In recent years, much attention has been focused on the activities of physicians who operate with management companies and collection lawyers in the no-fault industry. Up until now, no-fault insurers would often file a civil RICO (Racketeer Influenced Corrupt Organizations Act) claim against a provider in order to go after additional fines and penalties that are permitted under this type of action.
This series of laws also permits the insurance companies to collect significant damages such as triple damages and an expanded ability to attach personal assets. In addition, it gives them the ability to go after and subpoena documents which they would otherwise not be able to in a regular fraud lawsuit.
Such an action makes it much more costly to defend than a regular lawsuit and gives an insurance company an unfair advantage. It also forces the physician to provide information about any independent contractors, management companies, or collection’s attorneys with which the physician does business.
Recently, the insurance companies and the government have stepped up their use of this statute in a rare filing of a criminal RICO case alleging fraud and abuse against a number of medical providers, physicians, managers, and the attorneys who represent them and work with them in personal injury cases. The RICO statute is designed to get past any enterprise that a civil suit or the government can prove has become the subject of corruption and is operating improperly. As in the case of many organized crime run businesses, it was difficult for the government to prosecute the offenders. This statute gives the government and private civil plaintiffs an advantage by allowing them to look behind certain corporate walls and deem the whole corporate structure a fraud or criminal enterprise.
The use of the criminal and civil RICO statutes has been expanded over the last decade to include many health care providers and health care claims. This expansion leaves providers significantly exposed and whether or not the statute is used appropriately, puts them at a legal disadvantage which is more costly to defend against.