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Allstate Suing 21 for Insurance Fraud

On August 24, 1998, Allstate Insurance Company served summons and complaints accusing 13 physicians, chiropractors, health care providers and others, of taking part in an elaborate scheme to defraud the company of millions of dollars. Allstate seeks to recover approximately $25 million in statutory damages, attorneys' fees, and costs from the defendants.

The two suits, filed in Los Angeles County and San Bernardino County, detail how the named medical professionals had allegedly engaged in insurance fraud, ranging from "upcoding" to charging for services that were never rendered. Upcoding involves submitting invoices for more expensive services than the injured person actually received, in an attempt to obtain a larger fee from the insurance company.

Allstate first suspected that it had been victimized by these individuals and entities in November 1997. The company's Special Investigative Unit immediately initiated an inquiry that led to these lawsuits. To date, Allstate has identified 331 potentially fraudulent claims. That number is expected to grow with additional defendants facing legal action.

Recently, Allstate was awarded $10 million in California after it successfully used the Racketeer Influenced Corrupt Organizations (RICO) act to sue several lawyers and chiropractors for filing false auto insurance claims.

Allstate's Special Investigative Unit is made up of 600 analysts and investigators who are specially trained to identify suspicious claims and prepare cases for legal and criminal prosecution.

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This article was posted on December 22, 1999.