On Thursday, the court denied a motion to dismiss a case brought by GEICO against AFO Imaging, Inc. et al. The case, filed in the Middle District of Florida, deals with two alleged fraudulent schemes: one that alleged the AFO imaging centers submitted thousands of charges for medically unnecessary and possibly falsified radiology services for patients that had been involved in low speed collisions with minor injuries, and another alleging the services were provided without the proper review of a medical provider, violating Florida business laws regarding supervision of medical practices.
The opinion recounted that n the aftermath of a motor vehicle accident, diagnostic testing including MRIs are frequently required to determine the extent of the injury and create a treatment plan. However, in low-speed accidents, the soft tissue injuries that occur frequently do not require extensive diagnostics for the creation of a treatment plan. In the suit, GEICO alleged that the services provided by AFO were medically unnecessary and performed solely for the purpose of increasing the billing to GEICO and supporting other spurious claims. This lead to GEICO filing the complaint for civil RICO, alleging that the AFO corporation was a corrupt organization that perpetuated fraudulent billing for the purposes of theft from insurance companies and also stood in violation of Florida licensing rules for medical practices
The motion to dismiss had two major arguments, both of which were denied by the court. The first argument was that the pleading from GEICO was a so-called “shotgun pleading” designed to complicate the lawsuit and to unfairly disadvantage the defendant in formulating a sufficient response. The court disagreed with this argument, noting that while the complaint did adopt the factual statements for each of the individual counts, the only overlap was of factual details and each count specifically laid out the individual legal argument pertinent to the complaint. The court did note that the complaint was a long one, at 94 pages long, but also noted that the scheme to defraud being alleged was complicated and had multiple actors whose roles were laid out with sufficient detail that creation of a response would be possible for each actor.
The motion to dismiss also alleged that the complaint should be dismissed for failure to state a claim, arguing that the claims regarding fraud did not have sufficient particularity and that there was no evidence of a conspiracy. Regarding the conspiracy element, the complaint alleged that in the roles of supervisory physicians, it was part of the defendants’ job description to oversee billing to prevent the type of fraud alleged, so either the plaintiffs were knowingly approving of the fraudulent billing, or were deliberately ignorant of the practices, which the court held was sufficient as a conspiratorial action. The court also noted that the complaint detailed several examples of fraud that would meet the requirements of particularity.