Geico recently filed a lawsuit in a Florida federal court against the parent
company of 411 Pain, the medical-legal referral service. The breadth of
the suit is astounding. Geico’s legal complaint is almost 200 pages
long, and alleges the referral service, along with many co-defendants,
engaged in racketeering, illegal kickback schemes, fraud, and other serious
forms of misconduct. The co-defendants include chiropractors, physicians,
Geico’s central claim is that Path Medical, LLC, which operates under
the 411 Pain brand name, caused Geico to be billed for millions of dollars
of medical services which were unnecessary, overbilled, or not performed
at all. Basically, Geico claims Path Medical and the other co-defendants
conspired to evade the laws governing payment of auto insurance benefits
for accident-related care. Geico seeks $15 million in damages which it
says it paid out for the alleged wrongful billing in the last several years.
Of course, a legal complaint alone is not proof of anything. Whether Geico
can prove even a fraction of the allegations it makes remains to be seen.
However, if even a small part of the things it claims are true, the defendants
involved in the case could be in deep financial trouble. Even if they
can pay their share of any damages awarded, their business reputations
will probably be ruined. And if they’re completely innocent, they’re
still likely to be punished, because they’ll shoulder enormous costs
to prove their innocence.
If nothing else comes from this lawsuit, it reinforces the idea that our
current no-fault auto insurance system doesn’t work. A scheme designed
to ensure accident-related health care was paid for quickly, and with
a minimum of administrative hassle, has morphed into a bureaucratic nightmare.
Providers and patients feel insurance companies refuse to pay their legitimate
bills, while insurers claim they can’t ferret out fraud quickly
enough to avoid paying bogus claims.
Meanwhile, all the parties to this sorry spectacle spend a lot of time
at the courthouse. They endlessly litigate about billing, coding, reasonable
medical necessity, and other issues. Something which was designed to be
simple has turned into a lawsuit quagmire.
Meanwhile, regardless of the outcome of individual cases, consumers are
collectively the ones who lose. They pay higher insurance premiums for
their no-fault coverage and get stiffed for medical bills they incur just
trying to get better.
Against this backdrop, it is good news indeed that the Florida legislature
seems to be serious about scrapping the no-fault system. As we’ve
said before, we welcome this change and hope it happens this year. A bill
to repeal no-fault and replace it with a fault-based system is overdue
for serious consideration.
In the meantime, anyone who thinks Florida’s no-fault auto insurance
law still works can read the Geico complaint and see why it doesn’t.