Allstate sues string of pharmacies over alleged insurance fraud
The carrier seeks more than $600,000 in total recovery from the defendants.
Allstate Insurance Co. took aim at five New York pharmacies for allegedly paying kickbacks to doctors at no-fault clinics to obtain more prescriptions for car crash victims, leading to higher reimbursement requests.
On Monday, Manning & Kass, Ellrod, Ramirez, Trester filed the cases on Allstate’s behalf in the Eastern District of New York. This litigation surge was surfaced on Law.com Radar.
The defendants named in the suits are Best Care Pharmacy of New York Inc., Fill RX NY Inc., Everhealth Pharmacy Inc., Aptechka Rx Inc. and Ezrx Chemists Corp.
The owners of each pharmacy are also named defendants, as well as various John Does and ABC Corporations that the plaintiff claims participated and aided in the alleged kickback scheme detailed in the complaint.
Attorney Robert A. Stern, partner at Manning & Kass, declined to comment on behalf of the plaintiff.
Allstate is seeking to recover the following from each defendant:
- Best Care Pharmacy: $88,000
- Fill RX NY: $192,000
- Everhealth Pharmacy: $98,000
- Aptechka: $138,000
- Ezrx Chemists: $86,000
According to the complaint filed against Best Care Pharmacy, the defendants “engaged in a massive scheme” to exploit New York’s Comprehensive Motor Vehicle Insurance Reparations Act, which is known as the “no-fault law.”
The act allows policyholders to receive payments for medical care prescribed by a provider. “Covered persons are also permitted to assign those benefits to doctors and other licensed healthcare providers, including pharmacies, enabling them to bill insurance companies directly for their services,” the complaint said.
Blue Care Pharmacy did not respond to a request for comment.
The pharmacy defendants allegedly submitted fraudulent insurance claims for “medically unnecessary” topical pain products and oral medications, Allstate claimed.
“As part of the scheme to defraud alleged herein, the pharmacy defendants entered into illegal kickback arrangements with no-fault clinics in the New York metropolitan area and unlicensed laypersons who work at or are associated with the no-fault clinics pursuant to which the no-fault clinics prescribed expensive, pre-formulated topical pain creams, gels, lotions and ointments dispensed and billed at exorbitant prices by [the pharmacies],” the complaint alleged.
The medications prescribed could have easily been replaced by the commercial and affordable over-the-counter medications and pain creams, the complaint said, but the defendants allegedly “targeted the topical pain products and other select oral medications rather than the cheaper over-the-counter alternatives for no other purpose than to submit fraudulent, inflated bills to Allstate for reimbursement, exploiting the covered persons for financial gain, without regard to genuine patient care,” the complaint said.
Allstate brought claims of racketeering under 18 U.S.C § 1962(c), unjust enrichment, and declaratory judgment under 28 U.S.C. § 2201. The plaintiff requested treble damages, attorney fees and costs, and compensatory and punitive damages against the defendants.
“The defendants … will continue to seek reimbursement from plaintiffs for their false and fraudulent claims absent a declaration by this court that plaintiffs have no obligation to pay the pending, previously-denied and/or submitted unpaid claims, regardless of whether such unpaid claims were ever denied, regardless of the purported dates of service,” the complaint said.
Read the complaint:
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