In New York, auto insurers like GEICO, State Farm, and Allstate have been aggressively commencing lawsuits against healthcare providers alleging they committed for fraud, violated violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, and/or were unjustly enriched in connection with reimbursements for No-Fault insurance benefits. These lawsuits can have a significant effect on practitioners who treat patients involved in automobile accidents as the insurers often withhold benefit reimbursement payments during litigation, seek to temporarily and permanently stop collection efforts, demand repayments of prior reimbursements (in some cases exceeding a million dollars), and request courts award treble damages.
The crux of these lawsuits are allegations that defendant-medical providers: (1) systematically billed for unnecessary treatments and services; (2) were not appropriately licensed to perform the covered services; (3) had granted ownership or control of their medical practice to unlicensed individuals; (4) engaged in fee-splitting arrangements; and/or (5) paid kickbacks in exchange for patient referrals.
Before litigation is commenced, insurers typically build their case by requesting information about claims from the providers and questioning witnesses through an examination under oath. They also use computer systems and algorithms to identify patterns that they claim are improper. In some cases, they may also surveil the provider’s practice and attempt to obtain information from their staff and patients.
Any physician, chiropractor, physical therapist, acupuncturist, or other provider seeking No-Fault reimbursement can be the target of an investigation, and ultimately a lawsuit, at the whim of the insurers. Insurers commonly target providers who: (1) treat patients at multiple locations; (2) treat patients in a suite or building where other providers are treating those same patients; (3) work with a managed services organization; (4) lease space to or from a medical practice where there is a referral relationship; (5) have non-compliant employee or independent contractor relationships; (6) have ongoing relationships with attorneys and funding companies; and/or (7) render treatment that is suspectable to being deemed “cookie-cutter” by the carriers.
A medical provider’s best defense to these proceedings is to be forward thinking about documenting their professional and business agreement and treatment in a compliant manner. Doing so may be the difference between a negotiated resolution at the beginning of an investigation and a lengthy and expensive litigation.
The potential for criminal prosecution, including by the Department of Justice for health care fraud (18 U.S.C.A. § 1347), is another reason to seriously consider and vet one’s compliance with both No-Fault statutes and professional obligations laws. In a recent case, the Southern District of New York restated that one can be prosecuted for the aforementioned misconduct that is at the core of the auto policy makers’ lawsuits.
Should you need the assistance of experienced counsel to assist you in evaluating your compliance with New York State No-Fault law and related statutes and regulations or defending a lawsuit, do not hesitate to contact Joshua D. Sussman at (516) 287-8035 or [email protected].
Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.
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