State Farm Awarded $15.4 Million in RICO Suit Against Doctors
In a civil RICO suit that accused three doctors of operating a fraud mill that sharply inflated the costs of medical care for car accident victims, a federal jury last week awarded more than $15.4 million to State Farm Mutual Automobile Insurance Co.
After a three-week trial, the jury on Thursday awarded State Farm more than $4 million in compensatory damages and $11.4 million in punitive damages.
Lead defendant Arnold Lincow, an osteopathic doctor alleged to be the leader of the fraud ring, was hit the hardest with an order to pay $5 million in punitive damages.
The jury also levied punitive awards of $600,000 each against two other osteopaths, Lawrence Forman and Richard Mintz, and two chiropractors, Stephen Hennessy and Richard Butow. Another doctor, Stephen Sacks, struck a confidential settlement with State Farm prior to the trial.
Four medical service companies were also hit with punitive awards.
In court papers, State Farm alleged that Lincow concocted a scheme to drastically inflate the medical bills of car accident victims by systematically prescribing a full menu of tests and treatments, as well as prescriptions and medical equipment -- whether medically necessary or not -- and then routinely padding the files with bills for additional treatments that were never provided.
The allegations were that Lincow "created standardized treatment plans and medical records" for his patients, and systematically instructed his employees "to document, for billing purposes, services that were never rendered, services that were different and more costly than services actually rendered, as well as services that were not medically necessary or appropriate and/or not reimbursable under applicable law."
