Statute of Limitations, HIPAA and Missed IMEs, EUOs
Generally, the statute of limitations for commencing an action to recover no-fault insurance benefits is six years from the date the claim becomes overdue, based on the fact that the action arises out of an alleged breach of the insurance contract. What happens when the action is against a self-insured entity in which there is no insurance contract to speak of? In 2007, the Second Department held that CPLR 213(2) (breach of contract) rather than CPLR 214(2) (liabilities imposed by statute without specific limitations) applied to self-insured entities, in Matter of ELRAC v. Suero.1 The court's rationale was that such an action "against a self-insured vehicle owner," while statutorily mandated, remains "contractual rather than statutory in nature."
The Appellate Term in both the First and Second departments subsequently applied the rationale of ELRAC, which concerned an uninsured/underinsured claim, to no-fault actions involving self-insureds. The only exception to this was the Appellate Term, Second Department's holding that the statute of limitations for a no-fault action against the Motor Vehicle Accident Indemnification Corporation (MVAIC) is three years.2 In 2011, the Appellate Division, First Department, switched gears and held that the statute of limitations for no-fault actions against self-insured entities is three years.3
Recently, the Appellate Term, Second Department in Contact Chiropractic v. New York City Tr. Auth.4 was asked to revisit this issue. Relying upon Matter of Manhattan & Bronx Surface Tr. Operating Auth. v. Evans5 and Mandarino v. Travelers Prop. Cas. Ins.,6 the court stood by its earlier decisions and held that the statute of limitations in a no-fault action against a self-insured entity is, in fact, six years.
Based on these decisions, the no-fault statute of limitations can be summarized as follows: For an action against an insurance company—six years; for an action against MVAIC—three years; for an action against a self-insured in the First Department—three years; and for an action against a self-insured in the Second Department—six years. Thus, if nothing else, the varying decisions from the courts will certainly keep practitioners in this field, both plaintiff and defendant alike, on their toes.
A continuing split between the departments also occurs with respect to Examinations Under Oath (EUO) and Independent Medical Examinations (IME). The no-fault regulations permit an insurer to request a claimant (both the injured person and his/her treating medical provider assignee) appear for an EUO, and to request an injured person appear for IMEs as necessary. If a claimant fails to appear for a scheduled EUO or IME, the insurer must schedule a follow-up exam, and if the follow-up exam is missed, without proper excuse, the insurer may deny the claim.
It had long been the holding in the Second Department that the defense of missed EUO or IME must be raised in a timely denial, or else it is deemed to be waived.7 The First Department held likewise.8 Recently, there have been several appellate decisions in both the First and Second departments addressing this issue.
In the Second Department, the cases include: Arco Med. NY v. Metropolitan Cas. Ins.9; Eagle Surgical Supply v. Allstate Indem.10; Megacure Acupuncture v. Lancer Ins.11; Olmeur Med. v. Nationwide Gen. Ins.12 and Five Boro Psychological Servs. v. Utica Mut. Ins.13 In all of these cases, the Appellate Term, Second Department, held, either explicitly or implicitly, that a timely denial based on missed IME or EUO is necessary to preserve such defense.
In Arco Med., the court dismissed certain bills as it found that the defendant insurer established its missed EUO defense and that it timely denied those bills on that basis. With respect to the remaining bills in that action, however, the court upheld judgment in favor of the plaintiff medical provider as the defendant insurer did not raise the missed EUO defense and did not preserve such defense in timely denials with respect to those remaining bills. Clearly, had the Appellate Term deemed that such a defense need not be preserved in timely denials, it would not have discussed the presence or absence of timely denials and would not have upheld the granting of partial summary judgment in favor of the plaintiff for those bills that were not timely denied on that ground.
In Eagle Surgical Supply, the court reaffirmed that a medical provider who ignores an EUO request, even one that is purportedly unwieldy and unduly burdensome, does so at its own peril, provided the EUO request and subsequent denial is timely. That case further held: 1) only business days are to be counted for purposes of determining the number of days a verification request is late; and 2) the 30-day period for denying a claim based on EUO no-show begins after the final missed EUO. In that case, the first EUO scheduling letter was sent 24 business days after receipt of plaintiff's claim, making the request nine days late. Pursuant to the no-fault regulations, the nine business day lateness in issuing the request simply reduced the time to pay or deny by nine days. As the defendant issued a denial 20 days after the final missed EUO, the court held it was timely, and therefore upheld dismissal of the action.
In Megacure Acupuncture, the court denied summary judgment in favor of the plaintiff with respect to certain bills which it found were timely denied on the basis of missed EUOs by the plaintiff. However, the court upheld the partial granting of summary judgment in favor of the plaintiff with respect to the balance of bills which were not timely denied and for which EUOs were not requested. In addition to reaffirming that a missed EUO defense must be raised in a timely denial in the Second Department, the court also reaffirmed that an insurer cannot make a blanket request for an EUO of a medical provider. Instead, a request for an EUO of the medical provider must be specific to each bill.
In Olmeur Med., the court, again, held that the defense of missed EUO of the assignor must be preserved in timely denials, and further held that a defect in a certificate of conformity for an out-of-state affidavit may be cured in reply papers, thus rendering a supporting affidavit sufficient to warrant summary judgment dismissal of the action.