Travelers sued Meridian Hospital, PLLC in Houston federal court on October 13. Its New York racketeering complaint, filed in February, alleges lay control of medical practices, unnecessary testing and billing under codes no longer active for reimbursement as of January 1, 2013.
Travelers, the property and casualty insurer, sued Meridian Hospital in Houston federal court on October 13, eight months after its New York racketeering complaint sought more than $291,019.03. The New York complaint alleges that unknown lay owners directed a scheme using sham physician ownership and medical practices that billed Travelers for unnecessary tests and, in some instances, services never performed. On October 22, Tim Capowski, an attorney at the law firm Kahana Feld, flagged both suits in a fraud alert, and the New York docket records another notice of voluntary dismissal on October 19. For an auto claims organization, the New York complaint is the one to read: it ties ownership, referrals and billing codes, claim by claim, to Travelers’ request to stop paying.
The Southern District of Texas docket lists The Travelers Indemnity Company as plaintiff and Meridian Hospital, PLLC as defendant in case No. 4:26-cv-08961. On October 13, Travelers filed the complaint, a summons request, a corporate disclosure statement and two notices of appearance. On October 15, the docket lists an order for initial conference and a clerk’s notice on consent to a magistrate judge; its October 16 entry is labeled “Summons Issued/Not Issued.”
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Insurance Business reported on October 16 that the Texas complaint runs 192 pages and brings 14 counts, nine of them under the federal racketeering statute. The publication reports that the complaint alleges $3,385,515.87 was billed for one patient’s knee, shoulder and back injections.
The Eastern District of New York complaint, filed February 2 by 15 Travelers companies through King, Tilden, McEttrick & Brink, P.C., Travelers’ outside counsel, runs 345 pages. It names nine physicians and 18 medical practices as defendants and brings claims for civil RICO, common law fraud and unjust enrichment. It opens with Travelers’ theory: “This case is about laypersons and healthcare providers who banded together to access and then exploit the generous benefits available to insurance policy holders under New York’s insurance laws.”
The complaint describes the structure in layers. It alleges that two physicians conspired with unknown lay owners, who directed the scheme, and operated through 12 medical practices. Those practices allegedly entered leases with medical clinics, which the complaint says generated the referrals needed to bill insurers like Travelers. Six more practices allegedly billed under the name and New Jersey medical license of a doctor who is not a party to the case. The complaint calls this the corporate practice of medicine.
The tests at issue are specific: transcranial doppler testing, shockwave therapy, videonystagmography, electrodiagnostic testing, quantitative sudomotor axon reflex testing and caloric vestibular testing. Travelers estimates that the defendants submitted hundreds of bills knowing that none were lawfully compensable under New York law.
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The numbers in the complaint are concrete. It alleges that five of the practices billed Travelers more than $179,000 between 2018 and 2023 for four nerve testing codes that had not been active reimbursable codes since January 1, 2013. One representative bill, according to the complaint, charged $2,796.44 for the deleted codes, when the most those services could have been billed for was $653.46 under the replacement code.
The complaint alleges that 10 practices billed Travelers at least $108,762.46 for transcranial doppler tests under one code, while nine of those practices billed more than $85,572.81 for vasoreactivity tests, which it says are used before a rare surgery to reduce stroke risk. “None of the Travelers’ claimants presented with conditions requiring this rare test,” the complaint says. Seven practices allegedly billed about $700 per shockwave treatment, which the complaint calls experimental and not necessary for Travelers’ claimants.
Under New York’s no-fault system, the complaint says, insurance benefits include up to $50,000 per Travelers claimant for necessary healthcare expenses. A patient can assign those benefits to a provider, which may then bill the insurer directly.
The New York federal docket shows how a case of this size moves. Waivers of service came in through February. The clerk entered defaults on March 27 and April 6. Notices of voluntary dismissal followed on March 31, April 7, May 20 and October 19, with orders dismissing parties on April 1 and August 14. An answer was filed on April 27; the docket lists an Initial Conference Hearing on June 9 and scheduling orders dated April 28 and June 9. The last entry, on October 21, adds and terminates parties.
**Analysis:** the money for a claims organization sits in the declaratory judgment count, not the damages figure. Travelers asks the court to declare that it is not obligated to pay the practices on all previously denied and pending claims, so a ruling would reach the unpaid bill queue and not only the more than $291,019.03 already paid out.
The Houston docket’s last known filing is an October 16 entry labeled “Summons Issued/Not Issued.” The New York docket shows what the next eight months can bring: defaults, an answer, dismissals of some parties and a defendant list still changing on October 21.
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