New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on October 5, 2001, representing the position of the New York State Insurance Department.

RE: Copy Fees for Verification Requests.

Question Presented:

When a health service provider has submitted a bill to an automobile insurer for No-Fault insurance benefits, after receiving an assignment of benefits from an eligible injured person, and the insurer delays payment of the bill pending receipt of requested verification of the of the claim, is the health service provider responsible for reproduction costs incurred in providing the verification?

Conclusion:

Yes.

Facts:

In illustration of the inquirer’s question the inquirer provided examples where an insurer’s requested verification would take the form of copies of a physician’s narrative report and copies of a hospital’s medical records. The inquirer stated that it was its initial conclusion that the health service provider must bear the cost of copying these records and providing them as requested by the insurer. The inquirer cited N.Y. Comp. Codes R. & Regs. tit. 11, §§ 65.15(d)(1) (1991), 65.15(g)(7) (1992), and 65.12 (1992) (Regulation 68) as the basis for its conclusion. The inquirer stated that these provisions of Regulation 68 contain "language that an insurer is ‘entitled’ to receive all information regarding the eligible injured party’s condition from the applicant for benefits (i.e. the physician or the hospital)."

Analysis:

It is the obligation of the applicant for No-Fault benefits to provide the insurer with "written proof of claim" concerning the elements of the claim. N.Y. Ins. Law §5106(a) (McKinney 2000) is the statutory basis for this obligation, and states in pertinent part: "(a) Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of the loss sustained."

N.Y. Comp. Codes R. & Regs. tit. 11, § 65.12 (1992) (Regulation 68) contains the "Proof of Claim" provision under "Conditions" of the prescribed No-Fault endorsement. The "Proof of Claim" provision implements the claimant’s statutory obligation to provide "written proof of claim" to the insurer and it is quoted in pertinent part below:

Proof of Claim: Medical, Work Loss, and Other Necessary Expenses. In the case of a claim for health service expenses, the eligible person or that person’s representative shall submit written proof of claim to the Company, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable, but in no event later than 180 days after the date services are rendered or 180 days after the date written notice was given to the Company, whichever is later.

The "Proof of Claim" provision provides the claimant or his or her assignee health service provider with an initial obligation to provide necessary information regarding the injured party’s treatment and injuries to the insurer in that party's application for No-Fault benefits. The insurer is also entitled to receive additional information to verify the claim from the claimant. N.Y. Comp. Codes R. & Regs. tit. 11, § 65.15(d)(1) (1991) (Regulation 68) states:

(d) Claim Procedure. (1) Within 10 business days after receipt of the completed application for motor vehicle No-Fault benefits, the insurer shall forward to the parties required to complete them, those prescribed verification forms it will require prior to payment of the initial claim. The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested. (Emphasis added)

The eligible injured person's application for No-Fault benefits and all documentation and information provided to the insurer are components of the required "written proof of claim". The obligation to supply the "written proof of claim" consistently remains with the party claiming No-Fault benefits. Accordingly, the obligation to bear the costs of copying records to comply with a verification request will always remain with the eligible injured person or assignee health service provider.

For further information, you may contact Senior Attorney Robert Freedman at the New York City office.