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The failure to respond to an EUO letter non-suits another DME providerMay 16, 2012

Leica Supply, Inc. v Encompass Indem. Co., 2012 NY Slip Op 50890(U)(App. Term 2nd Dept. 2012)

Plaintiff’s argument that its assignor’s failure to appear for the duly scheduled EUOs permitted only the denial of pending claims is without merit (see ARCO Med. NY, P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Moreover, plaintiff does not claim to have responded to the EUO requests; therefore, plaintiff’s objection on appeal regarding those requests will not be heard

The next issue to be tackled: What happens when Plaintiff responds to the EUO demands and still fails to attend the EUO?  Do we finally reach a reasonableness analysis?  I would say I can hardly wait, but it is the lack of certainty that makes reading these decisions interesting.  As each gap gets filled, this sometimes becomes an exercise in who can cite the most principles of law.

3 Responses

  1. mitchell s. lustig says:

    JT, I belive at that point we will definitely reach a “reasoanble basis” analysis. Once the plaintiff objects, the Court will have to determine if there is a reasonable basis for the EUO. The reasonable basis does not have to rise to such a level as to prove a valid defense as a matter of law, but there must be some rational basis articulated for the EUO. It is not enough to merely say “we have received a lot of bill from this provider and we need to verify the loss.” No-fault arbitrators have been using this reasonable basis test for a long time.

    The Opinion Letter from the Supt of Insurance only states that the insurer is not required to set forth its basis for the EUO in the scheduling letter of the denial. It does not say, as many defense counsel assert, that an insurer can conduct an EUO at any time and for any reason.

    • JT says:

      Mitch, I have always believed that you get a free shot at the EIP. You need some legitimate reason to hit the provider. It is not a heavy burden, but there has to be a bona-fide good faith reason. No, the facility being a mill and performing CPT testing will not do it. Sorry.

      Some reasons I use, when proper, for provider EUOs are: Runner activity, acupuncture over-billing and significant billing discrepancies, all gleaned from properly done EIP EUO’s will allow this type of investigation. There are other more nuanced reasons, but I will let the reader think them through.

      And once the investigation starts, I am no sure where it ends.

  2. Raymond Zuppa says:

    “I am no sure where it ends.” The translation from Spanish speaking to speaking English is difficult Jason. But amigo I am sure you will get it.

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