NU Online News Service, Oct. 13, 12:10 p.m. EDT

Allstate Insurance Co. says it has filed its 32^nd fraud suit in the state of New York, this time seeking $4.5 million from more than 20 medical professionals.

Yesterday, the company announced it filed suit against five medical doctors, seven chiropractors and 10 medical-professional corporations along with one nonprofessional in a scheme to allegedly bill insurance companies fraudulently for procedures, including procedures that were medically unnecessary and/or inappropriate.

Since 2003, Allstate says it has filed 32 fraud lawsuits in New York State, seeking more than $175 million in damages.

The company says the situation is New York is unacceptable and the laws need to be changed because fraud costs honest policyholders millions of dollars a year.

“In essence, honest, hardworking New Yorkers are paying a ‘fraud tax,’” says Krista Conte, spokesperson for Allstate’s New York office, in a statement. “We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

Allstate says it has filed counterclaims and a third-party complaint alleging that two New York medical-professional corporations (Cambridge Medical P.C. and Pine Hollow Medical P.C.) were fraudulently incorporated through a scheme using the names of licensed medical physicians, and that a lay-owner, who was not a physician, secretly owned and controlled the medical-professional corporations.

Allstate’s counterclaims and third-party complaint further allege that these corporations fraudulently billed Allstate Insurance Co.

Cambridge filed an action seeking to recover billing from Allstate, and Allstate responded with its counterclaims and third-party complaint, the company says.

The company went on to say that its claims were filed following an investigation by Allstate's Special Investigative Unit and seek reimbursement for personal-injury-protection benefits it paid on behalf of its customers during time frames specified in the counterclaims and third-party complaint.

Allstate says the counterclaims and third-party complaint are the latest in a string of actions it has taken to protect consumers from these and similar activities.