An insurance giant’s fight against a local orthopedic surgery center, its doctors and administrators over accusations that they wrongly drove up their costs has ended with a settlement in the tens of millions, according to sources close to the case.
State Farm’s lawsuit against the Palm Beach Lakes Surgery Center and several others was supposed to have headed to a federal trial this month after U.S. District Judge Daniel T.K. Hurley rejected a request from the defendants’ attorneys to have the civil racketeering case against them tossed. But days after their court-ordered mediation seemed to get them nowhere in November, State Farm attorneys informed Hurley in December that they were able to work out a settlement “on or about Dec. 5” after all, according to court documents.
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ArthroCare insurance settlements
Since 2009, ArthroCare has paid back more than $7 million to insurance companies that objected to billing practices of its DiscoCare subsidiary, which sells and promotes the SpineWand. ArthroCare admitted no wrongdoing.
June 1, 2009 — $2.5 million to State Farm.
Dec. 8, 2009 — $995,000 to Geico.
Feb. 23, 2010 — $1.7 million to Allstate.
March 4, 2010 — $1.5 million to Nationwide Mutual.
December 2011 — $450,000 to GMAC.
Source: ArthroCare filings with the U.S. Securities and Exchange Commission.
The SpineWand case
The Palm Beach Lakes Surgery Center, and several of its former doctors and employees have fought a legal battle over their use of the SpineWand, a medical device whose manufacturers have paid insurance companies millions in settlements over alleged bad claims.
In December, according to court records, the doctors and surgery center owners settled a civil racketeering lawsuit in federal court with insurance giant State