Allstate Insurance is seeking to recover more than $1.1 million from 16 New York-area defendants.
According to its federal complaint filed last week, the insurer alleges that a chiropractor, together with one layperson and two lay entities, illegally owned and controlled three professional medical corporations.
These corporations were allegedly owned on paper by a medical doctor. These businesses were allegedly used to submit fraudulent billings to Allstate.
The insurer contends that professional service corporations were actually owned and controlled by laypersons, rather than by licensed medical professionals. The lawsuit alleges that the defendants submitted claims for services that were performed by independent contractors in violation of the no-fault law. There were also incidents of illegal referrals to a person who had a financial interest.
Additionally, four other individuals and four other companies were also named as being part of the overall scheme to submit fraudulent bills to Allstate. Since 2007, Allstate has filed 36 fraud lawsuits in New York, seeking nearly $199 million in damages.
According to the Insurance Information Institute, New York is in an insurance fraud crisis and no-fault fraud is costing New Yorkers millions of dollars year-after-year.
“We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first,” said Krista Conte, spokesperson for Allstate’s New York office.
Allstate and other insurers are pushing for a comprehensive reform of the no-fault system. “The no-fault system is being exploited and responsible citizens are the victims,” Conte said.
“Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together to fix the broken no-fault system.”
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