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LI no-fault clinics participated in fraud ring, insurer says

Allstate Corp., based in Illinois, aims to acquire

Allstate Corp., based in Illinois, aims to acquire Esurance and Answer Financial from White Mountains Insurance Group of Bermuda. (April 27, 2010) Credit: AP

Long Island medical clinics were part of a wide-ranging $2.1 million fraud ring that exploited the no-fault insurance system in metropolitan New York City, according to the Allstate Insurance Co.

The scheme involved dozens of wholesale and retail businesses in Brooklyn, Queens and elsewhere in the city, and centered on bogus, inflated invoices for unneeded therapeutic devices such as knee braces, whirlpools and cervical traction units.

The allegations were in a complaint filed Wednesday at U.S. District Court in Brooklyn. The lawsuit did not name the Long Island clinics.

“In exchange for kickbacks and/or other financial compensation agreements with the retailers, one or more no-fault clinics operating in Brooklyn, Queens, Bronx, Nassau, Suffolk and Westchester Counties, through their medical doctors and/or chiropractors, provided the retailers with prescriptions for DME and/or orthotic devices pursuant to a standard protocol or predetermined course of treatment, without regard to medical necessity or need," the company said.


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