Allstate, Encompass Seek $17 Million in N.J. Fraud Lawsuit against Chiropractors, Related Co.’s

December 19, 2003

Allstate New Jersey Insurance Company and Encompass Insurance announced that they have filed a multi-million dollar civil complaint, under the New Jersey Insurance Fraud Prevention Act, in the Superior Court of Morris County against Scott Greenberg, D.C., a Central New Jersey-based chiropractor, and his various chiropractic businesses.

The bulletin indicated that the following entities, allegedly controlled by Greenberg, were also named in the lawsuit: “Middlesex Diagnostic Associates, a neurological testing company, as well as a medical billing business, Accurate Billing Company, Inc. Other defendants in the suit include Roman Sorin, M.D. and Neuro Muscular Medical Group, P.A., alleged to be controlled by Sorin, as well as Steven Brownstein, M.D. and Brunswick Imaging Corporation, an MRI facility alleged to be controlled by Brownstein.”

Allstate N.J. and Encompass said they have paid more than $17 million to the defendants beginning in 1993. They are seeking “restitution of all monies paid in violation of New Jersey statutes and regulations governing the delivery of health care.” They’re also asking for treble damages, and a declaratory judgment against the medical practitioners “in order to halt all claims being made by Drs. Greenberg, Brownstein and Sorin and the professional entities controlled by them.” That request was included because the companies are still receiving claims from the defendants.

The lawsuit alleges:”Greenberg orchestrated a referral scheme to defraud the carriers. Specifically, the complaint accuses Greenberg of illegally self-referring his chiropractic patients to Middlesex Diagnostic Associates, the mobile diagnostic facility in which he was the sole owner.” It notes that N.J. law makes it “illegal for a chiropractor to own a diagnostic facility.” Greenberg closed Middlesex Diagnostic, but then referred his patients to Neuro Muscular Medical Group, a diagnostic facility owned by Sorin. The companies said that an investigation revealed that “Neuro Muscular Medical group’s patients consisted almost exclusively of Greenberg patients.”

Greenberg is also charged with setting up and controlling Accurate Billing Company, which kept 30 percent of Neuro Muscular Group’s monthly gross income. The lawsuit contends that the deal constituted a “kickback from Sorin to Greenberg in exchange for the patient referrals.” It also contends that “Greenberg in fact illegally employed Sorin in order to evade the regulations that require diagnostic facilities to be owned by plenary licensed physicians.”

Edward J. Moran, assistant vice president for Allstate Insurance Company’s Special Investigations Unit Division, said that the doctors’ businesses continue to be investigated by Allstate New Jersey. he noted that, because insurance fraud is difficult to detect and must be proven in court, it can take some time to find those involved in the fraud, sort out all the facts and present a case.

Richard C. Crist, Jr., President of Allstate N.J., stated: “Allstate New Jersey believes that the fight to rid the system of insurance fraud is a crucial one, and it continues daily. It is especially disturbing when doctors and others in the medical profession have allegedly violated their public trust. People place their faith in medical professionals and they should be protected from those who violate the law.” He also stressed that “auto insurance fraud is not a victimless crime. It impacts everyone’s car insurance costs.”

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