EUOs/ $5000

Healthcare Providers Cannot Demand Upfront EUO Fees

Examinations Under Oath (EUOs) are a critical component of New York No-Fault Insurance Law, allowing insurance carriers to investigate potentially fraudulent claims. However, a recent appellate court decision clarifies important boundaries around the scheduling and payment conditions for these examinations.

In Parisien v Travelers Insurance Co., the court addressed whether healthcare providers can demand upfront payment as a precondition for attending scheduled EUOs. This case highlights the ongoing tension between providers seeking compensation guarantees and insurers conducting legitimate fraud investigations.

The decision comes amid increasing scrutiny of no-fault insurance practices, where fraudulent schemes continue to plague the system. Understanding the proper procedures for EUO scheduling and payment becomes crucial for both providers and insurers navigating these complex waters.

Jason Tenenbaum’s Analysis:

Parisien v Travelers Ins. Co., 2022 NY Slip Op 50622(U)(App. Term 2d Dept. 2022)

“Contrary to plaintiff’s sole contention with respect to defendant’s motion, plaintiff’s letters, which improperly demanded that defendant agree to pay a flat up-front fee of $5,000 as a condition for plaintiff to attend the EUOs scheduled by defendant (see Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 51 Misc 3d 143, 2016 NY Slip Op 50698 ) as well as sought to repeatedly reschedule the EUOs to unspecified dates two months later, were insufficient to demonstrate the existence of an issue of fact as to whether the EUOs were scheduled at reasonably convenient times.”

Well there are two issues here. First, you cannot demand pre-payment. I am unsure if I agree with that notion. In the expert witness deposition paradigm, I can tell you in State Court in Florida, Courts regularly order prepayment upon appropriate motion. I do not see why a provider can’t file a properly supported declaratory judgment action to address the payment issue. I also wonder how many EUOs a carrier gets of a provider in light of the First Department’s objective basis analysis?

Key Takeaway

The court’s ruling establishes that healthcare providers cannot condition their EUO attendance on receiving upfront payment, even substantial amounts like $5,000. However, this raises questions about whether providers could pursue declaratory judgment actions to address payment timing issues, particularly given different practices in other jurisdictions where prepayment is sometimes ordered.