DECISION AND ORDER Plaintiff State Farm Mutual Automobile Insurance Company (“SFMAIC”) and State Farm Fire and Casualty Company (“SFFCC”) moves for an Order granting SFMAIC and SFFCC summary judgment pursuant to CPLR §3212. Defendant Fast Care Medical Diagnostics, P.L.L.C., cross-moves for an Order pursuant to CPLR 3211§(a) (7) to dismiss the action on the basis that the pleadings fail to state a cause of action against Defendant. Plaintiffs argue that they have demonstrated that because Fast Care Medical Diagnostics failed to provide SFMAIC and SFFCC within 120 days, additional verification that was timely requested pursuant to 11 N.Y.C.R.R. S 65-3.5, based on the testimony of Iosif Aronov, M.D. at an Examination Under Oath (“EUO”) held on January 31, 2018 and February 27, 2018, SFMAIC and SFFCC are entitled to summary judgment. Defendant argues that the Plaintiff has failed to state a cause of action and that Plaintiffs have intentionally and willfully breached their contract with Defendant by failing to timely and properly pay the first party beneficiary claims of Defendant under New York Insurance Law and the No-Fault Implementing Regulations promulgated under Insurance Law §5106 (a); 11 NYCRR 65-3.8. The Court has carefully considered the Plaintiffs motion, Defendants Affirmation in Opposition, Defendants cross-motion, Plaintiffs opposition to the cross-motion and reply to their motion and Defendant’s Affirmation in Reply. In support of the motion, Plaintiff has submitted to the Court affidavits by SFMAIC and SFFCC Claim Specialist Bill Wynne, attesting to SFMAIC and SFFCC’s written requests for the production of documents ; Special Investigative Unit (“SIU”); Investigator Gwendolyn Harrison, describing SFMAIC and SFFCC’s investigation into Defendant; and SFMAIC and SFFCC Supervisor-Claims Support Lisa Edwards, attesting to SFMAIC and SFFCC’s mailing procedures regarding the verification letters and denials based on the 120 Day Rule. PROCEDURAL HISTORY On or about January 31, 2019, Plaintiffs commenced the matter at Bar with service of a Summons and Verified Complaint regarding more than $38,620.82 in billing for healthcare services that has been submitted to SFMAIC and SFFCC. Plaintiffs moved for default judgment against Defendant on April 8, 2019. Defendant alleges that was the first time that they learned of this action. Defendants Answer was filed and served on April 24, 2019, along with Defendant’s Demand for Written Interrogatories, Notice for Discovery and Inspection, Witness Discoveries and Notice foe Examination Before Trial. Plaintiff was instructed to respond to the interrogatories within twenty (20) days in compliance with CPLR §3131 and §3132. On May 2, 2019, no appearance was made by Plaintiffs on the motion calendar. As such, the motion was marked off. Plaintiffs now move for summary judgment because Defendant failed to provide the outstanding additional verification that was timely requested pursuant to 11 N.Y.C.R.R.§65-3.5 and maintain that they timely and properly denied the claims. At an Examination Under Oath, Plaintiffs queried Iosif Aronov, M.D. concerning the eligibility of Fast Care Medical Diagnostics, P.C. to collect no-fault reimbursement. Plaintiff then requested documents to confirm Aronov’s testimony, and/or to resolve any questions which Aronov was not able to answer with sufficient detail during his testimony regarding a variety of issues. Plaintiff asserts that Defendant has failed to provide all of the documents requested, specifically: (I) copies of documents relating to the income and expenses of Fast Care Medical Diagnostics, including bank statements, cancelled checks, and general ledgers, for the period of time from January 1, 2017 through the present; and (ii) copies of Fast Care Medical Diagnostics’ Federal, New York State, and New York City corporate income tax returns. Plaintiffs point to Aronov’s EUO at which he testified, among other things that: (I) he is not a radiologist but is the eighty-percent (80 percent ) co-owner of Fast Care Medical Diagnostics and another MRI provider, Aris Diagnostic Medical, P.L.L.C. (“Aris Diagnostic Medical”); (ii) Aris Diagnostic Medical and Fast Care Medical Diagnostics’ co-owner radiologists were granted just twenty percent (20 percent ) ownership, without having to make any initial investment; (iii) the co-owner radiologists merely performed the reads for the MRI films; (iii) Fast Care Medical Diagnostics and Aris Diagnostic Medical receive a significant number of patient referrals as the result of relationships developed through numerous marketing companies paid by Fast Care Medical Diagnostics and Aris Diagnostic Medical; and( iv) Fast Care Medical Diagnostics pays no less than five separate entities for “marketing” services. After Fast Care Medical Diagnostics’ appearance at an EUO on January 31, 2018 and February 27, 2018, beginning in March, 2018, SFMAIC and SFFCC elected to make formal requests for written verification from Defendant, and made such requests in connection with the claims listed in the Complaint. These requests were made in accordance with the insurance policies under which the claims were submitted, and pursuant to the No-Fault Laws. Each written verification request from SFMAIC and SFFCC to Fast Care Medical Diagnostics was timely made and sought items necessary to verify the claims pursuant to 11 N.Y.C.R.R.§65-3.5©. Id. Each request advised Defendant or its obligations under 11 N.Y.C.R.R. S 65-3.5(0) and that SFMAIC and SFFCC may deny the claim if Defendant fails to comply with its obligations. Plaintiffs concede that Defendant has provided some documentation, but it has not provided all of the documents requested by SFMAIC and SFFCC pursuant to II N.Y.C.R.R. S 65-3.5, including pertinent financial records. Plaintiffs allege that to date, pursuant to 11 N.Y.C.R.R. S 65-3.5(0), Fast Care Medical Diagnostics, has failed to comply with the verification requests by providing all of the requested verification under Fast Care Medical Diagnostics’ control or possession within 120 calendar days of the original request or by providing written proof providing reasonable justification for its failure to comply. Defendant alleges that as Plaintiff has never responded to their Demand for Written Interrogatories, Notice for Discovery and Inspection, Witness Discoveries and Notice for Examination Before Trial, and as such, the Plaintiffs motion is premature as discovery is outstanding. STATUTORY AUTHORITY AND APPLICABLE CASE LAW It is well established that on a motion for summary judgment, the movant must establish its defense or cause of action sufficiently to warrant a court’s directing judgment in its favor as a matter of law. See Zuckerman v. City of New York, 49 N,Y,2d 557,427 N.Y.S.2d 595 (1980); see also Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065,416 N.Y.S.2d 790 (1979); see further Stewart Title Insurance Company v. Equitable Land Services, Inc., 207 A.D.2d 880, 616 N.Y.S.2d 650 (2nd Dept. 1994). The party opposing the motion, on the other hand, must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which the opposing claim rests. See Zuckerman v. City of New York, supra; Stewart Title Insurance Company v. Equitable Land Services, Inc., supra; Reyes v. Rental’ Development, 207 A.D.2d 336, 615 N.Y.S.2d 425 (2nd Dept. 1994); Romano v. Vincent’s Medical Center of Richmond, 178 A.D. 2d 467, 577 N.Y.S. 2d 311 (2nd Dept. 1991). The party opposing the summary judgment motion must lay bare affirmative proof demonstrating that the matters he or she alleges are real and capable of being established at trial. See Archambault v. Martinez, 120 A.D.2d 632, 502 N.Y.S.2d 234 (2nd Dept. 1986). Mere conclusions or unsubstantiated allegations are insufficient to raise a triable issue. See Gilbell Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 525 N.Y.S.2d 793 (1988). Pursuant to 11 N.Y.C.R..R.§65-3.5©, the Regulations expressly permit an insurer “to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” In addition, 11 N.Y.C.R.R. §65- 1.1(d), includes a section entitled “Conditions” which states, in part, that a healthcare provider that takes an assignment of benefits from an eligible injured person shall — upon request by the Company — submit to an EUO and “provide any other pertinent information that may assist the Company.” Additional verification includes all information that is necessary for the insurer to determine whether the claim submitted by the healthcare provider is payable. See Nyack Hosp. v. General Motors Acceptance Corp., 27 A.D.3d 96, 808 N.Y.S.2d 399 (2nd Dept. 2005). The Regulations do not limit the areas of inquiry that may be addressed through the claim verification process. More specifically, II N.Y.C.R.R.§65-3.5 states in relevant part: (b) Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms. Any requests by an insurer for additional verification need not be made on any prescribed or particular form…. © The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested. e) All examinations under oath and medical examinations requested by the insurer shall be held at a place and time reasonably convenient to the Plaintiff and medical examinations shall be conducted in a facility properly equipped for the performance of the medical examination …. Furthermore, 11 N.Y.C.R.R.§65-3.8(a)(1) states: No-Fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, which shall include verification of all of the relevant information requested pursuant to section 65-3.5 of this subpart. In the case of an EUO or a medical examination, the verification is deemed to have been received by the insurer on the day the examination was performed. Additional verification includes all information that is necessary for the insurer to determine whether the claim submitted by the healthcare provider is payable. See Nyaek Hospital, 808 N.Y.S.2d at 402; See also Hospital for Joint Diseases v. State Farm Mutual Automobile Insurance Company, 8 A.D. 3d 533, 779 N.Y.S.2d 534, 536 (2nd Dept. 2004). The No-Fault Regulations allow insurers to deny claims where medical providers fail to provide requested verification. 11 N.Y.C.R.R. §65-3.5(0), which applies to claims for services that are provided on or after April 1, 2013, states that healthcare providers shall provide requested verification within 120 days of the date of the initial verification request, or submit written proof providing reasonable justification for their failure to do so. 11 N.Y.CR.R. 965-3.5(0) also provides that insurers must advise medical providers of their obligations to submit either the requested verification or written proof providing reasonable justification for same within 120 days. Insurers that comply with 11 N.Y.CR.R. §65-3.5(0) may deny claims where providers fail to comply with their obligations. However, an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the provider has not submitted all such verification under the provider’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the provider as required in section 65-3.5(0) of this Subpart. See 11 N.Y.CR.R. §65-3.8(b)(3). It is well settled that a timely request for additional verification tolls the time for an insurer to pay or deny the claim of a healthcare provider until such time as the insurer is provided with all of the relevant requested information. See NY Ins. Law 95106[a); 11 N.Y.C.R.R. §65-3.8(a)(2); See Montefiore Medical Center v. Government Employees Ins. Co., 34 A.D.3d 771,826 N.Y.S.2d 616 (2nd Dept. 2006); see also New York and Presbyterian Hosp. v. Allstate Ins. Company, 31 A.D.3d 512, 513, S18 N.Y.S.2d 583, 584 (2nd Dept. 2006). Likewise, Courts have routinely held that an insurer may seek additional verification after testimony at an EUO raises additional concerns and questions. See ANALYSIS Here, Defendant Fast Care Medical Diagnostics has failed to provide the additional verification that Plaintiffs SFMAIC and SFFCC timely demanded in connection with its review and analysis of the claim at issue, as required by 11 N.Y.CR.R. §65-1.1 and §65-3.5. Specifically, SFMAIC and SFFCC sought, and Fast Care Medical Diagnostics failed to provide the following documentation: (I) copies of documents relating to the income and expenses of Fast Care Medical Diagnostics, including bank statements, cancelled checks, and general ledgers, for the period of time from January 1, 2017 through the present; and (ii) for 2017, copies of Fast Care Medical Diagnostics’ Federal, New York State, and New York City corporate income tax returns. Recent changes to the No-Fault Regulations allow insurers to deny claims where medical providers fail to provide requested verification. The New York State Department of Financial Services promulgated the Fourth Amendment to 11 N.Y.C.R.R. §65-3. The Fourth Amendment to the Regulations inserts 11 N.Y.C.R.R.§65-3.5(0), which provides that medical providers shall provide requested verification within 120 days of the date of the initial verification request, or submit written proof providing reasonable justification for their failure to do so. Concomitantly, the same provision provides that insurers must advise medical providers of their obligations to submit either the requested verification or written proof providing reasonable justification for same within 120 days. Insurers that comply with 11 N.Y.C.R.R. §65-3.5(0) may deny claims where providers fail to comply with their obligations. See 11 N.Y.C.R.R. S 65-3.8(b)(3). The verification request letters sent by Plaintiffs advised Defendant of its obligations under 11 N.Y.C.R.R.§65-3.5(0) and that SFMAIC and SFFCC may deny the claim if Fast Care Medical Diagnostics fails to comply with its obligations. As Fast Care Medical Diagnostics failed to either provide all requested verification or submit written proof providing reasonable justification for same, pursuant to 11 N.Y.C.R.R.§65-3.8(b)(3), SFMAIC and SFFCC was entitled to deny Fast Care Medical Diagnostics’ claim. Recently, numerous courts have granted judgment to Plaintiffs and upheld SFMAIC and SFFCC’s denials based on a provider’s failure to provide post-EUO verification pursuant to 11 N.Y.C.R.R.§65-3.5(0). While Defendant contends that it is necessary to complete discovery in order to properly oppose the motion and that the motion is premature. However, Defendant has not moved to compel discovery. CONCLUSION Here, Plaintiffs SFMAIC and SFFCC specifically advised Defendant Fast Care Medical Diagnostics of its obligations under 11 N.Y.C.R.R. §65-3.5(0) and that SFMAIC and SFFCC may deny the claims if Fast Care Medical Diagnostics failed to comply with SFMAIC and SFFCC’s post-EUO verification requests. Fast Care Medical Diagnostics failed to either provide the necessary documents/information requested by SFMAIC and SFFCC or submit written proof providing reasonable justification for same, within 120 days of the original request. Accordingly, SFMAIC and SFFCC is entitled to summary judgment. For the reasons set forth herein, Plaintiffs SFMAIC and SFFCC’s motion for summary judgment is GRANTED as Plaintiffs have clearly established that it timely and properly denied Defendant’s claims based upon Defendant’s failure to provide the necessary documents/ information requested by SFMAIC and SFFCC or submit written proof providing reasonable justification for same, within 120 days of the original request. This constitutes the Decision and Order of this Court.
