Opinion
19131/07.
Decided January 12, 2010.
Defendant: Law Offices of James F. Sullivan, P.C., New York, NY.
Plaintiff: Joseph Sporacio, P.C., Staten Island, NY.
The sole issue presented at trial was whether a plaintiff medical provider is excused from submitting its bills to a defendant insurance company after the company has issued a general denial to the plaintiff. Defendant requests that this case be dismissed due to plaintiff's failure to timely submit its bills.
Defendant Allstate Insurance Co. ("defendant" or "Allstate") issued a general denial dated June 14, 2006, based upon an independent medical examination ("IME") performed upon the assignor Kristin Puma ("Assignor" or "Puma") wherein the doctor utilized by defendant determined that no further medical services were necessary ("IME cut-off date). The assignor continued to undergo medical treatment, including chiropractic treatment from plaintiff J. R. Dugo, D.C. ("Dugo" or "plaintiff"), from August 22nd through December19, 2006. Plaintiff never submitted its bills to Allstate and Allstate consequently never issued a denial, verification request or paid the above claim.
Plaintiff contends that once defendant issues a general denial which predates any services provided by plaintiff, it is no longer under an obligation to submit claims within 45 days of the date of service. Defendant contends that its general denial does not obviate plaintiff's obligation, under the No — Fault Law, to submit a claim within 45 days.
Defendant's attempt to distinguish the current factual situation from the governing case of Mtr. Of State Ins Co. V. Domotor, 266 AD3d 219 (2d Dept. 1999) is unavailing. In Domotor, supra, the insurance company initially provided medical benefits to the appellant assignor but then issued an IME cut-off denial based upon its expert's opinion that the assignor no longer needed medical treatment.The assignor nevertheless continued to obtain medical care although she submitted no further claims to the insurance company . She subsequently demanded arbitration to resolve the issue of the insurance company's liability.
The court ruled that once an insurance company had unequivocally repudiated liability on the claim by sending a letter disclaiming coverage, it could not "insist upon adherence to the terms of its policy." 266 AD2d at 220. The insurance company's letter of disclaimer thus negated the insured's otherwise absolute obligation to comply with the conditions precedent under the policy to provide a timely written proof of loss. Id at 220-21. The assignor was therefore entitled to arbitrate her claim that she was entitled to such medical benefits following the issuance of the denial, even though the bills for those services were never submitted to the insurer prior to her demand for arbitration. Id. Dormitor was further explained in Mtr. Of Arbitration between NY Medical Health v. NYC Transit Authority, 2009 NY Slip Op. 51526U, 24 Misc 3d 1219A (Civil Ct, Kings Co. 2009). Judge Sweeney first noted that the condition precedent to the obligation of an insurer to pay no fault benefits arose from the policy of insurance which contained the mandatory personal Injury protection ("PIP") endorsement — that an eligible injured person or his assignee submit written proof of claim within 45 days after the date services are rendered (11 NYCRR 65.1, 65-2.4(c)). However, pursuant to set insurance law precedent, "an insurer cannot insist upon cooperation or adherence to the terms of its policy after it has repudiated liability on the claim ***by sending a letter denying liability. Id at 3 citing Rajchandra Corp. V. Title Guarantee Co., 163 AD2d 765, 769 (2d Dept. 1990). See, Auerbach v. Otsego Mutual Fire Ins. Co. , 36 AD3d 840 , 842 (2d Dept. 2007). Since the Transit Authority had unequivocally notified the assignor that it was denying all no-fault benefits, neither the assignor nor his assignee — the medical provider — were obligated to submit written proof of claim to the respondent. Id. At 4.
Nor does the opinion letter annexed to defendant's papers from the Office of Counsel, State Insurance Department, support defendant's position. The precise question posed before Counsel was whether an insurance company must continue to issue denials for claims for continued treatment which are submitted subsequent to the company's issuance of a general denial for all-future benefits. Unlike the current situation, where plaintiff has not submitted any claims, the facts presented to the Office of Counsel revealed that the medical provider continued to submit claims for reimbursement after the general denial was issued. Therefore, Counsel's opinion was predicated upon an insurer's obligation under the regulations ( 11 NYCRR § 65-3.8(c)) to either deny or pay a claim within 30 calendar days after proof of claim is received. His further comment that "the obligation of an applicant to submit timely claims to be eligible for reimbursement remains continuous, irrespective of whether an insurer has denied a claim" is merely dicta.
However, Allstate's "ability to resolve the claims at issue if warranted" is not prejudiced. Plaintiff had the option of continuing to submit claims, despite Allstate's general denial, and chose not to. Since plaintiff has failed to file its claim, no presumption of medical necessity attaches to the services rendered by plaintiff.The burden therefore has not shifted to defendant to demonstrate the lack of medical necessity. See,, e.g. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U, 17 Misc 3d 1135A(Dist. Ct., Nassau Co. 12/3/2007); A.B. Medical Services, PLLC v. NY Central Mutual Fire Ins. Co., 2005 NY Slip. Op. 50662(U), 7 Misc 3d 1018 (A) (Civil Ct. Kings. Co. 2005); Citywide Social Work Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings Co. 2004). At trial, plaintiff must establish the medical necessity of the services rendered and negate the general denial issued by Allstate that pursuant to an IME, no further medical services were warranted,
As such, the court denies defendant's motion to dismiss the case due to plaintiff's failure to submit a claim and directs the parties to contact the court, within 20 days of receipt of this decision, to schedule a date to recommence the trial unless they can resolve the matter beforehand.
The foregoing constitutes the Decision and Order of the Court .