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American Chiropractic Care, P.C. v. GEICO Insurance

Civil Court of the City of New York, Kings County

July 20, 2017

American Chiropractic Care, P.C. A/A/O KERLINE MARSEILLE, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O TUNG LY, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O VLADIMIR LPEJA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O YURAINA LINDSEY, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O LILLIAN LEBRON, Plaintiffs,
v.
GEICO Insurance, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O IBRAHIM S. HUSSEIN, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O TAMARA JACKSON, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O SHANEKA HUE, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O ISRAEL HERNANDEZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O KASHAUN HENRY, Plaintiffs,
v.
GEICO INSURANCE, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O CHRISTOPHER HART, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O JESUS GUTIERREZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O BELLA GUTIERREZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O ANDREA GRANT, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O ANGELLA GORDON, Plaintiffs,
v.
GEICO INSURANCE, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O NIAMBI M. SMITH, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O ELIZABETH SINGELTON, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O JERMAINE SHIRLEY, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O AMANDA SERRANO, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O DONOVAN SCOTT, Plaintiffs,
v.
GEICO Insurance, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O MELISSA RIVERA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O PATSY RIVERA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O KRYSTLE RIVERA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O FREDDY RIVERA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O ANA RIVERA, Plaintiffs,
v.
GEICO INSURANCE, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O VERNESE RILEY, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O CRISTINO REYES, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O KAMILAH RENEAU-DUNBAR, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O GILBERT RENEAU, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O FRANK RAMOS, Plaintiffs,
v.
GEICO INSURANCE, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O WILFREDO RAMIREZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O JAMES E. POPE, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O JEFFREY PINERO, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O CLAUDIA ORTIZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O SUSAN ONYEMECHALU, Plaintiffs,
v.
GEICO INSURANCE, Defendant. AMERICAN CHIROPRACTIC CARE, P.C. A/A/O HELEN OFFONG, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O KRISTINA NUNEZ, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O MARTIN MUIR, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O MINERVA MEDINA, AMERICAN CHIROPRACTIC CARE, P.C. A/A/O CAROL MARTINEZ, Plaintiffs,
v.
GEICO INSURANCE, Defendant.

          Plaintiff is represented by Zara Javakov, Esq., P.C., by Adam Waknine, Esq.

          Defendant is represented by Rivkin Radler LLP, by Vincent P. Valente, Esq.

          MICHAEL GERSTEIN, ACTING SUPREME COURT JUSTICE

         The issue as to which reargument is granted, as to which we find no controlling appellate authority, is whether a no-fault insurer which notices an Examination Under Oath ("EUO") of a medical professional provider, as to which the provider timely objects and requests explanation as to the reason for the EUO, is obligated to provide such a reason as a prerequisite to the EUO.

         Defendant GEICO Insurance ("GEICO") moves for reargument of this Court's decision and order dated March 20, 2017 ("March 20 Decision"), which denied GEICO's motions for summary judgment in eight cases consolidated for decision. [1] The March 20 Decision found that Plaintiffs had established their prima facie cases as to timely mailing of bills, receipt thereof by GEICO, and non-payment of the bills, and that GEICO had made its prima facie case as to timely mailing of requests for Examinations Under Oath (EUOs) and Plaintiff provider's non-appearance for examination. The Court held, in relevant part, that "in view of Plaintiff's request in response to Defendant's demand for EUO of a reason therefore, and Defendant's response denying necessity to provide any reason, triable issues exist as to whether Defendant had any legally valid reason for seeking EUOs of Plaintiff provider." (March 20 Decision, at paragraph 2 thereof). It is primarily this holding that is challenged by GEICO on reargument.

         The Relevant Facts

         The relevant facts in each of these cases are similar. In each case, upon receipt of bills from Plaintiff, GEICO timely notified Plaintiff American Chiropractic Care P.C. ("American") to appear for an EUO, and Plaintiff's counsel, upon receipt of that notification, expeditiously wrote to GEICO's counsel, prior to the date scheduled for the EUO, requesting that GEICO provide "good faith reasons, based upon the application of objective standards that serves as justification for demanding [Plaintiff] to appear for an EUO." See, e.g., letter of Julie Lyumbimova, Esq. dated August 14, 2014, annexed within Exhibit 3 to GEICO's motion.

         In response to the letters of Plaintiff's counsel requesting a good faith reason for the EUO of the provider, GEICO's counsel declined to provide any reason, but instead asserted that "GEICO is not required to provide your Client with the objective basis and/or 'good reasons' for its request for an EUO, " citing 11 NYCRR 65.3.5(c), and specifically so much thereof as provides, in relation to the requirement that EUOs to be supported by specific objective justification, that "insurer standards shall be available for review by [State Insurance] Department examiners". (See letter of Ryan Goldberg dated August 26, 2014, part of Exhibit 3 to GEICO's motion). It is undisputed that following the exchange of such correspondence, Plaintiff did not appear for examination.

         The Legal Issue

         After careful analysis of the case law cited by each party, and the applicable regulations, the Court stands by its prior decision that upon receipt of a timely request (that is, sufficiently prior to the date for which the EUO is scheduled to allow for a response), the insurer is required to provide some good faith basis for the EUO, and the requirement that insurer standards for scheduling EUOs are available for review by the Insurance Department does not relieve the insurer from the need to respond, in the manner set forth below, to a timely request on behalf of the provider.

         Analysis

         The Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law §5101 et seq.) and the No-fault Regulations (11 NYCRR 65.1.1, et seq.) provide the no-fault insurer with the right to require an EUO of the assignor of the claim, as well as the provider of medical services or supplies. While the right to an EUO of an assignor, that is, an individual who suffered injury as the result of an automobile accident, is virtually automatic, the EUO of a provider stands on different grounds. The reason for this is that there is obvious potential to abuse the EUO of a provider, typically a medical doctor or chiropractor, although it may also be a provider of durable medical equipment. The claims at issue in no-fault cases are ordinarily no more than a few thousand dollars, and frequently less than even $1000. To require a doctor to leave his or her practice for at least half a day, between the time to travel to and from an EUO, and the time actually spent under examination, will often result in a loss of income to the doctor disproportionate, if not in excess, of the amount of the claim, although here GEICO specifically offered to reimburse American for lost earnings and transportation expenses, as required by the regulations. Equally important, an EUO takes the doctor away from time that would otherwise be spent providing health care to patients. (In this regard, there is no provision to reimburse the provider for the time spent in preparation for the examination, including that necessary to compile and review the numerous documents requested by GEICO in advance of the EUO). The public interest requires that such disruption of medical professionals not be undertaken lightly or on the proverbial fishing expedition in the hope that some basis, perhaps the provider's non-appearance, may be developed to deny an otherwise legitimate claim.

         This Court recognizes, and indeed endorses, the right of an insurer, acting in good faith, to require an EUO of a provider. Such EUOs are an important tool in rooting out fraud, which many believe to be all too prevalent in the medical treatment of no-fault patients. Thus, a balance must be struck between the policy of rooting out and preventing fraud, and not unnecessarily disrupting the practice of a medical professional without a good faith basis for so doing.

         On reargument, both Plaintiff and GEICO have provided case law supporting their respective positions. The Court notes that virtually all of the cases cited emanate from trial courts or arbitrators, so ...


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