Avalon Radiology, PC. v Ameriprise Ins. Co., 2016 NY Slip Op 26182 (Dis. Ct. Suffolk Co. 2016)
“Avalon responded to the first EUO request with a letter dated April 3, 2014, requesting the good faith, objective reason for defendant’s request for an EUO pertaining to Avalon’s incorporation and licensure, as well as the basis for suspecting it had engaged in fraudulent behavior (Exhibit K). In response to Avalon’s letter of April 3, 2014, defendant sent a second letter dated April 14, 2014, stating that it was not required to provide the specific objective justification for its EUO request and rescheduling the EUO for May 1, 2014 (Exhibit L), as well as a third letter dated April 18, 2014, also setting forth the May 1, 2014 EUO date (Exhibit H). The claims were denied following Avalon’s failure to appear for the May 1, 2014 EUO (Exhibits R, S and T).”
“The insurer’s response in this case to the effect that it was not obligated to do so is plainly wrong. The insurer clearly had an obligation to comply with No-Fault regulation 65-3.5(e)and supply the requesting party, in this case the provider, with the “specific objective justification supporting the use of such examination.” The regulations do not allow the insurer to use an EUO as a fishing expedition. There must be a specific objective reason for the request. See American Transit v Jaga Medical Services, P.C., 128 AD3d 441 (1st Dep’t 2015); American Transit v Curry, 45 Misc 3d 171 (Sup.Ct. NY Co. 2013). If the Court were to conclude otherwise, the cited language of the applicable regulation would be rendered meaningless.”
I have to agree with the District Court on this one. To dictate letters to providers demanding a provider’s appearances at EUOs without giving a reason when asked to provide a reason is improper. That is plain and simple. When taken to the mat as to why an EUO is necessary, the carrier must respond. The Court got this one right. Hopefully EUO counsel has learned from their mistakes.
6 Responses
Carrier’s counsel have been arguing this for years. Amen to judge Matthews who had the courage and the UNDERSTANDING of the no-fault law rules and regulations to come up with a well reasoned and analytical decision. finally CARRIERS COUNSEL will have to either give an objective reason for the euo once there is a demand or face the prospect of LOSING their cae
I agree with Judge Matthews decision as it relates to providers. I won’t demand a provider EUO unless I have a real basis that I can articulate. Admittedly, there has been too much abuse on the carrier side in demanding EUOs. I sense that is a reason for the shift in the First Department on the issue. And my favorite case Allstate v. New Way kind of tells you the thinking of the judiciary at this point. I always say when you have a real reason, do your EUO’s. And, if you do a really good EUO and raise some questions as to what the heck is going on, then you get your taxes, ledgers, K-9s, payroll information, lease information, billing information, etc. Fail to follow the formula, get nothing.
Good Reporting here. useful stuff for the rico counterclaims
also i bet the letter the provider sent was a lift of the first letter i ever sent saying same.
i wrote those letters starting in 2005.
i recently came across a letter from putin medical pc that used exactly the same language in 2016.
the same poetry citations; citations to shakespeare and the bible that i used.
under the regulations, the only places that the insurer does not have to give a reason are in the scheduling letter and the denial. What many arbitrators and judges overlook is that the regulation does not apply to objections by the provider.
Would this reasoning apply to a demand for an euo on a property insurance Policy?