DOCTOR'S BILLING IN BUFFALO AND NYC ON SAME DATES JUSTIFIES EUO DEMAND
American Arbitration Association
New York No-Fault Arbitration Tribunal
In the Matter of the Arbitration between: Zenith Medical PC and Geico Ins. Co.
AAA Case No. 412011061337
AAA Assessment No. 17 991 35420 11
Kent L. Benziger, Esq., arbitrator
Edited by Lawrence N. Rogak
Summary of Issues in Dispute
1) Whether the Applicant had a reasonable basis for an EUO of the physician/owner of a
medical facility; and,
2) Whether a verification request for the documents repeatedly filed on
numerous claims was excessive and overly burdensome.
In this dispute, the Applicant/Medical Provider is seeking reimbursement for medical
services. The basis of the Respondent's denial on both this and numerous others cases
involving the same parties was the Applicant's failure to comply with a verification request
for an examination under oath (hereinafter referred to as an EUO) of the physician owner of
the medical facility . The Applicant contends that the EUO requests were improper and that
it also complied with the relevant portion of numerous overly burdensome document
As this arbitrator is deciding numerous cases involving these same issues, both
parties have stipulated that the all documents including verification requests, responses,
affidavits as well as testimony and an examination under oath be applicable to all cases.
In this particular case, the underlying claim is for evaluations, physical therapy treatment and
EMG/NCV studies rendered from March 29, 2010 through August 4, 2010. However,
Respondent has submitted evidence that the claim must be reduced by $1,127.17. The
Applicant billed $$656.81 for treatment from March 29, 2010 through April 21, 2010. The
Respondent has submitted proof that it paid $390.80 for the claim pursuant to Physical
Therapy Ground Rule 11 in that the Applicant cannot bill for more eight units of modalities
per day. Similarly, the Respondent reimbursed$$255.20 pursuant to fee schedule for a claim
totaling $440.36 for service from April 26, 2010 through May 3, 2010. The Respondent's
fee schedule contentions are correct. As a finding of fact, the Applicant has made a prima
facie showing of necessity for the services through submission of the proper claim forms,
and, therefore, the burden then switches to the Respondent to properly pay or deny the claim.
Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins. , 2007 N.Y. Slip Op.
522273U (Dist. Ct. Nassau Co. 12/3/2007).
Prior to discussing the substantive and procedural issues, the Respondent has also submitted
proof that $2,323.53 remains on the insurance policy. Respondent also claims that since
there is a prior pending lawsuit in State Court for $1,440.15 that this amount should also be
deducted from the policy. However, Respondent's counsel has submitted no authority that a
pending claim must be applied to reduce the policy limits. Therefore, as a finding of fact, the
policy limits are currently $3,233.53.
Document Demands and EUO Requests
Following receipt of the claims, the Respondent served the following verification requests on
this and numerous other cases. One verification request was a document demand that
requested the following:
- Ownership records including certificate of
incorporation, receipts for filing, stock certificates
and stock ledger;
- Income and expense records from time of
incorporation to present including: tax records and
financial statements, bank statements and general
ledgers, accounts receivables, all agreements
relating to financing, accounts receivable;
- List of individual who provided/supervised health
care services for claim with identification of
professional licenses, practice specialty, (i.e. W-2,
1099and business relationship with individual and
- List of days of week and hours that Dr. Williams
provides or supervises services;
- SOAP notes for patient with dates of service;
- All documents, including schedules agreements,
contracts, attachment or agenda relating to Zenith
Medical and any individual that leases equipment
or provides management, consulting or
administrative or billing services and any payments
- List of locations where Zenith Medical P.C.
renders services including a copy of all lease
agreements concerning the premises;
- Make, model year and serial number of all
diagnostic equipment rendered to patients;
- Agreements relating to purchase or lease of
The Respondent then submitted a verification request for an examination under oath
addressed to Zenith Medical, P.C. The request set forth the basis of the EUO:
you stated that Dr. Williams reviewed and signs off on
every visit performed by his nurse practitioners before
billing. Your response in addition to Zenith's billing, calls
into question what services Dr. Conrad Williams is actually
rendering himself in two different locations in two different
parts of the state on the same date. Geico is requesting that
Dr. Conrad R. Williams appear for an examination under
The first examination was scheduled for October 27, 2010 at the offices of the Carrier's inhouse
counsel in Woodbury, New York. The letter stated that the Applicant was to call no
later than seven days prior to this examination to confirm attendance. It also stated:
"if that date, time and/or location are inconvenient, please
contact A.L. and we will reschedule the examination for a
date and time as well as a location that is reasonably
convenient for you."
Through correspondence, Applicant objected and stated that Dr. Williams reviewed and
signed off on every visit performed by his nurse practitioners before billing. The claims
analyst then replied that the response still called into question how Dr. Williams could be in
two different locations on the same date.
Following the EUO requests in some of the cases there were objections by phone call or
in writing from Applicant or Applicant's counsel. In all cases, the Respondent complied with
the proper procedures for Notice of the EUO including follow-up requests. 11 NYCRR.
65.3.5. However, Dr. Williams was never produced for an EUO. Respondent then issued the
"You have failed to comply with your obligation to present a proper
proof of claim, as required under 11 N.Y.C.RR. § 65-1.1 by failing to
provide verification in the form of an examination under oath that
we requested you to attend on 10/27/10 and 11/30/10 and failing to
establish, among other items your compliance with 11 N.Y.C.R.R.
§65-3.11 and/or §65-3.16(a)(12). Therefore you have failed to
satisfy a condition of coverage, and your claim is denied. Unless
otherwise noted, all fees should be in accordance with the medical fee
schedule as per the rules and regulations authorized by the State of
New York, department of Insurance, 28 Amendment to Regulation
Applicant then filed a Request for Arbitration Notice of Arbitration on July 28, 2011.
Through this arbitration process the following additional discovery was exchanged.
Applicant Counsel's Affidavit
Applicant's counsel has submitted an affidavit. She contends that the Respondent filed
extensive, overly burdensome document demands on all Zenith claims, many of which had
had no relevance to the particular service rendered. For example, the Respondent would
demand the make, model year and serial number of an MRI machine on claims for office
visits where no such equipment was used. Counsel's affidavit noted that the
Applicant/Provider and counsel were barraged by the continuing receipt of hundreds of
unsigned "computer generated" demands similar to the one listed above that requested, in
essence, all of the provider's records for corporate structure, finances, schedules, leases as
well as medical records and bills. Counsel objected to sending out the same voluminous and
repetitive responses on each case. Counsel stated she would write or call the adjusters
handling the claims with these issues, but would make no progress and often be placed on
hold. Counsel stated that she even submitted the demands and made complaints to the State
Insurance Department. Applicant's counsel eventually had a meeting with Jim Lyons at
Geico who allegedly stated she could ignore the verification requests.
Although Counsel effectively conveys the Carrier's alleged abuses of verification requests,
her affidavit also relies on emotional arguments that are not based on reason and logic. For
example, counsel contends: that: 1) the supervising physician has been targeted because he is
an African American; 2) the supervising physician is "very well loved" by his patients,
"works late into the evening", and that she (referring to counsel) always had "a good feeling
about him even though she had never met him". In addition, counsel claims she has been a
"victim" of Carrier's verification requests. Counsel reliance on emotion rather than careful
legal analysis detracts from her arguments.
The Respondent has submitted an affidavit from an SIU investigator which makes the
"Specifically, the systemic nature in which Zenith had rendered
treatment and referred for testing to other PCs at the location
suggests that patients are being referred for, and provided with,
diagnostic testing and treatment pursuant to a fraudulent, predetermined
protocol and without reference to the
medical necessity of the treatment provided.
Zenith is located in Buffalo NY. Dr. Williams also allegedly owns
and operates Targeee Medical Services PC ("Targee" which is
located at 460 Midland Avenue, Staten Island NY 10306. GEICO
has received billing form both Zenith and Targee for services
allegedly rendered by Dr. Williams for the same dates of service
on more than one occasion. Given the distance between the two
facilities (approximately 408 miles) this is questionable. Requests
to perform a site inspection of the Zenith location and an interview
of Williams were denied."
Testimony- Yves Richard Blanc
For these proceedings, Applicant produced Yves-Richard Blanc who is director of business
development and administrator for Zenith Medical, P.C. He was produced for testimony
before this arbitrator as well on a separate day at the Buffalo offices of Respondent's counsel.
In both instances, Respondent's counsel claimed that he did not know Mr. Blanc was going
to be produced. Mr. Blanc testified as to the structure of the medical entity as well as the
names and status of numerous employees and independent contractors. Respondent's
counsel inquired as to whether Dr. Williams saw every patient or reviewed the patient's
records or charts before billing. Mr. Blanc initially referred to a letter where he noted that
every visit performed by a nurse practitioner was reviewed by Dr. Williams before billing,
but then testified:
"It's not every visit because there are a number of visits being done.
He reviews a lot of these notes. And because of the amount of
visits that we do in the practice, I cannot be sure that he's reviewed
every single one of them."
Mr. Blanc also testified that the director of accounts receivable reviews every office visit
done by both the nurse practitioner and Dr. Williams for fee schedule billing.
After a review of the voluminous submissions and contentions of counsel, the following two
issues are the heart of these cases. First, the Respondent/Carrier repeatedly submitted overly
broad and burdensome document requests that run counter to the goal of arbitration and the
expeditious, efficient and equitable resolution of such disputes. Secondly, the
Respondent/Carrier had a reasonable basis for an EUO of Dr. Conrad Williams, and he was
An arbitrator has equitable powers to promote the expeditious handling of verification
requests with the goal of the prompt payment of legitimate claims. Nyack Hosp. v. General
Motors Acceptance Corp., 8 N.Y.3d 294, 300, 832 N.Y.S.2d 880, 884 (2007); Infinity Health
Products, Ltd. v. Eveready Ins. Co., 67 A.D.3d 862, 890 N.Y.S.2d 545 (2d Dept. 2009).
Pursuant to the No-Fault regulations pertaining to arbitration proceedings, verification
requests can include both examinations under oath and document production on claims where
there is a reasonable basis to suspect a Malella violation or other fraud. An arbitrator will
ultimately determine whether a specific verification requests was reasonable or overly
As to the document demand as with any verification request, the purpose is to justify the
claim or obtain information necessary to properly review and process the claim. Westchester
Medical Center v. Travelers Property & Casualty Ins. Co., 2001 N.Y. Slip Op. 50082(U) at 3,
2001 WL 1682931 (Sup. Ct. Nassau Co., Ralph P. Franco, J., Oct. 10, 2001). In this
instance, the repeated service of the overly broad and burdensome document demand on
almost every claim filed by this provider was onerous and runs contrary to the Fair Claim
Practice Principles which include: 1) prompt and fair payment; 2) assisting in processing of
the claim and not treating the Applicant as an adversary; and 3) only demanding verification
when practical. 11 NYCRR 65-3.2.
As noted in Brownsville Advance Medical v. Country-Wide, 33 Misc.1236(a) (2011), the
Respondent should first attempt to obtain readily accessible public records on pertinent
issues. Further, the verification request must be relevant to the specific case. Clearly, the
policy behind the No-Fault regulations is not served when the insurer repeatedly requests the
same verification especially when the material demanded such as licensing information or the
structure of the business entity has previously been provided or is readily obtainable from
public web-sites or other sources. Medical Society of the State of New York, 100 N.Y.2d 854
2003); Fair Price Medical Supply v. Travelers, 10 N.Y.3d 556 (2003).
Further, a Carrier should have a common database or repository for basic provider information such as
licensing, structure and other relevant facts that are not claim specific. This information
should be accessible to its personnel including claims analysts to prevent the needless
duplication of verification requests. In the event of continued filing of excessive and
repeated demands, and arbitrator has the equitable powers to find such request invalid and
even award sanctions if the Carrier has previously been provided said information. 11
NYCRR 65-4.5 (o)(1).
However, in fairness to Respondent in this case, much of the information as to the structure
and operation of the Applicant Zenith Medical, P.C. was answered through the hearing
testimony and EUO of Mr. Blanc which occurred after the filing of the Request for
Examination Under Oath
To verify a claim, an EUO can be scheduled as often "as may reasonably be required" with
specific objective justification. 11 NYCRR 65-1.1, 65-3.5(e). At the time of the EUO, An
insurer is not required to provide the claimant with a copy of its internal guidelines for
conducting an EUO or of its reasons for requesting an EUO. Progressive Northeastern Ins.
Co. v. Manhattan Medical Imaging, 2009 N.Y. Slip Op. 31200(U) at 13, 2009 WL 1582471
(Sup. Ct. New York Co., Louis B. York, J., May 29, 2009). However, to prevail at an
arbitration proceeding, the Carrier has the burden of proof to justify the verification request.
This involves stating "indicators" for requesting an EUO along with evidence from
individuals with personal knowledge as to how the those indicators were met in the particular
case in other words why an EUO was appropriate under the circumstances. Progressive
Northeastern Ins. Co. v. Arguelles Medical P.C., 2009 N.Y. Slip Op. 32353(U), 2009 WL
3361691 (Sup. Ct. New York Co., Marcy S. Friedman, J., Oct. 9, 2009).
To establish this reasonable basis, numerous cases and arbitration decisions have looked to affidavits from
claims analysts or from the insurer's Special Investigation Unit (SIU). See: Progressive
Northeastern Ins. Co. v. Arguelles Medical P.C., supra,; Westchester Medical Center v.
Government Employees Ins. Co., 2009 N.Y. Slip Op. 30914(U), 2009 WL 1136785 (Sup. Ct.
Nassau Co., Daniel R. Palmieri, J.,Apr. 17, 2009)Merit Acupuncture, P.C. v. Lancer
Insurance Company, AAA No. 412012018490 (5/8/12).
In the instant case, the Carrier clearly had a reasonable or good faith basis for the EUO of Dr.
Conrad Williams. This was provided through the initial correspondence accompanying the
EUO request, the subsequent affidavit from the SIU unit, as well as the EUO of Mr. Blanc.
The reasonable basis for the EUO were issues pertaining to Dr. Williams' ability to conduct
or supervise treatment from two locations as well as his billing practices.
For whatever reason, Applicant's counsel has gone to great lengths to prevent the EUO of
Dr. Williams. Counsel produced Mr. Blanc, director of business development/Administrator,
on two occasions. Counsel has no authority for her contention that the Applicant or the party
served with a specific EUO request has the first right to determine who to produce. Further,
as a finding of fact, Mr. Blanc failed to adequately answer questions as to Dr. Williams'
specific involvement in evaluations and supervision of nurse practitioners and record
Pursuant to 11 NYCRR 65.15(d)(a), a Respondent can request additional verification from
an Applicant before acting on a claim. Section 11 NYCRR 65.15(g)(1)(i) finds that No-Fault
benefits are overdue only after the Insurer "receives verification of all relevant information
requested". Further, in this instance, the carrier's verification request for an EUO was
proper and actually gave the Applicant the opportunity to reschedule the examination at a
date, time and location that was reasonably convenient. Even if the Applicant/Provider
believed the EUO was improper, Applicant or Applicant's counsel still had a duty to
communicate with the insurer regarding the request. Dilon Medical Supply Corp. v.
Travelers Insurance Co., 7 Misc 3d 927 (Civ. Ct. Kings Co. 2005).
However, due to the sheer number of verification requests both for documents and the EUOs
served upon this Applicant/Provider by numerous claims analysts from Geico, this Carrier
cannot equitably contends that the Applicant's failure to comply with the EUO requests voids
coverage. As noted, the excessive number of repetitive document requests were, in large
part, overly burdensome and improper. This barrage of verification requests on numerous
claims all with different dates made compliance difficult, and violated the principles of the
Fair Claims Act. 11 NYCRR 65-3.2.
However, as earlier noted, the EUO request for Dr. Williams was not improper. The
Applicant will be given a further opportunity for compliance due, in part, to the excessive
and burdensome document demand. In sum, the Respondent's denial as to the EUO should
not be upheld as a breach of a condition precedent for coverage when it acted with "unclean
hands" through its submission of improper document requests. 11 NYCRR 65-4.5 (o)(1);
National Distillers & Chemical Corp. v Seyopp Corp., 17 N.Y.2d 12, 214 N.E.2d 361,
This claim is, therefore, denied without prejudice. It is not ripe since the 30-day
period in which a no-fault insurer must pay or deny a claim has not commenced until there is
compliance with the relevant verification request the EUO of Dr. Williams. 11 NYCRR §
65-3.8(a)(1); Complete Orthopedic Supplies, Inc. v. State Farm Ins. Co. 16 Misc.3d 996
(Civil Ct., Queens Co.2007).
Again, both parties must comply with the principles of the Fair Claims Act and communicate
and work together for resolution of the claims. It is suggested that both parties designate
individuals to coordinate and expedite the scheduling and compliance with relevant
verification requests. Further, any compliance with the EUO request as well as additional
relevant verification requests will be deemed applicable to all pending cases.
APPLICANT'S CLAIM IS DISMISSED WITHOUT PREJUDICE AS SAID CLAIM IS
NOT RIPE FOR ARBITRATION DUE TO THE OUTSTANDING VERIFICATION
REQUEST FOR AN EXAMINATION UNDER OATH OF DR. CONRAD WILLIAMS.