People ex rel. Allstate Insurance Company v. Platon, Case No. BC 475239 (Los Angeles Superior Court, March 8, 2013): A California Superior Court awarded Allstate Insurance Company (Allstate) over $7.7 million in a qui tam lawsuit brought under California’s Insurance Fraud Protection Act (IFPA). The court found that defendants – unlicensed medical and chiropractic personnel – submitted to Allstate more than 390 false chiropractic claims.
In December 2011, Allstate sued defendants Maria Miranda, Frank Rivera, and L.A. Healthcare Management Inc., alleging they prepared and presented to Allstate fraudulent medical reports for alleged accident victims. After defendants failed to answer the complaint, Allstate requested entry of default. The court entered default in 2012, and in 2013 Allstate filed a brief in support of its request for entry of default judgment. Allstate argued, among other things, that defendants (1) generated and billed for false “narrative” reports – including medical findings, diagnosis, and prognosis – for each patient without consulting with licensed practitioners; (2) implemented a standard protocol for patient treatment for every patient regardless of age, gender, type of injury, or severity of injury; and (3) intentionally falsified records using identical notes in charts for patients involved in different accidents in different years. Superior Court Judge William Fahey entered default judgment in favor of Allstate and ordered defendants to pay over $7.7 million.
Although the matter was uncontested, Allstate’s brief and the court’s award provide insight into the use of experts to prove an alleged insurance fraud and the calculation of IFPA penalties. Allstate cited extensively to expert declarations to establish the alleged fraud. Expert testimony established, for example, that the uniformity of medical notes at the clinic “could only be the product of intentional and improper recordation by defendants which equates to clinical fraud.” It also established that the amount of time billed to Allstate was a “categorical impossibility” due to the number of patients seen and number of chiropractors employed. Allstate’s brief also provides a good reminder of how fees and assessments are calculated under the IFPA. Allstate was entitled to penalties of not less than $5,000 and not more than $10,000 per claim and an assessment of up to three times the amount fraudulently billed to the insurer. Allstate sought – and the court granted – the maximum statutory award of $3.94 million for the 394 claims submitted and treble damages of $3.6 million. The court also awarded plaintiffs reasonable attorney’s fees, expenses, and costs totaling over $200,000.