Auto Insurer Sues Doctor, Other Parties For Alleged Insurance Fraud

Oct. 12--An auto insurance company filed suit Thursday against Richard Lipsky, co-owner of Meadowlands Hospital in Secaucus, two surgical centers owned by his family, and several related doctors' practices, alleging insurance fraud.

The five-count complaint by Selective Insurance Co. of America also alleges violations of a state law barring doctors from referring patients to their own facilities without disclosing their financial interest.

The suit claims that Lipsky, a Woodcliff Lake anesthesiologist, and other doctors associated with pain-management practices in Hackensack, West New York and Roseland submitted misleading and false claims for "personal injury protection" insurance payments on behalf of 24 people insured by Selective.

The people, identified only by their initials and claim numbers, were treated at the medical practices and then referred to either the Essex Surgery Center in Hackensack or the Roseland Ambulatory Surgery Center in Roseland, the lawsuit said. Among the practices making the referrals were Essex Pain Management Group and Highland Medical Group, both located at 165 Main St. in Hackensack.

Lipsky was an owner or part-owner of each of the medical practices and the two surgical centers, either personally or through a family trust, the suit said. But patients were not informed of that interest, in violation of the Codey Act, which prohibits physician self-referral, the suit said. The state law is intended to ensure that patients receive treatment that is medically necessary, and not done to enrich the medical provider.

Some of the services were not necessary or in the best interests of the patients, said the complaint filed in Sussex County Superior Court by Gordon S. Graber, of Sullivan and Graber in Morristown.

A spokesman for Lipsky said the lawsuit would not succeed.

"Dr. Lipsky feels that if the New Jersey Supreme Court allows [Selective] to amend the complaint, he will once again be victorious litigating this matter," said Bill Maer, the spokesman.

The lawsuit was filed as an amended complaint to a 2006 case that went to the state Supreme Court. In that case, which Selective lost in both the appellate division and the Supreme Court, the insurer asked the court to compel medical providers, including doctors and ambulatory surgical centers, to give it information about their ownership structure and compliance with state law.

Selective wanted the information to help its investigation of the "apparent interlocking financial interests" of the centers and the doctors.

Since then, Thursday's filing said, Selective had uncovered information independently that supports its "suspicion that the defendants were operating in violation of the law."

The original 2006 complaint was "frivolous," Maer said, and "this action is simply Selective filing a motion to amend their previously unsuccessful lawsuit."

But the industry said the lawsuit had significance beyond Selective and Lipsky. Deana Lykins, president of the Insurance Council of New Jersey, representing the state's auto insurers, said the suit "is indicative of an industry-wide issue."

"We think that the ownership and oversight of ambulatory surgery centers and potential illegal self-referrals is a significant issue in New Jersey and a key contributor to the state's high insurance premiums," she said.

Selective is one of the state's smaller automobile insurers, with less than 10 percent of the market, she said. Selective Insurance Group, Inc. is a holding company for 10 property and casualty insurance companies that offer primary and alternative market insurance for commercial and personal risks.

Lipsky and Tamara Dunaev are the principal owners of the private investment group, MHA, LLC, which purchased Meadowlands Hospital Medical Center at the end of 2010 for $15 million.

They also operate four ambulatory surgery centers, including Essex Surgery Center, and others in Saddle Brook and Paramus. The hospital has also had a financial relationship with Roseland Ambulatory Surgery Center, including the hospital's purchase from Roseland of $603,316 worth of equipment and supplies.

___

(c)2012 The Record (Hackensack, N.J.)

Visit The Record (Hackensack, N.J.) at www.NorthJersey.com

Distributed by MCT Information Services