Health Financing/Insurance

Allstate Insurance files $4 million fraud case

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Allstate Insurance Company is seeking to recover $4 million against 20 New York area defendants in its first insurance fraud lawsuit of 2011. The complaint specifically cites six physicians, eight medical professional corporations, and the lay-owned companies allegedly used to control the medical professional corporations. Since 2003, Allstate has filed 28 fraud lawsuits in New York State, seeking more than $165 million in damages. According to the Insurance Information Institute, the state of New York is in an insurance fraud crisis and no-fault fraud is costing New Yorkers hundreds of millions of dollars year-after-year. The complaint alleges that New York medical professional corporations known as Right Aid Diagnostic Medicine P.C., A Plus Medical P.C., Omega Medical Diagnostic P.C., Shore Medical Diagnostic P.C., Oracle Radiology of NY P.C., Atlantic Radiology Imaging P.C., Atlantic Radiology P.C. and Aurora Radiology P.C. were fraudulently incorporated through a scheme using the names of licensed medical physicians, and that lay-owners, none of whom were physicians, secretly owned and controlled the professional corporations. Allstate’s complaint further alleges that these defendants caused the submission of fraudulent claims and MRI reports to Allstate demanding payment of No-Fault benefits. The lawsuit was filed following an investigation by Allstate’s Special Investigative Unit and seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers during timeframes specified in the lawsuit. The lawsuit is the latest in a string of actions taken by the insurer to protect consumers from these and similar activities.

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