AMERICAN TRANSIT INSURANCE COMPANY RESOLVES SIGNIFICANT LAWSUIT AGAINST HEALTH CARE PROVIDERS: Suit Alleged Fraudulent and Other Improper Treatment and Billing Practices.

• Position: COVER

American Transit announced that it has resolved a lawsuit filed against certain health care providers for what it alleged was fraudulent and other wrongful conduct those providers had engaged in concerning treatment and billing in the no-fault insurance coverage program. American Transit 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 and alleged that $37 million in improper claims had been received. American Transit sought in the suit a declaration the claims were unlawful and unenforceable, to enjoin the defendants from further wrong billing and to recover damages it sustained arising from defendants' scheme.

American Transit 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 American Transit, 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 that "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 had sought to dismiss the action. In ruling in American Transit'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...