SURE WAY NY, Inc. v. TRAVELERS INSURANCE COMPANY 2016 WL 7233969
The issue in this case was whether a no fault insurer must request EUO’s of all conceivable entities within 15 calendar days of receipt of a written notice of claim, in accordance with 11 NYCRR 65–3.5(b), or whether its 15 days in which to request an EUO starts anew after it completes one EUO and discovers the need for an additional EUO of another entity.
Insurer received provider’s two bills on September 16, 2013 (“first bill”), and October 2, 2013 (“second bill”), respectively, and made two successive verification requests for each bill seeking, additional documentation. Insurer made verification requests on the two bills between September and November 2013.
On December 19, 2013, while the requested verification remained outstanding, insurer conducted an EUO of the assignor, which plaintiff concedes was timely. The assignor’s testimony raised questions. As a result, on January 9, 2014, defendant sent a letter to plaintiff requesting that it appear for an EUO scheduled for January 29, 2014. After plaintiff failed to appear for the EUO, defendant sent a second scheduling letter to plaintiff dated January 31, 2014, requesting that plaintiff appear for an EUO on February 18, 2014. Plaintiff again failed to appear.
The Court said as follows:
In Prestige Medical P.C. v. Travelers Home & Marine Ins. Co., 2014 N.Y. Slip Op 24317, 2014 N.Y. Misc. LEXIS 4592 (Civil Ct., Kings Co.2014), this Court held that before an insurance company can take advantage of denying a claim for failure to appear for an EUO beyond the 30 day period pursuant to Unitrin Advantage Ins. Co. V. Bayshore Physical Therapy, PLLC, 82 AD3d 559 (1st Dept.2011), it must first comply with the notification time lines contained in the verification procedures. This court reached this result because an EUO, as cogently noted by the Hon. Fred J. Hirsh in Tarnoff Chiropractic, P.C. v. Geico, 2012 N.Y. Slip Op 50670(U), 35 Misc.3d 1213(A) (Dist.Ct., Nass.Co.2012), supra, “is a hybrid between a condition precedent to coverage and verification.” Id at 11. Thus, most of the procedural time lines governing EUOS are contained in the regulations relating to verification. Prestige, supra at 3. See also, Country–Wide Ins. Co. v. Castro, 2016 N.Y. Slip Op 31505(U), 2016 N.Y. Misc. LEXIS 2925 (Sup.Ct., N.Y. Co.2016).
11 NYCRR § 65–3.5 details the verification procedures to be followed after the insurer receives the completed application for no-fault benefits (N.Y.S form N–F 2). The injured party or that party’s assignee (medical services provider) must then submit written proof of claim (claim form—usually verification of treatment by attending physician or other health care provider—NYS form N–F 3) to the insurer within 45 days after the date the medical services are rendered. Prime Psychological Services P.C (Ortiz) v. Nationwide Property & Cas. Ins. Co., 24 Misc.3d 230, 233 (Civil Ct., Richmond Co.2009). 11 NYCRR 65–3.5(b) authorizes an insurer, upon receiving the written proof of claim or its substantial equivalent written notice, to request “any additional verification required … to establish proof of claim within 15 business days of receipt of the prescribed verification forms.” Nyack Hospital v. General Motors Acceptance Corp., 8 NY3d 294, 299 (2007). See, A.M. Med. Servs., P.C. v. Progressive Cas. Ins. Co., 101 AD3d 53 (2d dept.2012); Prestige, supra at 4. By properly requesting additional verification within 15 days from the receipt of the proof of claim form, an insurer may toll the 30 day period in which it must deny the claim. Prestige, supra at 4 citing to Prime Psychological Services, supra, 24 Misc.3d at 233. If the requested verification has not been supplied to the insurer within 30 days after the original request, the insurer shall, within10 days, follow up upon its request for verification either by a telephone call or by mail. 11 NYCRR 65–3.6(b).
EUOs and independent medical examinations (IMEs) are considered to be part of an insurer’s “entitlement to ‘additional verification’ “ following receipt of a provider’s statutory claim forms. See, Section 65–3.5(d). Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc.3d 18, 19 ( [App Term, 2d Dept 2004) aff’d in part 35 AD3d 720 (2d Dept.(2006). See also, Prime Psychological supra, 24 Misc.3d at 233; All–Boro Med. Supplies, Inc. v. Progressive Northeastern Ins. Co., 20 Misc.3d 554, (Civ Ct, Kings County 2008). Therefore, the written request or demand letter for an EUO must be mailed by an insurer within 15 days of receipt of the proof of claim form. Allstate Ins. Co. v. American Comprehensive Healthcare, 2016 N.Y. Slip Op 31175(U), 2016 N.Y. Misc. LEXIS 2344 (Sup Ct., N.Y. Co.2016). See National Liability & Fire Ins. Co. v. Tam Med. Supply Corp., 131 AD3d 851, 851(1st Dept 2015); American Tr. Ins. Co. v. Jaga Med. Servs. P.C., 128 AD3d 441, 441 (1st Dept 2015):. O & M Med., P.C. v. Travelers Indem. Co., 2015 N.Y. Slip Op 50476(U), 47 Misc.3d 134(A) (App.Term, 2nd Dept.2015). Prestige, supra at 3. See also, Unitirin Advantage Ins. Co. V Better Health Care Chiropractic, P.C.,, 2016 N.Y. Slip Op 30837(U), 2016 N.Y. Misc. LEXIS 1698 (Sup Ct., N.Y. Co, 2016) (an insurer must comply with the no-fault insurance regulations governing the Claim Procedure which prescribe specific time frames for requesting and scheduling EUOs and IMEs, in order to satisfy its prima facie burden on a motion for summary judgment declaring that no coverage exists based on the failure of a claimant or medical provider to appear for an EUO or IME).
In Prestige, supra, this court ruled, in a case of first impression, that when an insurer obtains new information from an EUO of the assignor, which gives it reason to conduct an EUO of the assignee provider, the insurer must send the EUO request to the assignee within 15 business days of the date the EUO of the assignor was held. This court now provides the rationale for this ruling: that the decision to conduct the EUO of the assignee was based upon new information, causing this to be a new verification request, as opposed to a follow-up request upon a party who has not responded or did not respond in full to the initial request for information.
This Court then addressed the ramifications that flow from a request for an additional EUO that was not made within the 15 days prescribed in the regulations. It applied precedent governing untimely requests for additional verification to untimely requests for EUOs. In Nyack Hospital v. General Motors Acceptance Corp, 27 AD3d 96 (2nd Dept., 2005), the Second Department ruled that when an insurer is late in requesting additional verification beyond the 15–day time period, the insurer’s time to either pay or deny the claim is reduced from 30 to 28 days and does not render the additional verification request invalid. In so ruling, the Appellate Division relied on 11 NYCRR 65–3.8(l), which states that “[f]or the purposes of counting the 30 calendar days …, with the exception of section 65–3.6 [follow-up requirements], any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” In Prestige, the insurer requested an EUO of the provider 13 days after the expiration of the 15 day time period from which the assignor’s EUO was conducted, resulting in the provider having to subtract those 13 days from the 30 days it had to pay or deny the claim after the provider failed to show up for the scheduled EUO follow up on April 23, 2012.
Similarly here, defendant insurer sent a letter requesting an EUO of the provider on January 9, 2014, some 21 days after the EUO was conducted of the assignor on December 19, 2014. It therefore had to subtract six days from the 30 days it had in which to issue a denial after the provider failed to appear for its EUO on February 18, 2014. Since defendant issued its denial on February 20, 2014, only two days after the EUO no show, its denial was timely. Defendant also properly established that it properly generated and mailed the two EUO notification letters, and that the insurer failed to appear for the EUO. IDS Prop. Cas. Ins. Co. v. Stracar Med. Servs., P.C., 116 AD3d 1005 (2nd Dept.2014); Synergy First Med., P.L.L.C. v. Allstate Ins. Co., 2016 N.Y. Slip Op 51365(U), 2016 N.Y. Misc. LEXIS 3408 (App. Term 2nd Dept.2016); Professional Health Imaging, P.C. v. State Farm Mut. Auto. Ins. Co., 2016 N.Y. Slip Op 51026(U), 52 Misc.3d 134(A) (App. Term 2nd Dept.2016).