PHILADELPHIA (CN) – A chiropractor claims his practice was “targeted for destruction” by State Farm Insurance because most of his patients are African-American. Peter Schatzberg, D.C., claims: “If a claimant is a minority, an immigrant, or from a poor, urban area, State Farm automatically looks on their claims as potentially fraudulent.”
In his federal complaint, Schatzberg says: “Not only did State Farm in one fell swoop arbitrarily begin a system of characterizing all soft-tissue injury claims as fraudulent, it created a corporate culture which treats the entire chiropractic industry as fraudulent as well.”
Schatzberg also claims State Farm defamed him with letters to his office and to his attorney, accusing him of “professional impropriety,” merely because he is a chiropractor who treats soft-tissue injuries.
“Under this scheme therefore, a bill for treatment of soft tissue injuries suffered by an African-American from a large city sent to Sate Farm by a chiropractor is considered potentially fraudulent before it is even removed from the envelope.”
State Farm then embarks on a campaign “to brand the targeted provider a fraud and put them out of business, thus eliminating a source of claim expense for State Farm,” the complaint states.
Schatzberg claims that State Farm does all this under the rubric of its “ACE” policy, which stands for “Advancing Claims Excellence.”
He adds: “State Farm knows that patients and attorneys who represent them will avoid any provider who is ‘under investigation’ by State Farm, and that regardless of wrongdoing, the act of ‘investigating’ a provider will slowly choke the provider’s business until it is dead.”
State Farm brings civil suits against providers not to recover money but “to send a message of intimidation to the legal community to chill claims,” the complaint states.
“State Farm receives approximately 30,000 auto-related injury claims a day, more than 75 percent of which involve claims for soft-tissue injuries. The vast majority of soft-tissue injury claims made to State Farm involve treatment with a chiropractor. So, not only did State Farm in one fell swoop arbitrarily begin a system of characterizing all soft-tissue injury claims as fraudulent, it created a corporate culture which treats the entire chiropractic industry as fraudulent as well,” according to the complaint.
“State Farm’s ACE program, in essence, manufactured an epidemic of fraudulent claims based on arbitrary and racially discriminatory criteria, just to give itself an excuse to dramatically cut the amount of money it pays out on claims every year – to the tune of $1 billion annually.”
Schatzberg demands punitive damages for defamation. He is represented by Andrew Baratta with Baratta, Russell & Baratta of Huntingdon Valley, Pa.