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Allstate Wins Landmark Case Against Doctors


A Los Angeles jury awarded Allstate Corp. $8.2 million on Thursday in a landmark fraud case involving nine medical clinics accused of billing for treatments that were never rendered. It was the first case tried under a 1995 California law that allows auto insurers to pursue civil fraud allegations in court rather than rely on regulators to tackle the cases.

Allstate, the nation's second-largest auto insurer, has been a leader in using the law to sue doctors and clinics. Most cases have been settled out of court.

"A verdict like this says jurors recognize that fraud should not go unpunished and that they're willing to crack the whip when it's demonstrated," said Dick Ross, a member of the state Department of Insurance's criminal investigations branch.

An attorney for Allstate said the company hopes the ruling will have a deterrent effect on doctors who falsify billings or provide unnecessary treatments.

"There are a lot of dirty doctors out there and it's costing policyholders billions of dollars in claims," said Dennis B. Kass of Manning & Marder, Kass, Ellrod, Ramirez.

In 1999, Allstate filed suit in Los Angeles County Superior Court against six doctors who ran nine Southern California clinics: Tri-Star Family Health Center in El Monte, Wilshire Tri-Star Medical Clinic, Van Nuys Family Health Center, Carson Community Medical Clinic, Carson Medical Clinic, Wilshire Rampart Health Center, Value Care Medical Clinic in West Covina, Anaheim Walk-In Medical Clinic and El Monte Valley Health Center.

Allstate accused the doctors and clinics of altering medical records and bills to support insurance claims or personal-injury lawsuits against the insurer and its policyholders.

Allstate settled with three of the doctors--Behrouz Meshkin, Noland Coons and Jacqueline Ganjeh--for $180,000 and pursued the other three--Hisham Muhyeldin, Feras Y. Haddad and Elyas Khury--in court, Kass said. The jury deliberated for about two weeks before finding the doctors liable for fraud, he said.

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