GEICO alleges four New York medical-supply firms ran a fast-moving billing operation, charging more than $2.9 million in four months for equipment it says was cheap, unneeded or never delivered.
In a complaint filed August 6, 2026 in the Eastern District of New York, the insurer alleges that four supply companies served as the billing arm of a "quick hit" scheme targeting New York's No-Fault system. According to the filing, the companies took turns dispensing durable medical equipment and orthotic devices - lumbar-sacral supports, osteogenesis bone stimulators, orthopedic pillows and massagers - to people said to have been injured in car accidents, then billed GEICO and other auto insurers.
GEICO alleges the firms were owned "on paper" by four individuals, each of whom, the filing says, "is not and has never been a licensed healthcare provider." The real control and profit, the complaint alleges, sat with an unidentified operator it calls the "Secret Owner," named as a John Doe defendant, for whom the paper owners are said to have worked.
The mechanic is one claims teams will recognize. GEICO alleges the defendants obtained prescriptions for "medically unnecessary" equipment "through the payment of kickbacks and other financial incentives," and that the prescriptions were written, according to the filing, in a deliberately "generic, vague, non-descript manner." That vagueness, the complaint says, let the companies attach billing codes - known as HCPCS Codes, the standard codes insurers use to price equipment - that carried higher reimbursement than the equipment justified.
On the equipment itself, GEICO alleges that where anything arrived at all, it was "inexpensive and poor-quality" and "did not match the HCPCS Codes identified in the bills," obtainable from ordinary retailers "for a small fraction" of the billed rate. For items not listed on the state fee schedule, reimbursement is capped at the lesser of the provider's acquisition cost plus 50% or the usual price charged to the public, under 11 N.Y.C.R.R. 68, Appendix 17-C, Part E. GEICO alleges the bills "grossly inflated" those rates.
The filing also points to the money trail. GEICO alleges that checks it issued were cashed at a New Jersey check-cashing outlet "resulting in tens of thousands of dollars of insurance checks converted into cash," which the complaint says was a way to fund kickbacks rather than route money through a corporate account.
GEICO brings fifteen causes of action, including declaratory judgment, two claims under the federal RICO statute, and several common law fraud and unjust enrichment counts. It seeks to recover "more than $1 million" it says it already paid, a declaration that it owes nothing on "more than $1.2 million" in pending claims, plus treble damages and attorneys' fees. The filing ties specific sums to each entity, ranging from more than $173,000 to more than $366,000.
For carriers, the complaint reads as a familiar warning about the No-Fault DME channel. Rotating supply entities, vague prescriptions and code inflation remain a live exposure, and GEICO is signaling it will litigate to recover paid claims and block pending ones.
The allegations have not been tested in court, and no judge has ruled on the claims.
