Four New York pharmacies billed GEICO roughly $6.6 million for a narrow set of high-cost pain medications as part of what the insurer calls a coordinated scheme to exploit the state's no-fault auto insurance system.
GEICO filed the 120-page complaint on September 14, 2026, in the US District Court for the Eastern District of New York. The suit names four pharmacy entities, their individual owners, and a physician, and brings 21 claims for relief. Those include federal racketeering charges under RICO, the law that allows plaintiffs to seek triple damages when they can show a pattern of fraud run through a business.
Three products sit at the heart of the case: Lidocaine 5% Ointment, Diclofenac Sodium 2% Solution, and extended-release Cyclobenzaprine. Together, these allegedly made up roughly 89% of the pharmacies' total billing to GEICO, or approximately $5.9 million. Individual prescriptions for the topical products allegedly ran from $1,524 to around $2,691 each, with the muscle relaxant reaching as high as $2,721 per fill.
The complaint describes what it calls a "quick-hit" billing rotation. The first pharmacy began submitting claims in January 2025 and stopped by May. A second started in March, overlapping for two months before continuing through September. A third picked up in September, and a fourth joined in October. From there, the last two billed GEICO at the same time through January 2026. The filing characterizes these staggered handoffs as a deliberate strategy to spread claims across separate names and tax identification numbers and avoid detection.
GEICO alleges the pharmacies bought the targeted products cheaply and billed at what the complaint calls "exorbitant" prices, exploiting reimbursement rates set under New York's pharmacy fee schedule. Over-the-counter alternatives were available at a fraction of the cost, the filing states, but those products are not covered under no-fault law - giving the defendants reason to push the prescription versions whether or not individual patients actually needed them.
The bulk of the prescriptions allegedly came from a single physician operating through two multidisciplinary clinics in Elmont and the Bronx. According to the complaint, approximately 76% of the pharmacies' billing for the targeted products traced back to prescriptions attributed to this one practitioner. GEICO alleges the referrals were the product of kickback arrangements that violated a New York anti-kickback statute barring referral deals where the prescribing practitioner has a financial relationship with the pharmacy.
Rather than tailoring treatment to individual patients, the physician allegedly issued cookie-cutter examination reports listing the same predetermined treatments for virtually every patient, the complaint states. GEICO says the prescriptions followed "predetermined fraudulent protocols" built to maximize billing, not to address genuine medical needs.
The filing backs this up with multiple examples of patients involved in the same car accident who were prescribed identical medication sets despite being in different physical conditions and seated in different positions in the vehicle at the time of impact. In one case, the complaint alleges a patient told the physician she had no remaining pain and wanted to be discharged - yet another round of the same three prescriptions was written anyway.
Prescriptions were often sent to the pharmacies days after the examinations they were supposedly based on, and the examination reports frequently did not mention the prescribed medications at all, according to the filing.
The complaint also cites sworn testimony from a former nurse practitioner at one of the clinics. She allegedly stated that clinic managers - not physicians - set prescribing protocols, including directing staff to prescribe Lidocaine 5% Ointment to every patient. She also alleged that a stamped copy of her signature was used to authorize referrals without her knowledge or consent, which she said prompted her to resign.
GEICO further alleges the pharmacies were not functioning as typical retail operations. Instead of stocking a broad range of products, they concentrated almost exclusively on the three targeted medications. All four used the same delivery company, the same delivery receipt format, and the same patient counseling language on their slips, the complaint states.
The geographic spread of patients adds another layer, according to the filing. Between roughly half and 72% of each pharmacy's patients lived outside the county where that pharmacy was located, with addresses scattered across multiple boroughs and into Long Island.
The complaint references prior federal fraud lawsuits against the physician, involving allegations of medically unnecessary treatments and illegal kickback arrangements with other insurers. It also points to a 2018 report from the US Department of Health and Human Services Office of Inspector General that flagged Lidocaine and Diclofenac among the products most commonly tied to pharmacy billing fraud.
GEICO says it has already paid approximately $1.41 million on claims generated through the alleged scheme. It seeks to recover that amount, plus a court declaration that it owes nothing on roughly $4.22 million in outstanding claims still pending. If the RICO claims succeed, the recovery could be tripled to approximately $4.23 million, plus attorney's fees, the complaint states.
These are allegations in a civil complaint, and no court has made any findings on the merits of the claims.
