GEICO filed two separate federal lawsuits on July 1, alleging complex fraud schemes involving no-fault insurance claims in New York and Florida. The filings seek to recover millions of dollars the insurer says it paid for medically unnecessary services and equipment, while also asking courts to declare that it owes nothing on pending bills related to the alleged misconduct.
The New York case, lodged in the Eastern District of New York, targets Daven Health Goods Inc. and Centre Medic Supply Corp. GEICO alleges that a single individual owned and controlled both durable medical equipment suppliers.
The insurer claims the companies billed it more than $1.1 million for items including infrared heat pads, bone-growth stimulators, ultrasound units, and compression devices that accident victims did not require.
According to the complaint, prescriptions for these items were supported by kickbacks and financial incentives paid to clinic operators. GEICO states that some prescriptions contained photocopied or duplicated signatures, lacked dates, or were backdated to days when providers had not seen the patients. The filing suggests the two suppliers operated in parallel to split billing totals and keep individual amounts low.
GEICO also alleges that the suppliers used vague prescriptions to select higher-paying billing codes. The insurer says it charged $3,300 for bone-growth stimulators and $2,700 for ultrasound devices under specific codes, despite the equipment not meeting those classifications. GEICO has paid over $438,000 on these claims and is seeking a declaration that it owes nothing on more than $684,000 in pending claims.
The Florida suit, filed in the Southern District of Florida, involves seven Miami-area clinics, their operators, and several physicians, with damages exceeding $4 million. GEICO alleges that the named medical directors falsely posed in their roles and left oversight to clinic owners, violating Florida’s Health Care Clinic Act.
The insurer claims the clinics subjected nearly every patient, many from minor crashes with no recorded injuries, to pre-set treatments.