State Farm FRAUD Claim Against Doctors DISMISSED

On December 11, 2018, Judge Catherine C. Blake of the United State District Court of Maryland, dismissed in its entirety a sweeping fraud lawsuit filed by State Farm Insurance Company against a group of doctors with offices in Maryland and Virginia.

State Farm filed its lawsuit on May 1, 2018, alleging that doctors working in three offices had engaged in widespread fraud in their treatment of 550 patients insured by State Farm from 2006 through the present.  State Farm sought more than $1.5 million in damages as well as a Declaration from the Court that State Farm should never have to pay any bills from the doctors ever again.

State Farm’s lawsuit was the continuation of its campaign waged across the country against doctors who submit billing for the treatment of patients injured in auto accidents.  Understanding the devastating damage done to a doctor’s reputation merely by making such an accusation, as well as the virtually impossible task of funding the defense of one’s treatment of hundreds of patients against the world’s wealthiest auto insurance company, State Farm has generated huge returns with sweeping accusations of fraud against medical providers in massive federal lawsuits like this one.

The most common basis in recent years utilized by State Farm to support its lucrative fraud accusations against medical providers is an invention of State Farm it calls the “predetermined treatment protocol.”  In short, the predetermined treatment protocol accusation alleges that a retrospective analysis of hundreds of charts reflects that many patients received similar findings and treatment and such similarity alone demonstrates that all of the findings and treatment was performed pursuant to a predetermined protocol rather than on “individualized” basis.

The danger of such a “fraud” accusation is that it can be generated at any time against virtually any medical provider who is treating auto accident patients, as they in particular have generally suffered a similar mechanism of injury which respond to similar treatment protocols.  The accusation of fraud by State Farm against the doctors in Maryland was generated entirely on this basis.

On June 28, 2018, counsel for the doctors, Andrew Baratta, Esquire, filed an extensive Motion to Dismiss State Farm’s lawsuit.  Baratta argued that the only basis offered by State Farm for its accusation of fraud was its retrospective statistical analysis which State Farm claimed “demonstrated the fraudulent nature of the records.”  Baratta pointed out that State Farm’s lawsuit failed to identify a single patient whose treatment had been unreasonable or unnecessary and instead, accused the doctors of “fraud” based on nothing more than the fact that many patients had received similar findings and treatment.

The Court agreed.  Judge Blake wrote that “State Farm’s complaint failed to identify even one patient whose treatment was medically unnecessary based on that patient’s injuries.  Similarly, the complaint failed to identify even one specific document or record that indicated a treatment had been provided to a patient which either was medically unnecessary or had not been performed at all.”

The Court ultimately concluded that “State Farm provided no factual basis, aside from its own statistical analysis, for the court to conclude that every single record provided by Carefree for each of the 550 patients plausibly constituted fraud.”

Because the Court found that State Farm had offered no basis for its fraud claim, its claims of unjust enrichment and for a declaratory judgment were also dismissed.

If you have any questions regarding this case please contact Andrew P.  Baratta directly at 215.914.2222 or Andrew@barattarussell.com.

 

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