Rogak's New York No-Fault Law & Practice

“No-fault,” “personal injury protection,” and “PIP” all mean the same thing: the basic, mandatory no-fault program, which provides first party benefits for medical treatment, lost wages and incidental expenses incurred by a covered person as a result of a covered accident. No-fault benefits may also be provided by two optional, additional coverages: OBEL and APIP (see those topic headings for details). The general framework for payment of first-party benefits derives from Insurance Law Article 51, and more particularly §5106(a), and is further defined by New York State Insurance Department Regulation 68 and codified as 11 NYCRR §65. Sections 65-2.4, 65-3.5, and 65-3.6 of these regulations form the outline for processing first-party no-fault claims. The intention of the Legislature when it enacted the no-fault law was to keep relatively minor injuries out of the tort system by creating a “serious injury threshold,” by which persons with injuries which did not meet that threshold would be barred from bringing lawsuits against the parties deemed culpable. As a tradeoff for depriving such persons of the right to sue, they would be entitled to a minimum of $50,000 in benefits to pay their medical bills, lost wages and incidental expenses without having to prove that anyone was at fault for their injuries: hence, the term “no fault.” Unfortunately, the definition which the Legislature came up with for “serious injury” is so amorphous that the courts are cluttered with cases requiring a judicial determination as to whether a given plaintiff’s injury comes within the definition of the threshold. An injured party is required to provide notice to the insurer that an auto accident occurred, and that they were injured, within 30 days after the date of the accident. This notice requirement may be satisfied when the injured party submits an “Application for Motor Vehicle No-Fault Benefits” (Form NF-2), or a police accident report, or some other written form of notice that reasonably puts the carrier on notice that a certain accident occurred. The injured party or that party’s assignee must submit a “written proof of claim” to the insurer for health service expenses (bills) within 45 days after the date services are rendered, and submit proof of work loss within 90 days. [See topic heading Proof of Claim for more details]. For proof of claim for health service expenses, the health care provider usually submits a “Verification of Treatment by Attending Physician or Other Provider of Health Service” (Form NF-3), or “Verification of Hospital Treatment” (Form NF-4), or “Hospital Facility Form” (Form NF-5). Within 10 business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for health care or hospital treatment (NF-3, NF-4 or NF-5) to the injured party or that party's assignee. After receipt of the completed verification of health care or hospital treatment form, the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within 15 business days thereof. 11 NYCRR §65-3.5(b). [see topic heading Verification requests for more details]. As additional verification, the insurer may seek, for example, an independent medical examination [“IME”] of the injured party, which must be held within 30 calendar days from receipt of the initial verification forms, or an examination under oath [EUO], which “must be based upon the application of objective standards so that there is specific objective justification supporting the use of such examination.” [See topic headings Examination Under Oath and Independent Medical Examinations for more details]. If any requested additional verification has not been supplied to the insurer by 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the claimant “either by telephone call, properly documented in the file, or by mail.” There is currently no law, rule or regulation limiting how long after this follow-up the insurer must wait before issuing a denial. But the courts have held that an insurer may not issue a denial at all if the requested verification is not provided, thus leaving the claim open indefinitely. After receipt of the notice and proof of claim, the onus shifts to the insurer to pay or deny the claim within 30 calendar days. This is what is called the “thirty day rule.” No-fault benefits are overdue if not paid within 30 calendar days. If the insurer denies the claim, it uses a prescribed “Denial of Claim Form (NF-10),” providing a detailed explanation for the denial. [See topic heading Denials, subtopic Timeliness for more details.] To establish a prima facie case, plaintiffs have the burden of proof of demonstrating (1) standing to bring the action; and (2) the submission of completed proofs of claims to defendant which defendant did not pay or deny within 30 days, or delay by sending timely verification letters. [See topic heading Prima facie case] When injured parties assign their rights to collect no-fault benefits to a health care provider or hospital, assignment of benefits forms must be provided as part of the prima facie case. [see topic heading Assignment of benefits for more details]. Also part of the prima facie case is proof that the plaintiff has standing to sue; the plaintiffs’ burden in proving standing is satisfied once they submit properly completed assignment of benefits forms. The insurer must then come forward with evidence of a claimed defect in the assignment, and proof that the alleged defect in the assignment was cited in its denial. The defense of defective assignment will be waived unless it was alleged in the insurer’s denial of claim. In litigation, plaintiffs must present a completed affidavit of service (of the summons and complaint) to satisfy their service requirements. The affidavit of service raises a presumption of delivery which may be either rebutted or waived. Plaintiffs must submit completed proofs of claim forms, which contain the name of the policyholder, name and address of the provider, policy number, date of accident, date of health care service, place of service, description of treatment/service rendered and charges billed. Once a claimant elects to place a bill into arbitration, they are barred from litigating any subsequent bills on the same claim. [see Election of remedies for more details]. Next, plaintiffs must show that these claims were mailed to the insurer. This can be accomplished in one of several ways. First, plaintiffs may provide an affidavit of service and/or proof of mailing. Second, plaintiffs may provide proof of a standard office practice or procedure designed to ensure that claims are properly addressed and mailed. The date the claim was received as specified on the denial of claim form serves as an admission of receipt by the insurer and is sufficient proof of mailing, even in the absence of other proof by the plaintiff, provided that the denial form sufficiently identifies the bill in question. The courts have liberally interpreted the plaintiffs’ burden as to require only submission of complete proofs of claims to defendant which defendant did not pay or deny within 30 days. The Appellate Term, First Department, recently held that due to an untimely denial, the insurer “waived any defenses relating to the adequacy of plaintiffs’ claim forms, including the alleged absence of necessary signatures.” The insurer’s failure to timely and properly deny the bill is considered an admission, of sorts, that the bill is correct; it is also characterized as a waiver of any defense based on errors in the bill. However, an untimely denial does not waive a defense based on lack of coverage.