NU Online News Service, May 23, 11:59 a.m. EDT
Allstate Corp.’s Encompass Insurance says it has come out on top in a legal battle with chiropractors in Massachusetts.
The insurer says a ruling in Suffolk Superior Court in Boston is a victory “in the crackdown on insurance fraud.” The court has ordered chiropractors Alan and March Cohen to pay the insurer more than $1.1 million in damages, Allstate says.
Meanwhile, in New York, Allstate says it added to its fraud-lawsuit count. Filed in district court under the Racketeer Influenced and Corrupt Organizations Act (RICO), the insurer is seeking to get back $2.1 million from 37 New York area defendants who allegedly “engaged in a scheme in which fraudulent and misleading bills were submitted to Allstate for durable medical equipment, medical supplies and orthotic devices,” Allstate says.
Allstate says Encompass was one of four insurers in Massachusetts to file a countersuit for fraud, conspiracy and RICO violations against the Cohens, who allegedly submitted bills for work on patients the insurers claimed were involved in staged auto accidents.
The chiropractors actually sued first and sought money from insurers for the services given to patients after auto wrecks.
Apparently, the insurer’s evidence to the contrary was enough for the court, which awarded Encompass treble damages, attorneys’ fees and other costs. The Cohens’ claims were dismissed, Allstate says.
The insurer’s latest lawsuit in New York is the 29th filed in the state since 2003, seeking to recover $167 million, says Allstate, which alleges that the retailers submitted or facilitated the submission of fraudulent and misleading bills and medical records to the insurer under New York State’s no-fault law.
This is the second fraud-related lawsuit to be filed by the insurer in New York this year. Earlier this month Allstate announced it was seeking $4.7 million from doctors who allegedly filed fraudulent claims for unnecessary medical tests for accident victims. Allstate alleges the tests were “of non-diagnosable quality, served no legitimate purpose and appear to be wholly fabricated.”