GEICO has initiated legal action against Central RX Pharmacy Corp. and its owner, alleging they orchestrated a fraudulent billing scheme involving more than $2 million in payments from the insurer. The complaint, filed July 16, 2026, in the Eastern District of New York, accuses the pharmacy of exploiting New York’s No-Fault auto insurance regulations to generate excessive profits from crash victims.
Under state law, auto insurers must cover up to $50,000 per insured for necessary medical care, allowing patients to assign these benefits directly to healthcare providers. GEICO contends that Central RX Pharmacy Corp. utilized this mechanism to submit inflated invoices.
The filing identifies a specific group of high-cost items, including Lidocaine 5% Ointment, Diclofenac Sodium Gel 3%, and Naproxen-Esomeprazole, as the primary drivers of the alleged fraud. These items, labeled as "Fraudulent Pharmaceuticals" in the document, accounted for over 75% of the pharmacy’s GEICO billing.
The insurer alleges that the pharmacy purchased these products at low costs but billed them at significantly higher wholesale rates by leveraging the state’s Pharmacy Fee Schedule. GEICO noted that cheaper, over-the-counter alternatives, such as lidocaine priced between $10 and $20, were not recommended. Prescriptions for Lidocaine reportedly ranged from $1,392.00 to $1,905.00, while Diclofenac prescriptions were billed at $2,358.00 each.
Beyond pricing discrepancies, the complaint suggests the pharmacy engaged in improper referrals. GEICO alleges the pharmacy provided kickbacks or financial incentives to prescribers and unlicensed clinic operators to direct prescriptions to its location, which would violate Public Health Law § 238-a.
The filing also points to "predetermined fraudulent protocols," citing instances where individuals injured in the same accident received identical prescriptions, suggesting the orders were not based on individual medical necessity.