Lawyers claim Geico turning to civil courts to avoid payments

Geico, Allstate, State Farm most likely to sue using civil lawsuits to crack down on claimed fraud. “Objective is to put my clients out of business” says lawyer

Insurance News

By Lyle Adriano

While known mostly for its pervasive advertising campaigns, GEICO in Massachusetts is also famous for its hardline stance against insurance fraud. Typically, insurers report cases of staged car accidents, fake injuries, and false medical bills to law enforcement. GEICO, however, chooses to tackle their fraud issues head-on by suing local chiropractors and physical therapists, forcing the practitioners into costly legal disputes.

Many of the civil suit cases by GEICO end up settling, with the involved practices agreeing to turn down future GEICO clients, according to court documents, defense lawyers, and defendants.

Although the approach is effective to a degree, some defense lawyers have voiced their concerns that the insurer is aggressively trying to avoid medical claims from clinics in lower-income areas.

“These kinds of general fraud lawsuits can have a significant chilling effect on clinics and could easily be used to get all the clinics in any neighborhood to stop seeing patients with a certain brand of car insurance,” said Jeffrey Coniaris, a lawyer from Weston, MA.

Coniaris had previously represented Boston Therapy, a clinic based in East Boston that GEICO sued in 2013 over claims of about $78,000. The case was later dismissed.

Indeed, industry trade groups say GEICO, the nation’s second-largest auto insurer, utilizes the civil courts “more aggressively” than other insurance companies to combat fraud.

The company has even used racketeering laws, which were originally designed to fight organized crime, to take legal action against practices.

Lawyers assert that GEICO’s use of civil actions allows the insurer to put intense financial pressure on physical therapy offices and chiropractors, tying up practitioners’ assets while the case is being litigated. It can cost tens of thousands of dollars to fight the suits, and as a result, many clinics are discouraged from accepting clients who are signed to GEICO.

 “If you have to face a [civil] suit, it can be financially draining; it makes you think twice about defrauding an insurer. It can send a very loud and clear message that you take on that insurer at your own risk,” said James Quiggle, Coalition Against Insurance Fraud spokesperson.

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