Verification and Fee Schedule Defenses in No-Fault Litigation: Blackman v Nationwide

Key Takeaways

• In Blackman v Nationwide, the carrier proved timely initial and follow-up verification requests — but the provider’s generic “I mailed it” affidavit was enough to create a triable issue of fact on whether the verification was returned.
• The fee schedule defense did not have to be preserved in a timely denial because the services were rendered in 2015, after the April 1, 2013 amendment to 11 NYCRR 65-3.8(g).
• Mailing presumptions cut both ways: the same standard of proof that lets carriers establish mailing of denials lets providers establish mailing of verification responses.
• Summary judgment for the provider was reversed; both issues went back for trial.

Two recurring battlegrounds in no-fault litigation collide in this Appellate Term decision: outstanding verification as a defense that the claim is premature, and the fee schedule as a defense that the bill exceeds what the regulations allow.

The Decision

Blackman v Nationwide Ins., 2019 NY Slip Op 52038(U) (App. Term 2d Dept. 2019)

Two lessons. The Appellate Term is still finding the generic I mailed the verification affidavit sufficient to raise an issue of fact. Seems wrong to me. Secondly, the Judge Hackeling’s constitutional findings on FS predictability seem to be in doubt.

“Defendant demonstrated, prima facie, that it had timely mailed initial and follow-up requests for verification (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 ) and had not received the requested verification. However, the affidavit submitted by plaintiff in opposition to defendant’s motion was sufficient to give rise to a presumption that the requested verification had been mailed to, and received by, defendant (see Compas Med., P.C. v Praetorian Ins. Co., 49 Misc 3d 152, 2015 NY Slip Op 51776 ). In light of the foregoing, there is a triable issue of fact as to whether plaintiff provided the requested verification. Moreover, we find that, on this record, there is also a triable issue of fact as to defendant’s fee schedule defense, which defense, contrary to the finding of the Civil Court, defendant was not required to establish that it had preserved, as the services at issue were rendered in 2015 (see 11 NYCRR 65—3.8 ; ).

Accordingly, the judgment is reversed, so much of the order entered December 8, 2017 as granted plaintiff’s cross motion for summary judgment is vacated, and plaintiff’s cross motion for summary judgment is denied.”

The Legal Framework

Verification. Under 11 NYCRR 65-3.5 and 65-3.6, an insurer may toll its 30-day pay-or-deny clock by requesting additional verification within prescribed time frames, with a follow-up request required if the verification is not supplied. Until the requested verification is returned, the claim is not overdue, and an action on the bill is premature. The carrier’s prima facie showing is built on proof of mailing — either actual mailing or a standard office practice and procedure designed to ensure that items are properly addressed and mailed. The firm’s mailing and proof of service hub collects the cases on what those affidavits must say.

The presumption runs both ways. The same mailing jurisprudence gives a provider’s affidavit equal force. In Blackman, the provider’s affidavit that it mailed the requested verification triggered a presumption of receipt — enough to neutralize the carrier’s “never received” showing and send the question to trial. My own view, noted above, is that the generic version of these affidavits is being credited too readily; but the Appellate Term has been consistent.

Fee schedule preservation. Before April 1, 2013, a fee schedule defense generally had to be preserved in a timely denial or it was waived. The amendment to 11 NYCRR 65-3.8(g) changed that for later-rendered services: payment obligations extend only to charges permitted by the fee schedules, so an insurer may litigate the fee schedule even without a timely, specific denial. Because the Blackman services were rendered in 2015, the Civil Court’s insistence on preservation was error. The point dovetails with the court’s skepticism of the constitutional “predictability” analysis that Judge Hackeling had advanced below.

Why This Matters

For carriers, Blackman is a reminder that a verification defense that looks airtight on the moving papers can dissolve on opposition. The defense proves non-receipt by affidavit; the provider proves mailing by affidavit; the result is a trial. Carriers should pair the verification defense with substantive defenses — here, the fee schedule — so that a fact issue on one does not end the motion.

For medical providers, the decision confirms the value of contemporaneous, item-specific mailing records for verification responses. A provider that can swear to a standard mailing practice gets the same presumption of receipt that insurers enjoy. But providers should not assume a fee schedule challenge is waived by an imperfect denial — for post-April 2013 services, it is not.

For litigators on both sides, posture matters: it was the plaintiff’s cross motion for summary judgment that was reversed, with fact issues on verification and fee schedule each independently defeating it. The fee schedule defense hub traces how these disputes are actually tried.

Practice Pointers

1. Plead and prove both prongs of mailing. Whether you are mailing verification requests or verification responses, the affidavit should describe the office practice in detail — who generates the mail, how it is addressed, how it gets to the postal service.
2. Check the date of service before briefing preservation. For services rendered on or after April 1, 2013, do not concede that an unpreserved fee schedule defense is waived.
3. Carriers: document non-receipt. A claims affidavit that explains how incoming verification is logged makes the “never received” showing more durable against a mailing presumption.
4. Providers: respond to verification in writing and keep proof. Even a partial response, or a letter explaining why the demanded material does not exist, changes the litigation posture dramatically.

Frequently Asked Questions

Does an insurer have to preserve a fee schedule defense in its denial?

For services rendered on or after April 1, 2013, no. Under 11 NYCRR 65-3.8(g), the insurer’s payment obligation extends only to fee-schedule-compliant charges, so the defense survives even without a timely, specific denial. For earlier services, preservation rules still control.

What happens if a provider says it mailed verification but the insurer says it never arrived?

That is a triable issue of fact. A sufficient mailing affidavit from the provider raises a presumption of receipt, which collides with the carrier’s sworn claim of non-receipt — exactly the standoff in Blackman v Nationwide — and a judge or arbitrator must resolve it.

Why does outstanding verification defeat a no-fault lawsuit?

Because the 30-day period to pay or deny does not begin to run until all requested verification is received. If verification remains outstanding, the claim is not overdue, and the provider’s action is premature.

Related Resources

• Verification, the 120-day rule, and Chapa — the firm’s verification cluster hub
• Fee schedule defense in New York no-fault — the firm’s fee schedule cluster hub
• The firm’s Legal Encyclopedia
• No-Fault defense practice
• Mailing and proof of service in no-fault cases
• New York No-Fault Insurance Law