Allstate the Winner in Texas Chiropractic Lawsuit

A Dallas jury ruled on Friday that Texas’ largest chiropractic chain, Accident & Injury Pain Center Inc., reportedly conspired in a statewide scheme designed to defraud Allstate Insurance Company and Encompass Insurance, a subsidiary of Allstate.

Accident & Injury Pain Center Inc., its related entities and various chiropractors, osteopaths and medical doctors were found to have conspired to commit common law fraud by over-treatment and unnecessary referrals. The jury ordered them to pay $2.8 million in actual damages and $3 million in punitive damages.

“At Allstate, we’re taking a stand to fight insurance fraud and get the defrauders, no matter where they’re hiding,” said Gary Briggs, Texas Field vice president. “Our commitment is to deliver competitive insurance rates to our policyholders, and we can help do that by exposing insurance fraud and putting fraudulent enterprises out of business.”

Allstate and Encompass had alleged that the vast majority of X-rays for auto accident patients of Accident & Injury Pain Center were referred to “Lone Star Radiology,” located within Accident & Injury Pain Center’s corporate office in Dallas. Patients were routinely referred for MRIs on their first visit to one of four facilities that were owned by Robert Smith, the owner of Accident & Injury Pain Center.

The medical doctors to whom patients were referred conducted the ‘second opinion examinations’ at Accident & Injury Pain Centers. They reportedly had an arrangement with Receivable Finance Company to sell or kick back to Receivable Finance their medical bills for the examinations for a small percentage or flat fee. Receivable Finance Company is also owned by Robert Smith and is located within the Accident & Injury Pain Center corporate office.

Further, Allstate and Encompass had reportedly developed evidence that the wife of one of the medical doctor defendants was receiving up to $10,000 a month for “marketing services” from a pharmacy where the vast majority of the Accident & Injury patients were receiving prescriptions.