Hush money: Secrets of Georgia’s injury lawyers coming to light

Editor’s note: This is the first article in a four-part series on the fight to expose who and what are fueling Georgia’s lucrative market for car-wreck lawsuits.

“I did what they told me,” her translator told the courtroom. That included signing a contract written in a foreign language. It included being sued by the doctor who treated her injuries – the very same doctor her lawyers had told her to visit after a car wreck. Sure, money was at stake, but so was secrecy.

This isn’t the story of an unlucky tourist in a foreign land. The language in the contract was English, and Glenda Ochoa speaks Spanish and lives in Georgia. When she hired a lawyer because a traffic accident generated $18,000 in medical bills, her court case became worth five times more, and she somehow became a defendant.

How? Well, there are plenty of people out there who invest in lawsuits and demand maximum returns from America’s growing litigation market. And Glenda Ochoa’s lawsuit is a good example of how they go about making those profits.

Normally a person injured in a traffic accident would seek treatment from doctors who would be paid by their insurance or Medicaid. But in Georgia, the alleged scheme is this: An attorney takes their case and orders them to the lawyer’s favorite doctor who bills whatever tests and treatment it takes to make the forthcoming lawsuit more profitable.

When the doctor agrees to be paid out of whatever is recovered in court, someone else emerges - an outside company often unknown to the car-wreck victim - that cuts a check to the doctor for the cost of actual care. When a settlement or verdict comes, the funder, having obtained the doctor’s interest in the case, pockets the difference between what it paid to the doctor and the inflated medical bill presented to judges and juries.

People like Glenda Ochoa are reduced to commodities on spreadsheets whose injuries are bought and sold. Everyone is banking on the defendant’s insurer paying out the policy maximum, and it can seem easier for insurance companies to do that instead of waging war in court.

In Ochoa’s case, one such insurer had spent $123,000 on lawyer and court fees before a January hearing. Beyond the legal fight of obtaining communications and other records from lawyers, doctors and funders, Protective Insurance Company had to contend with one player who is said to have avoided service of a court order by hiding in a bush.

But defendants in Georgia are nevertheless hitting back. They want to know what exactly the lawyer says to the doctor, and what the lawyer says to the funder, and what the doctor is diagnosing to make the funder and the lawyer happy. They want to know how profitable repeat business is among the three, and how far they will go to keep it all a secret.

“We get complaints every day insurance is too high. And insurance is high because of all these lawsuits,” said Travis Ginest, general counsel of the Owner-Operator Independent Drivers Association.

All Americans worry about paying their medical bills. Ochoa had no idea who was paying hers. In the end, she was paid $100,000 to settle a collection suit by her doctors in which she was the defendant. She had to dismiss her own car-wreck lawsuit to get the money, so that no one could ever investigate what happened in her case. All these agreements were in English, but the Spanish-speaking Ochoa trusted her lawyer – or ex-lawyer, as in the dismissal agreement she fired her attorney, too.

“They told me that either I took the money, or I run the risk of just not getting anything,” Ochoa said through her translator.

Secrets of the ‘7 figure case’

Cases like Ochoa’s may never have been fully understood without help last year from Georgia lawmakers and Gov. Brian Kemp, who passed a comprehensive legal reform package. Plaintiffs used to be able to abandon cases, no questions asked. But Judge Eric Norris was asked to keep Ochoa’s open after her lawyers voluntarily dismissed it rather than hand over information to the insurer.

Doctors play a central role in this alleged scheme, because plaintiffs need them as experts to testify their injuries were caused by an accident. But plaintiff lawyers are the quarterbacks. Ochoa was represented by a law firm owned by Ali Awad, a proud Georgia State University grad who calls himself the CEOLawyer (he also has an MBA from Georgia State). Awad once wrote a playbook on “how personal injury works.”

“Once you confirm coverage, you get MRl's on ALL injured body parts,” Awad wrote in the since-deleted post on LinkedIn. “ALWAYS get medical doctor involvement.”

Other tips: “Avoid gap in care” by urging the client to immediately see a doctor. “They can even buy ibuprofen at a pharmacy within 2 weeks to prove special damages. After 2 weeks, causation gets harder.” And if nerve damage or a spinal injury is detected, procedures called radiofrequency ablations signal that “This is now a 7 figure case because RFA’s are repeated annually.” Awad did not respond to messages seeking comment.

Plaintiff lawyers also urge their clients to avoid going to their own doctors or using their own insurance. The reason? “Insurance carriers have peer review for unnecessary treatment, as well as pricing agreements,” said Joe Kessing, a consultant who spent decades as an insurance executive overseeing litigation and settlement of personal injury lawsuits.

In one case against Coca-Cola, the plaintiff was sent to Ortho Sport & Spine despite being an Air Force veteran with plenty of treatment options available to her. And those providers would have been satisfied being repaid, but Ortho held a lien that guaranteed it a chunk of her winnings in court.

“You have these doctors working with these same attorneys,” Ginest added, “making the bulk of their money with these attorneys, and every time a large verdict comes in that raises insurance premiums.”

Traffic lawsuits traditionally produced settlements and verdicts for three times “specials,” lawyerspeak for medical expenses, Kessing explained. A third for the lawyer, a third to repay the hospital and a third for pain and suffering.

A plaintiff who uses their own insurance can only claim “specials” at the rate insurance pays for medical care. But doctors allied with personal injury lawyers charge more – sometimes a lot more – driving up “specials” and turning what might have been a $300,000 case into a million-dollar case. The key is not running any of those bills through a conventional insurance company.

Hidden figures

When insurers have obtained court-ordered discovery, they have found doctors keep two sets of books: One recording the amount they were actually paid for services, and the other a higher amount to present in court. Since even the discounted rate they give plaintiffs can be two or three times more than insurance or Medicaid reimbursement, doctors welcome the opportunity to treat the patients lawyers send them.

The difference between the cash cost of care and what the jury sees can be huge. Infinity Capital, a Las Vegas firm that once was a big funder in Georgia, filed for Chapter 11 bankruptcy in 2021 amid claims of fraud and embezzlement. Bankruptcy court filings show page upon page of medical liens Infinity purchased from doctors and diagnostic clinics with the price paid versus the amount Infinity hoped to collect.

To take just one example, Infinity bought a list of receivables from Stat Diagnostics – all associated with personal injury lawsuits -- for $157,000 and reported a gross billing amount of $879,000.

Between those two amounts is Infinity’s potential profit when those cases settle. All it takes is a cooperative judge who looks the other way. Since the plaintiff signed a lien to the doctor, who sold that cost to a funder, and given it typically takes two to three years for a case to settle, virtually all money allocated for medical damages gets gobbled up by the funder’s often-usurious interest rates.

As Tecumseh Capital, a North Carolina hedge fund, put it in a pitch to investors, buying medical liens at a “pre-negotiated, discounted rate” from doctors is a surefire path to profits. Tecumseh touted an 8% annual dividend and total returns in the “high-teens to mid 20’s” for a $20 million fund it raised in 2020 to invest in Infinity receivables backed by accident claims. A recent report on another Tecumseh medical receivables fund shows gross profit margins as high as 800% per receivable.

With that much money at stake, insurers say doctors have an incentive to say whatever it takes to ensure the plaintiffs they treat win in court. So insurance company lawyers are increasingly asking judges to lift the veil of secrecy and order doctors to turn over their funding arrangements.

“That’s what they’re fighting so hard to hide – the difference between the amount they are charging and what they’re being paid,” said Zach Matthews, a partner with McMickle, Kurey & Branch in Alpharetta, Ga., who’s made a career out of probing how personal-injury lawyers drive up medical costs in traffic lawsuits.

And Ochoa’s case demonstrates another tactic lawyers use to keep prying eyes out of their business: If a judge orders disclosure, they urge clients to dismiss their case with prejudice, meaning it can never be brought again, or quickly reach a settlement.

Coca-Cola obtained one such discovery order in a lawsuit last year, which ordered Ortho Sport & Spine to give up amounts billed and amounts negotiated over the previous two years, plus marketing materials distributed to the plaintiff’s lawyers. That included parties, sporting events, vacations and gifts, if there were any.

All communications between the firm and Ortho regarding the case were to be turned over. By February of this year, Ortho had produced “some, though not all, the materials ordered,” and an extension was requested to April 15. The case settled that day, with the federal judge giving his blessing to dismissal.

But in Ochoa’s case, Oconee County Judge Eric W. Norris did the opposite. During the January hearing, he actually had plaintiffs lawyers produce what was supposed to be the confidential settlement Ochoa received when her own doctors sued her.

Throughout, Norris seemed skeptical Ochoa knew what she was doing when she signed documents accepting a $100,000 payment in exchange for dropping her case and firing her lawyer. He asked her repeatedly if she understood what dismissing a case with prejudice meant (it means it can’t be refiled), and finally: “was this settlement agreement, was it ever in Spanish for you?”

“No,” said the translator.

“Okay. Do you read English very well?” the judge asked.

“No. I never read the document. They just asked me to sign there.”