Auto Insurers Sue 16 Medical Clinics for $1.5 Million in Fraudulent Claims

Strategic Insights -

In a shocking move, a group of auto insurers, including Allstate Insurance Co. and Progressive Casualty Insurance, have filed a lawsuit against 16 medical clinics in Minnesota, accusing them of defrauding insurers by soliciting accident victims and billing for unnecessary, excessive, or never-rendered treatments. The clinics, located in the St. Paul and Minneapolis regions, allegedly carried out this scheme since 1999, using runners to illegally solicit accident victims for treatment at the defendants' clinics. The insurers are seeking $1.5 million to cover legal expenses and investigative costs.

Key Takeaways:

  • The lawsuit, filed in Hennepin County District Court, accuses 16 medical clinics in Minnesota of defrauding auto insurers by soliciting accident victims and billing for unnecessary, excessive, or never-rendered treatments.
  • The clinics allegedly fraudulently billed the companies for $770,000, according to Mike Siemienas, a spokesman for Allstate.
  • The insurers are seeking $1.5 million to cover legal expenses and investigative costs.
  • The suit alleged that the clinics had been carrying out the scheme since 1999 by using runners to illegally solicit accident victims for treatment at the defendants' clinics.
  • The clinics allegedly charged for medical services never performed and billed for unnecessary and excessive treatments.
  • The treatments were prescribed according to a standardized plan designed to maximize billings rather than based on the needs of the patients.
  • The lawsuit is part of the insurers' efforts to fight fraud and keep insurance costs down for consumers.
  • The National Insurance Crime Bureau estimates that fraudulent insurance claims cost consumers $200 to $300 a year in increased insurance premiums.
  • Allstate has filed another lawsuit against a chiropractic clinic in Pennsylvania recently for allegedly billing the company fraudulently and "upcoding" their billing.
  • The marks involved in the lawsuit are Sport Fit Inc., Choice Wellness and Sport Rehab, and Proactive Chiropractic.

Statistics:

  • The lawsuit accuses the clinics of defrauding the insurers for $770,000.
  • The insurers are seeking $1.5 million to cover legal expenses and investigative costs.
  • Fraudulent insurance claims cost consumers $200 to $300 a year in increased insurance premiums, according to the National Insurance Crime Bureau.
  • The clinics allegedly operated this scheme since 1999.

Sources:

  • A. M. Best (via COMTEX)
  • BestWire (July 15, 2004)
  • Marie E Suszynski
  • A. M. Best Company, Inc.
  • COMTEX (http://www.comtexnews.com)