GEICO Sues New York Medical Supplier Over Alleged $620K Insurance Fraud Scheme

GEICO has launched a federal lawsuit against Advanced Supplies of NY Corp. and its owner, alleging a coordinated insurance fraud scheme involving over $620,000 in improper no-fault insurance payments. Filed in the U.S. District Court for the Eastern District of New York, the complaint claims the defendants submitted fraudulent bills for durable medical equipment, such as cervical collars and lumbar supports, that were either unnecessary or never delivered.

According to GEICO, the scheme relied heavily on questionable prescriptions obtained from healthcare providers in New York City no-fault clinics. These prescriptions, allegedly secured through kickbacks and collusive arrangements, were often backed by duplicated provider signatures. The insurer further accuses the supplier of manipulating Healthcare Common Procedure Coding System (HCPCS) codes to inflate reimbursement amounts.

The total billings submitted to GEICO reportedly exceeded $950,000, of which the insurer paid over $620,000. GEICO is seeking to recover those funds and is asking the court to rule that it is not liable for an additional $200,000 in pending claims linked to the supplier. The lawsuit includes counts of RICO violations, common law fraud, unjust enrichment, and requests for declaratory judgment.

At the center of the lawsuit is GEICO’s assertion that Advanced Supplies and its co-conspirators exploited New York’s no-fault insurance system, which mandates coverage for medical equipment when prescribed by a licensed provider. The insurer contends the system was systematically manipulated for financial gain, harming both insurers and policyholders alike.