OGC Opinion No. 04-03-08: Submission of No-Fault Claims

OGC Op. No. 04-03-08

The Office of General Counsel issued the following opinion on March 10, 2004, representing the position of the New York State Insurance Department.

Re: Submission of No-Fault Claims

Question

When a health service provider submits a claim to an insurer for No-Fault reimbursement more than 180 days after a health service is performed, must the insurer consider that claim?

Conclusion

No. A claim submitted more than 180 days after a health service is performed violates the requirements of both the current No-Fault Regulation 68 and its predecessor regulation. However, pursuant to Section 5106(a) of the Insurance Law, the insurer must formally issue a denial of the late claim within 30 days of the claims receipt.

Facts

The inquirer questioned whether there was a legal authority for a No-Fault insurer to refuse to consider payment of what the inquirer categorized as an "old" claim submitted more than 180 days after the health service was performed. For purposes of the inquirers question, the Department is assuming that these claims were submitted based upon policies issued prior to April 5, 2002, when the old version of Regulation 68 was in effect.

Analysis

Pursuant to the prescribed No-Fault endorsement contained in the former No-Fault regulation, N.Y. Codes R. & Reg. tit. 11 § 65.12(e), under the Proof of Claim conditions, it is required that "In the case of a claim for health service expenses, the eligible injured person or that persons 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 extent later than 180 days after the date services are rendered or 180 days after written notice was given to the Company, whichever is later". Under the clear terms of this provision, the health claims that the inquirers company submitted in excess of the 180 day period would be in violation of the policys proof of claim provision.

However, pursuant to N.Y. Ins. Law § 5106(a) (McKinney 2000), "Payments of first party benefits and additional first party benefits shall be made as loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained." Since the health provider did not provide timely proof of claim, the insurer has a 30 day period in which to issue a denial of claim based upon the lack of timely submission. The failure of a No-Fault insurer to issue a timely denial would serve to preclude such insurer from asserting the defense of lack of timeliness in submission of the claim.

Please note that in the current No-Fault regulation, effective for all policies renewed or issued on or after April 5, 2002, the period of time for submission of claim by a provider has been reduced from 180 days to 45 days.