GEICO Sues Over $2.7M Medical Equipment Fraud Tied to Kickbacks

GEICO’s lawsuit against two Brooklyn medical suppliers outlines a complex insurance fraud scheme allegedly exploiting New York’s no-fault system. According to court filings, the companies—J Flexible Corp. and LJR NY Inc.—are accused of submitting more than $2.7 million in fraudulent claims for durable medical equipment (DME), much of it allegedly unnecessary or never delivered. The scheme reportedly included high-priced bone stimulators and specialized mattresses prescribed to patients who did not need them.

For insurance claims adjusters, this case highlights critical fraud indicators: billing spikes tied to company shutdowns and transitions, identical prescriptions for unrelated injuries, and inconsistencies in medical documentation. GEICO also alleges kickbacks were paid to clinic operators who funneled prescriptions, some signed by unlicensed staff. These details underscore the need for claims professionals to closely examine provider patterns and prescription legitimacy.

Adjusters should pay attention to clustered claim origins, questionable provider credentials, and unusually high charges for common equipment. This case may also impact how insurers approach pending payments in potentially fraudulent scenarios, especially under RICO-related litigation.