NU Online News Service, Dec. 30, 10:39 a.m. EST
Allstate Insurance Company said it has added another lawsuit to its list in an attempt to recoup claims it paid to allegedly fraudulent medical professionals.
The suit, filed in the U.S. District Court in the Eastern District of New York, is Allstate's 27th in the state since 2003 aimed at insurance fraud, the insurer said.
The Northbrook, Ill., home and auto insurer said it has sought to recover more than $161 million during that time. In 2010 alone Allstate said it filed seven lawsuits in New York looking for more than $10.5 million in damages.
The latest lawsuit names 11 defendants that allegedly make up fraudulently incorporated medical professional corporations known as Quality Medical, Spartak Medical and Richmond Medical. The alleged medical centers were "secretly" owned and controlled by four people who were not physicians, through a series of other companies they own, Allstate said.
These allegedly fake medical professionals "submitted or caused to be submitted, or otherwise facilitated, the submission of fraudulent claims to Allstate through medical professional corporations that were never eligible to bill or collect no-fault benefits," Allstate said.
According to the New York Alliance Against Insurance Fraud, questionable liability claims involving excessive medical treatment surged 42 percent during the first six months of 2010. Many claims involved no-fault auto insurance claims submitted by medical mills.
State Superintendent of Insurance James Wrynn, is currently proposing revisions to regulations regarding New York's no-fault law. Because of loopholes in the law, medical professionals, attorneys and others have exploited the system, the industry has said. The superintendent has said that the changes he has proposed would make it more difficult to commit fraud and abuse.
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