Allstate Insurance has filed another insurance fraud lawsuit. It is the second one the insurer has filed this year. The insurer is seeking to recover a total of $6 million dollars from four defendants, (all of whom are from New York).
Recently, the federal government did a nationwide takedown that resulted in 107 medical professionals being charged with Medicare fraud. The purpose was to prevent criminals from attempting to make money by filing fraudulent claims with Medicare for services or equipment that patients did not need or did not actually receive. This is the type of fraud that leads to a higher cost for Medicare.
The federal government isn’t the only insurer that is concerned about fraud. Allstate Insurance Company, which is a private insurer, has filed their second insurance fraud case of 2012. Since 2003, Allstate has filed a total of 38 fraud lawsuits in New York state. The total amount they were seeking is more than $207 million in damages (from all of the lawsuits).
The most recent fraud lawsuit filed by Allstate is against four defendants, (all of whom are from New York). The insurer is seeking to recover $6 million against these four defendants. This lawsuit was filed after an investigation was done by Allstate’s Special Investigative Unit. It is specifically seeking reimbursement for the no-fault benefits that the insurer paid on behalf of its customers during the timeframe that is noted in the lawsuit.
The complaint from Allstate alleges that Richmond Radiology, P.C., which is a New York medical professional corporation, violated New York law by illegally having the company managed by an unlicensed person and a management company. The unlicensed person violated New York law by not being a physician, by controlling and owning the professional corporation in secret, and by sharing in the money that the company received for professional services.
The bigger issue here is the no-fault law that exists in New York. According to the Insurance Information Institute, fraud from the no-fault law is costing the people of New York millions of dollars, year after year, in higher insurance premiums. Allstate, and several other insurers, want lawmakers to enact legislation that will reduce this fraud. It has been said that all this insurance fraud results in forcing the citizens of New York to essentially be paying a “fraud tax”. It isn’t truly a tax, but, it is an extra cost that they end up paying as a result of all the incidents of fraud.
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