period within which the denial is due. The same rules apply to denials based on an IME report (Contempo Med. Care, P.C. v Travelers Indem. Ins. Co., 12 Misc 3d 139[A], 2006 NY Slip Op 51338[U] [App Term, 2d & 11th Jud Dists]). Defendant failed to submit to plaintiff the IME report within the statutory claim determination period. Since the said period was not otherwise tolled as to the two aforementioned claims (SZ Med. P.C. v Clarendon Natl. Ins. Co., 12 Misc 3d 144[A], 2006 NY Slip Op 51428[U] [App Term, 2d & 11th Jud Dists), defendant is precluded from asserting the defense (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, supra; see also A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U], supra). Absent any defense to the two claims that survived the preclusion sanction, plaintiff is awarded summary judgment thereon and the matter is remanded to the court below for a calculation of the [*3]statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., and Belen, J., concur.

Weston Patterson, J., concurs in part and dissents in part in a separate memorandum.

Weston Patterson, J., concurs in part and dissents in part and votes to deny the motion for summary judgment as to all but plaintiff’s first three claims in the following memorandum:

While I agree with the majority that defendant properly refused to pay plaintiff’s first three claims, I disagree with the majority’s decision to grant plaintiff summary judgment on its remaining claims. In my view, defendant’s timely denials of those claims provided adequate notice of the reasons for the denials.

Defendant’s denial forms state, in pertinent part:
“The Service(s) Submitted Were Rendered Beyond Denial, Based On An Independent Medical Examination.”
In a sworn supporting affidavit, Morton Nussbaum states:
“1. That on November 17, 2003 I saw Andrea Campbell for a chiropractic independent examination. The following was found:” (emphasis added).
Following these forms is a copy of a detailed independent medical examination (IME) report prepared by Dr. Nussbaum indicating no chiropractic disability.

Unlike the cases cited to by the majority (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43 [App Term, 2d & 11th Jud Dists 2004]), here, it is clear from the denial of claim forms that Dr. Nussbaum’ s IME report was attached to the denials. The denial forms specifically refer to additional findings, which were contained in a copiously detailed report following the denials. Under these circumstances, it cannot be said that defendant’s denial of claim forms were factually insufficient to apprise plaintiff of the reasons for the denials.
Decision Date: January 2, 2007