Chiropractors Face Trial for Insurance Fraud

     PORTLAND, Ore. (CN) – Farmers Insurance’s claims against a chiropractic clinic will proceed, after a federal judge dismissed the clinic’s counterclaims.
     The dismissal clears the way for insurers to proceed with claims that a Portland chiropractic clinic implemented a “fraudulent protocol to maximize revenue.”
     Farmers and eight other insurance companies sued First Choice Chiropractic & Rehabilitation, the clinic’s chiropractors and an outside medical doctor, claiming they ran a scheme to cash in on fraudulent insurance claims by inflating or completely fabricating the injuries of their patients.
     According to the October 2013 lawsuit, First Choice co-owners Sunita Bhasin and David Petroff coordinated a “fraudulent protocol” since at least 2007 where they trained the six chiropractors on staff to report predetermined diagnoses and order predetermined treatments for patients who had personal injury protection benefits for injuries from car crashes.
     An outside medical doctor, Ajay Mohabeer, allegedly “rubber-stamped” First Choice’s diagnoses and treatment plans in exchange for patient referrals.
     In 2011, the Oregon Chiropractic Board launched an investigation of First Choice.
     The board used two undercover operatives to contact the clinic and pretend to have been in a car collision, the ruling said. Independent chiropractors first tested the operatives to confirm that they were healthy.
     The first operative reported no pain, but doctors at First Choice allegedly submitted to the insurance agency chart notes that claimed the operative was in pain and that his pain continued during several weeks of chiropractic treatments.
     The second operative told First Choice she had had “very light pain in her neck only” for five days. Doctors at First Choice again allegedly submitted false chart notes, this time claiming that the patient had not only neck pain, but also thoracic pain that lasted one to two months.
     Farmers sued for racketeering, fraud, conspiracy to violate racketeering laws, unjust enrichment and violations of the Oregon Unfair Trade Practices Act.
     First Choice countersued, accusing Farmers of defamation in letters sent to First Choice patients. In the letters, Farmers told the patients – its clients – that their claims would be covered for now, but its investigation of First Choice might result in denials of future claims based on its findings.
     First Choice claimed that the letters falsely suggested that they were running a fraudulent scam.
     Farmers moved to dismiss those claims. United States Magistrate Judge Paul Papak agreed, finding the claims in the letters were not defamatory because they were objectively true.
     “To the extent that Farmers investigated the claim files at issue in the current case for fraud, and ultimately brought this action pursuant to the review of those claim files, those files were the subject of a fraud investigation, rendering letters notifying insureds of that investigation objectively true,” Papak wrote.
     First Choice also accused Farmers of tortious interference, claiming the letters violated industry standards and were “legally and ethically unnecessary.”
     But because Oregon law “requires insurers to communicate with insureds regarding claim coverage and investigations in to claim files” and since Farmers’ claims in the letters were factual, Papak nixed those claims as well.
     Judge Michael Simon adopted Papak’s findings on Wednesday.
     Pretrial proceedings are scheduled to begin no later than March 21 2016.
     Representatives for Farmers and First Choice did not respond to requests for comment.

%d bloggers like this: