VV Allstate Awarded $850,000 in Fraud Case WASHINGTON: A King County pcrior Court jury recently awarded to Allstate Insurance Co, in a fraud suit it brought against two Northwest chiropractic clinics and their owners. Allstate said it was the company's largest-ever fraud case in the Pacific Northwest. The insurance company plans to ask the judge to award treble damages as well as attorney fees on top of the jury verdict. The jury in the two-week trial unanimously agreed that the owners of the two linics involved—one in Seattle, and one in Portland—had violated the state consumer protection act, the state criminal profiteering act. the federal racketeering act and common law fraud. Allstate alleged the clinics paid kickbacks to employees of law firms for bringing in motor vehicle accident "victims" for treatment they did not need, and that the clinics fraudu- lently billed Allstate and then paid a portion of the insurance proceeds to the legal employees. Allstate said that the pro- prietors of the clinic illegally owned the chiropractic clinics, because, in Washington, laypersons are not allowed to own any part of a chiropractic clinic. In Oregon, laypersons cannot own 50 or more percent of the clinic. Neither of the clinics* owners is a licensed chiropractor, and Allstate alleges that they arranged for "sham sales" of the clinics. but, in fact, continued to own them themselves. Though All- state believes the law firms or their employees were in on the conspiracy, the insurance company has not yet decided whether to pursue litigation against them. The fraudulent activities apparently took place in Seattle from 1993 to 1997. when the Seattle clinic closed down. The Portland clinic is still open and operating. Allstate is said to have become suspicious because the two clinics concentrated on motor vehicle injuries and also sub- mitted billings for unusually expensive treatments, using billing codes for patient exams that are ordinarily associated with large multiple vehicle accidents treated at hospital emergency rooms. Doctor pleads guilty to health-care fraud. OHIO: A former Ohio chiropractor has been sentenced to five months in prison and ordered to pay $6.071 in restitu- tion to various government and private insurers for health- care fraud. The chiropractor, also once a Missouri state trooper, must serve five months of home detention with electronic monitoring after his prison term ends, and must pay a $100 special assessment to the district court. Federal prosecutors allege that, between Aug. 18, 1999, and Oct. 28, 1999, the chiropractor submitted about 123 false claims, totaling about $27,000, to various health-care benefit programs. He had, also, instructed two employees to sign patients into the office log, even though he knew the patients had not been in the office. The doctor pleaded guilty to a single count of health-care fraud. It seems like a little thing—but it is so important. OHIO: United Health Care in Ohio failed to include chiropractic doctors in its directory, claiming that it caused confusion in plans that do not have DCs on panel. Ohio doctors complained loudly to United Health Care and the ACA was asked for assistance. Thanks to these complaints and the efforts of the ACA—specifically Gary Cuneo, Pat Jackson and Kathy Mills—United has prepared "Chiropractic Inserts" to put into their Directories. Source: [email protected]. Rob Sherman, OSCA General Counsel Chiropractor Sentenced to Prison and Fined for Tax Evasion MASSACHUSETTS: After a two week trial, a chiropractor with offices in Westfield. MA, was recently sentenced to a term of 1 year and 9 months' imprisonment and ordered to pay a total fine of $6.000 for tax evasion. At trial, the government introduced evidence that the chiropractor had failed to pay over $250,000 in income taxes for 1990, 1991, and 1992 on income earned from his chiropractic practice. At the sentencing, the officiating judge commented on the chiropractor's continued failure, even during the criminal investigation, to set aside money for his income taxes while earning between $250,000 to $350,000 per year up through 1998. Source: PR Newswire Association, Inc. Pass on the information to warn other DCs about events that are really happening to chiropractors. When you see a "yellow page" article in your local, regional, or national newspapers about chiropractic or your fellow chiropractors, fax or mail it to us at TACfor further investigation. Fax to: I-305-716-9212 or see page 4 for our mailing address.
