|Allstate Files New RICO Lawsuit In Eastern District Of Michigan|
By Lonce Lamonte - April 30, 2019
Allstate Insurance Company, a giant auto-insurer, filed a new RICO lawsuit last week in the U.S. District Court for the Eastern District of Michigan. The suit claims Allstate was victimized by a racketeering conspiracy from six metro Detroit treatment clinics, an MRI center, and a medical transportation company.
Allstate says these entities acted together to make millions of dollars by exploiting and abusing Michigan’s no-fault insurance system.
The Pain Center USA, Interventional Pain Center, Dr. Rajendra Bothra, and Dr. Erick Backos are named defendants in the new suit which seeks $860,000 in damages. Allstate filled a similar lawsuit against several other clinics back in February 2019 seeking $3.5 million.
Some of the clinics received help, the lawsuit reads, from auto repair facilities and tow truck drivers. They were supposedly offered kickbacks by middlemen such as $500 per patient referral. Patients were illegally solicited to be treated in clinics just days after their auto accidents. Representatives called the accident victims and claimed to be with a law firm.
Allstate’s April 22nd 2019 lawsuit claims The Pain Center USA and other Detroit-area clinics took advantage of Michigan’s no fault auto insurance law. It claims Dr. Rajendra Bothra operated both The Pain Center USA and Interventional Pain Center in Warren, Michigan. Dr. Erick Backos participated in controlling both clinics.
The suit alleges that Dr. Bothra has claimed the pain center only treats patients with chronic pain who have not been helped through conservative treatment. However, many patients allegedly started their treatment there right after their auto accidents.
Allstate accused the medical clinics of using “predetermined protocols” on patients that involved unnecessary physical or chiropractic therapy, MRI scans, and other procedures purely done to generate large bills. Some patients allegedly went along because of offers of narcotic drug prescriptions, money from future lawsuits, or opportunities for friends or family members to be an in-the-home care provider.
One procedure cited involved small, behind-the-ear pain relief devices called P-STIMs. These devices cost less than $300 a piece wholesale, but some clinics billed insurance $8,600 for the full procedure. $56,272 was billed at times, the suit reads, when a surgical suite was used.
Also, the suit accuses, that once the patients arrive, The Pain Center and Interventional Pain perform bilateral procedures on two separate dates when usually they are performed on the same day. The two separate dates are used in order to multiply the amount of fees charged.
Allstate claims the doctors prescribed opioids as an inducement knowing they were contributing to the nation’s opioid addiction crisis. The opioid prescriptions led to urine drug screening, which could be billed.
It was alleged clinics gave patients lumbar back braces that sell for less than $100 at Walmart. The braces were billed to Allstate at $1,400 each and were handed out regardless of patients’ medical need for them.
According to Claims Journal on April 29th 2019, “Allstate says (Dr.) Bothra found a way to expand his billings in March 2016, when he opened the Interventional Pain Center’s ambulatory surgery center. The surgery center billed Allstate for facility fees for dates of service more than three months before it opened, according to the suit. The clinics billed for blood tests that were not performed, urine drug tests that weren’t performed, physical therapy that wasn’t performed, and injections that were never given, the suit says.”
The April 29th Claims Journal article further reads that Allstate alleges Dr. “Backos wrote out disability certificates for the ‘overwhelming majority’ of patients who(m) he treated at the clinics.
In the Detroit Free Press on April 23rd 2019, is reported that rampant fraud is going on in Michigan related to the no-fault auto-insurance system. “The high cost of auto insurance in Michigan is a hot political issue,” it reads.
“An estimated 10% of all auto accident claims nationwide contain some aspect of fraud. In Michigan, that figure is 16% to 18%, according to State Farm Claims Manager, Michael Ouding.”
In the same Detroit Free Press article, it is reported that critics counter that Allstate and State Farm insurance companies have been abusing racketeering laws by trying to shut down legitimate clinics that simply treat a lot of no-fault patients.
“The insurance companies failed to get legislative changes to Michigan’s no-fault-law, these critics say, so they turned to fighting the no-fault system through RICO cases to lower their payouts and boost their profits.”
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