Suit Accuses 46 Minnesota Chiropractors in Kickback Scheme

A federal lawsuit filed Monday accuses a diagnostic imaging company and 46 chiropractors of engaging in an elaborate kickback scheme aimed at defrauding Minnesota’s no-fault insurance system.

The Insurance Federation of Minnesota says the $1.9 million lawsuit against Mobile Diagnostic Imaging Inc., its owner and the chiropractors is the largest no-fault suit since the state’s law was put in place in 1974. It was filed by Illinois Farmers Insurance and its subsidiaries, the Star Tribune reported.

The allegations reflect what local insurance representatives say is a growing trend of kickback schemes and staged accidents that aim to defraud personal injury protection under Minnesota’s no-fault laws. The law requires insurance companies to pay a minimum of $20,000 for medical expenses regardless of who is at fault in an auto accident.

“Today’s filing of a federal lawsuit reaffirms what our industry has been saying for several years now – that insurance fraud is rampant in Minnesota,” Insurance Federation spokesman Mark Kulda said.

The insurance companies allege that Edina-based Mobile Diagnostic Imaging and its owner, Michael Appleman, paid 46 chiropractors kickbacks for ordering MRIs that were not always medically necessary, according to the lawsuit.

Appleman declined to comment Monday, according to the Star Tribune.

The alleged kickbacks were written up as leasing of office items including telephones, fax machines, computer copiers and Internet access, Farmers Insurance alleges, saying that “MDI conducts its scans in a self-sufficient MRI trailer.”

The insurance companies claim that from January 2011 until November 2011, Mobile Diagnostic Imaging and Appleman paid $221,800 in kickbacks to the chiropractors and their clinics named in the lawsuit.