GEICO filed two No-Fault fraud suits the same day, seeking to recover millions it says it paid on medically unnecessary claims.
On July 1, the insurer filed federal suits in New York and Florida over what it calls two separate No-Fault schemes. The paired filings share the same insurer, the same law firm and the same filing date, pointing to a coordinated anti-fraud effort by GEICO.
The New York suit, filed in the Eastern District of New York, targets two durable medical equipment suppliers, Daven Health Goods Inc. and Centre Medic Supply Corp., and the man GEICO says owned and controlled both. Durable medical equipment is reusable gear a patient uses at home. GEICO says the pair billed it alone more than $1.1 million for items such as infrared heat pads, bone-growth stimulators, ultrasound units and compression devices that accident victims did not need.
The prescriptions, the complaint alleges, flowed from a "fraudulent scheme" fed by "kickbacks and other financial incentives" paid to clinic operators. Some scripts carried a "photocopied or duplicated signature," GEICO says; some were undated; some were dated to days the provider never saw the patient. The filing says the two suppliers ran in parallel and split the billing to keep each one's totals low.
There's a coding angle. GEICO says the suppliers used vague prescriptions to pick higher-paying codes - charging, for example, $3,300.00 per bone-growth stimulator under HCPCS code E0747 and $2,700.00 per ultrasound device under E0760 - for equipment it says didn't meet those codes. It has paid more than $438,000.00 so far and wants a declaration that it owes nothing on more than $684,000.00 in pending claims.
The Florida suit, filed in the Southern District of Florida, is larger: seven Miami-area clinics, their operators and several physicians, with damages put above $4 million. The suit's foundation is Florida's Health Care Clinic Act, which requires a physician medical director who actually reviews billing for fraud. GEICO alleges the named directors "falsely posed" in the role and left oversight to the clinics' owners.
The rest follows a well-worn PIP pattern, according to the filing. GEICO says the clinics ran nearly every patient - most from minor crashes where police recorded no injury - through the same pre-set treatment. It says initial exams were billed under CPT code 99204, which signals a moderate-to-high-severity problem and at least 45 minutes of work, though the visits were template-driven and took no more than 15 minutes. Patients were also routinely and falsely tagged with an "emergency medical condition," GEICO says - the diagnosis that raises Florida's PIP ceiling from $2,500.00 to $10,000.00 per person.
Two claims stand out. GEICO says physical therapy was done, if at all, by "massage therapists" and "unlicensed/unsupervised personnel," then billed under licensed practitioners' names, because Florida bars PIP payment for massage-therapist work; it cites single days when one practitioner purportedly performed or supervised at least 57 hours of therapy across multiple locations. It also alleges a "secret and unlawful patient brokering agreement," in which one therapy clinic steered patients to imaging clinics that, in exchange, stamped them with false "emergency medical condition" diagnoses - conduct GEICO says breaches Florida's Patient Brokering Act and Anti-Kickback Statute.
Both suits invoke the federal RICO and mail-fraud statutes, seek treble damages, and ask the courts to declare the pending bills unpayable.
The allegations are unproven, and no court has ruled.
