The following papers numbered 1 to 4 were read on this petition by MVAIC to vacate the master arbitrator's award dated September 23, 2010.

Papers

Numbered

Notice of Petition-Petition-Affidavits-Exhibits...........1-2

Opposition-Affidavits-Exhibits ...........................3

Reply ....................................................4

Upon the foregoing papers it is ordered that the petition is resolved as follows:

On or about February 3, 2007, Wei Long Bai (Bai) was involved in a motor vehicle accident. On February 13, 2007 Bai underwent an initial comprehensive neurological examination by Dr. Noel Fleischer. On February 20, 2007 and February 24, 2007, Bai under went a cervical MRI and a lumbar MRI at Stand-Up MRI of Manhattan, P.C. (Stand-Up). Stand-Up submitted a claim to MVAIC on March 13, 2007. On March 23, 2007, MVAIC sent to Stand-Up its initial request for additional verification, including the attending physician's narrative and a letter of medical necessity. On April 23, 2007, MVAIC sent to Stand-Up a follow-up request since it had not received the requested information.

By letter dated May 19, 2009, Stand-Up informed MVAIC that Dr. Fleischer "does not and will not write separate letters of medical necessity". Stand-Up also provided MVAIC with Dr. Fleischer's [*2]February 13, 2007 report and follow-up progress notes from February 17, 2007 through May 25, 2007. On June 3, 2009, MVAIC again informed Stand-Up that resolution of the claim was still pending since it never received a narrative report or letter of medical necessity.

Thereafter, Stand-Up filed for arbitration against MVAIC with the American Arbitration Association. On May 13, 2010, an arbitration hearing was held before Walter P. Higgins, Esq., wherein MVAIC contended that Stand-Up's claim forms were not complete and thus its time to have to pay or deny the claim did not begin. On June 11, 2010, the arbitrator rendered an award against MVAIC, finding that Stand-Up established a prima facie entitlement by proof it submitted completed claim forms setting forth the fact and amount of losses sustained and that payment of no-fault benefits was overdue. The arbitrator stated that MVAIC failed to pay or deny the claim within the 30-day claim determination period or thereafter.

MVAIC appealed to a Master Arbitrator, Robyn D. Weisman, Esq., arguing that the decision was arbitrary, capricious and irrational as a matter of law because the arbitrator ruled that Stand-up was entitled to reimbursement even though it failed to fully respond to requests for verification. The Master Arbitrator affirmed the decision in her award dated September 23, 2010, stating that Stand-Up provided a detailed narrative of the physician who referred the patient and explained that the physician would not write a separate letter of medical necessity and that it was not in Stand-Up's power to obtain one. Thus, the Master Arbitrator stated the lower arbitrator did not exceed his power or decide the case arbitrarily and once MVAIC was aware that Stand-Up was unable to obtain a letter of medical necessity, MVAIC had a duty to pay or deny the claim.

MVAIC currently moves to vacate this award. MVAIC argues that the information it sought was both necessary and proper to determine the status of the claim. MVAIC states that Dr. Fleischer's refusal to justify in a letter of medical necessity the need for the MRI does not prejudice its right to the information.

In opposition, Stand-Up argues that it provided MVAIC with sufficient documentation for it to make a determination and that it failed to do so within 30 days, as required by 11 NYCRR 65-3.8.

The Appellate Division, in Shand v Aetna Ins. Co. (74 AD2d 442 [2d Dept., 1980]), held that all no-fault arbitration determinations are to be reviewed as if they were "compulsory arbitration" regardless of whether the review is requested by the [*3]insurance carrier, which is compelled to submit to arbitration, or the claimant, which is not compelled to submit to arbitration. Thus, judicial review of the arbitration award applies an arbitrary and capricious standard which includes whether the arbitrator "exceeded his power" pursuant to CPLR § 7511 [b][1][iii] and whether any rational basis whatsoever exists to support the arbitrator's determination (see Motor Vehicle Acc. Indemnification Corp. v Aetna Cas. & Sur Co., 89 NY2d 214 [1996]; Cady v Aetna Life & Cas. Co., 96 AD2d 967 [3d Dept., 1983]).

The purpose of the no-fault statute is to ensure prompt payment of claims by accident victims (see Presbyterian v Maryland, 90 NY2d 274 [1997]). In ensuring that legitimate accident victims receive swift compensation, the regulations are strictly construed and insurance companies have strict guidelines to follow (see Presbyterian Hosp. in City of NY v Aetna Cas. & Sur. Co., 233 AD2d 431 [2d Dept., 1996]). The Insurance Law and the regulations promulgated thereunder provide that within thirty (30) calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part (see Insurance Law 5106[a]; 11 NYCRR 65-3.8[c]). An insurer may extend this 30-day period if, within 15 business days after receipt of the claim, the insurer sends a request for further verification of the claim (11 NYCRR 65-3.5[b]). If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 calendar days of the insured's failure to respond (11 NYCRR 65-3.6[b]). The 30-day period which the insurer has to either pay or deny the claim does not begin to run until all demanded verification is provided (11 NYCRR 65-3.8[a][1]). An insurer is precluded from issuing a denial while a verification request is outstanding (11 NYCRR 65-3.8[b][3]). However, once an insurer receives information from a claimant in response to its request, the insurance company is required to act on the response. That action could be to pay the claim, deny the claim, or request further verification if it finds the provided response insufficient. The verification, however, does not remain outstanding simply because the insurer only received some of the material it requested (see Westchester County Medical Center v NY Central Mutual Fire Ins Co., 262 AD2d 553 [2d Dept., 1999; All Health Med Care, P.C. v GEICO, 2 Misc 3d 907 [Civ Ct,. Queens County, 2004]).

Here, even under the close scrutiny which this Court must view the arbitrator's determination (see Matter of Motor Vehicle Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214 [1996]), the decision of the arbitrator, as confirmed by the Master Arbitrator, finds ample evidentiary support in the record and was not arbitrary, capricious, without a rational basis, or incorrect as a [*4]matter of law. The claimant responded to MVAIC's requests for verification and its response constituted good faith in that it included the narrative reports of the treating neurologist. Once MVAIC received the neurologist's reports and notice that the neurologist would not provide a letter of medical necessity, the subsequent verification request asking for the same items was pointless. At that point, as concluded by the arbitrator, MVAIC had a duty to either pay or deny the claim. If MVAIC thought the there was insufficient proof to establish medical necessity for the procedure, it was within its rights to deny the claim. Its failure to timely deny the claim serves as a proper basis to sustain the award.

Thus, there is nothing to warrant a vacatur of the award. Accordingly, the petition to vacate the arbitration award is denied, the arbitration award is confirmed and Stand-Up is granted leave to enter judgment accordingly.

Dated: June 29, 2011________________________

Index No.: 335/11J.S.C.