Commercial Law World - Issue 4, 2017 - 22

Dispelling the Four
Biggest Myths to
Healthcare Collections
in New York

by Timothy Wan, Esq.
Timothy Wan is a partner in the firm
Smith Carroad Levy & Wan, in Commack,
New York, and can be reached at
twan@smithcarroad.com
He has successfully tried several hundred
litigation matters and has successfully brought
and defended appeals on hospital and
healthcare-related matters to the appellate
courts in the State of New York, including
many that were cited in this article.
www.smithcarroad.com

I

n the collection of outstanding healthcare obligations,
patients, consumer advocates, and even Judges,
perpetrate myths. This article will not get into litigating
cases where there is an umbra of medical malpractice,
or a situation where there is some allegation of identity
theft or fraud. Rather, we will deal with the biggest
challenges facing healthcare collections in New York,
and dispel the four biggest myths.

"I Had Insurance!"
The most common myth arises from those who
believe that merely because the patient was covered
by insurance, it is somehow a defense to the action.
This could not be farther from the truth. A third-party
responsibility does not obviate a patient's obligation of
payment for the services rendered. The patient is still
ultimately responsible, and it would be incumbent on the
patient to seek indemnification, if a third-party failed to
comply with an agreement made with the patient. Since
the patient does not deny that services were provided,
the belief that there is insurance coverage does not
relieve the patient from liability. Gray v. B.R. Trucking
Co., 463 N.Y.S.2d 192, (App. Div. 2nd 1983); See also
Finchside Intern., Ltd. v. Jeanette Coquette Co., Finchside
Intern., Ltd. v. Jeanette Coquette Co., Inc. 232 A.D.2d
312, 648 N.Y.S.2d 593 (N.Y.A.D.,1996) (Holding that
an allegation that patients' insurance companies have
refused to pay their claims, is not a meritorious defense
to the action.); Cedeno v. Wimbledon Bldg. Corp. 207
A.D.2d 297, 615 N.Y.S.2d 40 (N.Y.A.D.,1994) (Holding
22 COMMERCIAL LAW WORLD

that a statement by patient that its insurer has declined
to investigate, defend or settle the underlying claim, is
insufficient to raise a meritorious defense.)
Where the patient's sole allegation is that there was
insurance coverage, yet, offers nothing to substantiate
that belief, there is simply no defense. North Shore
University Hosp. At Forest Hills v. Zuk 859 N.Y.S.2d 896.
(N.Y.Sup.App.Term 2008). Quite simply, "The fact that
there was some insurance coverage does not relieve
patient from liability on the debt..." See North Shore
University Hosp. At Manhasset v. Austin No. 2012-2061
NC (N.Y.Sup.App.Term 2014).
Moreover, in Cole v. Metropolitan Life Ins. Co. 273
A.D.2d 832, 708 N.Y.S.2d 789 (N.Y.A.D.,2000), where
the Plaintiff was a physician who sued the insurance
carrier, alleging that he was a third-party beneficiary to
the patient's insurance policy, the Appellate Division
held that "a non-participating provider, was not an
intended beneficiary and cannot enforce the insurance
contract..."
There is a ridiculous number of trial court decisions
that have repeatedly held that the allegation of insurance
coverage is insufficient as a meritorious defense.
In the District Court of Nassau County, the case
law is replete with such cases. In North Shore University
Hospital at Plainview v. Gentissi, Index Number 1899008 decision of the Honorable Fred J. Hirsh, dated
March 30, 2011, the Court granted Plaintiff's motion

OCT /NOV /DEC 2017


http://www.smithcarroad.com

Table of Contents for the Digital Edition of Commercial Law World - Issue 4, 2017

Contents
Commercial Law World - Issue 4, 2017 - Cover1
Commercial Law World - Issue 4, 2017 - Cover2
Commercial Law World - Issue 4, 2017 - Contents
Commercial Law World - Issue 4, 2017 - 2
Commercial Law World - Issue 4, 2017 - 3
Commercial Law World - Issue 4, 2017 - 4
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Commercial Law World - Issue 4, 2017 - 22
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Commercial Law World - Issue 4, 2017 - 28
Commercial Law World - Issue 4, 2017 - Cover3
Commercial Law World - Issue 4, 2017 - Cover4
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