Allstate, Liberty Mutual File $1M Lawsuit in Alleged Ky. Fraud Scam

June 26, 2003

Allstate Insurance Company and Liberty Mutual Group announced they jointly filed a federal RICO lawsuit against a Kentucky doctor and owners of several medical clinics and billing companies in that state.

The defendants in this case include, Dr. Olen Amerson (retired), of Paintsville, as well as Greg Mack, Mark L’Hommedieu and Larry Lammers, who own and/or control the following clinics and billing companies: Injury & Rehab Centers of Ky., Accident Injury Medical Centers Inc., Physician’s Medical Services, Paintsville-Pikeville Physician Services, Great Southern Medical (GSM) Inc., Comprehensive Medical Data (CMD), Intergroup Medical Inc., and Innovative Diagnostics of Kentucky Inc.

The lawsuit, filed in U.S. District Court, Eastern District of Kentucky, seeks a declaration in regard to reimbursement of more than $1 million dollars for payments issued on behalf of policyholders by Allstate and Liberty Mutual Group companies, including Liberty Mutual Insurance Company, Employers Insurance of Wausau and Indiana Insurance Company.

Allstate and Liberty Mutual allege that the defendants formed and operated several medical clinics and billing companies in which excessive and unnecessary MRIs and nerve tests were ordered. The suit contends that the defendants billed for those excessive medical tests and for services not rendered. The lawsuit also alleges the clinics and several mobile diagnostic operations established illegal fee-splitting agreements. The suit currently involves more than 900 Allstate personal injury protection claims, and 300 Liberty Mutual, Wausau and Indiana claims for personal injury protection, workers’ compensation and bodily injury.

“Allstate strongly believes that eliminating fraud is in the best interest of our customers and can have a positive effect on the cost of insurance,” said Edward J. Moran, assistant vice president for Allstate’s claims services operation. “When we prevent insurance fraud, we prevent the bad guys from getting money that doesn’t belong to them. Fraud is not a victimless crime. The cost of fraud comes directly out of the premiums consumers pay to their insurance companies.”

“These defendants engaged in a pattern of knowingly submitting bills with false and/or misleading information to collect insurance benefits they were not entitled to,” said Glenn Wolf, director of special investigations for Liberty Mutual. “Medical facilities and providers that commit insurance fraud cost our customers through higher premiums, and Liberty Mutual has zero tolerance for these violations.”

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