Bar-Coding to Prove Service - a Case Study
Saturday, April 8, 2006 | 0
Editors Note: While the below discussion by NY attorney Larry Rogak is about proofs of service in no-fault auto claims, his discussion is relevant to documentation of service of claim denials in the workers compensation setting we felt the discussion and Rogaks proposed solution of interest and worthy of consideration.
COURT FIND INSURER'S PROOF OF MAILING NO-FAULT DENIAL TO BE
INSUFFICIENT
Harbor Medical & Diagnostic PC a/a/o Sandra Dorsett v. Allstate Ins.
Co., NYLJ 4/03/06 (Civil Court, Queens County) (LANE, j)
Plaintiff commenced this no-fault benefit suit for medical services
rendered to assignors Sandra Dorsett and Sharon Little. Thereafter,
plaintiff moved for summary judgment on its claims in the amount of
$3,177.54, on the ground that defendant failed to pay or to deny its
claims within the statutory 30-day period as required by Insurance
Law section 5106 (a).
Plaintiff proved that it submitted a timely and proper notice of
claim pursuant to the No-Fault statute for medical treatment
rendered, which defendant acknowledged receiving, denying and not
paying. The burden then shifted to defendant to show the existence of
a triable issue of fact.
Defendant maintained that it issued timely denials to plaintiff's
claim and in its opposition papers asserts the defense of lack of
medical necessity. "It is well settled that for an insurer's denial
of claim form to be deemed timely, the insurer must prove that it
generated the denial of claim within thirty (30) days of receipt of
plaintiff's proof of claim and that it also mailed the denial to the
claimant within the same time period," stated the Court.
"Defendant submits denial of claims form that indicate that the bill
was being denied due to a lack of medical necessity. The denials for
the bills are timely on their face. In support of its motion
defendant submits copies of the denials and purported proof of
mailing of its denials. Specifically, defendant proffers the
affidavit of Ms. Joan Rolfe, a claims representative employed by the
defendant, and the affidavit of Matt Olmstead, an employee of
defendant who is employed as a Senior Operations Staff Analyst at
Southwest Output Processing Center."
"The two affidavits submitted by defendant do not establish mailing
because neither Ms. Rolfe nor Mr. Olmstead state in their affidavits
that they had personal knowledge that the denial of claim was
actually sent to plaintiff; nor does either affidavit create a
presumption of mailing because neither sufficiently describes the
standard operating procedures defendant uses to ensure that its
denials and requests for verification are mailed. Although the
affidavits provide information on the preparation and mailing of the
denial of claims, they do not include sufficient factual information
describing how defendant's regular office practices and procedures
for mailing denials are geared as to ensure the likelihood that [the
denial of claim] is always properly addressed and mailed."
"Specifically, defendant failed to state sufficiently, or describe
with particularity the regular office practices and procedures
defendant uses to ensure that denials are properly and timely mailed,
including, but not limited to the following: (1) whether the NF-10's
generated by computer by the claims representative are compared with
the NF-10's that come into the Southwest Output Processing Center's
job queue; (2) the specific date that the denial was actually mailed
to plaintiff; (3) whether the envelope contained the NF-10's and that
the envelope was correctly addressed; (4) whether any computer
printout or record was generated and reviewed which listed the
claimants who were allegedly mailed NF-10's on the date or dates that
defendant alleges it mailed the NF-10's; and (5) whether it was the
duty of the claims representative or Senior Operations Staff Analyst
to ensure compliance with said office practices and procedures or
whether the claims representative or Senior Operations Staff Analyst
had actual knowledge that said practices and procedures were complied
with."
"The court finds the assertions of Ms. Rolfe and Mr. Olmstead
conclusory and such assertions fail to specify either that it was the
duty of either one of them to ensure compliance with said office
procedures or that either one had actual knowledge that said
procedures were complied with. As defendant's papers in opposition to
plaintiff's motion for summary judgment do not contain an affidavit
of someone with personal knowledge that its denial was actually
mailed, or describe the standard office practices or procedures used
to ensure that such denials were properly addressed and mailed,
defendant failed to establish by competent evidence that it timely
mailed its denials, and therefore, defendant is precluded from
offering all of its defenses in the instant matter."
"Accordingly, plaintiff's motion for summary judgment is granted.
Judgment shall be awarded in favor of plaintiff in the amount of
$3,177.54, together with statutory interest and attorneys fees."
Comment: When thousands of similar documents are mailed in the
regular course of a company's business, it is quite a high hurdle to
establish by "personal knowledge" that any particular document was
mailed other than to provide a reasonable basis to conclude that it
was sent in the regular course of business based on evidence in the
claims file.
What insurers might want to consider doing -- and the technology
exists to do it -- is to bar code and scan every denial and have a
scanner record when the denial is placed into an envelope, stamped,
and placed in the mail chute. That way a printout could be produced
showing that a given denial was generated and placed into a U.S mail
depository. Nobody does this yet for no-fault denials, but it is
worth considering.
Article by Larry Rogak. Lawrence N. Rogak is an insurance defense attorney in New York. He writes The Rogak Report, a daily insurance law newsletter, and his insurance law articles appear in several industry publications. For more information see www.Rogak.com.
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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.
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