Auto insurers, most notably State Farm, GEICO, and Allstate, continue to rely on an invented concept they call “predetermined treatment” to deny paying medical bills for legitimate accident-related injuries. This theory has no basis in medical literature or credible statistical analysis. Instead, insurers point to supposed “patterns” in a provider’s treatment or billing records and unilaterally label them “not credible,” using that as evidence of alleged fraud.
How Auto Insurers Use “Pattern” Accusations to Deny Medical Bills
This self-serving premise allows insurers not only to deny pending medical bills but also to launch federal fraud lawsuits across the country against medical providers of every specialty who treat auto-accident patients. These lawsuits have generated billions of dollars in returns for major auto insurers. Insurers have become so successful at exploiting fraud allegations that they often achieve their desired result simply by hiring well-known “fraud counsel” to imply that a lawsuit is coming.
A major driver of this success is the body of legal precedent insurers have manufactured in federal courts. Courts have repeatedly held that alleging a “pattern” deemed “not credible” alone is enough to satisfy federal pleading standards for fraud—plausibility and particularity. As a result, insurers can sue virtually any medical provider with minimal factual support and still survive a motion to dismiss.
Why Doctors Rarely Get to Challenge These Accusations
Here’s the real problem: the legitimacy of the alleged “pattern” is almost never litigated. Insurers use the pattern accusation merely as a doorway into expensive, reputation-damaging litigation. For most medical providers, the crushing financial cost of defending a federal fraud lawsuit forces a settlement long before trial—regardless of innocence.
This is the very outcome insurers are banking on.
Baratta Law’s Mission: Protecting Injured Patients and Their Providers
Baratta Law is committed to helping individuals seriously injured by others’ negligence rebuild their lives. A critical part of that mission is ensuring that auto accident victims receive the medical care guaranteed under their auto insurance policies.
We have represented medical providers nationwide who have been targeted by major insurers weaponizing fraud accusations. Our firm has:
- Defended federal fraud lawsuits across the country
- Advised providers threatened with impending fraud claims
- Filed state-court actions designed to halt insurers’ “fraud-for-profit” strategy
A Recent Win Against State Farm’s “Pattern” Theory
In a recent case in the Philadelphia Court of Common Pleas, Baratta Law represented a chiropractic practice threatened by State Farm’s fraud counsel. The insurer claimed that “patterns” observed in the provider’s records were grounds to accuse the practice of fraud.
Our lawsuit sought, among other relief, a declaration that alleged patterns alone are insufficient to reach any conclusion about the reasonableness or necessity of an individual patient’s treatment.
State Farm Tried to Move the Case to Federal Court
State Farm attempted to remove the case to federal court—where it believes, not without reason, that it holds a strategic advantage. The insurer argued that the amount in controversy exceeded the threshold for federal diversity jurisdiction, claiming “suspicions” about hundreds of thousands of dollars it might pursue in future litigation.
We moved to remand the case, explaining that our client was not seeking monetary damages. Instead, we sought a judgment that patterns alone cannot justify denying a medical bill. State Farm would remain free to deny bills or file lawsuits; it would simply need more than a pattern to do so.
The Federal Court Agreed
The District Court remanded the matter back to the Philadelphia Court of Common Pleas, where the case resolved quickly under confidential terms. Although State Farm again avoided having to prove its “pattern” theory at trial, the federal court’s opinion is revealing.
The Court acknowledged the obvious truth insurers hope to avoid litigating: patterns alone create, at most, a suspicion, and suspicion must be supported by actual facts to be actionable.
What This Means for Medical Providers
While this decision will not stop insurers like State Farm from filing or threatening fraud lawsuits based solely on alleged patterns, it affirms that providers are not powerless.
Courts are increasingly unwilling to rubber-stamp insurers’ overreaching accusations.
But timing matters. The moment a medical provider is contacted by an insurer’s attorney, especially one known for auto-insurance fraud litigation, they should seek counsel experienced in these matters. Early representation can prevent insurers from controlling the narrative and using threats to manufacture leverage.
