June 21, 2000 9:35 a.m. CDT
Allstate Insurance Company, Liberty Mutual Insurance Company, and Progressive Casualty Company and three of its affiliates, served summons and complaints throughout the Denver area last Thursday against two chiropractic clinics, one physical therapy clinic and one billing service the insurers allege were improperly owned by four individuals.
This lawsuit, filed in the United States District Court in Denver, accuses the defendants of taking part in various schemes intended to defraud or mislead the companies’ policyholders of millions of dollars. The insurers coordinated effort emphasizes their commitment to fight auto insurance fraud.
“Insurance fraud is intolerable,” said Ed Moran, Assistant Vice President over Allstate’s special investigative unit. “We do not think it’s fair for our customers to pay for the acts of allegedly unscrupulous individuals. We are committed to drive fraud out of the cost of insurance.”
The Insurance Information Institute estimates that property/casualty fraud costs more than $21 billion a year.
“We may compete for customers, but we all work together when it comes to fighting fraud,” said Al Yeager, head of claims for Progressive. “We maintain that these medical providers were out to steal, not heal.”
According to the complaint, these clinics were illegally run by non-medical personnel. The complaint outlines in detail the allegations of their efforts to cover up this improper ownership.
This alleged scheme, specifically outlawed by Colorado law, allows unlicensed providers of medical services to influence medical treatment, bill for services never rendered and grossly inflate medical bills for people involved in traffic collisions.
This joint insurance industry effort has two objectives. The first is to obtain a declaration that the Colorado No-Fault Act does not require an insurer to honor charges from improperly licensed or incorporated medical service providers. This declaration will assure that in this case and in future cases, Allstate, Liberty Mutual, Progressive and their customers, do not have to pay for improper services. Second, the insurers seek to recover the amounts paid to these clinics based upon alleged fraud and alleged violations of the Colorado Consumer Protection Act and the Colorado Organized Crime Control Act.
The three insurance carriers are seeking several million dollars in damages from the defendants’ alleged conduct.
“Liberty Mutual has zero tolerance for anyone who commits fraud against us or our customers,” said Glenn Wolf, director of special investigations for Liberty Mutual. “Medical professionals who commit insurance fraud cost our customers through higher premiums, and we are an advocate for our customers in stopping insurance fraud.”
“We believe the patients’ well-being was secondary to profit for these clinics. These actions are compounded by complaints by patients that the clinics billed them for treatments they never received,” said Allstate’s Moran.
Allstate has a 632 member special investigation unit which gathers evidence and prepares cases for prosecution. Allstate works closely with law enforcement officials to facilitate the criminal prosecution of those individuals accused of insurance fraud. fraud and works closely with the National Insurance Crime Bureau, and federal, state and local law enforcement departments to prosecute suspected insurance criminals.
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