EUO no-show case/objective reasons not necessary/ what's next?

The Objective Reasons Debate in EUO No-Show Cases

Examination under oath (EUO) requests remain one of the most powerful tools available to no-fault insurers investigating potentially fraudulent or questionable claims. However, the scope of an insurer’s right to demand EUOs has been subject to extensive litigation. A recurring question is whether insurers must demonstrate “objective reasons” justifying the EUO request before they can disclaim coverage based on a provider’s failure to appear.

The Appellate Term, Second Department addressed this issue in Gentlecare Ambulatory Anesthesia Services v. GEICO Insurance Co., providing clarity on the prima facie requirements for establishing an EUO no-show defense. The decision confirms that insurers need not justify their decision to request an EUO, but instead must only prove proper scheduling, non-appearance, and timely disclaimer.

This procedural simplification benefits insurers by eliminating a potential defense that providers frequently assert—namely, that the EUO request was improper because the insurer lacked objective grounds for questioning the claim. However, the decision leaves open important questions about what happens when providers offer valid excuses for non-appearance or when disclaimers are issued after EUO no-shows.

Case Background

In Gentlecare Ambulatory Anesthesia Services v. GEICO Insurance Co., the medical provider plaintiff sought to recover assigned first-party no-fault benefits. GEICO cross-moved for summary judgment, asserting that the provider failed to appear for scheduled EUOs and that the insurer had timely disclaimed coverage based on these no-shows.

The provider opposed the cross-motion, arguing among other things that GEICO had failed to establish objective reasons for requesting the EUOs in the first place. The plaintiff contended that without such objective justification, the EUO requests were improper, and the subsequent disclaimer based on non-appearance was invalid.

GEICO submitted evidence including EUO scheduling letters and proof of mailing, affidavits from personnel with knowledge of the provider’s non-appearance, and copies of the timely denial of claim forms. The Civil Court granted GEICO’s cross-motion, and the provider appealed to the Appellate Term.

Jason Tenenbaum’s Analysis:

Gentlecare Ambulatory Anesthesia Servs. v GEICO Ins. Co., 2018 NY Slip Op 50864(U)(App. Term 2d Dept. 2018)

“Contrary to plaintiff’s contentions, the proof submitted by defendant in support of its cross motion was sufficient to give rise to a presumption that the EUO scheduling letters and denial of claim form had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 ) and to demonstrate that plaintiff had failed to appear for the EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [*2]). Furthermore, defendant was not required to set forth objective reasons for requesting EUOs in order to establish its prima facie entitlement to summary judgment, as an insurer need only demonstrate “as a matter of law that it twice duly demanded an from the … that the provider failed to appear and that the issued a timely denial of the claim[]” (Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 ; see Parisien v Metlife Auto & Home, 54 Misc 3d 143, 2017 NY Slip Op 50208 ; Palafox PT, P.C. v State Farm Mut. Auto. Ins. Co., 49 Misc 3d 144, 2015 NY Slip Op 51653 ). Consequently, plaintiff has not provided any basis to disturb the Civil Court’s order.”

The unanswered question is assuming that the provider sets forth valid reasons for not attending the EUO and a disclaimer is issued, what is the remedy? Does the insurance carrier always prevail? Or, is the disclaimer without prejudice to compelling the entity to appear for an EUO? I think the new Fourth Department case of Progressive v. Elite and the older Second Department case of Park v. Long Island call into question the remedy for this discreet type of breach. But that is a discussion for another day.

Legal Significance

The Appellate Term’s holding that insurers need not establish objective reasons for requesting EUOs represents a significant victory for no-fault carriers. Prior to this decision, some courts had suggested that insurers must demonstrate particularized suspicions or concrete grounds for questioning a claim before demanding an EUO. This requirement created litigation over whether the insurer’s justification was sufficient, diverting attention from the core issue of whether the provider complied with the EUO demand.

By eliminating the objective reasons requirement, Gentlecare streamlines the prima facie case for EUO no-show defenses. Insurers need only prove three elements: (1) that they twice duly demanded an EUO, (2) that the provider failed to appear, and (3) that they issued a timely denial. This framework aligns with the principle that insurance contracts give insurers broad rights to investigate claims, and providers who accept policy benefits must comply with reasonable investigation requests.

However, Jason Tenenbaum’s analysis identifies a critical gap in the decisional law. The Gentlecare court addressed only the prima facie requirements for an EUO no-show defense, not the remedial consequences when a provider offers a valid excuse for non-appearance. If a provider demonstrates that the failure to appear was excused—due to emergency, miscommunication, or other legitimate circumstances—does the insurer’s disclaimer remain effective? Or must the insurer schedule a new EUO and allow the provider another opportunity to comply?

The Fourth Department’s decision in Progressive v. Elite and the Second Department’s earlier ruling in Park v. Long Island suggest that disclaimers based on EUO no-shows may be without prejudice to the insurer’s right to compel future compliance. This interpretation would mean that even when a disclaimer is valid, providers might be able to reopen claims by subsequently appearing for EUOs. The implications of this potential remedy remain unresolved and warrant careful attention from both providers and insurers.

Practical Implications

For no-fault insurers, Gentlecare confirms the strategic value of EUO demands. By eliminating the need to justify EUO requests, the decision reduces the evidentiary burden on summary judgment motions. Insurers can focus their proof on demonstrating proper mailing of EUO scheduling letters, documented non-appearance, and timely disclaimer issuance. This streamlined approach makes EUO no-show defenses more predictable and easier to establish.

Medical providers, however, should not view Gentlecare as foreclosing all defenses to EUO no-show disclaimers. While insurers need not prove objective reasons for requesting the EUO initially, providers can still challenge whether the EUO demands were procedurally proper, whether notice was adequate, or whether valid excuses existed for non-appearance. The decision does not address these defenses, leaving them available for providers facing EUO-based disclaimers.

The unresolved remedial question identified in Jason Tenenbaum’s analysis creates planning challenges for both sides. Providers who missed EUOs due to valid excuses should consider proactively offering to appear for rescheduled examinations and documenting their willingness to comply. This approach may strengthen arguments that disclaimers should be deemed without prejudice. Insurers, conversely, should consider whether their disclaimers preserve the right to demand subsequent EUO compliance even after initially denying coverage.

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• Personal Knowledge Requirements for EUO Non-Appearances: NY Legal Standards
• Understanding EUO Denial: When Insurance Companies Can Substantiate Coverage Denials
• Validity of EUO, Appellate Term, 2d Dept: Take two
• New York No-Fault Insurance Law