Is Sunny Hostin’s husband next to settle massive NYC medical fraud suit?

American Transit has agreements with nearly 90% of defendants in its medical fraud lawsuit.

By John Hilton

American Transit Insurance Co. has reached agreements with about 85% of the 180 defendants it accused of running an elaborate medical fraud scheme in New York City.

Dr. Emmanuel Hostin, the husband of longtime co-host Sunny Hostin of “The View,” may soon be leaving the lawsuit as well. Hostin requested and received numerous time extensions from Judge James R. Ho of the U.S. District for the Eastern District of New York.

In the most recent request filed June 20, Hostin's attorneys informed the court that "the parties have exchanged a draft written agreement, and need the additional time to complete the settlement."

Settlements roll in

At American Transit's request, Ho agreed to a two-month postponement of an initial conference scheduled for June 26. The insurer has agreements with "159 of the 186 named defendants ... and is continuing discussions with or attempting to finalize settlements with additional defendants," the plaintiff's attorneys wrote.

American Transit, which insures taxi companies and Uber and Lyft drivers, filed a civil lawsuit Dec. 17. The lawsuit lists dozens of surgical centers, orthopedic services, and doctors and is reported to be one of the largest Racketeer Influenced and Corrupt Organizations Act (RICO) cases ever filed in New York.

American Transit seeks to recover compensatory damages in excess of $153 million and treble damages in excess of $459 million.

The insurer alleges that Hostin, who owns Hostin Orthopaedics, performed surgeries at other ambulatory surgical centers and billed American Transit through each of those entities “in exchange for kickbacks and/or other compensation which were disguised as dividends or other cash distributions” for an investment Hostin has in Empire State ASC, the lawsuit claims.

Plaintiff: Predetermined fraud protocol

American Transit traces its complaint to New York’s no-fault law, which states that plaintiffs are required to pay for health service expenses that are “reasonably incurred as a result of injuries suffered by occupants of their insureds’ motor vehicles, pedestrians, and bicyclists,” the lawsuit says.

Enacted in 1974, the no-fault law requires insurers to compensate covered persons for “basic economic loss,” which includes medical costs, incidental costs, and lost earnings. Across the country, officials are taking a closer look at no-fault laws enacted during the 1970s.

Personal line auto insurers that insure personal or private passenger vehicles are required to provide benefits up to $50,000 per person. Commercial auto insurers are required to provide up to $200,000 per person.

“This has put a target on the backs of livery vehicles, and the insurance companies which insure them, for unsavory persons seeking to capitalize on payouts following injuries. In the aggregate, those abusing the No-Fault Law have racked up hundreds of millions in fraudulent payments, destabilized the livery insurance markets in New York City,” the lawsuit states.

The alleged fraud was led by a group of ambulatory surgical centers from 2009 to the present, the lawsuit claims. Injured people were first treated at clinic, then transferred to an ASCs for “orthopedic and/or pain management evaluations,” the lawsuit says.

American Transit names 5,800 people who received such treatment “as part of the predetermined fraudulent protocol of treatment.”

The goal of the alleged fraud was always “to maximize reimbursement from insurers in general, and Plaintiff in particular, for No-Fault benefits for medically unnecessary services,” the lawsuit says.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.