GEICO says a Queens pharmacy billed it $1.2 million in two months, then stopped operating.
In a lawsuit filed June 19, 2026, in the Eastern District of New York, Government Employees Insurance Company and three affiliated GEICO entities accused Komil Pharmacy Inc., doing business as Clear Rx Pharmacy, and its sole owner of exploiting New York's No-Fault system. GEICO wants back roughly $583,000 it says it already paid.
The complaint calls it a "large, ongoing fraudulent scheme" that "exploited the New York 'No-Fault' insurance system," billing "approximately $1.2 million" in "less than two months."
For claims teams, the alleged playbook is the story. GEICO says the pharmacy zeroed in on a few pricey topical pain products - Diclofenac Sodium 2% Solution, Diclofenac Sodium Gel 3%, and Lidocaine 5% Ointment - plus the oral Vimovo Products. The filing lists typical charges of $2,686.88, $2,358, and $2,217.84 per prescription, respectively. According to the complaint, comparable drugs sell over the counter for far less; it cites Lidocaine options at "Rite-Aid and Target for advertised prices in the range of $10." Those topical products alone made up about 75% of the billing GEICO received - more than $920,000, the filing says.
The legal frame is New York No-Fault. Benefits cover up to $50,000 per insured, and pharmacy reimbursement is limited to prescription drugs. GEICO leans on the Pharmacy Fee Schedule (12 N.Y.C.R.R. §§ 440.5(a) and (d)), which caps charges against a drug's Average Wholesale Price, and alleges the defendants picked high-priced products on purpose to inflate bills.
GEICO also alleges kickbacks. The complaint says the pharmacy "participated in illegal, collusive referral relationships in violation of New York Public Health Law §238-a," steering prescriptions from clinics "in exchange for unlawful kickbacks and other financial incentives." The providers who wrote those prescriptions are described in the filing as "Prescribers"; they are not defendants in this case.
The investigative red flags GEICO cites: about 90% of patients lived outside Queens, some out of state; the same drug sets went to multiple people from a single crash; and some prescriptions sat for weeks before being filled.
Two counts are brought under RICO, which allows treble damages - the filing pegs that figure at "approximately $1,749,000.00." Common-law fraud, unjust enrichment, and a §238-a claim round out the suit.
The recovery angle carriers will recognize: GEICO says the pharmacy chased payment "primarily through numerous, separate expedited No-Fault arbitrations," a piece-meal approach the complaint says keeps any single arbitrator from seeing the whole pattern.
The allegations have not been tested in court. As of filing, the defendants had not answered, and no court has ruled.
