Preview
FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
-------- -------- X Index No.:
Government Employees Insurance Co., GEICO Indemnity Co., Date Purchased:
GEICO General Insurance Company and GEICO Casualty Co.
(collectively "GEICO"),
Plaintiff, SUMMONS
-against- Plaintiff designates Nassau
County as the place of trial
Optimus Plus Products Corp., The basis of the venue designated is:
Plaintiff's and Defendant's place
of business and residence
CPLR §§ 503(A) and (C)
Defendants.
------------------- ---------------------------X
SUMMONS
TO THE ABOVE NAMED DEFENDANT(S):
YOU ARE HEREBY SUMMONED to answer the Complaint in this action and to serve
a copy of your Answer, or, if the Complaint is not served with this Summons, to serve a Notice of
Appearance, on the plaintiff's attorney(s) within 20 days after the service of this Summons,
exclusive of the day of service; or within 30 days after the service is complete if this Summons is
not personally delivered to you within the State of New York; and in case of your failure to appear
or answer, judgment will be taken against you by default for the relief demanded in the complaint.
Dated: Melville, New York
September 9, 2019
Respectfully,
Law Office of Goldstein and Flecker
GEICO Staff Counsel
Meghan Grif m, sq.
Attorneys for Plaintiff
2 Huntington Quadrangle
Suite 2N01
Melville, New York 11747
(516)714-7748
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To: Optimus Plus Products Corp.
1820 Avenue M
Suite 648
Brooldyn, NY 11230-5347
Optimus Plus Products Corp.
363 The Hideout
Lake Ariel, PA 18436
2
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
-----------------------------------------------------------------X
Government Employees Insurance Co., GEICO Indemnity Co.,
GEICO General Insurance Company and GEICO Casualty Co. Index Number:
(collectively "GEICO"),
Plaintiff,
-against-
Optimus Plus Products Corp.,
Defendants.
--------------- -------- ¬----------------------------X
VERIFIED COMPLAINT
Plaintiffs GEICO (collectively, "Plaintiff"), by and through its counsel, Law Office of Goldstein
& Flecker, as and for its Verified Complaint against Defendant, hereby allege as follows:
PRELIMINARY STATEMENT
1. This is an action for a declaratory judgment pursuant to CPLR §3001 in which
GEICO seeks a determination that it is not legally obligated to pay Optimus Plus Products Corp.
("Provider"
("Provider") or "Defendant") for claims that Defendant has submitted to GEICO
seeking reimbursement for durable medical equipment ("DME") that were allegedly rendered to
individuals who were involved in automobile accidents and eligible for coverage under GEICO
insurance policies ("Insureds") in New York. GEICO seeks this judicial determination because
Defendant has systemically failed and/or refused to appear for examinations under oath ("EUOs")
that have been requested by GEICO, which constitutes a failure by Defendant to meet a condition
precedent to coverage and a violation of its obligations under the No-Fault Laws. The claims at
"A."
issue in this declaratory judgment action are identified on Exhibit
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2. This action seeks a declaration that Defendant is not entitled to receive No-Fault
reimbursements as Defendant failed to meet a condition precedent to coverage as set forth in the
No-Fault Regulation and the underlying policies of insurance.
NATURE OF ACTION
3. GEICO alleges that Optimus Plus Products failed to meet a condition precedent to
coverage by failing to appear for Examinations Under Oath ("EUOs").
4. The EUOs of Optimus Plus Products were requested pursuant to the terms and
conditions of the applicable policies of insurance and the No-Fault Regulations.
5. By failing to appear for EUOs, Optimus Plus Products breached a material
condition precedent to coverage under the applicable insurance policies and the No Fault
Regulations. The failure of Optimus Plus Products to meet the condition precedent to coverage
vitiates GEICO's obligation to honor any bills submitted by Optimus Plus Products for
reimbursement pursuant to the Insurance Law and the No Fault Regnktion for which EUOs of
Optimus Plus Products were requested and Optimus Plus Products failed to appear.
6. As such, Optimus Plus Products is not entitled to seek, keep or receive No-Fault
reimbursements from GEICO for all claims in which EUOs of Optimus Plus Products were
requested and which Optimus Plus Products failed to appear.
7. Additionally, GEICO is not obligated to pay reimbursement for any No-Fault
related matters pertaining to the claims in which EUOs of Optimus Plus Products were requested
and Optimus Plus Products failed to appear.
8. GEICO seeks a declaration that as a result of the failure of Optimus Plus Products
to appear for EUOs, Optimus Plus Products has no standing or legal right to seek, keep or receive
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No-Fault reimbursements from GEICO because Defendant has systematically failed and/or
refused to appear for EUOs.
9. Accordingly, GEICO requests a judgment pursuant to CPLR §3001, declaring that
Optimus Plus Products has no right to receive payment for the bills submitted to GEICO and listed
"A"
on Exhibit because it failed and/or refused to appear for an EUO requested by GEICO, and
thus breached a condition of coverage and violated its obligations under the No-Fault Laws.
PARTIES
10. GEICO is a New York insurer that is duly authorized to issue automobile insurance
policies in the State of New York. GEICO maintains an office to conduct business relating to the
administration of claims in Woodbury, New York.
11. Defendant Optimus Plus Products Corp. is a New York domestic business
corporation that was incorporated on or about April 3, 2017. The address on file with the NYS
Department of State, Division of Corporations is 363 The Hideout, Lake Ariel, Pennsylvania
18436. At all relevant times, Optimus Plus Products Corp. has conducted business in the State of
New York, specifically 1820 Avenue M, Suite 648, Brooklyn, New York 11230.
JURISDICTION AND VENUE
12. This Court has jurisdiction over Defendant because it is a New York DME supplier
that conducts business within New York State, the insurance policies were issued by GEICO in
New York and the conduct which forms the basis for this declaratory judgment occurred in the
State of New York. Venue is proper in the County of Nassau pursuant to C.P.L.R. §503(a)
inasmuch as GEICO resides and conducts business in Nassau County.
5
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ALLEGATIONS COMMON TO ALL CAUSES OF ACTION
L An Overview of the No-Fault Laws and NY Licensing Laws
13. GEICO underwrites automobile insurance in the State of New York.
14. Under New York's Comprehensive Motor Vehicle Insurance Reparations Act
(N.Y. Ins. Law §§ 5101, e_t seg.) and the regulations promulgated pursuant thereto (11 N.Y.C.R.R.
§§ 65, et sn) (collectively referred to as the "No-Fault Laws"), automobile insurers are required
to provide Personal Injury Protection Benefits ("No-Fault Benefits") to Insureds.
15. No-Fault Benefits include up to $50,000.00 per insured for necessary expenses that
are incurred for healthcare goods and services. In addition to reimbursement for healthcare goods
and services, insured parties may receive up to $2,000.00 per month to cover loss of earnings from
work as an element of their $50,000.00 maximum benefit.
16. Under the No-Fault Laws, Insureds can assign their right to No-Fault Benefits to
professional health service providers and/or DME suppliers, as long as the providers meet
applicable New York State and local licensing requirements to perform such services in New York.
With a duly executed assignment, a healthcare provider may submit claims directly to an insurance
company and receive payment for necessary medical services rendered, using the claim form
approved by the New York State Department of Insurance (known as the "Verification of
Service"
Treatment by Attending Physician or Other Provider of Health or, more commonly, as
an "NF-3"). Once the healthcare provider takes an assignment of an Insured's rights, the provider
cannot seek to recover payment from the Insured.
17. Finally, pursuant to N.Y. Ins. Law § 403, all bills submitted by a healthcare provider
and/or DME supplier to GEICO and all other insurers must be verified by the healthcare provider
subject to the following warning:
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Any person who knowingly and with intent to defraud any insurance company or
other person files an application for insurance or statement of claim containing any
materially false information, or conceals for the purpose of misleading, information
concerning any fact material thereto, commits a fraudulent insurance act, which is
a crime ...
18. Under the New York State Medicaid Program, the maximum permissible charge
for DME and orthotic devices is the fee amount that is mandated to be billed and paid for the DME
and orthotic devices at the time such DME and orthotic devices are provided. Specifically, in
Gov't Emples. Ins. Co. v. Li-Elle Serv.. 2013 U.S. Dist. LEXIS 31628 (E.D.N.Y., Mar. 6, 2013),
the Court states in relevant part that:
[i]f the New York State Medicaid program has not established a fee payable for the
specific item, then the fee payable shall be the lesser of the acquisition cost (i.e.,
the line item cost from a manufacturer or wholesaler net of any rebates, discounts
or other valuable considerations, mailing, shipping, handling, insurance costs or
any sales tax) to the provider plus 50%, or the usual and customary price charged
to the general public.
19. Optimus Plus Products Corp. was billing for supplies that did not have an
established fee under the New York State Medicaid Program. Based on that, GEICO sought to
have the fee explained as to whether your charge is the lesser of: (i) the acquisition cost to you
plus 50%, or (ii) the usual and customary price charged to the general public. Moreover, GEICO
deemed it necessary to have supporting documentation for your acquisition cost, including (i) a
detailed description of the equipment including the name of the manufacturer, make and model,
(ii) any photographs or pictures identifying the type of supplies provided, (iii) the wholesale
invoice, and (iv) proof of payment to the wholesaler.
20. According to the New York State Department of Financial Services which governs
no-fault in New York State, any charges for health services submitted for reimbursement under
Workers'
the no-fault law are subject to the fee schedules put forth by the Compensation Board.
7
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workers'
The compensation regulation concerning durable medical equipment ("DME") in turn
adopts the New York State Medicaid fee schedule in 12 N.Y.C.R.R. § 442.2, which provides:
The maximum permissible charge for the purchase of durable medical equipment,
reedical/surgical supplies, and orthotic and prosthetic appliances shall be the fee
payable for such equipment or supplies under the New York State Medicaid
program at the time such equipment and supplies are provided...
21. The above regulations and allegations set forth the basis for this declaratory
judgment action in which GEICO seeks a decision that it is not legally obligated to pay fraudulent
claims submitted by Optimus Plus Products Corp.
II. An Overview of New York's No-Fault Regulations Pertaining to Verification of
Claims
22. The No-Fault Laws obligate healthcare providers and/or DME supplies that seek
payment of No-Fault Benefits to provide insurers with additional verification in order to establish
proof of their claims.
23. The prescribed No-Fault policy endorsement set forth in 11 N.Y.C.R.R. § 65-1.1
includes a specific section entitled "Conditions", which states in part, that "upon request by the
Company, the eligible injured person or that person's assignee . . . shall (b) as may reasonably be
required, submit to an examination under oath by any person named by the Compañy, and shall
subscribe to same .. . , and (d) provide any other pertinent information that may assist the Company
payable."
in determining the amount that is
24. The prescribed No-Fault policy endorsement set forth in 11 N.Y.C.R.R. § 65-1.1
also states that "No action shall lie against the Company, unless, as a condition precedent thereto,
coverage."
there shall have been full compliance with the terms of this
25. The proof of claim requirement in the No-Fault policy endorsement, 11 N.Y.C.R.R.
§ 65-3.5(b) states in relevant part:
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Subsequent to the receipt of one or more of the completed verification forms, any
additional verification required by the insurer to establish proof of claim shall be
requested within 15 business days of receipt of the prescribed verification forms.
Any requests by an insurer for additional verification need not be made on any
prescribed or particular form . . .
26. Additionally, 11 N.Y.C.R.R. § 65-3.5(c) states in relevant part:
The insurer is entitled to receive all items necessary to verify the claim directly
from the parties from whom such verification was requested.
27. An insurer is entitled to any information that is necessary for the insurer to
determine whether the claim submitted by the healthcare provider and/or DME supplier is
payable. The issues for which additional verification can be properly sought are not limited, and
can include, for example:
(i) whether the supplies provided by the DME provider were rendered and/or
medically necessary;
(ii) whether the supplies provided were billed in accordance with the New York
State Medicaid Program; and
(iii) whether the items billed for were actually provided to the eligible injured
persons.
28. Under 11 N.Y.C.R.R. § 65-3.5(b) and 65-3.6, upon receipt of a bill, an insurer has
15 business days to issue a verification request, including a request for an EUO. Upon a parties
failure to provide such verification within 30 days, i.e., failure to appear for an EUO, an insurer
within 10 calendar days, shall contact the party from whom verification has been requested and
not been provided. At which time a follow-up EUO is scheduled.
29. Because an EUO is a condition of coverage, an insurer may deny a healthcare
provider's or individual's claim for No-Fault Benefits if the healthcare provider or individual
claimant refuses to appear for an EUO, which constitutes a material breach of the insurance policy
9
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and violation of the regulations. The New York State Department of Insurance has confirmed this
conclusion by opinion letter, dated December 22, 2006 which states:
As referenced above in Section 65-1.1(d), the prescribed No-Fault endorsement
requires that, as a condition to coverage, an eligible injured person or that person's
assignee shall "...as may be reasonably required, submit to examinations under
Company..."
oath by any person named by the
***
When an EUO is required and the party required to appear fails to attend a
scheduled EUO, the insurer must meet its obligations under N.Y. Comp Codes R.
& Regs. tit 11, §65-3.6(b) and within 10 calendar days, contact the party from
whom verification (the has been requested and not non-
EUO) provided, i.e.,
attendance at the scheduled EUO, in order to afford the party a second opportunity
to attend an EUO. If the party fails to appear at the rescheduled EUO, an insurer
may issue a denial of pending claims based upon the
Preview
FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -------- -------- X Index No.: Government Employees Insurance Co., GEICO Indemnity Co., Date Purchased: GEICO General Insurance Company and GEICO Casualty Co. (collectively "GEICO"), Plaintiff, SUMMONS -against- Plaintiff designates Nassau County as the place of trial Optimus Plus Products Corp., The basis of the venue designated is: Plaintiff's and Defendant's place of business and residence CPLR §§ 503(A) and (C) Defendants. ------------------- ---------------------------X SUMMONS TO THE ABOVE NAMED DEFENDANT(S): YOU ARE HEREBY SUMMONED to answer the Complaint in this action and to serve a copy of your Answer, or, if the Complaint is not served with this Summons, to serve a Notice of Appearance, on the plaintiff's attorney(s) within 20 days after the service of this Summons, exclusive of the day of service; or within 30 days after the service is complete if this Summons is not personally delivered to you within the State of New York; and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. Dated: Melville, New York September 9, 2019 Respectfully, Law Office of Goldstein and Flecker GEICO Staff Counsel Meghan Grif m, sq. Attorneys for Plaintiff 2 Huntington Quadrangle Suite 2N01 Melville, New York 11747 (516)714-7748 1 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 To: Optimus Plus Products Corp. 1820 Avenue M Suite 648 Brooldyn, NY 11230-5347 Optimus Plus Products Corp. 363 The Hideout Lake Ariel, PA 18436 2 2 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -----------------------------------------------------------------X Government Employees Insurance Co., GEICO Indemnity Co., GEICO General Insurance Company and GEICO Casualty Co. Index Number: (collectively "GEICO"), Plaintiff, -against- Optimus Plus Products Corp., Defendants. --------------- -------- ¬----------------------------X VERIFIED COMPLAINT Plaintiffs GEICO (collectively, "Plaintiff"), by and through its counsel, Law Office of Goldstein & Flecker, as and for its Verified Complaint against Defendant, hereby allege as follows: PRELIMINARY STATEMENT 1. This is an action for a declaratory judgment pursuant to CPLR §3001 in which GEICO seeks a determination that it is not legally obligated to pay Optimus Plus Products Corp. ("Provider" ("Provider") or "Defendant") for claims that Defendant has submitted to GEICO seeking reimbursement for durable medical equipment ("DME") that were allegedly rendered to individuals who were involved in automobile accidents and eligible for coverage under GEICO insurance policies ("Insureds") in New York. GEICO seeks this judicial determination because Defendant has systemically failed and/or refused to appear for examinations under oath ("EUOs") that have been requested by GEICO, which constitutes a failure by Defendant to meet a condition precedent to coverage and a violation of its obligations under the No-Fault Laws. The claims at "A." issue in this declaratory judgment action are identified on Exhibit 3 3 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 2. This action seeks a declaration that Defendant is not entitled to receive No-Fault reimbursements as Defendant failed to meet a condition precedent to coverage as set forth in the No-Fault Regulation and the underlying policies of insurance. NATURE OF ACTION 3. GEICO alleges that Optimus Plus Products failed to meet a condition precedent to coverage by failing to appear for Examinations Under Oath ("EUOs"). 4. The EUOs of Optimus Plus Products were requested pursuant to the terms and conditions of the applicable policies of insurance and the No-Fault Regulations. 5. By failing to appear for EUOs, Optimus Plus Products breached a material condition precedent to coverage under the applicable insurance policies and the No Fault Regulations. The failure of Optimus Plus Products to meet the condition precedent to coverage vitiates GEICO's obligation to honor any bills submitted by Optimus Plus Products for reimbursement pursuant to the Insurance Law and the No Fault Regnktion for which EUOs of Optimus Plus Products were requested and Optimus Plus Products failed to appear. 6. As such, Optimus Plus Products is not entitled to seek, keep or receive No-Fault reimbursements from GEICO for all claims in which EUOs of Optimus Plus Products were requested and which Optimus Plus Products failed to appear. 7. Additionally, GEICO is not obligated to pay reimbursement for any No-Fault related matters pertaining to the claims in which EUOs of Optimus Plus Products were requested and Optimus Plus Products failed to appear. 8. GEICO seeks a declaration that as a result of the failure of Optimus Plus Products to appear for EUOs, Optimus Plus Products has no standing or legal right to seek, keep or receive 4 4 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 No-Fault reimbursements from GEICO because Defendant has systematically failed and/or refused to appear for EUOs. 9. Accordingly, GEICO requests a judgment pursuant to CPLR §3001, declaring that Optimus Plus Products has no right to receive payment for the bills submitted to GEICO and listed "A" on Exhibit because it failed and/or refused to appear for an EUO requested by GEICO, and thus breached a condition of coverage and violated its obligations under the No-Fault Laws. PARTIES 10. GEICO is a New York insurer that is duly authorized to issue automobile insurance policies in the State of New York. GEICO maintains an office to conduct business relating to the administration of claims in Woodbury, New York. 11. Defendant Optimus Plus Products Corp. is a New York domestic business corporation that was incorporated on or about April 3, 2017. The address on file with the NYS Department of State, Division of Corporations is 363 The Hideout, Lake Ariel, Pennsylvania 18436. At all relevant times, Optimus Plus Products Corp. has conducted business in the State of New York, specifically 1820 Avenue M, Suite 648, Brooklyn, New York 11230. JURISDICTION AND VENUE 12. This Court has jurisdiction over Defendant because it is a New York DME supplier that conducts business within New York State, the insurance policies were issued by GEICO in New York and the conduct which forms the basis for this declaratory judgment occurred in the State of New York. Venue is proper in the County of Nassau pursuant to C.P.L.R. §503(a) inasmuch as GEICO resides and conducts business in Nassau County. 5 5 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 ALLEGATIONS COMMON TO ALL CAUSES OF ACTION L An Overview of the No-Fault Laws and NY Licensing Laws 13. GEICO underwrites automobile insurance in the State of New York. 14. Under New York's Comprehensive Motor Vehicle Insurance Reparations Act (N.Y. Ins. Law §§ 5101, e_t seg.) and the regulations promulgated pursuant thereto (11 N.Y.C.R.R. §§ 65, et sn) (collectively referred to as the "No-Fault Laws"), automobile insurers are required to provide Personal Injury Protection Benefits ("No-Fault Benefits") to Insureds. 15. No-Fault Benefits include up to $50,000.00 per insured for necessary expenses that are incurred for healthcare goods and services. In addition to reimbursement for healthcare goods and services, insured parties may receive up to $2,000.00 per month to cover loss of earnings from work as an element of their $50,000.00 maximum benefit. 16. Under the No-Fault Laws, Insureds can assign their right to No-Fault Benefits to professional health service providers and/or DME suppliers, as long as the providers meet applicable New York State and local licensing requirements to perform such services in New York. With a duly executed assignment, a healthcare provider may submit claims directly to an insurance company and receive payment for necessary medical services rendered, using the claim form approved by the New York State Department of Insurance (known as the "Verification of Service" Treatment by Attending Physician or Other Provider of Health or, more commonly, as an "NF-3"). Once the healthcare provider takes an assignment of an Insured's rights, the provider cannot seek to recover payment from the Insured. 17. Finally, pursuant to N.Y. Ins. Law § 403, all bills submitted by a healthcare provider and/or DME supplier to GEICO and all other insurers must be verified by the healthcare provider subject to the following warning: 6 6 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime ... 18. Under the New York State Medicaid Program, the maximum permissible charge for DME and orthotic devices is the fee amount that is mandated to be billed and paid for the DME and orthotic devices at the time such DME and orthotic devices are provided. Specifically, in Gov't Emples. Ins. Co. v. Li-Elle Serv.. 2013 U.S. Dist. LEXIS 31628 (E.D.N.Y., Mar. 6, 2013), the Court states in relevant part that: [i]f the New York State Medicaid program has not established a fee payable for the specific item, then the fee payable shall be the lesser of the acquisition cost (i.e., the line item cost from a manufacturer or wholesaler net of any rebates, discounts or other valuable considerations, mailing, shipping, handling, insurance costs or any sales tax) to the provider plus 50%, or the usual and customary price charged to the general public. 19. Optimus Plus Products Corp. was billing for supplies that did not have an established fee under the New York State Medicaid Program. Based on that, GEICO sought to have the fee explained as to whether your charge is the lesser of: (i) the acquisition cost to you plus 50%, or (ii) the usual and customary price charged to the general public. Moreover, GEICO deemed it necessary to have supporting documentation for your acquisition cost, including (i) a detailed description of the equipment including the name of the manufacturer, make and model, (ii) any photographs or pictures identifying the type of supplies provided, (iii) the wholesale invoice, and (iv) proof of payment to the wholesaler. 20. According to the New York State Department of Financial Services which governs no-fault in New York State, any charges for health services submitted for reimbursement under Workers' the no-fault law are subject to the fee schedules put forth by the Compensation Board. 7 7 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 workers' The compensation regulation concerning durable medical equipment ("DME") in turn adopts the New York State Medicaid fee schedule in 12 N.Y.C.R.R. § 442.2, which provides: The maximum permissible charge for the purchase of durable medical equipment, reedical/surgical supplies, and orthotic and prosthetic appliances shall be the fee payable for such equipment or supplies under the New York State Medicaid program at the time such equipment and supplies are provided... 21. The above regulations and allegations set forth the basis for this declaratory judgment action in which GEICO seeks a decision that it is not legally obligated to pay fraudulent claims submitted by Optimus Plus Products Corp. II. An Overview of New York's No-Fault Regulations Pertaining to Verification of Claims 22. The No-Fault Laws obligate healthcare providers and/or DME supplies that seek payment of No-Fault Benefits to provide insurers with additional verification in order to establish proof of their claims. 23. The prescribed No-Fault policy endorsement set forth in 11 N.Y.C.R.R. § 65-1.1 includes a specific section entitled "Conditions", which states in part, that "upon request by the Company, the eligible injured person or that person's assignee . . . shall (b) as may reasonably be required, submit to an examination under oath by any person named by the Compañy, and shall subscribe to same .. . , and (d) provide any other pertinent information that may assist the Company payable." in determining the amount that is 24. The prescribed No-Fault policy endorsement set forth in 11 N.Y.C.R.R. § 65-1.1 also states that "No action shall lie against the Company, unless, as a condition precedent thereto, coverage." there shall have been full compliance with the terms of this 25. The proof of claim requirement in the No-Fault policy endorsement, 11 N.Y.C.R.R. § 65-3.5(b) states in relevant part: 8 8 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms. Any requests by an insurer for additional verification need not be made on any prescribed or particular form . . . 26. Additionally, 11 N.Y.C.R.R. § 65-3.5(c) states in relevant part: The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested. 27. An insurer is entitled to any information that is necessary for the insurer to determine whether the claim submitted by the healthcare provider and/or DME supplier is payable. The issues for which additional verification can be properly sought are not limited, and can include, for example: (i) whether the supplies provided by the DME provider were rendered and/or medically necessary; (ii) whether the supplies provided were billed in accordance with the New York State Medicaid Program; and (iii) whether the items billed for were actually provided to the eligible injured persons. 28. Under 11 N.Y.C.R.R. § 65-3.5(b) and 65-3.6, upon receipt of a bill, an insurer has 15 business days to issue a verification request, including a request for an EUO. Upon a parties failure to provide such verification within 30 days, i.e., failure to appear for an EUO, an insurer within 10 calendar days, shall contact the party from whom verification has been requested and not been provided. At which time a follow-up EUO is scheduled. 29. Because an EUO is a condition of coverage, an insurer may deny a healthcare provider's or individual's claim for No-Fault Benefits if the healthcare provider or individual claimant refuses to appear for an EUO, which constitutes a material breach of the insurance policy 9 9 of 33 FILED: NASSAU COUNTY CLERK 09/09/2019 11:01 AM INDEX NO. 612343/2019 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/09/2019 and violation of the regulations. The New York State Department of Insurance has confirmed this conclusion by opinion letter, dated December 22, 2006 which states: As referenced above in Section 65-1.1(d), the prescribed No-Fault endorsement requires that, as a condition to coverage, an eligible injured person or that person's assignee shall "...as may be reasonably required, submit to examinations under Company..." oath by any person named by the *** When an EUO is required and the party required to appear fails to attend a scheduled EUO, the insurer must meet its obligations under N.Y. Comp Codes R. & Regs. tit 11, §65-3.6(b) and within 10 calendar days, contact the party from whom verification (the has been requested and not non- EUO) provided, i.e., attendance at the scheduled EUO, in order to afford the party a second opportunity to attend an EUO. If the party fails to appear at the rescheduled EUO, an insurer may issue a denial of pending claims based upon the