GEICO Charges New York Pharmacy, Medical Clinics With $3.7M in Prescription Fraud

Insurance company GEICO has filed suit against a New York pharmacy and five medical clinics and their owners alleging they perpetrated a fraudulent scheme under the New York no-fault auto insurance system by submitting more than $3.7 million in fraudulent pharmaceutical claims.

The insurer says the scheme primarily targeted expensive topical prescription drug products with high profit margins but questionable medical effectiveness which they “systematically dispensed to individuals involved in automobile accidents without regard for genuine patient care.”

The complaint targets Q Pharmacy Rx in Queens and its employees and owner, Borislav Yusupov, who the complaint alleges purchased the pharmacy from a man associated with other pharmacies that have been sued by no-fault insurers.

The 57-page complaint filed in federal district court for Eastern New York also implicates five medical clinics and prescribing doctors: Metropolitan Medical and Surgical, BL Pain Management, Eric Berger, M.D., Kings Highway Physicians Group, and Atlantic Medical and Diagnostic. Mark Gladstein, M.D., the alleged owner of Metropolitan Medical and Surgical is identified by GEICO as the top source of prescriptions dispensed and billed by Q Pharmacy.

GEICO maintains that Q Pharmacy paid the medical clinics kickbacks and other financial incentives to send it large volumes of prescriptions, many of them medically unnecessary, and often invalid, for the expensive topical drug products.

GEICO maintains that unlike legitimate pharmacies dispensing a variety of pharmaceutical products, Q Pharmacy’s business primarily targeted ointments, patches and gels as well as nonsteroidal anti-inflammatory drugs and muscle relaxers. These were dispensed to individuals involved in automobile accidents and eligible for insurance coverage under GEICO policies, according to the insurer.

The scheme “not only inflated the charges submitted to GEICO and other insurers, but also posed serious risks to the patients’ health, safety, and well-being,” GEICO claims.

The insurer says many of the topical pain products have no proven efficacy beyond what an over- the-counter equivalent could provide and were often duplicative of other medications that were also prescribed to the Insureds.

GEICO seeks to recover more than $1,203,320.00 it says the defendants stole from it since the scheme began in 2020, along with a declaration that GEICO is not legally obligated to pay reimbursement to Q Pharmacy of more than $1,620,633.00 in pending claims. The insurer also seeks treble damages.

The complaint notes that given the limitations on telephone or oral prescriptions in New York, without collusion with the medical clinics it is “highly unlikely – to the point of impossibility – that Q Pharmacy would legitimately receive such large numbers of prescriptions” from multiple different healthcare providers.

The insurer says insureds were never given the option to use a pharmacy of their choosing and some received prescriptions from Q Pharmacy despite having provided the clinics with the name of their preferred pharmacy. More than 63% lived outside of Queens, where the pharmacy is located, with residences scattered mostly throughout Brooklyn, Bronx, Manhattan, and Long Island, according to GEICO.

Insurers are under statutory and contractual obligations to promptly and fairly process claims within 30 days. The complaint contends that the defendants have hired law firms to pursue collection from GEICO and other insurers of the fraudulent charges submitted through Q Pharmacy. “These law firms routinely file expensive and time-consuming litigation against GEICO and other insurers if the charges are not promptly paid in full,” the suit claims, calling these collection efforts through hundreds of separate no-fault collection proceedings “an essential part” of the fraudulent scheme.

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Topics Fraud New York