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Allstate sues California doctors, seeks $16 million

NORTHBROOK, Ill., June 17 (Reuters) - Insurer Allstate Insurance Co. said Thursday it has filed lawsuits against 21 California doctors, chiropractors and health care providers, alleging that billing fraud has cost its policyholders millions of dollars.

Allstate, the nation's second largest insurer of homes and autos, is seeking to recover $16 million for medical overbilling and other costs through the two suits in California's Superior Court of the County of Sacramento and Superior Court of the County of Los Angeles.

The company said it started serving summons and complaints statewide earlier in the day.

``This coordinated statewide effort is the first of its kind and highlights the company's continued efforts to fight automobile insurance fraud,'' said Edward Moran, assistant vice president of Allstate's 637-member special investigative unit.

``Insurance fraud unnecessarily increases the cost of insurance. We must act to put these fraud schemes out of business,'' he said.

In Los Angeles, Allstate was suing 15 doctors, chiropractors and clinics, alleging upcoding and billing for treatment never rendered.

Allstate's complaints sought nearly $15 million in statutory damages and gave details of how these defendants allegedly tried to justify excessive charges by misleading Allstate about the medical services rendered.

Allstate is suing the defendants under a law that the State Legislature enacted to help combat insurance fraud.

In Sacramento, the complaint filed accused five doctors, chiropractors, clinics and others of defrauding Allstate and its insured clients by creating and submitting allegedly fraudulent, inflated and exaggerated medical bills and medical records.

It also charged that unnecessary medical tests and treatments were performed and patients were treated by unlicensed physical therapists.

Through this lawsuit, Allstate sought nearly $1 million and an injunction to stop the defendants from engaging in such allegedly unfair, unlawful, fraudulent, deceptive and misleading acts.

``We are determined to take the profit out of medical fraud for professionals and their businesses. Our Special Investigative Unit is cooperating with state and local law enforcement agencies and the Department of Insurance's Fraud Division,'' Moran said in a statement.

The lawsuits filed Thursday were similar to others filed by Allstate recently. Last year, Allstate filed a $107 million lawsuit in California, the largest in auto insurance history, against a group alleged to have been involved in what the company described as an organized insurance fraud ring operating since at least 1992.

Allstate Insurance, a subsidiary of Northbrook, Ill.-based Allstate Corp. (NYSE:ALL - news), insures one in every eight homes and autos in the country. The company provides insurance for more than 14 million households.