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Estoppel through Box #16



Some practioners called Box #16 the trap box. Hit independent contractor and you are dead. I always said wait a second. Just resubmit the bill, give a justification and you should get around the 45-day rule. However, do not make the mistake too often or the 45-day rule may become absolute. I also have said that on certain fee code issues, i.e., the “BR” codes, the same rule applies. Resubmit with the pertinent documentation and you should be alright.

Yet, there was always a displeasure I has towards Box #16 issues when the Claimant decided to fight the independent contractor issue through affidavit. The reason, as the Appellate Term said, was that all other defenses would be waived.

A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co.
2008 NYSlipOp 28528 (App. Term 2d Dept. 2008)

“In the case at bar, the claim forms at issue state that the treating professionals were independent contractors. Contrary to plaintiff’s contention, the allegation that said treating professionals were actually employees, and that the claim forms contain misinformation, is irrelevant. Plaintiff did not submit bills that entitled it to payment, and correction of the defect involved herein should not be permitted once litigation has been commenced”

The Court then said something which I found fasciniating and I think can be used in a litany of situations:

“An insurer should be able to rely on the assertions in the claim form, and, in keeping with the aim of “provid[ing] substantial premium savings to New York motorists” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]), should be able to handle a claim for services rendered by an independent contractor accordingly without engaging in further consideration of the claim. An insurer is not obliged to issue a denial in order to assert the non-precludable, independent contractor defense. Consequently, if a provider were to be permitted to demonstrate during litigation that the claim form was incorrect and services were, in fact, rendered by an employee, not only would the insurer, which exercised its option not to expend further efforts to defend a facially meritless claim, have lost its opportunity to conduct meaningful claims verification, but also its decision not to issue a denial would result in its preclusion from introducing most defenses”