Allstate Sues Doctors for Allegedly Running Sham Prescription Businesses
A group of more than a dozen doctors and chiropractors in San Joaquin Valley face a lawsuit by Allstate Insurance, who claims the group falsely ran chiropractic clinics as medical groups to obtain more insurance money, the Fresno Bee reports.
California joins Allstate as a plaintiff in the case, which was filed in Fresno County Superior Court.
The suit alleges that a chiropractor used the fake medical group to purchase, store, dispense and resell prescriptions. Chiropractors licensed by the state can neither prescribe nor dispense prescriptions.
The suit also claims that doctors helped in delivering, dispensing and prescribing the drugs. It alleges that a physician received money for posing as a majority owner of several medical corporations to falsely present the groups as legally compliant.
The lawsuit seeks damages of more than $3 million, as well as statutory penalties. In addition, the insurance company is seeking more than $1 million in damages, penalties and attorneys fees for violations of California's Insurance Fraud Prevention Act.
James Wilkins, a lawyer representing several of the defendants, said the allegations of wrongdoing are not true. He added that the California Medical Board recently determined his clients were running a legal medical corporation (Anderson, Fresno Bee, 7/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.