Sunday, May 25, 2008

NF-10 Wars -- Untimely & Defective Denials Rejected

New York Methodist Hospital a/a/o Kyle Cook v. Travelers Prop. & Cas. Ins. Co.
(Sup.Ct., Nassau Co., decided 5/7/2008)

Hat tip to Dave Gottlieb and his commenter (without any endorsement of the commenter's castigation of Travelers' defense counsel's arguments) over at No-Fault Paradise for reporting this decision.

Unlike the name of the case's primary plaintiff, this matter involved two hospitalization billings from Westchester Medical Center (WMC) as assignee of Colin Smith and Segundo Tapia.

Smith was injured in an MVA on August 1, 2007, and treated at WMC from August 1-3, 2007. WMC sent Travelers an NF-5 and UB-92 on August 20, 2007, claiming $2,279.77 in hospitalization costs. Travelers received the billing on August 24, 2007 and requested verification on September 18 and October 23, 2007. WMC did not respond fully to Travelers' verification requests until January 2, 2008, two and a half months after commencing this action.

Tapia was injured in an MVA on January 1, 2007, and treated at WMC from January 1-4, 2007. WMC sent Travelers anNF-5 and UB-92 on July 19, 2007 , claiming $15,151.77 in hospitalization costs (although the UB-92 listed $52,402.00 as the costs). Travelers received the billing on July 23, 2007 and issued an NF-10 denial of claim 33 days later on August 25, 2007, citing the assignor's late notice of the MVA, but incorrectly identifying the assignor/injured party as "Segundo Lupercio" and incorrectly listing $52,402 in Box 30 as the amount of the billing. The decision does not say whether Travelers also denied WMC's billing based on late proof of claim (billing submitted more than 45 days after dates of service) and, if not, why not.

Travelers apparently had issued an earlier denial directly to Tapia on May 16, 2007 based on late notice of the acccident (the decision indicating that telephone notice was first provided on April 4, 2007), but that NF-10 incorrectly listed Tapia's name as "Segundo R. Lupercio" and listed nothing in Boxes 23-32.

With respect to WMC's claim a/a/o Smith, the court agreed with Travelers that WMC's suit was premature because it did not fully respond to Travelers' verification requests until after it commenced this suit. "Since all requested verification was not received until January 2, 2008, the claim was not overdue when the action was commenced , on October 17, 2007, and the action was therefore premature." The court rejected Travelers' argument that WMC had failed to establish a prima facie case because the UB-92 identified the patient as "Trauma Russia", a name, WMC explained, given to a patient who is unconscious or non-responsive when they come into the hospital. The decision does not indicate whether Travelers paid or denied the Smith billing within 30 days of receiving the completed verification.

With respect to WMC's claim a/a/o Tapia, the court granted summary judgment to WMC, rejecting Traveler's arguments that the denial was not defective, despite the incorrect and missing information, because the basis for the denial was claimant's failure to fulfill a condition precedent required by the policy which was addressed to the entire claim and not any specific bill, and that an insurer can deny a claim retroactively to the date of loss for a claimant's failure to fulfil a condition precedent, irrespective of the 30-day rule of Insurance Law § 5106(a). Because Travelers did not deny WMC's billing until 33 days after it received the NF-5 and UB-92, its denial was found to be untimely. Although arguably dictum, Nassau County Supreme Court Justice William LaMarca also concluded that both NF-10s issued by Travelers were "incomplete and defective."

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