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GEICO Alleges $12.1 Million in Insurance Fraud, Seeks $36 Million in Damages

In its over-300-page complaint filed on 8/19/2011, GEICO General Insurance Company, et. al (hereinafter referred to as “GEICO”) asserts that the 32 defendants named in this case–13 physicians, 18 entities, and 1 entity owner– (“Defendants”) defrauded GEICO in an amount in excess of $12.1 million under New York’s No-Fault Insurance law. GEICO also seeks to recover $36 million in treble damages for “services that the Defendants never rendered, or were not entitled to bill for or that they knew or should have known were not medically necessary or were so improperly performed as to be useless.”

GEICO alleges that the Defendants submitted claims for nerve conduction velocity tests that were not performed and for which results were fabricated. Nerve conduction tests assist in determining whether a patient has sustained nerve damage. GEICO claims that the Defendants falsified the test results by copying results from other patients. In its opening paragraphs, GEICO asserts

The Defendants have exploited and abused the No-fault system and have engaged in some of the most abusive practices in the history of the New York No-fault system. The Defendants have submitted fraudulent claims. In claim after claim after claim they have falsified test results. They have billed for fictitious services that were never rendered as billed and in many cases their services have been incompetent and rendered without regard to the welfare of the patients. Indeed, in many cases the practices of the Defendants could have endangered the welfare of their patients.

Among its many allegations, GEICO also claims that the Defendants engaged in improper referrals to entities they controlled and/or in exchange for financial consideration and payments.

Notably, some of the Defendants in this case are also named defendants in a similar fraud action filed by Allstate (8/19/2009) in which Allstate seeks to recover more than $1,780,000.00 in damages for fraudulent billing of medical services under the NY No-Fault law. As of the date of this post, this case is still pending.

The HEALTH LAW ATTORNEY BLOG has written on countless instances in which healthcare providers and suppliers have become the target of criminal investigations and convictions; however, this suit, as well as the Allstate suit, are evidence that insurance companies have begun to take matters into their own hands.

For more information regarding healthcare fraud and abuse and how to properly structure business ventures, please contact Adrienne Dresevic, Esq., Carey F. Kalmowitz, Esq. or Esq., for information regarding healthcare compliance, please contact Abby Pendleton, Esq., and for information regarding healthcare litigation please contact Robert S. Iwrey, Esq. or Alan G. Gilchrist, Esq. at (212) 734-0128 or at (248) 996-8510 or visit the HLP website.

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