Courts Are Pushing Back Against Insurers – Except for New Jersey

For years, big auto insurers like State Farm, GEICO, and Allstate have used an aggressive legal tactic against medical providers who treat patients hurt in car accidents. They filed lawsuits claiming fraud under RICO and state fraud laws, hoping the threat of triple damages would scare providers into giving up. Courts often went along with it. But that may be changing. Several recent court decisions from Florida, New York, show judges are starting to push back and demand real proof before insurers can stop paying claims. However, New Jersey appears to be an outlier and our state Supreme Court has refused to follow the nationwide trend.

Florida: A Judge Calls Out Weak Evidence

In Complete Care Centers v. State Farm, a Florida judge ordered State Farm to start paying claims again after the insurer had cut off a clinic without any court order or fraud finding. State Farm’s excuse was that the clinic was too slow collecting copays from patients. The judge wasn’t buying it. After two days of hearings, the evidence showed the clinic actually collected 86% of copays, a rate State Farm’s own witness admitted was good. The judge pointed out that “delay” isn’t even mentioned in Florida’s fraud law, and he ordered State Farm to resume paying claims immediately. Judge Huey held: “Just like the real Florida Attorney General, State Farm needs probable cause before it can trample citizens’ rights. The record simply contains nothing because fabricating an ‘arbitrary’ time frame, i.e., what is a sufficient delay, is not something ‘unvague’ enough to support a prosecution.”

New York: Insurers Can’t Skip the Regulators

In GEICO v. Mayzenberg, GEICO accused an acupuncturist of paying for patient referrals and tried to use that as a reason to deny nearly $5 million in claims. The case eventually reached New York’s highest court, which sided with the provider. The court ruled that insurers cannot simply decide on their own that a provider committed misconduct and cut off payments. Instead, a state licensing board must first take action against the provider’s license before an insurer can deny claims on that basis. In other words, insurers must report suspected fraud to regulators, not act as judge and jury themselves. The New York Court of Appeals held: “Only after a State regulator (in NY the Board of Regents) has determined that a provider committed professional misconduct and it has suspended, annulled, or revoked their license, may an insurer deny the provider reimbursement of no fault benefit claims …”

New Jersey: Insurers Must Honor Arbitration

The Third Circuit Court of Appeals (which covers New Jersey and Pennsylvania) ruled in Gov’t Employees Ins. Co. v. Mount Prospect Chiropractic Center that GEICO’s fraud claims against three medical practices had to go to no-fault arbitration, not federal court. GEICO had signed its own Precertification Plan agreeing that disputes tied to PIP claims would be arbitrated, and the court held GEICO to that promise. The message: if an insurer chooses to take part in New Jersey’s no-fault system, it must accept the arbitration forum that comes with it, even for fraud claims.

That same question was in front of the New Jersey Supreme Court in Allstate v. Carteret Comprehensive Medical Care. However, the Supreme Court, in a brief decision that merely adopted the underlying Appellate Division decision, refused to follow the Third Circuit Court of Appeals. In its July 2026 decision, the Court concurred with Judge Gilson’s decision in the appellate proceedings, and held that complex civil fraud and RICO matters do not belong in arbitration. This clears the way for No-Fault Insurance companies in New Jersey to arbitrate the claims and choose and litigate others, promoting forum shopping, duplication of effort, and inconsistent decisions.

What This Means for Your Practice

Taken together, these rulings send a clear signal: insurers cannot simply cry “fraud” and stop paying claims without real proof and a proper process. Even though the New Jersey Supreme Court is permitting civil litigation of civil fraud or RICO claims by insurers, courts will hopefully require insurers to bring actual evidence of fraud to court, respect licensing boards, and not be able to trample the rights of healthcare providers through outspending them. For chiropractors and other providers who treat PIP patients, this is a meaningful shift after years of insurers using fraud accusations as leverage to delay or deny legitimate payments.

The author Jeffrey Randolph, Esq. is an independent person of the ANJC and his views are not authorized, sponsored, or otherwise approved by the A.N.J.C. The information provided is for general guidance on matters of interest only and may not take into account particular facts relevant to your individual situation. The application and impact of laws and health care can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in these materials. Accordingly, the information you receive is provided with the understanding that the author and the A.N.J.C. are not herein engaged in rendering legal, accounting, tax, health care or other professional advice and services nor are they providing specific advice with regard to your practice, the treatment of any specific illness, disease, deformity or condition, or any other matter that affects trade, commerce, or legal rights of others. As such, this article should not be used as a substitute for consultation with professional accounting, tax, legal, health care, or other competent advisers. Before making any decision or taking any action, you should consult an appropriately trained professional.