Simon Glairy is a distinguished authority in insurance litigation and risk management, recognized for his deep expertise in uncovering complex healthcare fraud schemes. With years of experience navigating the intersection of medical billing and regulatory compliance, he has become a leading voice in identifying the evolving tactics used by fraudulent enterprises to exploit insurance systems. In this discussion, we explore the mechanics of “no-fault” insurance fraud, the financial implications of equipment misrepresentation, and the aggressive legal strategies insurers are now deploying to protect the integrity of the healthcare industry.
In some medical systems, clinics allegedly issue identical prescriptions for expensive rental equipment to every patient regardless of their actual injuries. How does this specific kickback model compromise patient care, and what red flags should investigators look for when reviewing these automated billing cycles?
When a clinic prioritizes kickbacks over clinical necessity, the patient becomes a mere tool for revenue generation rather than a person in need of healing. This model compromises care by subjecting patients to unnecessary treatments or equipment, such as PEMF or ultrasound devices, that may not address their specific trauma. For investigators, the most glaring red flag is “uniformity of care”—the statistical impossibility of every patient, regardless of whether they have a neck strain or a broken leg, requiring the exact same $1,800 rental setup. We also look for high-volume billing spikes from newly formed DME companies, such as the seven entities identified in the recent FocalSupply litigation, which often appear out of nowhere and immediately begin churning out massive volumes of identical claims.
New York regulations cap monthly rental charges for medical equipment at one-tenth of the acquisition cost. When providers disguise rentals as sales to bill $1,800 for a $3,000 device, what are the broader financial consequences for the industry, and how can adjusters better verify true equipment costs?
The financial fallout of this price gouging is immense, as seen in recent filings where a single ring of companies attempted to siphon off over $1.5 million through inflated billing. By charging $1,800 for a device that should legally be capped at a $300 monthly rental—based on a $3,000 acquisition cost—these providers artificially inflate the cost of insurance for everyone. To combat this, adjusters must demand original invoices from the manufacturers rather than accepting the DME provider’s internal billing statements. We are seeing a shift where carriers require proof of “acquisition cost” as a prerequisite for payment, forcing transparency in a segment of the market that has traditionally relied on obfuscation to hide its margins.
Suppliers sometimes omit make and model details on claim forms to hide the use of cheap knockoff devices like PEMF or cryotherapy units. How does this lack of transparency impact patient safety, and what specific steps should insurers take to validate the quality of hardware being billed?
Transparency is the backbone of patient safety, and when a provider hides the make and model of a cryotherapy or light therapy unit, they are often hiding a “knockoff” that lacks the rigorous testing of medical-grade hardware. These unbranded devices can malfunction or provide ineffective treatment, leaving the patient’s recovery in jeopardy while the insurer pays premium prices for bottom-tier equipment. Insurers should implement strict “no-data, no-payment” policies that require the submission of serial numbers and high-resolution photos of the equipment tags for every claim. By cross-referencing these serial numbers with authorized distributor databases, we can quickly identify whether a device is a legitimate medical tool or a cheap imitation sourced from a wholesale supplier to maximize profit.
Utilizing federal RICO statutes allows insurers to pursue treble damages and declaratory relief on millions in pending claims. Why is this aggressive litigation strategy becoming more common against medical equipment rings, and what evidence is required to prove a coordinated criminal enterprise in federal court?
The shift toward RICO litigation is a direct response to the organized and repetitive nature of no-fault fraud, where the goal is no longer just to recover lost funds, but to dismantle the entire criminal infrastructure. By seeking treble damages, insurers can turn the financial tables on fraudsters, making the cost of doing business prohibitively expensive. To prove a RICO case, as seen in the recent actions against companies like Medrite and People’s Choice, we must demonstrate a “pattern of racketeering activity” and the existence of an enterprise that connects clinics, DME suppliers, and individual operators. This requires meticulous documentation of the kickback flows and evidence that the entities worked in concert to submit hundreds of fraudulent claims over a sustained period, such as the schemes documented from April 2023 through early 2026.
What is your forecast for the future of no-fault insurance fraud litigation?
I anticipate a significant escalation in “offensive” litigation where insurers use data analytics to identify fraud patterns in real-time and file preemptive federal lawsuits before the bulk of the claims are even paid. We are moving away from a “pay-and-chase” model toward a “litigate-and-block” strategy, exemplified by Allstate’s recent move to seek declaratory relief on over $1.1 million in unpaid claims. As artificial intelligence becomes more adept at flagging “identical prescription” patterns across different clinics, these criminal rings will find it increasingly difficult to hide within the high volume of New York’s no-fault system. The future will likely see more massive, multi-defendant RICO filings that target the “professional” facilitators—the lawyers and accountants—who help set up these shell DME companies.
