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Utilizing a California Law, 20th Century Sues Chiropractor


The insurance industry's fight against medical fraud widened Thursday as Woodland Hills-based 20th Century Industries sued a Glendale chiropractor and his clinic for $8 million.

The auto insurer accused David E. Neff and his Jackson Chiropractic Clinic, formerly called Harvard Chiropractic Clinic, of overbilling, billing for treatments that weren't provided and submitting fraudulent medical reports to 20th Century. The claims were mostly for victims of rear-end auto accidents, said John A. Marder, one of the attorneys representing 20th Century.

Neff did not return calls for comment.

20th Century is among a number of insurers using a California law allowing them to sue doctors and others for insurance fraud. Allstate Corp. was the first. Allstate's initial lawsuit, against doctors and lawyers accused of faking accidents, was settled in 1997, although the terms were not disclosed. Allstate filed three more fraud lawsuits last year against Southland doctors, clinics and their staffs asking for a total of $165 million in damages.


Quackenbush Sued: Two consumer advocacy groups sued Insurance Commissioner Chuck Quackenbush this week for allegedly failing to enforce laws regulating the sale of long-term care insurance. The state Department of Insurance said the lawsuit was misguided and that the advocates, Santa Monica-based Consumers for Quality Care and Sacramento-based Congress of California Seniors, had misinterpreted the laws.

For the Record
Los Angeles Times Saturday January 9, 1999 Home Edition Business Part C Page 2 Financial Desk 4 inches; 119 words Type of Material: Correction
Insurance suit--Santa Monica-based Consumers for Quality Care and Sacramento-based Congress of California Seniors have sued the state Department of Insurance. The suit accuses Insurance Commissioner Chuck Quackenbush of ignoring legislation that requires greater disclosure and regulation of insurance companies that sell long-term-care policies.
Amy Zajac, an insurance department spokeswoman, said that regulators are waiting until companies have at least a year's worth of data before requiring the disclosures. Zajac said the department started approving companies to sell the insurance after the new laws took effect in October 1997. "In many cases, there is no annual data to be had yet," Zajac said.
Because of an editing error, the insurance department's response was missing from an article about the lawsuit published Friday.

The groups accuse Quackenbush of ignoring legislation that requires greater oversight and regulation for insurance companies and agents that sell long-term care policies. Such policies are designed to pay for nursing home and other care that is typically not covered by Medicare or other private health insurance.

Among other charges, the groups say Quackenbush has not created suitability standards to determine when policies have been inappropriately replaced; that he has not required insurers to report the number of claims denied; and that he has not required insurers to reveal which agents may be "'churning," or repeatedly switching policies to earn greater commissions.

"If the long-term-care market is not properly structured, then the taxpayer is saddled with the cost of long-term care," said Jamie Court, a spokesman for Consumers for Quality Care.


Just Charge It: Californians with past-due state income tax bills may be able to pay by credit card under a pilot program announced Thursday by the Franchise Tax Board.

About 1 million taxpayers who haven't paid their 1997 or earlier taxes or who were assessed additional taxes during an audit will be sent notices over the next six months informing them about the new credit card option, said FTB spokeswoman Denise Azimi. Most major credit cards will be accepted. Credit card users will be assessed a convenience fee based on the size of their payment; the state expects the average fee to be about $19.

The state does not accept plastic for current tax bills. That may change if the pilot program is successful, Azimi said. The Internal Revenue Service, by contrast, this month started allowing credit cards to be used for federal tax payments.

Taxpayers who don't want to put their past-due bills on a credit card still have the option of working out a payment plan with the state. The FTB charges an 8% annual interest rate, compared with credit card rates that typically run 14% to 17%. For more information, taxpayers may call (800) 338-0505 or visit


Liz Pulliam can be reached by e-mail at

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