Define That Term #140
NY Legal News Round Up

Second Department Holds Insurance Company Out of Luck

In New York Univ. Hosp. Rusk Inst. v. Hartford Acc. & Indem. Co., 2006 NY Slip Op 06223, an individual sustained personal injury in an auto accident and sought medical treatment for his injuries at the plaintiff's hospital.  The plaintiff sent the defendants a hospital facility form (N-F5) and a UB-92 form, demanding payment of its $18,145.76 bill.  The defendant's ultimately denied a portion of the claim in letter form rather than the the prescribed denial of claim form (N-F10). 

At issue in this appeal was whether the defendants properly denied the claim.  The Court held that:

Contrary to the hospital's contention, [a] letter of disclaimer is permissible, provided that it is approved by the New York State Department of Insurance, issued in duplicate, and contains substantially the same information as the prescribed form which is relevant to the claim denied...Here, the defendants' September 28, 2004, letter adequately conveyed the information mandated by the prescribed form including, but not limited to, the precise ground on which the partial denial was predicated. However, the defendants failed to establish that the letter had been issued in duplicate and approved by the Department of Insurance (see 11 NYCRR 65-3.8[c][1], supra). Accordingly, having failed to pay or properly deny that portion of the hospital's claim within the statutory time frame, the defendants were precluded from interposing a defense. (Internal citations and quotations omitted).

Ouch!  That holding has to hurt, given that the disputed amount was $10,385.08.  It would seem that the safest way to issue a denial would be to simply use the proscribed form. 

I've learned that in the practice of law, taking a short cut is almost always a bad idea.  This case was no exception.

Comments

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Richard

>>> I've learned that in the practice of law, taking a short cut is almost always a bad idea.

And that's precisely one of the main problems with the law as it's practiced today.

Besides, the Court's decision is astoundingly ridiculous. It should listen to how pitiful is sounds sometimes. The "letter adequately conveyed the information mandated by the prescribed form (!!!)," BUT ... "the defendants failed to establish that the letter had been issued in duplicate ..." blah blah blah. Sounds like the script to a Monty Python skit to me.

Eddie

"Sounds like the script to a Monty Python skit to me."

That about sums up the world of No-Fault litigation which, thank the good lord, I have nothing to do with anymore.

NBlack

You're right, Richard. It sounds exactly like a MP skit--or something from "Hitchhiker's Guide to the Galaxy" (from http://www.imdb.com/title/tt0371724/quotes ):

The Book: Vogons. They are one of the most unpleasant races in the galaxy. Not actually evil, but bad-tempered, bureaucratic, officious, and callous. They wouldn't even lift a finger to save their own grandmothers from the ravenous Bug-Blatter Beast of Traal without orders signed in triplicate, sent in, sent back, lost, found again, queried, subjected to public inquiry, lost and finally buried in soft peat for three months and recycled as firelighter. On no account should you allow a Vogon to read poetry to you.

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