A.G. Schneiderman Announces Settlement with Manhattan
Doctor's Office for Alleged Deceptive Business Practices

Settlement Agreement Requires PATH Medical To Accurately Inform Patients about
Out-of-Pocket Costs and Insurance Coverage for Medical Tests and Services

Press Release, December 17, 2014

Attorney General Schneiderman today announced an agreement with PATH Medical, P.C., that requires the Manhattan-based business to ensure patients receive accurate information about their financial responsibility before undergoing medical testing and other services. The settlement with PATH Medical, located at 304 Park Avenue South and owned by Dr. Eric Braverman, the host of a weekly radio program that often promotes his business, concludes an investigation by the Attorney General's Health Care Bureau that alleged PATH Medical misrepresented to patients how much of the cost a health insurer was likely to cover, including for the extensive testing PATH Medical routinely conducted on new patients.

"Patients cannot make informed decisions about their medical care if their health provider misleads them about the cost of that care, including the reimbursement they can expect from their insurance plans," Attorney General Schneiderman said. "My office is committed to pursuing transparency in health care pricing so patients can make medical decisions without inadvertently placing themselves in a precarious financial position. We will take action when providers mislead patients about the cost of care."

As part of its focus on early detection and treatment of disease, PATH Medical conducted extensive and expensive diagnostic tests during a patient's initial visit. Those tests include echocardiograms, costing $1,900, "brain electrical activity mapping" tests, for $2,000 collectively, multiple ultrasounds, ranging from $450 to $750, as well as psychological and cognitive assessments. PATH also sold packages of tests and services to patients that ranged in cost from $10,000 to $100,000. While the business, does not participate (i.e., is not "in-network") in any health insurance plans, it led some consumers to believe that a significant percentage of the charges -- sometimes up to 80% -- would be covered by their health plans' out-of-network benefit. However, patients' health plans were not typically covering a significant percentage of the total charges for PATH Medical's services. Indeed, some plans were routinely denying the claims submitted by the practice. These alleged inaccurate representations by PATH Medical resulted in some patients facing thousands of dollars in unexpected costs for a single visit.

The Attorney General's Health Care Bureau is concerned about medical price transparency across the health care industry, including by insurance companies, hospitals and individual providers. Consumer protection laws bar providers from misleading consumers about health plan reimbursement, among other issues. The Health Care Bureau encourages all consumers to demand price transparency from their medical providers and to contact their health insurance companies before seeing a provider who does not participate in their health plan to understand their out-of-network benefits and coverage, if any.

The bureau launched an investigation into PATH Medical in mid-2013 after receiving repeated complaints about the medical practice, including complaints from patients faced with unexpected out-of-pocket costs because insurance did not cover as much as they were led to believe. When their insurance either denied the claims in full or did not cover as much as they expected, the patients were suddenly responsible for the balance, sometimes totaling thousands of dollars.

The complainants included one consumer who said she was told by PATH Medical's billing representative that the recommended testing for her first visit would cost approximately $8,000. When she expressed concerns about the cost, she was advised that her insurance would cover 80 percent, and she would receive a 50 percent discount. Based on that, the consumer reported paying approximately $4,000, and believed a portion of that would be reimbursed by her health insurance. Her health plan ultimately denied her submitted claims and PATH then advised her she was responsible for the full $8,000.

The Attorney General's investigation into PATH Medical revealed that the practice did not routinely provide patients with any documentation reflecting what tests and services were purchased, the charges for those tests and services, and what discounts were applied. Some patients also expressed difficulty and frustration with obtaining the results of their extensive testing, and patients sometimes incurred unexpected charges for discussing the results of that testing.

The settlement requires PATH Medical to reform its practices to ensure patients are provided with accurate information about their financial responsibility beforethey agree to undergo any testing or other services. In addition to reforms aimed at improving price transparency, the settlement requires PATH Medical to discontinue and modify other business practices that the Attorney General's Office identified during the course of its investigation. For example, the Attorney General's Office found that PATH Medical staff used personal e-mail accounts to communicate patients' medical information.

Under the terms of the agreement, PATH Medical will:

This investigation was conducted by Assistant Attorney General Elizabeth R. Chesler. The Health Care Bureau is led by Lisa Landau and the Executive Deputy Attorney General for Social Justice is Alvin Bragg. Janet Sabel is the First Deputy for Affirmative Litigation.

This page was posted on February 15, 2015

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