No-Fault Insurer Found Obligated to Inform Provider That Its Response To Additional Verification Requests Was Insufficient and/or Incomplete

NO-FAULT – ADDITIONAL VERIFICATION – OBLIGATION TO INFORM ASSIGNEE THAT RESPONSE DEEMED INSUFFICIENT OR INCOMPLETE
Media Neurology, P.C. a/a/o Justin Harris v. Countrywide Ins. Co.
(NYC Civil, Kings Co., decided 9/15/2008)

When a no-fault insurer receives what it believes to be insufficient and/or incomplete responses to its request for additional verification, what should it do? According to Kings Civil Court Judge Sylvia Ash, it should something, not nothing.

Plaintiff sought recovery of no-fault benefits for supplies furnished to its assignor. Countrywide contended that plaintiff's claim was premature because plaintiff had failed to comply with an additional verification request. Plaintiff argued that it responded to Countrywide's verification request, but Countrywide claimed that the response failed to fully comply with the request.

In awarding judgment to plaintiff, Judge Ash held:

There is no dispute that Plaintiff responded to the additional verification request. There is also no dispute that upon receipt, Defendant did not request any further response from Plaintiff. The issue before the Court is whether Defendant was obligated to notify Plaintiff that its response to their additional verification request was insufficient and/or incomplete. In All Health Medical Care, P.C. v. Government Employees Insurance, 2 Misc 3d 907, the Court reasoned that while "... the regulations are silent as to what, if anything, the insurance company must do if it receives insufficient verification, that it is clear that the insurance company must affirmatively act once it receives a response to its verification request." (see also Westchester County Medical Center v. NY Central Mutual Fire Ins Co., 262 AD2d 553).

In the case at Bar, once Plaintiff submitted its response to Defendant's additional verification request, it was then incumbent on Defendant to inform Plaintiff that said response was insufficient and/or incomplete. Any confusion or disagreement on the part of the Defendant as to what was being sought should have been addressed by further communication, not inaction (see Westchester County Medical Center v. NY Central Mutual Fire Ins Co., supra). Neither party may ignore communications from the other without risking its chance to prevail in the matter (see All Health Medical Care, P.C. v. Government Employees Insurance Co., supra).

The judicial trend, at least in the NYC civil courts, seems to be favoring action, not inaction. See, NYC Civil Court Finds That No-Fault Insurer Must Take "Final Action" Even If Verification Response Believed To Be Inadequate. No-fault insurers should be advised accordingly.