Hell: Experiencing Intermittent Flurries

Three highly important decisions were put out today by the Appellate Division, Second Department: A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 2007 NY Slip Op 03636 (App. Div., 2d Dep't, 2007); A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 2007 NY Slip Op 03635 (App. Div., 2d Dep't, 2007); and New York Univ. Hosp. Rusk Inst. v Government Employees Ins. Co., 2007 NY Slip Op 03671 (App. Div., 2d Dep't, 2007). These decisions reverse (both specifically and in practical terms) a host of Appellate Term, Second Department cases whereby it was held that a no-fault denial of claim form (NF-10) would be legally insufficient if it merely stated that said denial was based upon the results of a peer review or IME. That is, if a denial were based upon the results of a peer review or IME, the Appellate Term repeatedly held that a carrier had to issue a denial that either attached the peer/IME report or otherwise included the medical rationale of said report.

The Appellate Division's decision from today in A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co. sets out the thrust of their reversal of the Appellate Term:

"To the extent the Appellate Term's order may be understood to require an insurer denying a claim for first-party no-fault benefits on the ground of lack of medical justification to include a medical rationale in its denial of claim form, we agree with the defendant that the court erred. The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request (see 11 NYCRR 65-3.8[b][4]). Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form (see NYS Form N-F 10; 11 NYCRR 65-3.4[c][11]), it would have so provided."

This is a seismic change with a level of force far beyond the Richter Scale in the realm of no-fault medical necessity litigation and arbitrations. It also solidifies a trend by the Appellate Division to pull back the reins on some of the more "creative" Appellate Term decisions.

I expect to see a legion of defense attorneys waving these decisions around in court tomorrow...