Geico corporate headquarters in Chevy Chase, Maryland. (Photo: DCStockPhotography/Shutterstock)
Geico, the second-largest U.S. auto insurer, recently filed a lawsuit that claims the owner of a Brooklyn medical supply company defrauded the insurer and others by billing them for unnecessary medical equipment, including orthotic devices and pain-relief accessories.
According to the complaint, which was filed in the Eastern District of New York, Alexander Gorbachev and his business, Grand Medical Supply, provided equipment in response to prescriptions from doctors who treated the victims of no-fault automobile crashes. The doctors are not named as defendants in the suit.
More than $750,000 in fraudulent billing had been submitted to Geico through Grand Medical, Geico attorney Barry I. Levy of Rivkin Radler wrote in the complaint, which alleges Gorbachev violated the Racketeer Influenced and Corrupt Organizations Act and owes at least $185,000 in compensatory damages.
Levy argued that the prescriptions "were not medically necessary as they contained a predetermined set of virtually identical fraudulent equipment." In contrast, he argued that doctors treating patients in "a legitimate setting" would direct a more specific course of treatment based on the patient's symptoms.
"In further keeping with the fact that the prescriptions for fraudulent equipment … were not medical necessity but were the result of a predetermined fraudulent protocol, the prescriptions typically contained vague and generic descriptions for [durable medical equipment] and [orthotic devices], which … provided the Defendants with the opportunity to purportedly provide — and bill Geico for — whatever DME or OD they wanted," Levy wrote.
In some cases, patients were simultaneously prescribed braces that would immobilize parts of their bodies and were directed to conduct physical therapy regimens that "required prolonged bending and stretching of weakened parts of the body," Levy wrote.
"No legitimate treatment regimen would involve the simultaneous prescription of mobilizing physical therapy and immobilizing devices," he wrote.
Gorbachev devised the scheme "in conjunction with others who are not readily identifiable to Geico," identified in the complaint as John Does 1-10, Levy wrote.
Multiple phone numbers for Gorbachev or Grand Medical appeared to be out of service, and the defendants had not yet entered an appearance in the case as of May 28. Levy did not respond to a request for comment.
The case has been assigned to U.S. District Judge Diane Gujarati of the Eastern District of New York.
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