On June 24, 2009, Associate Counsel Alexander Tisch of the New York State Insurance Department's Office of General Counsel issued an opinion letter that has generated a good deal of discussion and debate in the New York no-fault community. In his opinion letter, entitled "Examinations Under Oath of Assignees", Mr. Tisch opined that "[n]either the [New York] Insurance Law nor the regulations promulgated thereunder permit an insurer to require that a corporate assignee of no-fault benefits designate a specific person of the insurer’s choice to submit to an examination under oath." (My bold.)
Some of the provider attorney ilk have questioned whether or themselves opined that Mr. Tisch's opinion letter may be read in support of an argument that any assignee EUO letter which identifies a specific deponent is invalid or defective as a matter of law. See, David Gottlieb's No-Fault Paradise post and Damin Toell's It's No Fault of New York post on this subject. I, myself, chimed in on this and a related question on the comment thread to Gottlieb's No-Fault Paradise post. At stake are claim denials dating back six years that were based on an assignee's failure or refusal to produce a specifically requested person, such as the provider's nominal owner, for an EUO.
If the bright minds of Gottlieb and Toell think there may be an issue here, then there may be an issue here. Rather than disagree privately or publicly with them, and given the opportunity this private soap e-box gives me to express my views on subjects such as this, I post this open letter to Mr. Tisch and his Office of General Counsel in hopes that the New York no-fault community may have some clarity and/or clarification:
Dear Mr. Tisch --
I have read your June 24, 2009 opinion letter entitled "Examinations Under Oath of Assignees" in which you addressed this general question:
May an insurer, when requesting verification in the form of an examination under oath of an assignee of no-fault personal injury protection (“PIP”) benefits, require a corporate assignee to designate a specific person to be examined?
You opined that a "[n]either the Insurance Law nor the regulations promulgated thereunder permit an insurer to require that a corporate assignee of no-fault benefits designate a specific person of the insurer’s choice to submit to an examination under oath." An inquirer apparently had asked the Department whether the Insurance Law or the regulations promulgated thereunder require that a corporate entity or partnership submit a particular person specified by the insurer to an examination under oath. You correctly noted that both the Insurance Law and Regulation 68 are silent on this question, and that the reference to “any person named by the Company and subscribed the same” in 11 NYCRR § 65-1.1 refers to the person that is to conduct the examination under oath, such as an attorney, rather than to the “eligible injured person or that person’s assignee or representative” to be examined.
You underscored the lack of any helpful text in the regulation by further pointing out that "nowhere does the regulation address whether an assignee that is a corporate entity or partnership must submit a person for examination that is specifically identified by an insurer in its examination under oath notice."
In spite of the regulation's silence on the question posed, however, you answered it with a no, interpreting the acknowledged absence of any prescription or prohibition in the regulation to be, in essence, a prohibition. But a prohibition of what? A prohibition on asking? Or on requiring?
Limited to its express terms, your opinion means only that a no-fault insurer may not require a corporate assignee of no-fault benefits to designate a specific person of the insurer’s choice to submit to an EUO. It doesn't or shouldn't mean that an insurer may not request that a certain person, knowledgeable of the issues to be explored during the EUO, attend the EUO. Indeed, your opinion recognizes a corporate provider's obligation to produce such a knowledgeable person for the EUO by stating:
Although a duty to cooperate is not expressly included in the no-fault endorsement, the Department’s Office of General Counsel is of the view that the principle enunciated in Somerstein Caterers that a corporation ought to produce employees familiar with the claim for an examination under oath should extend to a no-fault examination under oath of an assignee that is a corporation or partnership.
Here's the problem with your opinion. Some might interpret it to mean that an EUO request to a corporate provider which designates or names a particular person is defective or invalid under Regulation 68. Some might also attempt to extend your opinion to mean that all denials of no-fault benefits that were based on a corporate provider's EUO non-appearance or no-show are invalid if the related EUO letter or notice named a specific representative of the corporate provider, such as its purported owner, as the person to be examined under oath.
Either such interpretation of your opinion would be unwarranted and incorrect, in my opinion. My take on your opinion is that without any specific prohibition in either the New York Insurance Law or Regulation 68, an EUO request that names a certain owner or employee of a corporate provider is not legally invalid, but merely cannot serve as the basis of a denial if the provider produces someone else who is familiar with the issues to be explored in the EUO. Am I right?
You obviously don't think that a corporate provider which receives a person-specific EUO request can ignore it, do you? Some might think that your opinion allows providers to do so.
Section 65-3.2(c) of Regulation 68 mandates that "[w]hen verification of facts is necessary, it should be done as expeditiously as possible." Your opinion could undermine that claims handling principle if corporate assignees are allowed either to ignore person-specific EUO requests or produce a string of unknowledgeable employees of the assignee to frustrate or prolong the EUO process. Your opinion does state:
If the insurer is unable to garner the information that it needs from the examination under oath of a person submitted by the assignee corporation or partnership, the insurer may request additional examinations of the assignee until a person is submitted for examination by the assignee who can provide the “items necessary to verify the claim.”
Is there a limit on how many such additional EUOs an insurer may request? Who gets to decide whether the person submitted by the assignee "can provide 'the items necessary to verify the claim'"? To shorten the EUO process, wouldn't it be better for the insurer to say that "we want to examine Dr. So-and-So about such-and-such" so that the corporate assignee can determine whether there is any other person as or more familiar with the such-and-such? And at what point would you say that Somerstein Caterers allows the no-fault insurer after the first, second or third useless EUO to say, "Okay, if you don't produce Dr. So-and-So for an EUO, we will deny this claim"?
As you can see, your answer to what may have seemed like a simple question has itself raised a number of questions that, if left unanswered, could negatively affect the processing of no-fault claims in New York. I'm sure you didn't mean for your opinion to serve as the basis for ignoring or invalidating assignee EUO requests. Some clarification of your opinion would be helpful to both insurers and providers on this issue.
Thank you for your consideration of this issue. Both insurers and providers look forward to hearing from you.
Roy A. Mura
MURA & STORM, PLLC