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THE (NOT SO) CLEVER TACTICS OF INSURANCE CARRIERS: VERIFICATION REQUESTS

Insurance carriers are constantly trying to delay payment of claims by sending verification requests. This is a clever tactic because until a provider complies with these requests, an action to recover payment on the claims will not be ripe. Therefore, whether in court or arbitration, these cases will be dismissed without prejudice until the insurance verification requests are complied with or at least responded to. The purpose behind this is supposed to be to ensure the carriers have all the relevant information in front of them when deciding whether to pay or deny a claim.

Of course, insurance carriers use this to their advantage, notorious for asking for things they already have, and probably things they don't even use in the assessment of whether to pay or deny a claim, completely defeating the purpose behind this requirement. But still, courts have consistently required providers to respond and comply with the insurance carrier's verification requests. Courts have even gone so far as to say a phone call response is not enough, if the verification request is written, a written response must be given, even if it's just to say the provider doesn't have what the carrier is requesting.

As well as that, sometimes insurance companies will receive a response to the verification request and decide that it wasn't the response they were looking for or they weren't served properly etc. and do nothing about it. They figure as long as the verification request hasn't been responded to, the claim isn't ripe for suit, and payment of the claim can be indefinitely delayed.

Luckily, the Courts have realized the games the carriers play and aren't letting them get away with it as easily anymore. For example, New York Hosp. Med. Ctr. of Queens v. COUNTRY WIDE INS. CO., 2011 NY Slip Op 1628 , a March 1, 2011 decision , the Appellate Division reminded the insurance carriers that providers are NOT mind readers, so they could only get the things they actually asked for. Seems like something that doesn't need to be said right? Wrong.

"The defendant's verification requests, dated April 22, 2008, and May 22, 2008, respectively, requested "Rev. 01/04 NF5 & Assignment of Benefit Forms signed (No Stamps)." The plaintiff responded by providing exactly what was requested of it. The defendant cannot now complain that the NF5 or the Assignment of Benefits Forms provided by the plaintiff were "outdated," as its verification requests only sought the January 2004 version of the NF5 Form and its accompanying assignment."

Sometimes insurance companies attempt to take the position that they may ignore a verification response they believe has been served improperly. This defies the very spirit and purpose of the No-Fault Law in promoting prompt resolution of matters. In fact, allowing an insurance company to ignore the verification response is inconsistent with the purpose behind verification requests in allowing carriers to investigate a claim and giving providers the opportunity to fix any inadequacies in its claim. All Health Medical Care, P.C. v GEICO, 2 Misc3d 907.

Several cases have ruled on this very issue. . In All Health Medical Care, P.C., as Assignee of Eliyahu Malaev v. Government Employees Insurance Co, New York Civil Court Judge Peter Moulton held, "The court finds that defendant may not treat a response it deems inadequate as no response at all." The statutory scheme, which is "designed to promote prompt payment of legitimate claims" (Nyack Hospital v General Motors Acceptance Corp., 8 NY3d 294), is better served by defendant taking final action after receipt of a response to a verification request - even if finds that the request is inadequate. (See All Health Medical Care, P.C. v GEICO, 2 Misc3d 907. As long as plaintiff's documentation is arguably responsive to defendant's verification request, defendant must act within 30 days of receipt of plaintiff's response, or will be precluded from presenting any noncoverage affirmative defenses. See All Health Medical Care, P.C. v GEICO, 2 Misc3d 907 (emphasis added). While the law is clear that defendant's time to pay or deny is tolled pending receipt of some form of verification, once it has received verification, its time is no longer tolled and it has a duty to act. If Respondent considered the verification to be inadequate, its duty was to issue a denial rather than remain silent (Westchester County Med. Center v NY Cent. Mut. Fire. Ins. Co., 62 AD2d 553, 555 [2d Dept 1999].

There is nothing in the no-fault regulations or case law that allows defendant to remain silent in the face of plaintiff's response to its verification request.All Health Medical Care, P.C. v GEICO, 2 Misc3d 907. Further, the no-fault regulations state that insurance companies should not issue a denial while a verification request is pending, and thus providers are not tied to a time frame to respond to the verification request; however they do have a very strict time frame for the insurance companies to either pay or deny the claim. This is to further the objectives of the Regulations, which are to promote the prompt payments of claims. Therefore, an insurance company's silence serves to unfairly prejudice providers by allowing the matter to remain in limbo.

For more information: Call (516) 478-0237
By: Candice L. Deaner, Esq.


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