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EUO No-Show Denial Upheld: Sufficient Basis Existed for Demand

Lawrence Rogak

In the matter of the Arbitration between Fawzy Salama PLLC and State Farm Mutual Automobile Insurance Company

The issues in this arbitration are the Applicant’s unpaid bills for evaluations and electrodiagnostic testing, denied by the Respondent based on the Applicant’s failure to cooperate for an examination under oath. The Applicant brought this arbitration proceeding to obtain payment of $1,921.13 for the service dates running from June 16, 2009 to July 28, 2009. The conciliation submissions of both parties were made part of the record, as well as additional arbitration decisions that were submitted by the Respondent’s attorney at the hearing. In support of their position, the Applicant submitted their denials, the EUO scheduling letters, two opinion letters from the New York State Department, the affidavit of their SIU investigator, Laura Cevallos, corporate records of the 101st Ave. Management Company, and various arbitration decisions. Counsel for the Applicant argued that the affidavit of Laura Cevallos was insufficient, standing alone without the references cited, to establish a reasonable basis to conduct an examination under oath of the Applicant.

The affidavit of Laura Cevallos reads as follows:

“LAURA CEVALLOS, being duly sworn, deposes and says the following under the penalties of perjury:

  1. I am employed as an investigator in the Special Investigation Unit (“SIU”) by State Farm Mutual Insurance Company (“State Farm”). I have been so employed for the past six years. In the course of my employment, I investigated the eligibility of Medical Office of Fawzy Salama, PLLC (“Fawzy Salama”) to receive payment for no-fault benefits. Based upon my investigation, I have personal knowledge of the facts set forth in this affidavit and the reasons why State Farm sought an Examination Under Oath (“EUO”) of Fawzy Salama. 2. State Farm investigated Fawzy Salama due to questions surrounding the rendition and necessity of services; billing practices; and adherence to applicable New York statutes which grant authority to provide the services billed to State Farm, including the New York State Business Corporation Law, Education Law and Public Health Law; and whether the charges constitute “basic economic loss” within the meaning of New York Insurance Law Section 5102(a)(i).
  2. According to documents filed with New York State, Fawzy Salama was incorporated on April 3, 1998. According to bills, Fawzy Salama renders services out of 24 Bradley Avenue, Staten Island, New York, an address also used by Pro-Care Medical Billing & Management, Inc., a medical management company.
  3. Fawzy Salama renders services out of 24 Bradley Avenue concurrently with Richmond County Chiropractic Care, PC; Island Physical Therapy Rehabilitation, PC; TJG Acupuncture, PC; and Walter Pizzi, MD. These medical providers use the same billing address (P.O. Box 90537, State Island, New York 10309). A review of the medical records submitted to State Farm by the providers suggested that the treatment may be rendered based on a predetermined protocol. The reports of the initial evaluations are similar, with patients referred for MRIs and neurological consultations on the first visit. A sampling of files was sent by State Farm to an acupuncturist and to a neurologist for review. The acupuncturist concluded that the treatment rendered was inadequate and not in accordance with traditional Chinese medicine. The neurologist concluded that the clinical deficits noted in patients were unbelievable.
  4. On February 22, 2008, I traveled to Fawzy Salama’s office at 24 Bradley Avenue, Staten Island, New York. When I arrived at 24 Bradley Avenue, which was a house, I asked to speak with the doctor or office manager. A female behind the front desk at the office told me that the office managers were Grace Vagnone and Brian Edmonds, but that neither they nor a doctor were present. The female behind the desk would not permit me to inspect the facility.
  5. A second female who identified herself as a chiropractor wanted to know why I was present at the office. It is unclear who this female chiropractor was. All of the bills received by State Farm for chiropractic services at 24 Bradley Avenue listed Richmond County Chiropractic Care, PC’s treating provider as its alleged owner, Robert Attanasio, DC. This suggested that the services billed by Richmond County Chiropractic Care, PC (and possibly the other providers at the address) were really rendered by independent contractors.
  6. Richmond County Chiropractic Care, PC, and Fawzy Salama by extension, are connected to PCs that were illegally owned by laypersons. Richmond County Chiropractic Care, PC billed State Farm for services rendered at 95-12 101st Avenue, Ozone Park, New York which is the address for 101st Avenue Management Company. A search of the Lexis/Nexis database showed that the contact person for 101st Avenue Management Company is Robert Borsody. Robert Borsody is an attorney who has been identified as facilitating the nominal ownership of professional medical corporations by health care professionals, with true ownership and control of the PCs secretly vested in laypersons. In 2000, State Farm procured an affidavit from Dr. John Grauerholz, who identified Robert Borsody as the individual who facilitated his “nominal” ownership of “at least 29” PCs using management and lease agreements as the model.
  7. A search of Accurint, which is a locate-and-research database tool available to government, law enforcement and commercial customers such as State Farm, revealed that the office managers at 24 Bradley Avenue, Grace Vangone and Brian Edmonds, were both associated with Pro- Care Medical Billing & Management, Inc. Grace Vagnone and Brian Edmonds were also listed as purchasing 24 Bradley Avenue on June 28, 2007. In my experience in State Farm’s SIU, when health care providers share the same address as a management company that owns the property, and there are questionable treatment and billing practices occurring at that location, the medical providers are often owned, operated and controlled by the unlicensed laypersons who own the management company in violation of New York State laws.
  8. In light of the aforementioned, State Farm attempted to procure the examination under oath (EUO) of Fawzy Salama. To date, Fawzy Salama has not appeared for EUO. State Farm’s request for the EUO was made in good faith.”

I have considered the arguments of both sides. I find that the affidavit of Laura Cevallos is sufficient to establish a reasonable basis for the Respondent’s request for an examination under oath of the Applicant. The denials are sustained.