Photo: Amr Alfiky/AP
A New York judge ordered an insurance carrier for an former doctor at the center of one of the largest mass tort litigations in the state's history to pony up nearly $17 million to help pay judgments adding up to about $22 million already paid by other carriers.
Even so, the $39 million is well short of the $141 million awarded by an arbitrator last year to 250 former patients of Spyros Panos, who has already served one stretch in federal prison for health care fraud and on Friday pleaded guilty to more charges, including wire fraud, health care fraud and aggravated identity theft in New York's Southern District.
"I'm thankful that this has finally come to an end and the clients are receiving some measure of justice," said Nancy McGee of Wisell & McGee in Kew Gardens, who along with partner J.T. Wisell represents 150 of the plaintiffs who sued the former Poughkeepsie orthopedist for medical malpractice.
Panos, 52, is facing additional sentences of up to 20 years for wire fraud, 10 years for health care fraud and at least two years for aggravated identity theft, the mandatory minimum sentence for that crime.
He also agreed to forfeit $876,390 and pay the same amount in restitution, according to an Oct. 30 release from the office of acting U.S. Attorney Audrey Strauss for the Southern District.
Panos surrendered his medical license in 2014 and served two and a half years of a 54-month sentence. In 2018, he was rearrested for a scheme in which he falsely claimed to be a licensed doctor to review workers' compensation claims.
The civil litigation involves claims that, from 2004 to 2011, Panos performed unnecessary surgeries or pretended to perform procedures on hundreds of patients.
A plethora of medical malpractice suits were filed in New York's state courts naming Panos and his former practice, Mid Hudson Medical Group. They were combined for arbitration before retired New York state and appellate court Judge Peter Skelos with National Arbitration and Mediation.
In February 2019, Skelos awarded more than $140 million to the plaintiffs.
Panos and his practice carried insurance provided by two carriers: Medical Liability Insurance Co. and excess coverage by Healthcare Professionals Insurance Co.
After Skelos' arbitration award, HPIC declined to pay its excess coverage of more than $16 million.
The plaintiffs sued HPIC in New York State Supreme Court in Dutchess County seeking declaratory judgment that Panos' excess coverage was triggered after the exhaustion of his primary policies.
The insurer filed a motion to dismiss, but on Oct. 13, Judge Paul Marks granted summary judgment to the named plaintiff and ruled that HPIC's coverage was triggered and HPIC was liable for its policy limits.
"After some post-decision wrangling, the excess carrier agreed to pay the $16.8 million," said Wisell. "That money will be distributed to all the plaintiffs on a pro rata basis.
"Judge Marks was instrumental in bringing this to conclusion," said Wisell. "He was extremely involved and held many, many settlement conferences to get this resolved."
HPIC is represented by Cris Massaroni of Hodgson Russ in Buffalo. Neither he nor HPIC board chairman Mark Morris, whom Wisell said largely handled negotiations for the carrier, immediately responded to a request for comment Monday afternoon.
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