GEICO alleges a group of New York medical supply companies wrongfully obtained more than $2.5 million through no-fault billing, and wants a federal judge to block a further $2.2 million in claims.
In a lawsuit filed on Dec. 11, 2025, in the United States District Court for the Eastern District of New York, Government Employees Insurance Company and three related GEICO entities accused four durable medical equipment suppliers and several individuals of participating in what GEICO describes as a coordinated no-fault billing operation.
The plaintiffs Government Employees Insurance Company, GEICO Indemnity Company, GEICO General Insurance Company and GEICO Casualty Company named Healing Touch Supply, Inc., Wellness Supply Group, Inc., Sunrise Healing Supply Services, Inc., and R&E Meds LLC as defendants. GEICO also sued Edward Khavasov, Nathaniel Abramov, Daniel Khavasov, and Eduard Keselman, plus John Doe defendants “1” through “10.”
At the heart of the case is a pain point for insurers in New York’s auto no-fault system: medical equipment claims that GEICO contends were built to maximize reimbursement rather than reflect real medical need. GEICO says the defendants submitted and caused to be submitted “thousands” of bills for medically unnecessary, illusory, and otherwise non-reimbursable durable medical equipment and orthotic devices. The filing cites examples, including medically unnecessary lumbar sacral orthoses, cervical traction devices, and other items.
GEICO’s allegations portray the supply companies as the billing vehicle for a wider network. While the four DME businesses were “owned on paper” by the individuals named in the suit, GEICO alleges the companies were actually “operated and controlled by others not presently identifiable to GEICO.” The filing describes one John Doe as a “Secret Owner,” and says other unidentified participants included clinic operators and managers it calls “Clinic Controllers,” tied to various no-fault medical clinics.
The alleged playbook, as GEICO lays it out, depends on access: access to insureds, access to prescriptions, and access to the paperwork that triggers payment. GEICO alleges prescriptions were obtained through kickbacks and other financial incentives for medically unnecessary equipment, and then used to support billing to GEICO and other New York auto insurers.
GEICO also alleges the prescriptions were not given to insureds to fill, but instead were routed directly to the DME suppliers, so insureds would not attempt to use legitimate retailers.
GEICO further alleges the billing was engineered to inflate what insurers would pay. According to the filing, to the extent any equipment was provided, the bills allegedly misrepresented the type and nature of what was delivered, including by using HCPCS codes that did not accurately represent what was provided. GEICO also alleges the defendants inflated charges, including for non-fee schedule items, and took steps to make the billing less conspicuous, such as submitting multiple bills for items purportedly provided on the same date.
The lawsuit leans on the structure of New York’s no-fault rules. GEICO cites the state’s framework for personal injury protection benefits, including the up to $50,000 cap per insured for medically necessary expenses, and the standardized billing forms used for claims, including NF-3 and HCFA-1500/CMS-1500 submissions.
For insurers and claims professionals, the immediate takeaway may be the scale of the numbers and the relief GEICO is seeking.
GEICO alleges it has incurred damages of more than $2.5 million in payments it made based on the billing it received. It also asks the court to declare it is not legally obligated to pay more than $2.2 million in pending no-fault claims submitted since 2022. The filing asserts multiple causes of action, including a request for declaratory relief, federal RICO claims, and common-law claims such as fraud and unjust enrichment.
