Allstate files lawsuit against alleged fraud ring in New York

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New York InsuranceAllstate Insurance is looking to recover more than $4.5 million from and alleged insurance fraud ring comprised of medical professionals. The company filed a suit in the state of New York, where five physicians, ten medical corporations and a sleuth of other medical professionals had allegedly schemed to charge insurance companies for unnecessary procedures. The latest lawsuit adds to growing concerns regarding the rampant state of fraud in the state of New York, increasing the pressure faced by lawmakers to impose new laws to curb the phenomenon.

Since 2003, Allstate has filed more than 30 lawsuits concerning insurance fraud in New York. The Insurance Information Institute has declared that the state’s current insurance industry is in a state of crisis, riddled by fraud from both consumers and health care organizations. The overwhelming level of fraud in the state may be costing taxpayers millions of dollars every year, but legislators have, thus far, been slow to produce a solution.

In response to the lawsuit, two of New York’s medical corporations targeted by the insurer’s allegations have filed countersuits claiming that the companies were wrongfully associated with the fraud ring because of certain licensed physicians represented by the corporations. Both corporations will seek monetary compensation from the insurer to help cope with the any negative impact the impending trial may have.

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