State Farm can view surgical records in lawsuit over claim

State Farm, aggressively defending itself against an auto-injury lawsuit filed by the Morgan & Morgan law firm, has persuaded a federal judge to order that a Brevard County neurosurgeon turn over his surgical logs to the giant insurance company.

The insurer alleged during a court hearing last week that the logs will provide a financial road map confirming that a “preset” deal existed between the surgeon, Dr. Ara Deukmedjian, and Morgan & Morgan to inflate medical charges included in personal-injury lawsuits.

Representatives of both the doctor and the law firm have denied that any such agreement existed.

Results of the Sept. 4 order issued by U.S. Magistrate Judge Philip R. Lammens might make or break State Farm Mutual Automobile Insurance Co.’s defense in the long-running case. The lawsuit, filed by Morgan & Morgan in 2010, is shifting from evidence gathering to preparing for trial; if the surgeon’s logs don’t solidify State Farm’s allegations, then it’s not clear, based on gaps in evidence described by the insurance company in court, whether it will have a strong case.

There have been no allegations of criminal wrongdoing on the part of Deukmedjian or Morgan & Morgan. They are not named as part of the lawsuit, and Morgan & Morgan no longer represents the accident-injury victim who filed the suit in an attempt to force State Farm to pay her bills for surgery performed by Deukmedjian.

However, State Farm, in arguing that the accident victim’s medical costs were excessive — $61,788 for spinal surgery that its says Deukmedjian “typically performs in less than one hour” — is trying to show a history of inflated charges for surgeries performed by Deukmedjian on Morgan & Morgan clients.

State Farm has alleged in court documents and in courtroom arguments that Deukmedjian had a standing agreement with Morgan & Morgan to bill far more for his surgeries on the law firm’s auto-accident clients than he intended to collect. The inflated surgical costs, according to State Farm, could total millions of dollars and involve hundreds of personal-injury suits filed from the late 2000s to early this decade.

The case now has ties to a similar auto-injury lawsuit in state Circuit Court in Orlando. In that case, a former Morgan & Morgan paralegal testified last fall that Deukmedjian had an arrangement with the law firm to accept half the amount he billed for surgeries related to Morgan & Morgan lawsuits.

State Farm promptly introduced that state-court testimony in the federal case, which resulted in the company gaining further access to the records and correspondence of Morgan & Morgan and Deukmedjian.

In the federal case, the insurance company already has obtained from Morgan & Morgan hundreds of Deukmedjian invoices. But during last Tuesday’s hearing before the magistrate judge in U.S. District Court in Ocala, State Farm lawyer David Spector repeated allegations also made in court documents: that Morgan & Morgan had provided invoices for only about two-thirds of the more than 700 patients who were both represented by the law firm and treated by Deukmedjian.

State Farm also has complained in court documents there are “large gaps of information” in the invoices provided by Morgan & Morgan, and that the billing information produced by the firm was “woefully incomplete and inadequate.”