In 2008, the Court of Appeals, in Fair Price Medical Supply Corp. v. Travelers Indem. Co.1 set down what was then perceived as a “bright line” rule concerning the application of the “30-day preclusion rule”2 to various coverage defenses. In sum, the Court held that if the application of the preclusion rule would create coverage where it never existed, then the rule should not apply. However, where there is “an actual accident and actual injuries…coverage legitimately came into existence,” and any defenses not relating to those two facts are precludable.

While Fair Price dealt with the precludable defense that the billed-for services were never provided, it remained to be seen how the case would be applied to other fraud-related and coverage defenses. In the following years, the Appellate Divisions addressed some of these other defenses. In Globe Surgical Supply v. GEICO Ins. Co.,3 the Second Department applied Fair Price to preclude the defenses of overbilling and invoice recycling. In Kingsbrook Jewish Medical Center v. Allstate Ins. Co.,4 the Second Department applied Fair Price to disputes concerning billing codes utilized by a medical provider. Again in Westchester Medical Center v. Lincoln General Ins. Co.,5 the Second Department precluded an insurer’s entitlement to offset any no-fault benefits by any recovery pursuant to a Workers’ Compensation claim, for the insurer’s failure to timely disclaim.

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