Feroleto Law, Buffalo NY

No-Fault Providers Need Not Bill After a Denial

In State Farm v. Domotor 266 A.D.2d 219 (2nd Dept. 1999) the court held that after the no-fault carrier issues a denial of payment there is no need for the medical provider to send bills to the carrier. After the denial the provider can later litigate or arbitrate the bills for services provided after the denial without having to send in bills to the carrier.

In Domotor the court held that “An insured’s failure to provide timely written proof of loss is generally an absolute defense to an action to recover on the policy (see, Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201). However, this absolute defense may be waived (see, Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., supra; Treptow v Exchange Mut. Ins. Co., 106 AD2d 767). An insurance carrier may not insist upon adherence to the terms of its policy after it has repudiated liability on the claim by sending a letter disclaiming coverage (see, Rajchandra Corp. v Title Guar. Co., 163 AD2d 765, 769) for ‘[o]nce an insurer repudiates liability * * * the [in]sured is excused from any of its obligations under the policy’ (Ocean-Clear, Inc. v Continental Cas. Co., 94 AD2d 717, 718).”

In Domotor the carrier notified the appellant in December 1989 that it was denying all nofault benefits based upon the opinion of its medical expert that the patient  no longer required treatment. The court held that his disclaimer excused the medical provider from time limitations for submitting medical proofs of loss.  Rather, the insurance carrier “must `stand or fall upon the defense upon which it based its refusal to pay’ * * * i.e., because `no treatment [was] necessary'”