State Farm has been sued for racketeering in New York with a claim that it conspired with "Independent Medical Exam" companies and medical practitioners to produce fraudulent and sham medical reports. The suit, filed January 30th in the Eastern District of New York, is brought under the Racketeer Influenced Corrupt Organization Act (RICO). (This story has not been previously reported.)
State Farm acted in concert with "IME" companies and doctors to furnish fraudulent and boilerplate reports, according to the suit. The objective was to procure "scientifically dishonest reports in order to terminate benefits." The Complaint is here: McGee-v-StateFarm-RICO-Complaint.pdf
Of particular interest is that the plaintiff is not an injured accident victim that was wrongfully deprived of insurance benefits, but John McGee, a physician practicing rehabilitative medicine. The physiatrist asserts that claims submitted to State Farm are being wrongfully denied, thus depriving him of the revenue he should be receiving for the treatment he rendered. He alleges that "sham" examinations were done by the defendants to procure false findings so as to cut off the benefits, resulting in the claims he submitted being denied.
The Complaint alleges that State Farm and the other defendants communicated that the evaluations and reports must deny that its insureds needed future treatment and that there was a lack of medical necessity for prior treatment. The Complaint goes on to state that State Farm engaged the other defendants with the expectation that reports received would be favorable to the insurance carrier, and to the detriment of the insured.
McGee states that "State Farm made it known to the other defendants that if they did not provide sufficient denials within the evaluation reports then State Farm would not use their IME services."
According to the website of Independent, they play no role in the production of the report:
We have addressed the "independent" part of the examinations by requiring all reports to be independently processed by the medical provider, typed and forwarded on their own stationary. IPER does not participate in the production of the reports, thus ensuring an arms length transaction for our clients. IPER reviews all reports by a registered nurse only to ensure that essential components of the report are present and that your questions are answered. The medical opinions rendered are those of the examining physician and based upon his/her clinical assessment and review of medical records.
This description, however, is directly at odds with the allegations of the complaint, which states that "boilerplate medical evaluation reports" are used. That may be an easy thing to prove if identical language is used in many different reports.
Whether these companies are like Integrated Risk Services Inc. — a company I wrote about Tuesday that specifically states it doesn’t want information favorable to the plaintiff included — remains to be seen. (See: How to Fool a Jury (Is It Insurance Fraud?))
Another part of the Complaint alleges that State Farm pays an excessive fee to the IME company for the doctor’s services, and that the money is then shared with the IME company or a kick-back is given to non-medical personnel. The complaint sets forth (in paragraph 19) that felonies have been committed with respect to the sharing of medical fees with non-medical personnel.
Thanks to my anonymous tipster for the heads up.
The plaintiff is represented by Bruce Rosenberg of Bellmore, New York.
Chicago Personal Injury Lawyer Gary McCallister’s Injuryboard discusses this and other related issues
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