Allstate Wins $7.7M Insurance Fraud Lawsuit in California

A Los Angeles County Superior Court has ruled in favor of Allstate Insurance Co. and the State of California in a lawsuit topping $7 million over fraudulent business and billing schemes by unlicensed medical and chiropractic personnel.

Allstate alleged Maria Miranda, Frank Rivera and LA Healthcare Management Inc. violated the state’s Insurance Fraud Protection Act when they submitted to Allstate more than 390 chiropractic claims that were falsely generated by unlicensed and untrained personnel, or because the billed treatments did not reflect patients’ physical needs.

Judge William Fahey agreed with Allstate and ordered Miranda and Rivera to pay Allstate $3.9 million in penalties, plus $3.8 million in assessments and fees. That amounted to a $7.7 million judgment.

“Submitting even one false insurance claim is more than just a bad idea—it’s fraud, and insurance fraud is a crime,” Allstate’s California Field Vice President Phil Telgenhoff said in a statement.

Allstate’s suit identified Miranda and Rivera as two unlicensed non-professionals operating through LA Health Care and Lynwood Health Care clinics and catering to attorneys representing people who all made claims of soft tissue injuries. The clinics are no longer in operation.

Allstate argued that Miranda violated California’s Unfair Business Practices Act, claiming that as owner of L.A. Healthcare Management Inc. she was solely responsible for overseeing and directing the fraudulent operation of both clinics, which included the recruitment and steering of patients, setting standard operating procedures for patient treatment regardless of medical need, and submitting false narrative reports and bills.

Other violations recognized by the judge include Miranda and Rivera practicing medicine and chiropractic without a license, operating a professional medical corporation in violation of state law and falsifying patient medical records.

The Allstate Corporation serves roughly 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names and Allstate Financial business segment.

Topics Lawsuits California Fraud