How Fake Does An Insurance Claim Have to Be For Rejection?

In the realm of insurance, where legitimacy and adherence to rules are paramount, the notion of intentionally submitting a fake claim may sound preposterous. However, a recent case involving a medical company named Quality Diagnostic Health Care and insurance giant GEICO sheds light on an audacious attempt to secure payment for an apparent fraudulent claim.

The Curious Case

Quality Diagnostic Health Care found itself embroiled in a legal tussle with GEICO over an auto injury claim. The medical company had provided treatment to an individual injured in a car accident and subsequently submitted claims directly to GEICO. In Florida, where the incident unfolded, the law explicitly states that insurance companies are not obligated to pay if they determine that a false or misleading statement has been submitted in claims or charges.

GEICO, upon reviewing the claim, deemed it to be fraudulent billing, asserting that the clinic had submitted false insurance claims. The insurance giant refused to honor the claim, standing firm on its position. GEICO not only sought to recover the payments already made, amounting to around $140,000, but also aimed to dismiss an additional $80,000 in billed charges.

The Unbelievable Defense

In a surprising turn of events, the defendants, in this case, Quality Diagnostic Health Care, admitted that the claims were falsely inflated and up-coded. However, their defense took an unusual twist. Instead of acknowledging the fraud and attempting to rectify the situation, they contended that GEICO should have known that the claims were false. The defendants argued that the deficiencies in their billing were so obvious that GEICO should pay them anyway, despite the glaring irregularities.

Justice Prevails

The court, however, did not waver in its commitment to justice. While the defendants boldly admitted to submitting false claims, the court rightly rejected their audacious argument. The ruling emphasized that GEICO had correctly identified the fraudulent nature of the claims, rendering them ineligible for payment. The defendants’ assertion that GEICO should have paid them despite the obvious billing discrepancies was unequivocally dismissed.

Lessons Learned

This peculiar case serves as a stark reminder to all stakeholders in the insurance industry—insurers, brokers, agents, and clients alike—that rules and regulations are the bedrock of the system. Attempting to sidestep these principles by submitting fake claims, regardless of how “obvious” they may seem, is not only unethical but also legally indefensible.

For those with an interest in the intricacies of insurance claims and the bizarre stories that occasionally emerge from the industry, following professionals like Barry Zama can provide a unique perspective. Barry, a distinguished insurance fraud investigator, regularly shares captivating tales from the insurance world, offering insights into some of the most unusual claims and the legal outcomes that follow.

The saga of Quality Diagnostic Health Care serves as a cautionary tale, underscoring the importance of integrity and adherence to rules in the insurance landscape. Fraudulent claims may attempt to masquerade as obvious truths, but the justice system, as demonstrated in this case, stands resolute in upholding the principles that safeguard the insurance industry’s credibility.

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