Additional Verification in No-Fault: What Counts as a Proper Response (Excel Surgery v Fiduciary)

Additional verification requests are a critical component of New York No-Fault Insurance Law, serving as insurers’ primary tool to validate medical claims and prevent fraud. When healthcare providers receive these requests, their response can make or break their ability to recover payment. The quality and specificity of the response often determines whether a provider has met their legal obligations under the no-fault system.

A recent appellate court decision illustrates the importance of providing targeted, specific responses to verification requests rather than broad, general statements about record availability. This case demonstrates how even well-intentioned responses can fail to satisfy legal requirements when they lack the necessary specificity and directness that courts demand.

Key Takeaways

• A verification response must address the specific items the carrier requested — a general statement about record-keeping practices is not enough.
• In Excel Surgery v Fiduciary, the provider’s letter saying it did “not possess all the medical records” and redirecting the carrier to the treating provider was held insufficient.
• A provider that states it does not possess a specific requested item lands in different territory — the Mt. Sinai v Autoone line of cases.
• Until verification is properly responded to, the carrier’s time to pay or deny does not run and the claim does not ripen into a lawsuit.

The Decision

Excel Surgery Ctr., L.L.C. v Fiduciary Ins. Co. of Am., 2017 NY Slip Op 50408(U)(App. Term 2d Dept. 2017)

“n response to defendant’s verification requests, plaintiff informed defendant, by letter, that plaintiff was an ambulatory facility and, as such, did “not possess all the medical records,” advising defendant to “request any additional information directly from the treating provider.” Plaintiff’s response did not refer to any specific request or state that plaintiff was not in possession of any of the items requested by defendant. Thus, plaintiff did not demonstrate that it had sufficiently responded to defendant’s verification requests”

So assume Plaintiff said we do not have the exact record? Different result as that would place the case into the Mt. Sinai v. Autoone category.

The Verification Framework

Under the no-fault regulation, 11 NYCRR 65-3.5, a carrier may seek additional verification of a claim within prescribed time frames after receiving the proof of claim. The request tolls the carrier’s 30-day window to pay or deny under 11 NYCRR 65-3.8. Until the requested verification is supplied — or the provider properly responds that it cannot supply it — the claim is not overdue, and any lawsuit commenced in the interim is premature.

That tolling rule is what gives this decision its bite. The provider in Excel Surgery did respond; the problem was the content of the response. A letter stating that, as an ambulatory surgery facility, it did “not possess all the medical records” said nothing about whether the facility possessed any of the particular items the carrier actually asked for. The Appellate Term treated that as no meaningful response at all.

The contrast the post draws with the Mt. Sinai v Autoone category matters. A provider that tells the carrier, item by item, “we do not have this record and cannot obtain it” has done what the regulation contemplates: it has either supplied the verification or explained why it cannot. A provider that issues a generic disclaimer and points the carrier elsewhere has done neither.

Why This Matters for Providers and Carriers

For medical providers and their billing departments, this case is a warning that form-letter responses to verification requests are a litigation trap. Ambulatory surgery centers, anesthesiologists, and other facility-based providers frequently receive requests for records generated by other treating professionals. The instinct to say “we don’t keep those records — ask the surgeon” is understandable, but unless the response is keyed to each specific item requested, the toll remains in place and the ensuing lawsuit will be dismissed as premature.

For carriers and defense counsel, Excel Surgery confirms that a vague or deflecting response does not restart the pay-or-deny clock. A defendant that can document its timely initial and follow-up verification requests, and show that the plaintiff’s response never engaged with the specific items sought, has a clean prematurity defense on summary judgment. This is consistent with the broader verification and 120-day rule framework that governs what each side must do before a no-fault claim becomes justiciable.

Practice Pointers

For providers:

• Match your response to the request. Quote or list each item the carrier asked for and answer each one: produced, not in our possession, or not applicable.
• If you genuinely do not possess a record, say so expressly as to that item. That specific statement is what moves you into the Mt. Sinai v Autoone category rather than the Excel Surgery category.
• Keep proof of mailing for every verification response, just as carriers must for their requests.

For carriers:

• Calendar both the initial and follow-up verification requests; the follow-up is what keeps the toll alive.
• When a provider sends a generic “we are only a facility” letter, do not treat the claim as ripe — but also do not ignore it. Document why the response fails to address the specific items.
• On a prematurity motion, put the verification letters, the provider’s response, and a comparison of the two before the court.

Related Resources

• Verification, the 120-day rule, and when no denial is required (Chapa)
• Another verification again
• The failure to respond to ALL of the requested verification renders lawsuit premature
• Partial response to verification insufficient
• Additional verification non-receipt
• The firm’s Legal Encyclopedia
• No-Fault Defense practice

Frequently Asked Questions

What happens if a medical provider ignores a no-fault verification request?

The claim never becomes overdue. The carrier’s 30-day period to pay or deny is tolled while verification remains outstanding, so a lawsuit filed before the provider responds will generally be dismissed as premature. The provider must either supply the requested items or specifically state that it does not possess them.

Is telling the insurer “we don’t have all the records” a sufficient verification response?

No. Under Excel Surgery v Fiduciary, a general statement that a facility does not possess “all the medical records,” coupled with a referral to the treating provider, is insufficient because it does not address any specific requested item. The response must engage with each item the carrier actually asked for.

What should a provider do if it truly does not possess a requested record?

State that expressly, item by item. A specific representation that the provider is not in possession of the exact record requested places the case in the Mt. Sinai v Autoone category, where the carrier must then act on the claim rather than holding it open indefinitely.