Allstate New Jersey, Encompass Insurance File Multi-Million Dollar Complaint

December 19, 2003

Under the New Jersey Insurance Fraud Prevention Act, Allstate New Jersey Insurance Company (Allstate New Jersey) and Encompass Insurance on Thursday filed a multi-million dollar civil complaint in the Superior Court of Morris County against Scott Greenberg, D.C., a Central New Jersey-based chiropractor, and his various chiropractic businesses.

The lawsuit also names entities allegedly controlled by Greenberg, Middlesex Diagnostic Associates, a neurological testing company, as well as a medical billing business, Accurate Billing Company, Inc. Other defendants in the suit include Roman Sorin, M.D. and Neuro Muscular Medical Group, P.A., alleged to be controlled by Sorin, as well as Steven Brownstein, M.D. and Brunswick Imaging Corporation, an MRI facility alleged to be controlled by Brownstein.

Since 1993, Allstate New Jersey and Encompass have paid more than $17 million to the defendants. The legal action seeks restitution of all monies paid in reported violation of New Jersey statutes and regulations governing the delivery of health care, and also seeks treble damages. The suit also asks the court for a declaratory judgment against the medical practitioners in order to halt all claims being made by Drs. Greenberg, Brownstein and Sorin and the professional entities controlled by them. Allstate New Jersey and Encompass continue to receive claims from the defendants.

The Allstate New Jersey-Encompass Insurance lawsuit alleges that Greenberg orchestrated a referral scheme to defraud the carriers. Specifically, the complaint accuses Greenberg of illegally self-referring his chiropractic patients to Middlesex Diagnostic Associates, the mobile diagnostic facility in which he was the sole owner. In New Jersey, it is illegal for a chiropractor to own a diagnostic facility. After Greenberg closed Middlesex Diagnostic, he reportedly referred his patients to Neuro Muscular Medical Group, a diagnostic facility owned by Sorin. However, investigative research reportedly indicates that Neuro Muscular Medical group’s patients consisted almost exclusively of Greenberg patients.

As alleged in the complaint, through a service agreement between Greenberg and Sorin, billing was exclusively done by Greenberg’s Accurate Billing Company. The terms of that agreement allowed Accurate Billing to keep 30 percent of the Neuro Muscular Group’s monthly gross income. The lawsuit contends that the 30-percent amount was a kickback from Sorin to Greenberg in exchange for the patient referrals. The lawsuit asserts that Greenberg in fact illegally employed Sorin in order to evade the regulations that require diagnostic facilities to be owned by plenary licensed physicians.

The complaint also addresses the fact that check payments from Brownstein’s Brunswick Imaging were received by a medical marketing facility in connection to two of Greenberg’s chiropractic facilities. The suit alleges that those checks were part of a referral and kickback scheme.

Allstate New Jersey and Encompass Insurance also allege that Greenberg has permitted unlicensed assistants to administer physical therapy treatment in violation of New Jersey law and regulations. Greenberg’s chiropractic clinics are located in Elizabeth, New Brunswick, North Plainfield, Perth Amboy and Trenton.

Additionally, the complaint asserts that Greenberg routinely fails to collect the statutory personal injury protection (PIP) co-pay and deductible from his patients. The failure to collect co-pay and deductibles is an indicator that the treatment and testing may be unnecessary, the lawsuit alleges.

Edward Moran, assistant vice president for Allstate Insurance Company’s Special Investigations Unit Division (SIU), said that the doctors’ businesses continue to be investigated by Allstate New Jersey.

Richard Crist, Jr., president of Allstate New Jersey, said, “Allstate New Jersey believes that the fight to rid the system of insurance fraud is a crucial one, and it continues daily. It is especially disturbing when doctors and others in the medical profession have allegedly violated their public trust.” He continued, “People place their faith in medical professionals and they should be protected from those who violate the law.”

Crist added, “The fact that can not be overlooked is that auto insurance fraud is not a victimless crime. It impacts everyone’s car insurance costs.”

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