Allstate Insurance Company won the lawsuit that it had filed in Nevada against a chiropractor and a number of his businesses. This was the insurer’s first medical fraud lawsuit filed in the state. A judgment of more than $7 million was awarded to Allstate. This lawsuit arose following a Racketeering Influenced in Corrupt Organizations (RICO) investigation that started nearly 10 years ago. In a statement, Allstate said its victory sets the stage for the company to “vigorously fight this type of fraud.” Chelci Vaughan, an Allstate spokesperson, stated:

Medical insurance fraud affects all policyholders’ premiums, and it’s not fair for consumers to pay higher rates for criminal behavior. We are committed to protecting our customers from being victimized by this type of fraud.

The RICO complaint was filed by Allstate in 2008 in the Las Vegas Federal District Court against chiropractor Obteen Nassiri, D.C., and his businesses: Advanced Accident Chiropractic Care, ONN Management, Digital Imaging Services and Digital X-Ray. Since the suit was filed, the Chiropractic Physicians’ Board of Nevada revoked Dr. Obteen Nassiri’s license. It was alleged in Allstate’s lawsuit that Dr. Nassiri began defrauding Allstate in 2003 by exaggerating clinical findings, submitting improbable diagnoses, charging for treatment he did not provide, providing unnecessary and excessive treatment, grossly misrepresenting billing, making inappropriate referrals, and exhibiting a general pattern of illegal and fraudulent conduct. The jury also found Nassiri’s wife, Jennifer Nassiri, liable for negligent misrepresentations in the fraudulent scheme.

The case accused Dr. Obteen Nassiri of running a practice that referred patients to his clinics for unnecessary medical consultations and expensive diagnostic studies in an effort to generate more revenue and profit. The liability verdict had been returned in June with the final judgment and damages award being returned by the jury on September 10. The total judgment against the Defendants consisted of $3.59 million in compensatory damages, $2.51 million in punitive damages and $1 million in pre-judgment interest. Allstate is also seeking more than a million dollars in attorneys’ fees and costs.

As a result of the verdict, Allstate will recover money it paid in the settlement of more than 150 automobile accident claims that involved bogus costs. Allstate sought recovery against each defendant for their violation of both Nevada state and federal law based on a pattern of fraudulent behavior. Ms. Vaughn, Allstate’s spokesperson, said:

It is especially disturbing when medical professionals violate their oaths and abuse the public’s trust. This judgment should send a strong message to unscrupulous providers and would-be criminals that Allstate maintains a zero-tolerance approach in the fight against insurance fraud.

It’s encouraging to see Alllstate using the court system to go after individuals and businesses that commit fraud. Some might find it somewhat hypocritical considering the giant insurer’s stance relating to consumer fraud lawsuits that are brought by individuals against companies in Corporate America. Perhaps Allstate has seen the light and now realizes how important the judicial system really is.

Source: Claims Journal

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