Farmers Files $3M Lawsuit Against Radiology Companies for Alleged False Billing

December 24, 2013

Farmers Insurance Exchange, 21st Century Insurance Company, Coast National Insurance Company, Mid-Century Insurance Company and Truck Insurance Exchange (“Farmers”) have filed a lawsuit in the Superior Court of California against two radiological corporations and their owners alleging they prepared and submitted false and misleading documentation to receive payment for services never provided.

The detailed civil complaint seeks restitution and additional remedies for alleged violations of California’s Unfair Business Practices (Business and Professions Code 17200) as well as the Insurance Frauds Prevention Act (Insurance Code 1871.7), and an order directing Defendants to cease and desist from engaging in alleged improper billing practices.

The lawsuit alleges that the radiological corporations and their owners billed Farmers for 3D Rendering of MRI and CT scans which were never performed, in more than two hundred bodily injury and workers’ compensation claims, under policies of insurance issued to Farmers policyholders.

The complaint also alleges that one of the defendant radiological corporations was, at all times relevant to the complaint, improperly owned and structured, because a lay person, and not a licensed physician, was the majority owner, in violation of California law which requires that corporations must practice medicine under the control of licensed medical doctors.

“Farmers continues to take aggressive action to protect its policyholders and stop fraud,” said Sean Zavala, director of Special Investigations. “Our Special Investigative Unit is trained to detect this type of alleged fraud and prepared to protect the public by filing cases to stop it from continuing.”

Source: Farmers Insurance Group of Companies

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