Follow-Up Verification Requests Sent on Day 30 Held to be Premature and Ineffective

NO-FAULT – TIMING OF FOLLOW-UP VERIFICATION REQUESTS – 11 NYCRR § 65-3.6(B)
Alur Med. Supply, Inc. a/a/o Teresa Radriguez v. Progressive Ins. Co.
(App. Term, 2nd Dept., decided 4/7/2009)

Section 65-3.6(b) of Regulation 68, provides:

     (b) Verification requests. At a minimum, if any requested verifications has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.

If the no-fault insurer sends the follow-up verification request on Day 30, instead of Days 31 through 41, after the original request, does it "lose" the tolling effect of such verification requests and is it precluded from relying on defenses related to those requests?  The Appellate Term, Second Department, has again said yes, Progressive's follow-up request sent before the expiration of that initial 30-day period was premature and a nullity, rendering Progressive's eventual denial untimely and precluding it from raising most defenses, including lack of medical necessity:

Since defendant's papers established that it mailed its follow-up requests for verification on the 30th calendar day after it mailed its verification requests, the follow-up requests were premature and without effect (see General Construction Law § 20; Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]; Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc 3d 1 [App Term, 2d & 11th Jud Dists 2008]). Consequently, defendant failed to timely deny plaintiff's claim and is precluded from raising most defenses, including its proffered defense of lack of medical necessity (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Accordingly, the Civil Court properly granted plaintiff's motion for summary judgment, and the judgment is affirmed.  

This is the second time the Appellate Term, Second Department, has construed 65-3.6(b) in this manner to, in effect, penalize a no-fault insurer for sending a follow-up request too soon.  Its Infinity Health Prods. 2-1 decision from July 2008 was the first time (follow-up request mailed on Day 27).   Other than in this case, that decision has not since been cited in any reported New York case on the 65-3.6(b) follow-up verification issue.