Lawsuit: Allstate Seeks 'Adjustment' for Fraudulent Chiropractic Claims

IRVING, Texas, Mar 10, 2008 (A. M. Best via COMTEX) -- ALL | news | PowerRating | PR Charts -- Allstate has filed a lawsuit against a Texas-based chiropractic group that seeks more than $10 million as payback for what the company alleges was an elaborate fraud scheme in Texas, Ohio, Indiana and Alabama.

According to the suit, filed in federal court in the Northern District of Texas, the Northbrook, Ill.-based insurer alleges the 66 defendants violated the Federal Racketeer Influenced and Corrupt Organizations Act. The company seeks treble damages, court costs and attorneys fees as well as reimbursement Allstate (NYSE:ALL) said it paid on fraudulent claims made by the Chiropractic Strategies Group Inc.

Allstate also names as defendants the chiropractic group's owner, Michael Kent Plambeck, as well as attorneys, telemarketers, and law office management companies the insurer's Special Investigations Unit found to be involved in deceiving Allstate since at least 2002, according to the lawsuit.

The lawsuit alleges telemarketers, some who would misrepresent their identity as being with an insurance company, would solicit automobile accident victims by using public police reports and then recommend they go to one of as many as 30 Chiropractic Strategies Group clinics for a "10-point examination." Commissions were given to telemarketers who made these appointments, the lawsuit said.

The examinations were sometimes given by unlicensed chiropractic assistants, Allstate alleges, and then the patients were directed to get other treatments and X-rays. Allstate claims it was then billed for the services and other services that were not actually performed, the lawsuit said.

Employees of the chiropractic group would then recommend patients to attorneys with the "enterprise," Allstate said. Attorneys would allegedly also visit the clinic to sign up clients.

Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior).

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)

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