Wednesday, May 28, 2008

What Part of "No" Did You Not Understand? Provider's Action Dismissed as Premature Based on Billing Counsel's Refusal to Provide Verification

Lenox Hill Radiology & MIA P.C. a/a/o Nila Sokol v. Global Liberty Ins.
(NYC Civil, New York Co., decided 5/21/2008)

The med billers over at Baker Sanders may want to tweak their form letters. Or stop suing their providers' no-fault recovery actions in New York Civil.

Here's the riveting screenplay-by-play from New York County Civil Court Judge Arlene Bluth:

Late April, 2007

EXT. Somewhere in metro NYC (presumably)

Nila Sokol merits mention on a police accident report for her reported involvement in a motor vehicle accident.


June 7, 2007

INT. Lenox Hill Radiology & Medical Imaging Associates, P.C.

Patient Sokol lies still on the MRI machine as it rat-a-tat-tats around her. Twice in fact. Once for $879.72, and the second time for $912.


June 12, 2007

INT. Lenox Hill Radiology & Medical Imaging Associates, P.C.

Patient/assignor Nila again lies on the MRI machine a third time in five days as it rat-a-tat-tats another $878.67-worth around her.


Some days prior to June 26, 2007

INT. Offices of BSBGFM&N

Dear Insurance Company:
Although there's no legal dispute that we're aware of yet,
we represent Lenox Radiology blah blah blah...
Three times we verily say to thee,
thou must deal with us, only us, and only us.
Failure to to do may result in unnecessary [sic] litigation.
Any enclosed bills, forms, "doctor's reports, notes and narratives
were prepared solely by the above-referenced provider."


July 10, 2007

INT. Offices of Global Liberty Insurance -- Workspace of no-fault claims examiner Cinnamon Houston

Thank you so much for your lovely form letter
and for forwarding your client's bill for $879.72,
which we received on June 26, 2007.
To verify this claim, would you please send us two items:
(1) a letter of medical necessity from the referring physician; and
(2) a claim form, like an NF-3 perhaps, with a valid signature of the provider.


July 17, 2007

INT. Offices of BSBGFM&N

Re: Verification Compliance
Dear Ms. Houston:
Whatever we gave you was good enough
and this provider is not giving you anything else.
If you need something from someone else,
go ask them. Now pay the bill.
"Any further requests to this provider are deemed unnecessary
and in violation of 11 NYCRR 65-3.2 (c)."


August 13, 2007

INT. Offices of Global Liberty Insurance -- Workspace of no-fault claims examiner Cinnamon Houston

Thank you for your July 17, 2007 letter
and stern warning but we really, really
need the stuff we asked for on July 10, 2007.
No kidding.



Sometime after August 10, 2007 and prior to January 1, 2008

INT. New York City Civil Court Clerk's Office

Good morning. Would you please file this
and the other 3,187 summonses and complaints
that I've brought with me today?

Of course I will. Just pile them up over there.
Is this bleach free, recycled paper?


Sometime after January 1, 2008

INT. Offices of Barry & Associates, LLC

GLI moves for summary judgment because
it timely requested but received
no verification of the three billings,
making this action premature.

I personally prepared each verification request,
put each in an envelope,
checked that each was properly addressed,
and put each in my outgoing mail bin.
GLI's regular office practice is that the mail person
comes by at approximately 3:45 each afternoon,
collects and stamps the mail,
and then delivers it to the post office that day.


Sometime later

INT. Offices of BSBGFM&N

Hold up there, defense attorney.
No summary judgment for you because:
(1) Ms. Houston did not swear that it was her duty
to ensure compliance with GLI's mailing procedures
and did not herself drop each verification request in the mailbox.
(2) In any event, GLI's verification requests were defective
because, even though we three times told it to do so,
GLI sent the verification requests only to us
and not also to our client, the provider.


May 21, 2008

INT. Chambers of Judge Arlene P. Bluth

The Court finds Ms. Houston's affidavit explaining preparation
of the verification requests and the mailing procedures with respect
to all of the verification requests (the initial three and the follow-up requests)
sufficient to prove timely and proper mailings.
* * * * *
Although plaintiff's opposition correctly notes that Ms. Houston
did not swear that it was her duty to ensure compliance with defendant's
mailing procedures and that she did not herself drop it in the mailbox,
it is enough that "the defendant submitted admissible evidence
in the form of an affidavit of an employee with knowledge of the defendant's
standard office practices or procedures designed to ensure
that items were properly addressed and mailed".
Ms. Houston's detailed affidavit fulfills this requirement.

The verification requests were sent to the plaintiff's law firm.
A letter properly mailed is presumed to have been received.
Although an associate of that law firm submitted an affirmation in opposition
to this motion, no attempt to rebut the presumption was made;
conspicuously absent from that affirmation is a simple denial
of receipt of the requests for verification.
* * * * *
The affirmant in opposition was in the position to,
but did not, even attempt to rebut the presumption
that plaintiff's law firm received the requests for verification
shortly after Ms. Houston stated that they were mailed.
Therefore, there is no question of fact as to proper mailing of the verification requests.

Having determined that defendant proved its timely and proper mailing
of the requests for verification, the Court turns to the other bases
for plaintiff's opposition. Plaintiff claims that defendant failed to present
a "good reason" why further verification was necessary; this Court disagrees.
This Court does not believe that it is unreasonable to ask for a letter
of medical necessity before a carrier pays more than $2500 for three MRIs
conducted during the course of one week, approximately six weeks
after an alleged accident. Defendant is not required to provide
a blank checkbook to plaintiff. Rather, defendant is entitled to find out
whether and why each MRI was prescribed; in other words,
the carrier is entitled to inquire as to the medical necessity before it pays the bills.

Plaintiff also claims defendant violated 11 NYCRR 65-3.6 (b) * * *
Plaintiff argues that because defendant did not send the follow-up
verification requests both to it and to its attorneys,
the requests are defective. This argument lacks merit.

Because the attorney's cover letter clearly put defendant on notice
that the law firm was the agent for the medical provider for all purposes
with respect to the bill submitted, sending the verification request
to the attorneys was the same as sending the request to the principal.
Accordingly, defendant's notice to the law firm-agent was notice to
the principal-provider as a matter of law. Under the circumstances
presented here, there was no need for the insurer to send another
copy to the principal.

In addition, in interpreting 11 NYCRR 65-3.6 (b), courts have found
that the additional notification to the applicant and its attorney
is required when the verification is requested from a third party,
not when, as here, the verification is requested from the applicant.
"Where verification is sought from a party other than the applicant,
the applicant is entitled to be timely informed of the nature of the
verification sought and from whom it is requested when, after an initial
verification request remains unsatisfied, a follow-up request is necessary".
This Court notes that this very plaintiff advanced the same arguments
that the second verification request was defective because the insurer
did not send an additional notification to the attorney's client/principal,
in Lenox Hill Radiology and Mia, P.C. (Dejesus) v Progressive Casualty Insurance,
Civ Ct, NY County, Index. No. 31019/07 (2008); there, albeit after trial,
Judge Jeffrey Oing also found the argument to be without merit.

Because plaintiff failed to respond to defendant's valid and proper
verification requests, the 30-day period within which defendant had
to either pay or deny the claim did not begin to run.
Therefore, plaintiff's claims for No-Fault benefits are not overdue,
this action is premature and must be dismissed.

For the forgoing reasons, defendant's motion for summary judgment
is granted and plaintiff's complaint is hereby dismissed.



D. Barshay said...

Please get your facts straight before posting. There are no "med billers" employed by this office. Moreover, the court's complete abrogation of the word "and" in the applicable reg will be the center of the appeal.

Roy A. Mura said...

Thanks for that clarification, D. Independent contractors, then? I think the court's point was that your office was submitting the billing, correct?

Speaking of regulatory abrogations, though, how is it that a no-fault insurer can unilaterally be denied its right to additional verification ("Any further requests to this provider are deemed unnecessary and in violation of 11 NYCRR 65-3.2 (c)."), especially, if Judge Bluth was accurate in her recitation of the facts, if what the insurer requested in the first place wasn't provided?

I'd like to see the appeal papers. I guess the "and to our client, the provider, as well" was implied at the end of your office's direction that "[a]ll correspondence including * * * verification requests * * * must be mailed directly to this office." Or, will your office argue that GLI should have ignored that direction and invited "unnecessary litgation"? I think the "and" you're referring to in 11 NYCRR 65-3.6(b) pertains to delay letters to applicants and their attorneys, anyways, and not to the original verification requests themselves.

Plus, prior to the amendment of 65-3.9, wasn't your office one of those which argued that no-fault regulatory sections must be read strictly, and that "applicant" doesn't include "assignee"? Was your office writing on behalf of the applicant or the assignee in this case? The decision would make it seem that it was on behalf of the assignee.

In any event, thanks for commenting.

d. barshay said...

How is it that a high school educated claims examiner can look at submitted medical reports and make a determination that medical necessity is not established and that something called a "letter of medical necessity" is needed to process the claim? Have you ever watched one of these examiners be cross-examined as to why they requested certain "verification"? If not, you should and your canned views would be very different. The point of the letter is that the provider (presumably a medical professional) has already submitted the information requested, to wit, justification of medical necessity in the form of medical reports submitted with the claim and again with the verification response. That a claims examiner ostensibly knows that a document entitled a "letter of medical necessity" is also needed is laughable. It is simply part of the delay, deny, defend strategy. Roy, do you believe that if the letter said you have 20 days to pay, that the 30-day rule would be inapplicable? Or if it said that you have 45 days to pay that the carrier would get the added 15 days to deny the claim and preserve defenses? Before you answer, take a look at Kings Highway Diagnostic Imaging, P.C. v. MVAIC, 2008 N.Y. Slip Op. 28157(N.Y.Sup.App.Term, April 14, 2008) and Boulevard Multispec Medical, P.C. v. MVAIC, 19 Misc.3d 138(A) (N.Y.Sup.App.Term, April 14, 2008).

Answer these questions, read the cases, and then understand that the reg requires mailing to both.

Roy A. Mura said...

David -

A canned view would be thinking that all "high school educated claims examiners" act maliciously in requesting letters of medical necessity. Painting all no-fault insurers with that same broad, coarse brush may make for good marketing with your clientele, but it won't change the fact that the regulation permits insurers to request verification. That you may not agree with the manner in which or even motive for seeking such verification is not the point of this case, or the two you cite, in which the providers unsuccessfully argued that verification requests issued after the payment due dates extended their 3-year SOL to sue MVAIC for payment.

Ironically, in my experience, "letters of medical necessity" were unknown and unseen until medical providers in metro NYC began including them with their billing packages several years ago. One could arge that the no-fault providers themselves have conditioned insurers to look for and request those self-entitled letters, especially with billings from diagnostic facilities that ostensibly are not self-referring but relying on a referring doctor's determination of medical necessity.

And yes, I think that if your office were to issue letters telling insurers that they had 45 days to pay your clients' bills, and they reasonably relied -- by believing you and following your directions, as GLI apparently did in this case -- on such instructions, that there could be an estoppel situation, precluding your clients from them arguing that the 30-day payment rule applied. Parties may always make private agreements not to invoke deadlines or prescriptions of statutes and regulations, as long as those agreements are not unconscionable or against public policy. Have you never obtained and extension to plead or file responding motion papers from opposing counsel?

So which was it -- applicant or assignee?

d barshay said...

so you have never seen a claims examiner cross examined on verification. I've done scores, all different insurers, and the answers are always the same. Three D's. Perhaps Buffalo is a cluster for well-educated claims reps with medical degrees. Also, I suggest you reread the cases I cited.

Roy A. Mura said...

It's like I'm talking to myself, so I'll stop, especially if it'll end your demeaning and pointless sarcasm. Good luck with your appeal and with citing those cases. I've read them. Heck, I even blogged them on May 2nd. I could be wrong, but I don't think I'll see either cited in the Appellate Term's decision if your office does decide to appeal Judge Bluth's decision.

Ronny said...

Is Mr. Barshay finally admitting that his office habitually sends correspondance to the insurer with information that is contrary to the regulations in order confuse and frustate the insurers? Therefore, trying to force the insurers to make some mistake of ommision or commission so that his office can go and litigate these matters to collect attorney's fees?

Larry Rogak said...

I'm glad to see that I am not the only defense attorney whom Dave Barshay flogs for disagreeing with him.

Roy A. Mura said...

If you spit on your screen and rub it around a bit, Larry, it acts as an anti-flogging film.

Larry Rogak said...

I find myself spitting on my screen more and more these days, Roy.