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| | Zenith Yanks Financial Cane Away from Med Equipment Distributor
By Robert Warne - August 25, 2003 Fed up with doling out $1000 for products like a “Bio-Care Home Cervical Kit” that really is a $16 orthopedic pillow, Zenith Insurance has called the perpetrating service provider’s bluff with a lawsuit in the Orange County Superior court.
The carrier alleges that Yorba Linda based N-Care and its owner, Robert Bohacs of exploiting a workers’ compensation law that allows a physician to seek reimbursement for durable medical equipment dispensed to injured workers.
By law the physician may bill for the cost of the product and tack on an additional 50 percent, up to $25 to cover costs.
But according to Zenith, Bohacs made it possible for a variety of physicians to maneuver around the law by setting N-Care up as the distributor and billing agent.
Supposedly, Bohacs went so far as to claim N-Care manufactured the medical products rather than just purchasing them to further conceal the pricing racket.
The complaint alleges that these acts not only are deceptive, misleading and unfair, but they also are illegal. According to the complaint, the defendants have violated various criminal and civil statutes prohibiting insurance fraud. It also alleges that by these deceptive, misleading, unfair and illegal acts and practices, defendants committed unfair competition in violation of California's Unfair Competition Law. The complaint seeks a permanent injunction as well as restitution for monies paid to N-Care.
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