In the company’s second fraud-related lawsuit of 2013, Allstate Insurance Company is seeking $1.7 million in damages from three New York-area medical providers who allegedly engaged in a fraudulent medical billing scheme.
The subsidiary of The Allstate Corporation, the nation's largest publicly held personal lines insurer, has aggressively pursued fraudsters while supporting legislative reforms intended to ferret out abuse of the state’s no-fault personal injury protection (PIP) system for many years.
Since 2003, the insurer has filed a total of 46 fraud lawsuits in the state of New York State seeking more than $233 million in damages. Filed in the U.S. District Court, Eastern District of New York, this latest complaint against Gerald Surya, M.D., Sun Medical Care of Nassau, P.C., and Sky Medical, P.C. involves a familiar fraud: inflated medical invoices for “unwarranted, unnecessary or undelivered” treatment and diagnostic testing.
Allstate alleges the defendants in the case—Dr. Surya, Sun Medical Care and Sky Medical—fabricated medical claims by inflating charges and billing for services never rendered to cash in on the state’s no-fault insurance benefits. The inaccuracy of such claims would preclude compensation under New York law and thus serves as the basis for Allstate’s motion to recoup the $1.7 million it paid to the defendants.
Though the outcome of this latest battle in the war against insurance fraud is not yet known, the case nonetheless illustrates the due dilligence required of insurers in protecting policyholders and the industry at large from ever-enterprising fraudsters. In New York alone, no-fault fraud is estimated to cost consumers hundreds of millions of dollars each year, according to recent statistics from the Insurance Information Institute (I.I.I.).
“In essence, honest hardworking New Yorkers are paying a ‘fraud tax,’” said Allison McMahon, a spokesperson for Allstate. "We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first."
Numerous insurance carriers across the nation continue to lobby for comprehensive fraud-related reform and stiffer penalties. Stay tuned for updates on this case, along with the latest measures to combat and deter insurance crime.
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