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Coalition Against Insurance Fraud

NY patients allegedly sent to Jersey to inflate no-fault bills

February 07, 2019, Saddle Brook, NJ — The owner of a Saddle Brook surgery center where poor sterilization and other deficiencies may have exposed patients to HIV and hepatitis owns another North Jersey surgery center that has been alleged in a lawsuit to have defrauded an auto-insurance company of millions of dollars.

HealthPlus Surgery Center in Saddle Brook was recently ordered to notify more than 3,700 patients that they should have their blood tested after infection-control lapses were cited by New Jersey inspectors, who shut the center for three weeks. Its owner, Yan Moshe, a Long Island businessman, also owns Dynamic Surgery Center, a Hackensack facility that is the subject of the recent lawsuit.

The lawsuit says car accident victims from New York were sent to the Hackensack center so their health care providers could get higher insurance payments than if the procedures were done in New York. The suit, filed in December by American Transit Insurance Company, says this depleted the patients’ coverage faster and defrauded the insurer of millions of dollars.

Schemes that exploit no-fault auto insurance coverage – by inflating charges and billing for treatment that may not be medically necessary – help drive up premiums for honest drivers, experts say. New York and New Jersey have some of the highest car insurance premiums in the nation; they have also been home to several schemes that have drawn scrutiny in recent years from insurance companies and prosecutors.

But this type of insurance fraud can cause more than financial harm: Patients who receive excessive or unnecessary care may be exposed to additional health risks by undergoing anesthesia and invasive procedures.

The defense attorney for Dynamic Surgery Center and Moshe says American Transit’s lawsuit is “flimsy,” and shows a “profound misunderstanding” of insurance law.

HealthPlus, the Saddle Brook center that Moshe owns, was not named in the American Transit lawsuit.

But documents obtained by NorthJersey.com and the USA TODAY NETWORK New Jersey show similarities between the two facilities, beyond their ownership:

Like the Hackensack center, HealthPlus derives most of its revenue from claims paid by car-insurance companies and workers’ compensation, not commercial insurers or government programs like Medicare or Medicaid, according to annual reports filed with the state Health Department.
A significant share of the patients at both centers come from New York. In the case of HealthPlus, “the majority of patients notified were from New York,” according to the New Jersey Health Department, referring to the notifications sent to former patients recommending that they be tested for HIV and hepatitis.
Both centers, along with Moshe, were sued last year by car-service drivers who transport patients to the centers for allegedly not paying the drivers minimum wages or overtime.
Many of the same doctors and medical practices operate at the Saddle Brook and Hackensack centers.

Both of Moshe’s ambulatory surgery facilities appear to specialize in personal-injury protection claims, the pain treatments and other care for injuries from car accidents that are paid by auto insurers. Many such claims involve “soft-tissue injuries,” conditions such as whiplash that – unlike broken bones – depend upon subjective assessments and are hard to measure, and thus difficult for insurers to challenge.

The Hackensack center, Dynamic Surgery Center, was formerly known as Excel Surgery Center and is located at 321 Essex St. HealthPlus is located at 190 Midland Ave. in Saddle Brook.

A spokesman for the two surgery centers said Dynamic and HealthPlus “are popular with New York doctors because they are better managed, less crowded, cleaner and provide superior staff than facilities available in New York.”

The American Transit lawsuit alleges that Moshe and his Hackensack surgery center, along with his wife, Margarita Moshe, a pharmacy owner; his sister, Regina Moshe, a doctor; and 22 New Jersey and New York physicians, chiropractors and their practices billed more than $28 million in fraudulent claims, $5 million of which has already been paid.

“Again and again New York residents have been brought across state lines to New Jersey not knowing why they were sent there,” the lawsuit says.

Patients were not told that medical professionals and surgery centers could bill their insurance more if they were treated in New Jersey than in New York, and that this would use up their insurance coverage faster, the lawsuit claims. And they weren’t told many of the services could be performed at a lower cost in a medical office rather than an ambulatory surgery center, it says.

Accused of paying kickbacks
Among the professionals who performed procedures at both places was Todd Koppel, a Passaic County pain-management doctor who was indicted last February by a New Jersey grand jury on 20 counts of money laundering, health care claims fraud and conspiracy for his alleged role in a medical kickback scheme.

The New Jersey Property-Liability Insurance Guaranty Association sued Koppel in May, accusing him of fraudulent billing and paying kickbacks for referrals from chiropractors and other physicians; that lawsuit named HealthPlus as an “interested party” because the association paid him for at least one procedure there.

The American Transit lawsuit also names Regina Moshe, a physician who owns CitiMed Services, which provides anesthesiology and other services at both HealthPlus and the Hackensack surgery center. Regina Moshe is identified in the lawsuit as Yan Moshe’s sister. Other doctors and chiropractors performed procedures at both places.

Under New York’s no-fault insurance law, a person injured in a motor-vehicle accident is automatically covered for all medically necessary expenses up to $50,000. New Jersey has a similar no-fault law, but the cap can go much higher — to $250,000 or even $1 million. For some procedures, the New Jersey fee schedule is higher than New York’s. And insurers can be billed two ways at New Jersey surgery centers: for both the procedure and a “facility fee.”

Fraud experts say that some providers exploit this system by billing for fake or unnecessary medical services to reach that monetary cap. To maximize reimbursement, they create a “conveyor belt” of referrals, passing patients along from chiropractors to imaging centers to pain-specialist physicians and surgeons.

Some so-called “PIP mills” – named for the Personal Injury Protection section of car insurance – churn out high numbers of bogus claims that are difficult for insurers to penetrate, fraud experts say.

“No-fault fraud can run into tens of millions of dollars a year in a state – or even more,” said Jim Quiggle, spokesman for the Coalition Against Insurance Fraud, an industry group in Washington, D.C. “The cost of scams can be so high that they will raise auto premiums for honest drivers.”

No-fault fraud accounted for more than 85 percent of health-care fraud complaints in New York in 2017, the New York Department of Financial Services said.

“Fraudulent claims affect us all with respect to the diversion of legitimate medical resources away from the public interest,” said Ralph Bisceglia, American Transit's president and CEO, explaining why the company filed suit against Dynamic Surgery Center and some practitioners.

Charles Horn, the defense attorney for Dynamic, said American Transit’s lawsuit was intended to avoid payment for legitimate claims from people injured in car accidents. The argument that care was not medically necessary is false and not supported by any details, he said.

“The law gives deference to the treating physician as to what’s necessary and what's not necessary,” said Horn, of the Friedman Law Group in New York. “It’s not surprising that an insurance carrier would try to avoid payment by arguing that [claims for treatment] are not medically necessary.”

Moreover, he said, there could be no financial motivation for transporting patients to New Jersey, because the charges are the same whether a patient is treated in New York or New Jersey. He cited an amendment to New York’s no-fault insurance law that limits the amount out-of-state providers can bill for New York patients to the amount allowed for the same procedure in New York.

The amendment – announced in October 2017 -- was crafted after New York officials realized that New Yorkers “often are influenced to seek healthcare services from non-New York providers” who charge more than New York allows, New York’s Department of Financial Services said at the time. It added that this practice is “believed to lead to inflated claims, depleted cove

Source: North Jersey

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