Farmers Insurance Exchange is suing more than 40 New York no-fault medical providers for an alleged illegal fee splitting scheme in which it says unlicensed laypeople submitted claims for services provided to car crash victims.
The lawsuit, filed in the New York Supreme Court, is seeking damages of $1.3 million against the defendants. Farmers says no-fault providers—those who care for patients utilizing no-fault insurance—are not entitled to receive no-fault reimbursement as they are not properly owned, operated and controlled by licensed medical professionals.
The suit claims the providers violated state business corporation, education, and professional limited liability company laws as well as Regulation 68, New York's no-fault rule under which those involved in a no-fault accident have 30 days to report the claim to an insurer, and medical providers have 45 days to let the insurer know that treatment has begun.
This is the fifth insurance fraud lawsuit filed by Farmers Insurance in New York this year. The insurer has claimed damages of over $5.7 million through 12 lawsuits filed in the state since 2011.
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