Insurer Sues N.J. Hospital Over Bills

April 18--The Travelers insurance company alleged in a lawsuit filed this week that Meadowlands Hospital in Secaucus was at the center of a fraud scheme in which doctors and chiropractors referred car-accident victims to the hospital for procedures that could have been done elsewhere at lower cost or weren't needed at all.

Among the claims the lawsuit cited are an $18,673 hospital bill for an epidural injection that would have cost $1,200 at a same-day surgery center, and $94,947 to implant a nerve-stimulating device that cost $825 -- "charges so outrageous that they constitute fraud," according to the lawsuit.

The insurer said it should not be required to pay nearly $9 million in outstanding claims to the hospital and is seeking more than $600,000 it has already paid.

MHA LLC, the investment group that owns Meadowlands Hospital Medical Center, dismissed the lawsuit in a statement as "a transparent attempt to avoid payment."

"This lawsuit is just another unwarranted attack by an insurance carrier on [Meadowlands'] charges under the guise of 'fraud,' " spokesman William J. Maer said on Wednesday. "The amount we get paid for our services is fully justifiable. This is nothing more than an attempt by Travelers to avoid payment and/or recoup monies for medically necessary services that we provided," he said, noting that the treatments had been vetted and approved by the insurer.

He said he was confident the suit would not be "validated by the court."

New Jersey's long history of high auto-insurance rates has led to aggressive anti-fraud efforts over the years as well as attempts to control the fees charged by health-care providers to insurers. Until January, there were no set limits on what hospitals could charge for outpatient surgical procedures -- though there were limits on what ambulatory-surgery centers could charge in personal-injury cases. Now, those hospital procedures are also being regulated.

The Travelers lawsuit, which was filed Monday in state Superior Court in Morristown, alleged that Meadowlands, along with various North Jersey chiropractors, physician practices and pain-management centers, "developed a scheme" to refer accident victims to the hospital for treatments, rather than to outpatient centers, creating an income stream for the hospital.

"These referrals to Meadowlands for the procedures were unnecessary," the suit said.

Travelers is the eighth-largest auto insurer in the state, with slightly less than 4 percent of the market, according to the state Insurance Department. Based in Hartford, Conn., it does business in New Jersey as Travelers, Travelers Indemnity Co., Constitution State Services and First NonProfit Trust.

Meadowlands Hospital, which became a for-profit facility when MHA bought it for $15 million in December 2010, has come under intensifying scrutiny in recent weeks. Two state senators and its nurses' union have called for the state to appoint a monitor to oversee it. A state Health Department spokeswoman said on Wednesday that no decision had been made.

Among the issues cited: The IRS filed two liens against the hospital, in August and February, for non-payment of taxes withheld from employees' paychecks totaling $4.4 million; the hospital said earlier this month it had settled the liens.

The Health Department fined the owners $12,000 for failure to submit an audited financial report that was due last June; the hospital paid $6,000 of the fine, but has not submitted the report.

The Health Professional and Allied Employees union, representing nurses and technicians, sued the hospital last week in federal court for its alleged failure to pay some employee health claims. MHA's principals include Richard Lipsky of Woodcliff Lake, Tamara Dunaev, Pavel Pogodin and Anastasia Burlyuk.

The pain-management groups named as defendants in the lawsuit include Highland Medical Group of South Main Street in Hackensack; Garden State Pain Management on Clifton Avenue in Clifton; and two groups in Saddle Brook -- Midland Anesthesia and Pain Management and Comprehensive Pain Medicine and Anesthesia Group.

Highland is not affiliated with Meadowlands Hospital or the other defendants and "has committed no insurance fraud," said its attorney, Mike Midlige. The attorney for Garden State, Andrew Bronsnick, said he had not seen the complaint and could not comment.

An employee of Garden State, John Baxter, said the practice did minimal work at Meadowlands in 2012 and increased its presence there only after the new, restrictive fee schedule was imposed by the state in January. Messages left with the Saddle Brook pain-management practices were not returned.

The chiropractors alleged by the lawsuit to have participated in the scheme included two Clifton practices: Ralph Bonocore & Associates Chiropractic and Quality Advanced Care Inc. Bonocore did not respond to messages, and efforts to reach David and Gregory Soltanoff, identified as the principals of Quality, were unsuccessful.

Email: washburn@northjersey.com

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