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| | Allstate Goes After Frauds
By Barry Zalma, Esq. - July 1, 2013
Allstate Insurance Co. has filed suits seeking $6.6 million from dozens of New York and Florida people and companies for allegedly bilking the company by submitting fake bills under New York's no-fault auto insurance law, according to a written statement from Allstate.
The insurer claims that 31 durable medical retail equipment companies, 33 people and 16 durable medical wholesale companies submitted the phony billing for reimbursement. The scheme was a massive one, according to the 350 page complaint detailing the allegations, and was run for at least the past 13 years. The medical equipment retailers allegedly colluded with the wholesalers and medical providers to set up a system wherein large numbers of patients were prescribed the same medical equipment, regardless of medical necessity, records say.
One example outlined in the complaint shows that two separate patients were prescribed car seats, even though the patients admittedly did not have cars, records say. Prices for the medical equipment were "grossly inflated" to drive up the claim submitted to Allstate, records say.
Fraud in New York's no-fault insurance system has been an ongoing issue for some years, with insurance companies dedicating resources to mitigate the losses and lawmakers pitching in with legislative fixes.
This is Allstate's fourth fraud lawsuit of 2013. Since 2003, the company has filed 48 fraud-related lawsuits in New York, seeking more than $237 million in damages. The company also has a special investigation unit to smoke out fraud. In 2012, the company had 63 employees in its New York unit and 570 similar investigators nationwide.
© 2013 – Barry Zalma
Barry Zalma, Esq., CFE, has practiced law in California for more than 40 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally, for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.
www.zalma.com
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