NYU-Hosp. for Joint Diseases v. Allstate Ins. Co.

In a blow to New York No Fault health care providers, The Second Department has ruled that denials containing incorrect bill and dispute amounts are not subject to preclusion, as these errors are insignificant. The courts still have not created a bright line approach to what is and what missing or incorrect information would be considered fatal/defective, but suffice it to say, that in the Second Department, the incorrect bill amount/dispute amounts will not invalidate an insurance company’s NF-10. The key appears to be whether the mistake would be prejudicial to the health care provider. The court found that within the below set of facts, no prejudice was found. There is no mention of prejudice in the Regulation however when it comes to fatal denials, and the Regulation is supposed to be strictly construed.

The Second Department in New York covers all of Long Island, Queens, Brooklyn, Staten Island, Dutchess, Orange, Putnam, Rockland and Westchester Counties. As such, this decision covers most of the population in Downstate New York.

No other Appellate Department has issued a decision concerning this issue since December of 2014. I’d like to see this tested in the First Department, which covers Bronx and Manhattan Counties.

Read relevant portions of the decision here:

Supreme Court, Appellate Division, Second Department, New York.
NYU–HOSPITAL FOR JOINT DISEASES, as assignee of Martha G. Lopez, respondent, et al., plaintiff,
v.
ALLSTATE INSURANCE COMPANY, appellant.
Dec. 10, 2014.
123 A.D.3d 781 (2014)
1 N.Y.S.3d 114

“…Martha G. Lopez allegedly was injured in a motor vehicle accident. Approximately six months later, Lopez underwent surgery at the plaintiff NYU–Hospital for Joint Diseases. Lopez assigned her rights to no-fault benefits to the plaintiff. [Thereafter], the plaintiff mailed a copy of the NF–5 claim form to the defendant, Lopez’s automobile insurance carrier. The defendant received it and thereafter issued a [timely] NF–10 denial of claim form. The plaintiff, while not disputing that the defendant had issued a denial of claim within 30 days after its receipt of the NF–5 claim form, asserted in its motion for summary judgment that the NF–10 form was “defective” because it “contain[ed] the wrong amount of the bill and the wrong amount in dispute.’”

“Among the ways in which a no-fault insurer may comply with the “30 day rule” (see Insurance Law § 5106[a]; 11 NYCRR 65–3.8[a][1]; [c] ) is by issuing a “timely and sufficient” NF–10 denial of claim form within 30 days after its receipt of an NF–5 claim form (Viviane Etienne Med. Care, P.C. v. Country–Wide Ins. Co., 114 AD3d 33, 46). Nonprejudicial mistakes or omissions in an otherwise timely and proper “NF–10” denial of claim form are not necessarily fatal (see Wyckoff Hgts. Med. Ctr. v. Government Empls. Ins. Co., 114 AD3d 855; NYU–Hospital for Joint Diseases v. Esurance Ins. Co., 84 AD3d 1190, 1191–1192; St. Barnabas Hosp. v.. Penrac, Inc., 79 AD3d 733, 734; see also Westchester Med. Ctr. v. Government Empls. Ins. Co., 77 AD3d 737, 738; cf. St. Vincent’s Hosp. & Med. Ctr. v. New Jersey Mfrs. Ins. Co., 82 AD3d 871; Nyack Hosp. v. State Farm Mut. Auto. Ins. Co., 11 AD3d 664). Here, the papers submitted in support of the plaintiffs’ motion for summary judgment included a copy of the defendant’s NF–10 denial of claim form. Contrary to the plaintiff’s contention, the NF–10 form was timely and sufficient.”