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Regardless of fault, every automobile insurance policy in New York State provides for the payment of first-party benefits, also known as No-fault benefits, of up to $50,000 for “basic economic loss” for covered persons injured in car accidents.
II. Who is covered under the No-Fault Law?
1. “Covered Persons”
A. Includes any pedestrian, driver, or passenger injured through the use or operation of a motor vehicle, including the named insured under the insurance policy and members of the named insured’s household.
B. Bicyclists are covered persons.
C. Motorcyclists and their passengers are excluded from no-fault coverage, as are non-pedestrians injured by motorcycles.
D. Pedestrian who are victims of motorcycles are covered by no-fault.
E. With an express provision in the policy, insurance companies are permitted to exclude coverage for:
1. Persons who intentionally injure themselves;
2. Persons operating under the influence of alcohol or drugs;
3. Persons who are committing a felony;
4. Persons who are knowingly passengers in a stolen car;
5. Persons who are injured while fleeing the police or while racing.
III. First Party Benefits:
1. Basic economic loss (also called PIP or Personal Injury Protection):
A. Minimum limit: $50,000;
B. It is available regardless of fault;
1. Accident related medical expenses;
2. Lost wages up to $2,000 per month;
3. Other reasonable and necessary expenses.
2. Additional PIP Benefits (APIP):
A. Although $50,000 is the mandatory minimum on all motor vehicle policies in New York, car owners sometimes purchase additional coverage above the mandatory $50,000.
B. APIP benefits can be available from either the automobile policy of the vehicle involved in the accident or an auto policy issued to the injured party or to someone he/she resides with.
3. Procedure to obtain first party benefits:
A. An injured party must give all potential car insurance carrier notice of the accident within 30 days by filling out and filing a no-fault application. Failure to timely file this form will permit the insurance carrier to disclaim coverage for first party benefits.
B. Medical Bills:
1. Health care providers must obtain the insurance information for the no-fault carrier from the patient or his attorney, if he is represented, which normally includes:
a. The name of the company;
b. The claim number; and,
c. The name of the adjuster responsible for the claim.
2. THE MEDICAL PROVIDER MUST BILL THE NO-FAULT CARRIER WITHIN 45 DAYS OF THE DATE OF SERVICE AND FAILURE TO DO SO WILL RESULT IN THE CARRIER BEING ALLOWED TO DISCLAIM COVERAGE.
3. Once the no-fault carrier has been timely billed, the carrier must pay the bill within 30 days or must provide a written disclaimer stating the reasons why the carrier refuses to cover the bill.
a. The automobile insurance carriers pay bills according to an agreed upon fee schedule that pays medical providers substantially less than their normal fee.
b. The automobile insurance carriers pay bills according to which bill it receives first. First In – First Paid.
c. The injured party is not responsible for paying the difference between the medical provider’s normal fee and the no-fault fee schedule. No Balance Billing
4. Upon receiving a written denial, the Patient has the right to dispute the decision.
a. Can file a lawsuit or arbitration.
5. There is no time limit for how long the carrier is obligated to pay accident related medical expenses.
a. However, within one year after the accident the need for future accident-related treatment must be “ascertainable.”
b. If not, such expenses can still be covered but the injured party bears the burden of showing that the expenses were ascertainable and necessitated by the accident.
6. APIP is triggered, if it exists, after the $50,000 in mandatory PIP is exhausted.
a. If there is no APIP, the bills go to the next level of coverage, which is whatever the person’s primary coverage is. It could be private health insurance, Medicare, Medicaid, or self pay if the person has no coverage.
7. The patient and medical provider must cooperate with the no-fault medical provider’s requests for information, The failure to cooperate is grounds for the carrier to deny payment.
a. The patient will be required to attend a physical examination by a physician designated by the insurance to determine if medical benefits will continue. The decision will be either that:
1. The patient requires further treatment and benefits will continue at least up until the patient is re-evauated.
2. The patient needs no further treatment and future benefits will be denied.
3. The patient has reached maximum medical improvement and future benefits will be denied.
b. The physician may be required to attend an examination under oath (EUO) where the insurance carrier will question the physician about:
1. The procedures or treatment that the physician provided to the patient.
2. The need to provide the treatment.
3. The need for future treatment.
C. Lost Wages.
1. Limit is up to $2,000 a month for not more than three years after a motor vehicle accident.
a. The actual amount is calculated as 80% of the injured party’s average weekly wage. If that number is more than $2,000 for one month, the injured party will be paid $2,000.
b. New York State Disability benefits and Social Security Disability benefits are an offset to what the No-Fault carrier is required to pay for accident-related lost wages.
c. The carrier will require an injured party to file for both New York State Disability and Social Security disability even where it appears obvious that the injury party will not qualify for the benefit.
1. The failure to apply can delay, reduce or eliminate the no-fault carrier’s obligation to pay lost wages.
D. Other reasonable and necessary expenses.
1. Include household help, baby-sitting services, travel expenses to the doctor’s office, and the like.
2. Limited to $25.00 per day and for only one year.
E. Death benefit.
1. In the event of a motor vehicle related death, the no-fault carrier will pay a $2,000 benefit for funeral expenses.
F. Dealing with No-Fault Disputes.
1. The dispute begins with the carrier providing a written denial of claim form stating the reasons why the claim is being denied.
2. Aggrieved parties, who can include the injured person or their medical providers operating under an assignment of rights, have two options against the carrier:
a. Binding arbitration or
b. Filing a breach of contract suit.
3. Arbitration process:
a. Initiated by the aggrieved party by completing and filing of a no-fault arbitration request form along with a $40.00 filing fee to the American Arbitration Association.
b. An injured party or medical provider who prevails in a no-fault arbitration is entitled to the repayment of the $40.00 arbitration filing fee and to a reasonable attorneys’ fee if represented by counsel.
G. Workers Compensation Coverage.
1. A person injured in a motor vehicle accident while acting in the scope of his or her employment should file both a worker’s compensation claim and a claim for no-fault benefits, although worker’s compensation is most likely to be responsible to pay benefits.
a. The worker’s compensation carrier cannot assert a lien on the first $50,000 in benefits paid in such circumstances, because they are considered in lieu of ‘first party benefits’ under No-Fault.
b. Workers compensation usually provides better benefits for a longer period than no-fault to the injured party and the medical provider.
IV. Personal Injury Claims/Lawsuits: 1. The importance of the patient’s claim/lawsuit to the medical provider.
A. Most people involved in a motor vehicle accident retain a lawyer and bring a personal injury claim/lawsuit against the person that injured them.
1. If no-fault/PIP benefits have been cut-off by the carrier or the policy has been exhausted, and the patient has no other medical coverage available, the medical provider can continue to treat the patient on a lien basis.
2. The medical provider is not obligated to continue to treat the patient.
1. If a lien is properly secured by the medical provider, the medical provider is entitled to have its medical bills paid from the settlement of the patient’s personal injury claim/lawsuit
2. The medical provider’s bills will not be paid until the patient’s claim/lawsuit has been resolved. This can be a number of years.
3. Attention should be paid to the amount that the medical provider allows the medical bills/lien to accrue to because a lien does not always guarantee payment.
a. If the patient loses their lawsuit, the medical provider will not get paid.
b. If the lien gets too high, the patient may refuse to accept a reasonable offer to settle the lawsuit because after the lien is paid, the patient will net very little money.
c. The patient’s attorney may try to negotiate down the amount of the lien with the medical provider in order to effectuate a settlement.
d. There may be other medical providers who also have liens on the claim/lawsuit, and there may never be enough from the settlement to resolve all liens.
e. If the patient is an infant, under the age of 18, the Court must approve the settlement and has the right to order that the lien not be paid.
f. If the insurance policy against which the injured party brought his claim is small, there may not be enough money to satisfy the lien.
C. Securing a Lien.
1. The patient must sign a Lien Agreement to the benefit of the medical provider.
2. The Lien Agreement must be served upon the patient’s attorney in a manner that evidences proof of receipt (Certified Mail Return Receipt, FedEX).
3. Every effort should be made to get the patient’s attorney to sign the lien acknowledging the medical provider’s right to receive payment.
a. Efforts can include the refusal to continue medical treatment to the patient unless the attorney signs the lien.
4. The Lien Agreement should also be served upon the insurance carrier and defense counsel for the defendant in the patient’s personal injury lawsuit/claim.
a. The identity of the defendant’s attorney and insurance carrier can be ascertained through correspondence the medical provider will receive for the patient’s medical records or through Court websites.
D. Value of the Lien
1. The Lien will not be paid unless the patient prevails on the lawsuit.
2. New York’s No-fault law limits recovery in automobile personal injury lawsuits only to those persons who are “seriously injured” by someone else. Many injured people never recover anything in their claim.
a. Insurance Law 5102(d) defines a ‘serious injury” as one that results in:
c. significant disfigurement;
d. a fracture;
e. loss of a fetus;
f. permanent loss of use of a body organ, member, function or system;
g. permanent consequential limitation of use of a body organ or member;
h. significant limitation of use of a body function or system; or
i. a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than ninety days during the one hundred and eighty days immediately following the occurrence of the injury or impairment.
3. The minimum insurance limits in New York State are $25,000/50,000.
a. This means that there is $50,000 available for each accident and no one person can get more than $25,000
1. $25,000 is usually not enough to cover the medical liens, the lawyer’s fee, and adequately compensate the patient for his injuries.
V. Med-Pay Coverage:
A. “Med-pay” coverage, which will pay for medical expenses for one or more people involved in a motor vehicle accident regardless of fault.
1. For personal policies, the limits are ordinarily $1,000, although a person or entity can buy more.
2. Commercial policies usually have $10,000.
B. This coverage is really a “lawsuit avoidance” coverage because it allows adjusters to cover medical expenses for injured people up to the limit of med-pay coverage without getting into issues of liability and serious injury.
C. Any claim must be made within one year of the accident and it can be used for any person injured in an MVA, including the insured.
1. Can be used to satisfy liens and rights of subrogation.
VI. Workers Compensation:
A. A person involved in a motor vehicle accident while in the scope of his or her employment can resort to the workers compensation system for first party benefits and, in the event of a serious injury, can also bring an action against the at-fault driver.
B. Workers Compensation Law Section 29 authorizes an employee injured on killed on the job to both collect Workers Compensation benefits and pursue an action against the wrongdoer, but with several important strings attached:
1. The Workers Compensation carrier has a lien against proceeds recovered from the injured tortfeasor, except in an automobile accident for the first $50,000 in benefits that no-fault would have ordinarily paid had the patient not been hurt in the course of his employment;
2. The employee must notify within 30 days the Board, his employer and the carrier of his/her pursuit of a third-party action;
3. Any third-party action cannot be settled without the written permission of the workers compensation carrier;
4. If the at-fault party is a co-employee, the injured party is limited to the worker’s compensation remedy and cannot bring an action against the co-employee or the employer.
VII. Supplemental Uninsured/Underinsured Motorist Coverage:
A. “SUM” coverage, provides coverage to an insured and his or her family members injured in an auto accident where:
1. the at-fault party flees the scene and cannot be located,
2. has no insurance (uninsured claim), or
3. has less liability coverage than the insured’s SUM limits.
B. Whether this coverage is available for a particular accident is determined by:
1. whose fault the accident was;
2. the amount of the injured party’s SUM coverage; and
3. the amount of liability coverage the at-fault driver(s) has.
C. In order to recover SUM benefits, the injured party must give his/her carrier written notice of the possibility of a SUM claim within fairly strict time limits, which can be as short as 30 days. The failure to do so can result in the loss of this coverage.
D. In uninsured motorists cases, the insured must provide the carrier with an affidavit within 30 days detailing what was done to locate coverage or, in the event of a hit and run, find the driver.
E. SUM limits cannot exceed the injured party’s bodily injury policy limits.
F. SUM is not liability coverage, so liens and rights of subrogation do not apply to it.
A.The Motor Vehicle Accident Indemnity Corporation (MVAIC) is an agency of the State of New York that was formed to provide benefits to injured parties when there is absolutely no other coverage available.
1. MVAIC provides no-fault/PIP benefits to injured parties when:
a. There is no available no-fault/PIP benefits to the injured party (an uninsured vehicle); and
b. The patient does not have an auto policy of his own or in his household; and
c. The patient has no private health insurance coverage.
B. Filing a no-fault/PIP claim with MVAIC.
1. The patient must file a completed and executed no-fault application with MVAIC.
2. The patient must file affidavits with MVAIC evidencing that he has no other medical coverage available.
C. Filing Medical Claims.
1. All medical bills must be filed by the medical provider with MVAIC.
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