American Transit Insurance Company (ATIC) announced in April that it resolved a lawsuit filed against certain health care providers for what it alleged were fraudulent practices, along with other wrongful conduct regarding treatment and billing in the no-fault insurance coverage program. ATIC filed its lawsuit in December 2018 in the Supreme Court, New York County, against multiple defendants – including medical doctors, chiropractors, ambulatory surgery centers and related parties. At that time American Transit had received $28 million in billing which it alleged was improper. American Transit alleged a pattern of abusive billing under New York automobile no-fault coverage. The carrier later amended its complaint to add additional defendants and after the submission of additional claims, alleged that $37 million in improper claims had been received. ATIC’s suit sought a declaration the claims were unlawful and unenforceable, to enjoin the defendants from further wrong billing and to recover damages it sustained from defendants’ schemes.

ATIC also filed the action to protect its insureds, who, the complaint alleged, were being manipulated by defendants as part of the scheme. Ralph Bisceglia, the Chief Executive Officer and President of ATIC, stated that “American Transit insures many livery drivers. This is a demanding occupation and there are many challenges for the drivers. American Transit is committed to industry efforts to support the drivers. On top of the challenges the drivers face, they should not be pawns used by providers seeking to take advantage of the system and submit improper and/or exaggerated claims.”

John Poklemba, the General Counsel of American Transit, added, “Abusive and exaggerated claims affect not only the insurer, they affect the public as well, and American Transit believes every effort should be made to combat and discourage such claims.”

The Supreme Court sustained the complaint, determined the suit could go forward and rejected the motions of a number of the defendants who sought to dismiss the action. In ruling in ATIC’s favor, the Court held that “With respect to each of the moving defendants, the complaint makes ample factual, not merely conclusory, allegations that they participated in the scheme described by submitting fraudulent bills, and/or referring patients to one another in order to profit from such referrals without regard for the interests of the patients involved.”

ATIC also sought and obtained a preliminary injunction against the defendants, preventing them from pursuing their claims by arbitrations or collection lawsuits while the case continued. In granting the preliminary injunction, the Court held that “The plaintiff’s submissions… establish a likelihood of success on at least some of its claims. The plaintiff provides comprehensive and detailed factual allegations describing the defendants’ fraudulent scheme, including, inter alia, regulatory violations, unnecessary medical services, and unlawful referrals.”

The Court then enjoined the remaining defendants from “prosecuting further all pending arbitration proceedings or litigation to collect insurance proceeds against the plaintiff, pending a final determination in this action.”

This was critical as it meant that all such claims would be addressed in the suit ATIC had filed, rather than piecemeal in multiple arbitration proceedings and suits.

ATIC completed settlements with each of the defendants in the case. While the specific terms are confidential, ATIC is permitted to say it is satisfied with the terms on which the suits were resolved.

Ralph Bisceglia, the Chief Executive Officer and President of American Transit, further stated that “When livery drivers, passengers and pedestrians are injured in automobile accidents, American Transit believes that they should receive the most effective and affordable health care; and that this should happen in a manner that supports the commitment and efforts of those in the medical community dedicated to providing quality services to all constituents of the greater metropolitan area. American Transit has in the past and will in the future take proactive steps to ensure that occurs. American Transit has worked on initiatives in this area and is happy to work with those providers who offer fair and good health care to its insureds. However, when necessary, American Transit is willing to take action to contest abusive, excessive and unsupportable claims. It is satisfied with the outcome of this matter.”

Source: American Transit Insurance Company

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