Proposed Changes to New York No Fault Regulation 68

The New York State Insurance Department has released a draft of sweeping Proposed Revisions of Regulation 68 (No Fault Regulation). 

These are the first major revisions since 2002 and follow "an intensive review of the Regulation by the Department's Office of General Counsel and it's Property Bureau, including meetings with representatives of insurers, health professionals, trial lawyers, health service providers, and other stakeholders."  According to the Insurance Department's Press Release, the revisions "aim to help reduce fraud and abuse associated with no fault claims, while making the no-fault system more user-friendly."  I'm not really sure if user-friendly is the appropriate phrase to use here.  The Regulation has always been an extremely complex beast, creating new court decisions on a constant basis.  I hardly think the revisions, some of which are listed below, will do anything but create more litigation.

The release of the 152-page draft is just the first step in the regulatory process.  The Department is allowing comments on these revisions, which will run until January 8, 2010.  You can post your comments directly to the Insurance Department via email NoFaultDraftReg@ins.state.ny.us or through the Department's webform specifically set up for comments on the revisions: www.ins.state.ny.us/r68/r68_draft_form.htm

The following are highlights of the proposed changes:

• Insurers must send their first verification requests within 14 calendar days of receiving a completed NF application (currently 15 business days).
• Requests for further verification must be sent by the insurer within 21 calendar days of receiving completed claim forms (currently 10 calendar days).
• New: there is a time limit on an applicant's response to verification requests: they must comply within 90 days (currently there was no time limit).
• New: insurers may issue denials based on failure to comply with verification requests within 90 days, but only based on those requests sent to the assignor or assignee.
• Insurers will be required to notify assignees that verification has been requested from a third party.
  
• IME requests do NOT delay pending bills.
• EUO dates must be scheduled to be held within 10 to 30 calendar days of the first verification request.
• Applicants must be advised of their right to expense and wage reimbursement for EUOs but insurers need not reimburse such until properly documented.
• EUO requests must set forth the subject matter of the EUO (e.g., staged accident) and the applicant's right to legal representation.  However, at the EUO, questions may cover any subject related to proof of claim.
  
• EUO requests will delay pending bills as well as bills received after the request is sent, and the delay stays in effect until the EUO is completed (or second no-show).
• Requests for EUOs of providers do delay all pending and subsequent bills until the EUO is completed (or second no-show).
• If the provider EUO is based on services rendered to a specific assignor, it only delays bills relating to that assignor.
• If the provider EUO is based on that provider's compliance with State licensing requirements, it delays all bills from that provider for all assignors.
• IME and EUO no-shows must be re-scheduled with a notice sent within 10 calendar days of the no-show, and the new date must be within 10 to 30 calendar days of the notice.
• IME and peer review reports must be signed by the health professional and cannot be modified by anyone other than that professional.  Insurers cannot request any change in the reports but can request addendums.
  
• IME or no-show denials must be forwarded to all known assignees.
• EUO denials must specify the "area" of the testimony that forms the basis of the denial.  All EUO denials (based on testimony or no-show) must be sent to all known assignees.
• Even if EUO or IME denials are sent, additional denials must be timely sent in response to all subsequent bills.
• The requirement of sending denials "in duplicate" is eliminated.
• Proof of claim is deemed to "not have been provided" if the services billed for were not actually provided or for that portion of charges which exceed the fee schedule.  (Implication: that a denial cannot be "untimely" in such circumstance?)
• No more prohibition on an insurer requesting that interest be waived or reduced, after suit or arb is filed.
• Assignments of benefits will be deemed to include a prohibition of the provider going back to the applicant for reimbursement of unpaid claims, unless the reason for non-payment is a violation of policy conditions by the applicant.
• All Terrain Vehicles are now included as vehicles for which no fault benefits apply.
• When the total of claims exceeds the policy limit, claims must be paid in the order in which "complete proof of claim" is provided (thus codifying case law which holds that it is not the order in which bills are received, but the order in which verification is completed, which determines priority of payment).
• Insurers are specifically not required to pay more than policy limits.
  
• Once the insurer receives an NF-2 or NF-5 and reasonably believes the applicant was injured in the course of employment, the insurer must forward a new Form NF-9 "Agreement To Pursue Workers Compensation Benefits" to the applicant.  This does not apply to independent livery drivers dispatched out of an independent livery base.   The NF-9 requires the applicant to pursue workers comp and get turned down before being eligible for no fault benefits and the no fault insurer need not issue a denial or pay benefits until the signed form is received and a turndown from the workers comp board is received.
  
• There is a new section devoted to MVAIC claims and procedure.
  
• The prescribed forms have been revised.

If you have any questions about the Proposed Revisions to the No Fault Regulation, or if you would like me to post a comment on your behalf to the New York State Insurance Department, please feel free to contact me, New York No Fault attorney Jeena R. Belil.