Gov't Emps. Ins. Co. v. Relief Med., P.C.

Decision Date12 August 2021
Docket Number20-CV-2165 (MKB)
Citation554 F.Supp.3d 482
Parties GOVERNMENT EMPLOYEES INSURANCE COMPANY, GEICO Indemnity Company, GEICO General Insurance Company, and GEICO Casualty Company, Plaintiffs, v. RELIEF MEDICAL, P.C., Yury Koyen, M.D., Diagnostic Medicine, P.C., Aleksandr Levin, M.D., Dai Mai Acupuncture, P.C., Igor Mayzenberg, L.Ac., AM Chiropractic, P.C., Amber Street Chiropractic, P.C., Alexander Mazurovsky, D.C., Fine Motor Physical Therapy, P.C., and Joseph Sedrak, Defendants.
CourtU.S. District Court — Eastern District of New York

Garin Scollan, Steven Henesy, Michael A. Sirignano, Rivkin Radler LLP, Uniondale, NY, for Plaintiffs.

Michael A. Zimmerman, Zimmerman Law, P.C., Huntington Station, NY, for Defendants Relief Medical, P.C., Yury Koyen, M.D., Diagnostic Medicine, P.C., Aleksandr Levin, M.D., AM Chiropractic, P.C., Amber Street Chiropractic, P.C., Alexander Mazurovsky, D.C., Fine Motor Physical Therapy, P.C., Joseph Sedrak.

Matthew J. Conroy, Maria Campese, Schwartz, Conroy & Hack, PC, Garden City, NY, for Defendants Dai Mai Acupuncture, P.C., Igor Mayzenberg, L. Ac.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiffs Government Employees Insurance Company ("GEICO"), GEICO Indemnity Company, GEICO General Insurance Company, and GEICO Casualty Company commenced the above-captioned action against Defendants Relief Medical, P.C., Yury Koyen, M.D., Diagnostic Medicine, P.C., Aleksandr Levin, M.D., AM Chiropractic, P.C., Amber Street Chiropractic, P.C., Alexander Mazurovsky, D.C., Fine Motor Physical Therapy, P.C., Joseph Sedrak (the "Settling Defendants"),1 Igor Mayzenberg, L.Ac., and Dai Mai Acupuncture, P.C. (the "Mayzenberg Defendants")2 on May 13, 2020. (Compl., Docket Entry No. 1.) Plaintiffs allege, inter alia , that the Mayzenberg Defendants wrongfully obtained no-fault insurance reimbursements relating to healthcare services in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c)(d) ("RICO") and are liable for common law fraud and unjust enrichment, (id. ¶¶ 1, 407–413, 454–473, 532–545), and seek damages and a declaratory judgment, (id. at 114–118).

On November 9, 2020, Plaintiffs moved to (1) stay all no-fault "insurance collection arbitrations pending before the American Arbitration Association (‘AAA’) between [Plaintiffs] and ... Defendants" and enjoin "Defendants from commencing any further [no-fault] insurance collection arbitrations against [Plaintiffs], pending the disposition of [Plaintiffs’] declaratory judgment claim" and (2) enjoin "Defendants from commencing any [no-fault] insurance collection lawsuits against [Plaintiffs], pending the disposition of [Plaintiffs’] declaratory judgment claim," and Defendants opposed the motion.3 For the reasons set forth below, the Court grants Plaintiffsmotion to stay proceedings.

I. Background

The Court assumes the truth of the factual allegations in the Complaint for the purposes of this Memorandum and Order.

a. New York's no-fault insurance scheme

Under New York's no-fault law, automobile insurers provide mandatory coverage for certain no-fault benefits, including necessary expenses for medical treatment up to $50,000.4 N.Y. Ins. Law §§ 5102(a)(1), 5102(b), 5103. "[I]ndividuals injured in car accidents assign their statutory benefits to licensed medical professionals, who submit claims for medically ‘necessary’ treatments directly to the injured party's insurance carriers." United States v. Zemlyansky , 908 F.3d 1, 7 (2d Cir. 2018) (first quoting N.Y. Ins. Law § 5102 ; and then citing 11 N.Y. Comp. Codes R. & Regs. § 65-3.11 ). A regulation implementing section 5106(b) of the New York Insurance Law states that "[i]n the event any person making a claim for first-party benefits and the [insurance] [c]ompany do not agree regarding any matter relating to the claim, such person shall have the option of submitting such disagreement to arbitration." 11 N.Y. Comp. Codes R. & Regs. § 65-1.1(a), (d) ; see also Allstate Ins. Co. v. Mun , 751 F.3d 94, 97–98 (2d Cir. 2014) (quoting 11 N.Y. Comp. Codes R. & Regs. § 65-1.1(a), (d) ).

Plaintiffs seek damages from the Mayzenberg Defendants because they allegedly submitted claims to Plaintiffs for reimbursement of services that were, at least in some instances, not medically necessary or not ever rendered and seek to stay arbitration of no-fault collection claims. (Compl. ¶¶ 407–413, 454–473, 532–545.)

b. The parties

Plaintiffs "are Maryland corporations with their principal places of business in Chevy Chase, Maryland" that underwrite "automobile insurance in New York" and "provide Personal Injury Protection Benefits" to automobile victims covered by Plaintiffs’ insurance policies pursuant to New York Comprehensive Motor Vehicle Insurance Reparations Act §§ 5101 et seq. and 11 N.Y. Comp. Codes R. & Regs. §§ 65 et seq. (Id. ¶¶ 10, 24.)

Dr. Koyen is a medical doctor who owns Relief Medical — a medical professional corporation — and is the primary leaseholder at "a purported medical clinic located at 265 Avenue X, Brooklyn, New York" (the "Avenue X Clinic"). (Id. ¶¶ 2, 11, 54.) Mayzenberg is a citizen of New York who is "licensed to practice acupuncture" and owns Dai Mai Acupuncture, P.C., an "acupuncture professional corporation."5 (Id. ¶¶ 18–19.)

c. The alleged fraudulent scheme

Beginning in 2014, Defendants "masterminded and executed a complex fraudulent scheme wherein" Relief Medical, P.C., Diagnostic Medicine, P.C., AM Chiropractic, P.C., Amber Street Chiropractic, P.C., Fine Motor Physical Therapy, and Dai Mai Acupuncture, P.C. ("health corporations") billed Plaintiffs for "millions of dollars in no-fault insurance benefits [that] they were never entitled to receive." (Id. ¶ 42.) "Dr. Koyen headed the scheme at the Avenue X Clinic by using Relief Medical to sublease space to other healthcare providers and by paying kickbacks in exchange for the referral of automobile accident victims." (Id. ¶ 2.) The Mayzenberg Defendants subleased space and were "required to pay kickbacks in exchange for the referral of automobile accident victims to the Avenue X Clinic" and as a "precondition of renting office space." (Id. ¶¶ 5, 67.) Mayzenberg paid kickbacks to Nina Brouk Advertisement, LLC ("Nina Brouk") and Dona Catalina Marketing, LLC ("Dona Catalina") and "issued checks for the referral of patients to a series of shell companies secretly owned and operated by" Igor Dovman and Tamilla Dovman (the "Dovmans"). (Id. ¶¶ 60, 80–82.) Although "virtually nothing" was done "to market the existence of the [health corporations] to the general public," Avenue X Clinic "received a steady volume of patients ... through illegal fee-splitting, kickback, and referral arrangements." (Id. ¶¶ 46–52.)

d. Services rendered

The Mayzenberg Defendants engaged in an improper referral arrangement and subjected the automobile victims to "exaggerated diagnoses" and "medically unnecessary acupuncture

services" at the Avenue X Clinic. (Id. ¶¶ 320, 322.) They "virtually never" conducted "legitimate" acupuncture examinations on the automobile victims and failed to develop "discrete treatment plans designed to treat the[m]." (Id. ¶¶ 341, 343.) The Mayzenberg Defendants conducted initial and follow-up acupuncture examinations using "checklist forms," which were billed under current procedural terminology ("CPT") codes 99203 and 99202 respectively. (Id. ¶¶ 352, 355, 369, 371.) "CPT code 99203 typically requires that an acupuncturist spend [thirty] minutes of face-to-face time with the [patient or their] family" but the initial examinations at Dai Mai Acupuncture, P.C., "rarely lasted more than five to [ten] minutes" as the Mayzenberg Defendants "prepared reports containing no information on the patient's history other than documenting whether that patient was a driver, passenger, or pedestrian." (Id. ¶¶ 348, 350–351, 354, 358.) "CPT code 99202 typically requires that the physician or acupuncturist spend [twenty] minutes of face-to-face time with the [patient or their] family, along with taking an expanded problem-focused history and an expanded problem focused examination" but at the follow-up examinations, the Mayzenberg Defendants used "pre-printed checklist and template forms that ... d[id] not reflect any genuine examination of the [automobile victims] and contain[ed] purported findings that are, at best, a reiteration of ... subjective complaints." (Id. ¶¶ 368–370.)

In addition, the Mayzenberg Defendants "insert[ed] needles into [patients] in an assembly-line fashion"; "fabricated exams and reports used to support excessive and medically unnecessary acupuncture

treatments not warranted by the patients’ conditions"; "fraudulently inflated their billing by charging for ... ‘adjunct’ acupuncture procedure[s]" such as cupping and moxibustion ; used CPT codes reserved for new patients during follow-up examinations; "routinely bill[ed] three units of acupuncture per treatment date per patient" for short-timed treatments, despite the requirement that personal contact last a minimum of fifteen minutes per billed unit; "merely placed needles in [the patients’] necks and backs, set a timer, and left the [patients] unattended until [fifteen] minutes had elapsed" when the treatment lasted fifteen minutes; and did not treat acupuncture patients in accordance with "legitimate acupuncture practices." (Id. ¶¶ 325, 329–335, 338, 371–379, 381–387.)

e. Procedural history

On May 13, 2020, Plaintiff filed the Complaint alleging that Defendants wrongfully obtained no-fault insurance reimbursements relating to healthcare services in violation of the RICO, 18 U.S.C. §§ 1962(c)(d) and are liable for common law fraud and unjust enrichment, (Id. ) Plaintiffs allege that "Defendants have no right to receive payment for any pending bills because the [f]raudulent [s]ervices were not medically necessary" and that Defendants "intentionally misrepresented and exaggerated the level of services purportedly provided in order to inflate the...

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