RICO is an appropriate avenue for the civil prosecution of medical provider insurance fraud.

The plaintiff filed a federal civil RICO action against the defendants, a series of allegedly interconnected professional corporations (medical providers and diagnostic testing facilities). The plaintiff alleged the defendants billed Allstate via mail for medically unnecessary services and, moreover, that the defendant professional corporations were fraudulently incorporated and, therefore, ineligible for reimbursement under New York no-fault law. In order to state a claim under 18 U.S.C.S. § 1962(c), "a plaintiff must plead three principle elements: (1) the conduct (2) of an enterprise (3) through a pattern of racketeering activity." In denying the defendants' motion to dismiss, the court found that the plaintiff's allegations of approximately $4 million worth of mail fraud (submission of fraudulent no-fault billing via mail), committed by an array of allegedly fraudulently-incorporated professional corporations, would satisfy the conduct, enterprise and racketeering activity elements of a civil RICO claim. This case indicates that RICO, in addition to any applicable state insurance fraud statute and common law fraud, may be an effective tool in combating medical provider fraud.

Case Law Alert - 3rd Qtr 2012