Cuomo warns hospitals about insurance scam

Hospitals across the north country are being warned by the state attorney general about an insurance scam that involved the release of confidential patient information.

Attorney General Andrew M. Cuomo announced Wednesday that 12 people and nine corporations in the New York City area had been indicted for their roles in what Mr. Cuomo called "a criminal enterprise" that lured people into unnecessary treatment.

According to Mr. Cuomo, "The Levy Enterprise," which was run by Daniel Levy, Queens, who owned and controlled two clinics in the Bronx, operated a scheme in which it paid hospital employees to figure out which patients had been involved in minor motor vehicle accidents.

The enterprise then allegedly lured these patients to the two clinics, where the clinics would provide unnecessary treatment. The enterprise then would submit fraudulent claims to insurance carriers, netting more than $1 million in illegal profits, according to the attorney general.

In New York state, a person injured in a motor vehicle accident is automatically covered by the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the no-fault law. No-fault carriers provide reimbursement for a range of medical and health services, including medical evaluations, physical therapy, chiropractic care, acupuncture and diagnostic testing, when such services are deemed medically necessary.

According to the attorney general, Mr. Levy, who had no medical or health provider training, paid an attorney to supply his clinics with patients. The attorney would then pay public and private hospital employees in the New York City area for confidential patient information that disclosed who had been in minor car accidents, thus making them eligible for no-fault auto insurance.

The attorney then would give the information to two other men, who would "steer" patients to receive treatment at Mr. Levy's clinics, often directing the patients to fabricate or exaggerate injuries, telling them the worse they were hurt or the more treatment they received, the more money they would get in a bodily injury lawsuit settlement, Mr. Cuomo alleges.

The "steerers" would then direct the patients to certain attorneys to represent them in their lawsuits, and the attorneys would then kick back 40 percent of any settlement to the attorney Mr. Levy had hired to supply his clinics with patients.

Mr. Cuomo's letter to area hospitals is a reminder that confidential patient information is protected by state and federal law and he calls upon the facilities to ensure that they are abiding by their obligations to protect the information. The letter also asks for information about the facilities' security systems and procedures in place to prevent violations of patient privacy.