Allstate Slaps 2 N.Y. Medical Corporations With $1.7M Fraud Lawsuit

February 28, 2013

Allstate Insurance Company said it is seeking to recover $1.7 million against New York area defendants in its second insurance fraud lawsuit of 2013. Since 2003, Allstate has filed 46 fraud lawsuits in New York State seeking more than $233 million in damages.

The complaint is against Gerald Surya, M.D., Sun Medical Care of Nassau, P.C., and Sky Medical, P.C. The suit was filed in the U.S. District Court, Eastern District of New York.

The complaint alleges Sun and Sky defrauded Allstate by creating and submitting false, fraudulent and inflated invoices containing excessive charges for unwarranted, unnecessary and undelivered medical treatment and testing. As a result of the defendants’ allegedly fraudulent billing scheme, the P.C.’s were not entitled to collect no-fault insurance benefit payments under New York law, Allstate said.

According to the Insurance Information Institute, no-fault fraud is costing New Yorkers hundreds of millions of dollars year-after-year. “In essence, honest hardworking New Yorkers are paying a ‘fraud tax’,” said Allison McMahon, Allstate spokesperson.

“We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

Allstate said it is one of a number of insurers pursing comprehensive reform of the no-fault system in New York. “The no-fault system is being exploited and responsible citizens are the victims,” McMahon said. “Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together this legislative session to fix the broken no-fault system.”

Now in its 80th year as an insurer, the Allstate Corporation is the nation’s largest publicly held personal lines insurer.

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