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Allstate Sues Doctors, Clinics, Alleging Fraud

October 15, 1998|PAUL J. LIM | TIMES STAFF WRITER

Allstate is continuing its unprecedented crackdown on alleged auto insurance fraud, especially in Southern California.

According to a filing made public Wednesday, the country's second-largest auto insurer is suing 11 doctors and chiropractors, one staff member and seven clinics--from San Diego to Oxnard--for more than $33 million.

The charge: submitting false insurance claims for victims of minor auto accidents.

All seven clinics and a San Fernando-based medical billing firm, which was also named in the suit, are partially or wholly owned by Dr. Arthur G. Collins of Los Angeles, Allstate's attorneys said.

The announcement of the suit, which was filed July 29, comes four months after the company took similar actions, seeking $25 million, against two other Southern California clinics.

It also comes on the same day that Allstate filed a $1.95-million complaint in Cook County, Ill., accusing several Chicago-area medical clinics of engaging in the unauthorized practice of medicine and "up-coding."

Up-coding refers to the submission of invoices to insurance companies for more expensive medical services than a covered patient actually receives, according to Allstate. It is also a central complaint in the Southern California case.

The California suit, filed in Los Angeles Superior Court, accuses the defendants of engaging "in a sophisticated scheme to defraud Allstate" by billing for treatment that was never provided and billing for unnecessary treatment.

Daron Tooch, an attorney for Collins and the clinics, denied Allstate's charges and said they will fight the matter in court.

"The doctor strongly denies these charges. He never defrauded any insurance company and has never made any false diagnosis," Tooch said.

The medical clinics named in the California suit are Bel-Fe Medical Group in Huntington Park; Maclay Medical Group in San Fernando; National City Medical Clinic and National City Plaza Medical Clinic in National City near San Diego; Norwalk Medical Clinic in Norwalk; Oxnard Medical Clinic in Oxnard, and Southwind Medical Clinic in Santa Ana. A&L Medical Group, a medical management firm in San Fernando, is also named in the suit.

Allstate is believed to be the first insurer to sue doctors and clinics for allegedly fraudulently overbilling insurance companies for claims.

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